Q4 2019 Earnings Call

Good morning, and welcome to bio XL Therapeutics fourth quarter and full year 2019 earnings conference call and audio webcast before we start I would like to inform that this conference is being recorded and that all participants R&D listen only mode.

Operator: Good evening, and welcome to BioXcel Therapeutics' fourth quarter and full year 2019 earnings conference call and audio webcast. Before we start, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation. At that time, you can press star 1 to ask a question or star 0 if you have a problem on the call. Just to remind everyone, certain matters discussed in today's conference call or answers that may be given to questions asked or forward-looking statements that are subject to risk and uncertainties relating to future events and or the future financial performance of the company.

Of course said the company, we will open the conference up a question and just after the presentation at that time, you can press star one to ask a question.

Let's start there if you have to be problem on the call.

Just to remind everyone certain matters discussed in todays conference call or answers that maybe given two questions asked or forward looking statements that are subject to risks uncertainties relating to future events and or the future financial performance of the company.

Operator: Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Security Exchange Commission, including its annual report on Form 10-K for the fiscal year ended December 31, 2019, which can be found on the website www.bioxceltherapeutics.com or on www.sec.gov. I would now like to turn the call over to Vimal Mehta, Chief Executive Officer of BioXcel Therapeutics. Please go ahead.

Actual results could differ materially from those anticipated and these forward looking statements. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities Exchange Commission, including its annual report on form 10-K, but the fiscal year ended December 31st 2019, which can be found on the.

Website, www bio XL therapeutics dot com or one www dot FCC dot com.

I'd now like to turn the call over Toby Momenta, Chief Executive Officer Biotech cell Therapeutics. Please go ahead.

Thank you operator, good morning, everyone and thank you for joining our conference call to discuss by accident that I predict find it shouldn't be then and business highlights for the fourth quarter and 40 out of 2019, we appreciate everyone's time and attention today.

Vimal D. Mehta: Thank you, operator. Good morning everyone, and thank you for joining our conference call to discuss BioXcel Therapeutics' financial results and business highlights for the fourth quarter and full year of 2019. We appreciate everyone's time and attention today.

Vimal D. Mehta: 2019 has proven to be a pivotal year for BioXcel Therapeutics. Thanks to our experienced and knowledgeable team, we have made significant development strides with our two clinical programs, BXCL501 and BXCL701, positioning the company well to reach multiple important milestones in 2020. To start, I would like to discuss our lead neuroscience clinical program, BioXcel 501, and focus on the key achievements we have accomplished over the last year and thus far in 2020. As a reminder, BioXcel 5.0.1 is our proprietary thin film formulation of dexmetamidine or dex for the treatment of acute agitation. We have designed this candidate to be easily administered and have a rapid onset of action so it can produce a calming effect without excess. Building on the positive data from our Phase 1b trial in December 2019, we announced the initiation of the Serenity Programme 2 Phase 3 studies of BioXcel 501 for the acute treatment of agitation in patients with schizophrenia and bipolar disorder.

2019 has proven to be if he would tell you had for biotech felt that up your days. Thanks to our Expedia has 10 knowledgeable team.

Yeah made significant namenda stride with our two clinical programs be axiom fiber, one and be axiom that went on one positioning the company writing to reach more deep one important milestones in 2000, then going dnbi on.

Do we start I liked I would like to discuss our lead neuroscience clinical program be exceeding five well one and focus on the key achievements, we have accomplished over the last year and thus far in 2020.

And then in mind that would be Axiata fiber one is our proprietary pain fitting formulation nobec's modem redeemed or decks for the treatment of acute agitation.

We have designed this candidate to be easily administered and have a rapid onset of action. So he can produce a calming effect without access to finish.

Building on the positive data from our phase one be trial in December 2019, V. I know the initiation of the said energy program two phase three studies Ob axiom fiber one for the acute treatment of vegetation and pay shouldn't be in schizophrenia and bipolar disorder.

Vimal D. Mehta: The trials will separately assess up to 375 patients, with each arm of the study receiving either BioXcel 501 at 120 micrograms, 180 micrograms, or placebo. Please note that we have already manufactured the needed quantity of BioXcel 501 to complete both studies and have delivered the films to the clinical sites for use. This initiation of the Serenity Program brings us one step closer to providing a non-invasive, effective treatment option to the millions of individuals who suffer from agitation associated with these neuropsychiatric disorders. Since these trials are relatively short in duration and the enrollment operation is on track, we expect to report top-line results in mid-2020. Furthermore, following the completion of these pivotal studies, we plan on submitting our first NDA for BioXcel 5.0. It is important to understand that this NDA filing has the potential to be submitted only a few short years after the clearance of the IND, which helps to showcase the efficiency of our artificial intelligence.

The times when separately I'd say, it's up to T. N ceremony by patients with each of those studies deceiving E that'd be a C. N fiber one add one going to be micrograms, 180 micrograms or placebo.

Please note, we have already manufacturer that needed quantity or be axiall fiber one to complete body study and haven't deliver what their friends through the clinical sites for use.

It's initiation of the scene in a day program bring says one step closer to providing a noninvasive effective treatment option to the millions of individuals who suffered from education associated with these new looks like a big disorders.

Since these side, it's not at Liberty short in duration.

And the enrollment of patients is on track, we expect to report topline reserves in mid 2020.

Furthermore, following the completion of these people telling studies, we plan on submitting our first time be airport to be Axiall fiber one.

It is important doornbos turn that this endear filing has the potential to be summit in only a few short did.

After the clearance of the high Andy.

Which translates to showcase the efficiency of our artificial intelligence.

Vimal D. Mehta: Approach for Identifying and Advancing Improved Therapy. The clinical momentum with BioXcel 501 does not stop there. Last month, we initiated TRANQUILITY, a Phase 1b-2 trial for the treatment of acute agitation in geriatric dementia, expanding the potential utility of this product candidate to an indication beyond the current neuropsychiatric disorder. We expect to report results from this study in mid-2020. With 70% of dementia patients experiencing agitation and no FDA-approved therapies to treat this symptom, there is a high unmet medical need for an effective therapy that does not result in undesired side effects such as excessive sedation.

Approach bought I didn't do fine and advancing improve therapies.

The clinical momentum would be actually had five or one does not to stop there.

Last month, we initiated Franco lippy ear phase one be slashed through driving for the treatment of victory with education and do they had big dementia expanding that potentially utility of this product candidate do anything big it shouldn't be aren't big caught on numerous psychiatric disorders.

We expect to report results from this study and mid 2020.

Vince 70% of dementia patients experiencing agitation and no F.D. approved therapies to did they seem from there is a high unmet medical need for an effective therapy that does not result in our desired side effects such as excessive situation.

Additionally, since off label as if they shouldn't be men's have black box warning for their Dudley, we believe be axiall fiber. One is there fast acting easy to Ed and Mr. therapy that provide their treatment option for physicians and category, but whoever continuously is targeted to would be dementia related.

Vimal D. Mehta: Additionally, since off-label agitation treatments have black-box warnings for the elderly, we believe BioXcel 501 is a fast-acting, easy-to-administer therapy that provides a treatment option for physicians and caregivers who have continuously struggled to treat dementia-related agitation in geriatric patients. Moreover, the TRANQUILITY trial will lay the foundation for our future plans to investigate BXCL501 across In addition to these three ongoing trials, in February of this year, we announced that researchers at Yale University had initiated a Phase II study to assess biomarkers associated with HIV, including heart rate and EEG, in patients with schizophrenia and their response to BioXcel 501. We feel this trial will not only allow us to further justify BioXcel 501's calming effect but also may help to determine physiological changes linked to hyperarousal that can be used as an This, in turn, could give caregivers adequate time to deliver BioXcel 501 before patients experience severe agitation.

Agitation and Judy I take patients.

Moreover, the time Gonna do bad will lay the foundation for our future plans to invest teekay I'd be axiall fiber one across the spectrum of vegetation in dementia, including Alzheimer's disease significantly expanding the market potential of this candidate.

In addition to be three ongoing trials in February of this yes, we announced that they search trends at Yale University have initiated a phase two study to assess biomarkers associated with education, including hardware and E. G in patients with schizophrenia and.

Yeah, this bonds to be Axiata fiber one.

We feel this started when not only allow us to follow that justify bx in fiber ones calming effect, but also may have to do it doesn't mean physiological changes relating to a hyper about that can be used as an initial thinking that no vegetation. This in time could provide category, but I do agree.

I'm to deliver a big feel fiber one before patients experience every ad agitation.

Why did we have performing this study is solely solely on patients with schizophrenia. We believe this time may lead to the exploration of be Axiall, five woven and all that indication that also experienced it similar high but allows the including posttraumatic stress disorder and alcohol related with.

Vimal D. Mehta: While we are performing this study solely on patients with schizophrenia, we believe this trial may lead to the exploration of BioXcel 501 and other indications that also experience a similar hyperarousal, including post-traumatic stress disorder and alcohol-related withdrawal. Lastly, we are pleased to have received FDA clearance of our IND application for BioXcel 501 for the treatment of opiate withdrawal symptoms. Opioid overdose is reported to be the number one cause of death in the United States for individuals under the age of 50, and the distressing symptoms that are caused by withdrawal are a main reason for continued drug use.

No symptoms.

Lastly.

We are pleased to have received ever be a clearance oh for what I couldn't be application for be axiom fiber one for the treatment of opioid withdrawal symptoms.

Opioid overdose they reported to be the number one cause of death in the United States for individuals under the age of 50 as Andy distressing symptom that have caused by redraw Auden Mckenzie than fourq aren't being as drug usage.

Vimal D. Mehta: More effective treatment options are needed to combat this national opioid epidemic, and we believe BioXcel 5.0.1 has the potential to alleviate opioid withdrawal symptoms due to its intrinsic potency and its specific mechanism. After reviewing a study investigating intravenous drugs, which showed promising results in reducing withdrawal symptoms, we are preparing to initiate the release trial in patients experiencing symptoms of opiate withdrawal.

More effective treatment options are needed to combat the national opioid epidemic and we believe be axiata fiber one has the potential to at least good.

Oh paired with adults EMS dumbs due to its intrinsic potency and its specific mechanism affection.

I've got a viewing that started investigating in probably not beck's, which showed promising the there was on video thing withdrawals and then we have been bedding three new shared that release trial in patients experiencing symptoms of opioid redrawn expanding.

Vimal D. Mehta: Expanding... the therapeutic opportunity of BioXcel 501 into a fourth industry. This past year, we have truly built out our neuroscience program in hopes of reaching a broader patient population and providing an alternative treatment option that we believe is highly differentiated from the current standard of care. With our ongoing trials, we are gaining experience in treating patients with BXCL501 in disease conditions beyond schizophrenia. In addition, we are dedicated to the continuous exploration of various indications with BioXcel 501 as we feel this candidate has the potential to be an efficient treatment regimen for numerous disorders associated with hyperarrhythmia. Thus, our portfolio strategy is to broaden the commercial value of this product candidate, creating an advanced neuroscience franchise.

With that I predict opportunity a big Theyll fiber one into airport indication.

This past year, we have truly built out our neuroscience program in hopes of reading a broader patient population and to provide an art than they did treatment option that we believe it's highly differentiated from the current standard of care.

Without what ongoing progress we have gaining experience impeding patients we'd be axiall fiber one in disease conditions beyond <unk> beyond me schizophrenia.

In addition, we are dedicated to the content is exploration of various indications will be axiall fiber one as we feel this can do it has the potential to being f., we shouldn't be men regimen for numerous disorders as you did with high high but at all.

Thus our portfolio strategy is to broaden the commercial value of this product candidate, creating an advanced neuroscience franchise.

No I would like to done back on what the shallow worked well what do you mean oncology clinical program be Akcea is having a one hour orally systemic innate immunity activate their design with dual mechanism of actions back in December we had down that.

Vimal D. Mehta: Now, I would like to turn the conversation over to our Immuno-Oncology Clinical Program, BioXcel 701, our Orally Systemic Innate Immunity Activator designed with a dual mechanism of action. Back in December, we announced that we are expanding the evaluation of BioXcel 701 in combination with Keytruda into numerous advanced solid tumors. Tumors, this open-level Phase II basket trial is taking place at MD Anderson, a leading cancer center in the U.S., and is evaluating patients with advanced solid tumors who are either naive to or resistant to checkpoint therapy. We are hopeful that this candidate will help to extend treatment responses through Keytruda when used in combination, accelerating the clinical expansion of BioXcel 501 into a wider range of candidates. Additionally, we are currently conducting our Phase 1b-2 Double Combination Study of BXL501 and Keytruda for the treatment of emerging neuroendocrine prostate cancer, or TNEPC.

We are expanding devaluation of big fields that won't no one in combination with good food a into numerous advanced solid tumors.

Well most this open label phase two boss scared pilots, taking place at MD Anderson, a leading getting something done in the U.S. and evaluating patients with advanced solid tumors, who already done naive to or the affected with checkpoint therapy.

We are hopeful that this candidate this guy and they did we'll have to extend treatment of responses to get through the when used in combination accelerating that clinical expansion of big Theyll fiber one into a wider range of cancer [noise].

[noise]. Additionally, we have got only conducting our phase one beat slashed too.

Doubling combination study of being filled fiber, one and get through data for treatment emergent nudo endocrine prostrate cancer or D. N. P. C. In February of this he I'd be presenting safety and Tolerability data from the first and second cohort I'd be American society of clinical oncology Jan edge.

Vimal D. Mehta: In February of this year, we presented safety and tolerability data from the first and second cohort at the American Society of Clinical Oncology Genitourinary Cancer Symposium in San Francisco. We are currently enrolling an expansion cohort to explore the potential benefit of dosing twice a day and plan to report results from the Phase 1b portion of the trial in the first half of 2020. Following the readout, we expect to move to the Phase 2 application portion of that. The combination trial of BioXcel 701, BAMPAC from Nectar, and a value map from Pfizer and Merck KGA in pancreatic encephalitis will start following the completion of Nectar and Pfizer's safety run-in studies of BAMPAC and a value map and the outcome of that. Importantly, this past month, we significantly strengthened our balance sheet, securing net proceeds of $60 million in a public offering. This cash, together with our current reserves, provides BioXcel enough cash runway to fund key clinical, regulatory, and operational milestones well into 2021. With that, I would like to turn the call over to our CFO, Richard Steinhart. Thanks, Vimal.

I need to urinary cancers symposium in San Francisco.

We have currently enrolling an expansion cohort to explode the potential benefit or do you think twice a day and plan to report results from the phase one be portion of that battling the first out for 2020 following that lead out we expect to moved to the.

Phase two epic issue portion of that Todd.

The combination Dilo Bx, Seattle, San Bruno one bad impact from neck, and I've Allomap from Pfizer and Mulcahy in pancreatic and Sandridge start following the completion of next that emphasizes Pfizer's safety. Then in study a back end of Valley man and the outcome of that that.

Importantly, this past month will significantly strengthen our balance sheet, securing net proceeds of 16 million in a public offering.

This cash together with our got NVS, those pro wide buyer XL and out cash runway do fine key clinical regulatory and outpatient milestone valley into 2000 joined do.

With that I would like to done like all over to our CFO. They started to steinhart The chart. Thanks demo.

Richard I. Steinhart: Thanks, Vimal. Once again, thank you all for joining us this morning, and welcome to our shareholders. For the fourth quarter of 2019, we recorded a net loss of $8.3 million, compared to a net loss of $7.1 million for the fourth quarter of 2018. Research and development expenses totaled $6.5 million for the fourth quarter, compared to approximately $6 million for the same period in 2018. The increase was primarily due to an increase in professional research and related project costs.

Once again, thank you all for joining us this morning, and welcome to our shareholders.

For the fourth quarter of 2019, we recorded a net loss of 8.3 million compared to a net loss of 7.1 million for the fourth quarter of 2018.

Research and development expenses totaled 6.5 million for the fourth quarter compared to approximately 6 million, but the same period in 2018.

The increase was primarily due to an increase in professional research and the related project costs salary and related payroll costs.

Richard I. Steinhart: Salary and Related Payroll Costs, Manufacturing costs offset in part by a decrease in clinical trial expenses. General and administrative expenses in the fourth quarter of 2019 were approximately $1.9 million, compared to about 1.3 million for the fourth quarter of 2018. The increase was primarily due to increases in salary and related payroll costs and professional fees. With regard to the full year 2019, we reported a loss of $33 million compared to a loss of $19.3 million for the full year 2018. Research and development expenses were $25.8 million for the full year 2019 as compared to $14.6 million for the same period in 2018. General and administrative expenses were $7.8 million for the full year 2019 as compared to $5.4 million for the same period in 2018. We had cash and cash equivalents of $32.4 million as of December 31, 2019. That concludes our fourth quarter and full year 2019 financial review. Please note that the December cash numbers do not include our recent financing, which secured $60 million in net proceeds. Now, I'd like to turn the call back to Vimal. Thanks.

Manufacturing costs offset in part by decrease in clinical trial expenses.

General and administrative expenses in the fourth quarter 2019 were approximately 1.9 million.

Compared to about one point threemillion for the fourth quarter 2018.

The increase was primarily due to increases in salaries and related payroll costs and professional fees.

With regard to the full year 2019.

We reported a loss of $33 million compared to a loss of 19 point threemillion for the full year 2018.

Research and development expenses were 25.8 million for the full year 2019, as compared to 14.6 million for the same period in 2018.

General and administrative expenses were 7.8 million for the year 2019.

That's compared to 5.4 million for the same period 2018, we had cash and cash equivalents of 32.4 million as of December 30, Onest 2019.

That concludes our fourth quarter and full year 2019 financial review. Please note that the December cash numbers do not include our recent financing, which should cured $60 million net proceeds.

Now I'd like to turn the call back to them.

Thanks Richard.

Vimal D. Mehta: Thanks Richard. We would now like to open the call to questions, operator.

We're now like to open the call two questions operator.

Operator: Thank you. At this time, we will conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Thank you at this time, we will conduct a question answer session. If you would like to ask a question. Please press star one on your telephone keypad <unk>.

Confirmation Tony indicate your line is any question Q.

The press Star too if you would like to remove your question from the Q.

All participants use this week, we quit maybe necessarily to pick up your handset before prices. This dark.

Operator: One moment while we post our first question. Our first question comes from Robyn Kamikaz with SunTrust. Please receive the question. Hi guys, thanks for taking my question. So, just first up on manufacturing, you mentioned that you have enough to get through some of these trials. Can you talk to us about how much capacity you can ramp up to prior to a launch and what needs to happen for that to occur? And then as far as manufacturing for a submission to the trials, be positive, like how much do you have to do? Could that delay anything?

One moment why people first question.

Our first question comes from Robyn Camecos with Suntrust. Please proceed with your question.

Hi, guys. Thanks for taking my question. So I'm just first stop on manufacturing you mentioned you have enough to get there are some of these trials can you talk to us about how much capacity can you ramp up to prior to a launch and what needs to happen for.

That's correct and then as far as manufacturing for.

Submissions to the trials the positive like how much how much do you have to do because that delay or anything and then the second question. It's more about reimbursement I get a lot of questions people, saying how will this be reimbursed in a hospital you need a code et cetera, just talked about either reimbursement. Thanks.

Robyn Kay Shelton Karnauskas: And then the second question is more about reimbursement. I get a lot of questions from people saying, "How will this be reimbursed in a hospital? Do you need a code, etc."? Just talk to us about the ease of reimbursement. Thanks.

Vimal D. Mehta: Sure, thank you Robyn. This is Vimal Mehta.

Sure. Thank you Robyn this has been my thought a.

Vimal D. Mehta: Regarding manufacturing, we have, as we mentioned, completed all the batches that are needed to complete our two pivotal trials, Serenity 1 and Serenity 2. We've been scaling up and preparing for commercial readiness for CMC. All CMC is done in the U.S., so we don't see any delays in terms of preparing for the launch. We feel that we are in a good position to continue to scale up commercial readiness and prepare the material that will be required for launch toward the end of 2021 or early 2021.

Regarding the manufacturing like we have as we mentioned completed all the batches that doesn't needed to complete our two pivotal trials are sitting there de wanting to do.

We've been is scaling up and preparing for the commercial readiness 40, M.C. All T. N. C is done in U.S.. So we don't see any delayed a in terms of Ah, but bidding for the launch. So we feel that we are in good position to continue to scale up the Oklahoma shall there'd be no.

Okay and prepare the material that will be required for launch towards the end of 2021 on early 2022.

Vimal D. Mehta: Coming back to your question regarding reimbursement, currently, we are waiting to complete these two studies, Serenity 1 and 2, and understand what our key claims are. Then we will initiate discussions with the reimbursability or payers that like, you know, what is the value proposition, what our pharmacoeconomic benefit we are providing to the whole system, and what will be the right price. At a high level, there will be pricing for the ER and hospital visits, like when these patients show up; that will be the price, and we expect that there will be pricing for the long-term care centers, which are in nursing homes as well as in assisted living centers for dementia patients. And then we are developing this strategy for pricing for opioid withdrawal symptoms. So, I think this is a work in progress. As we have indicated, we are in the process of hiring a Chief Commercial Officer that is expected to come on board soon, and then we will be able to have a session where we can outline our reimbursability and the pricing strategy for

Coming back to your question regarding that Reimbursable D.

Currently we are waiting to complete these two started easy they need be one and do and understand what I want to keep claims that that'd be really initiate a discussions with the then but say bill D. L. It appears that like I know what is the value proposition what our pharmacoeconomic benefit we are providing.

To the whole system, and what will be that like pricing at the high level, there will be a pricing for that yacht and hospital visits like when these patient show up that will be the pricing and we expect that there'd be a bright thing for the long pay of long term care thing does retired and nothing.

Phones as well as in a assisted living tend to four dementia vision and then we are developing this strategy for pricing for opioid withdrawal symptoms.

That could be more or less maybe a treatment regimen that you've been type affect pricing. So I think this it work in progress as we have.

Indicated we out in the process of hiring a chief commercial officer that is expected to come on board soon and a then we will be able to have a session, where we can outline our the but sybil d. and the pricing strategy for the Florida.

Sumant Satchidanand Kulkarni: Great, thank you. Our next question comes from Sumit Kulkarni with Cantercourt Genuity. Please proceed with your question.

Great. Thank you.

Our next question comes from Sumit, who call me with Canaccord Genuity. Please proceed with your question.

Sumant Satchidanand Kulkarni: Good morning. Thanks for taking my questions. First, on the 501 side, we've received some questions from investors on the actual logistics of placing the film sublingually. We know that in your phase two trials, all the patients were able to place the film themselves. So could you talk about any of the experiences that you've had so far in terms of placing the film in the ongoing Serenity program?

Thanks for taking my questions first on the fiber one side of it seems some questions from investors and the actual logistics placement of the fund sublingual, we know that in your phase two trials all the patients were able to place the for them themselves. So could you talk about any of the experiences that you've had so far in terms of placement of the film in the ongoing set in the program.

As far as would be known so far what about what expedient has been with both the program say they need to one and do that continues to be that case.

Vimal D. Mehta: As far as we know, so far, from our experience with both the programs, Serenity 1 and 2, that continues to be the case. From what we observed in our Phase 1B study, we have not heard anything otherwise.

What we observed be not what phase when B study, we have not heard anything otherwise.

Sumant Satchidanand Kulkarni: And on the opioid withdrawal side, there are some questions around, you know, the potential for generic clonidine to be used in that setting off-label, so could you let us know exactly how DEX might be different? We know there's some selectivity things that are going on there, so could you please expound on that?

Got it and on the opioid midroll side.

There are some questions around potential for genetic clonidine to be used in that setting off table. So could you let us know exactly how next might be different we know there's some selectivity things that are going on there. So can you please expand on that.

Yeah.

Robert Risinger: Sure, we can outline the fundamental rationale why we decided to develop DEX for that. And I have Dr. Robert Risinger, who is our VP of Clinical Research for this BioXcel 501 program.

Sure sure weekend weekend outlined a like fundamentally rationale why are we decided to double up decks for that and I have.

Dr. Rob the thing Guy Who's our VP of Ah clinical research for this be Axiall, if I wouldn't program. He will outline that hi. Good morning. This is dr. right singer.

Robert Risinger: Hi, good morning. This is Dr. Risinger.

The principal differences between Clonidine for example, and decks magnetometer, Dean and our formulation and in our hands. The decks met a told me and has a very long half life.

Robert Risinger: The principal differences between clonidine, for example, and dexmedetomidine in our formulation, and in our hands, dexmedetomidine has a very long half-life. We'll be exploring the dose range as well as plasma pharmacokinetics in the upcoming trial for opiate withdrawal. Although clonidine is used in the United States for opioid withdrawal, We believe there's a certain advantage because Clonidine is dosed multiple times a day, and there's a fairly complex dose regimen that has to be titrated, for example, adjusted up or down. We believe there will be a certain ease of use for BXCL501, and we hope to demonstrate that, and then that would be a clear differentiating factor from, for example, generic clonidine.

We'll be exploring the dose range as well as the plasma pharmacokinetics and the upcoming trial for opiate withdrawal.

Although clonidine is used and the United States for Opiate withdrawal, we believe there's a certain advantage because clonidine.

His dose multiple times, a day and there was a fairly complex.

[noise] dose regimen that.

Has to be traded for example, adjusted upward down we believe there will be a certain ease of use for axiall five a one.

And we hope to demonstrate that and then that would be a clear differentiating factor from.

For example, generic clonidine.

Thanks, and my last question on the seven on one side could you talk about what do you think could be the timeline on the safety study for Ben that's available.

Vimal D. Mehta: And my last question, on the 701 side, could you talk about what you think could be the timeline for the safety run-in study for BAMPAC plus Avelumab, because that portion of that trial is out of your hands, given it's in your partner's interest to do that?

Because that bush enough that trial.

Your hands given its.

Right and that's interested.

Vimal D. Mehta: Currently, in our conversation with our partners, their study is ongoing. They expect that they will have this data completed either in Q2 or Q3 time frame. Then we will get the data, and then we will be in a position to initiate the 701. So, as you said, that is a little bit out of our control, but our partners are committed, and we are working very diligently to move the program forward.

Currently in our conversation with our partner as.

David Studies ongoing they expect that they will have this data completed eat or like you know in Q2 or the Q3 timeframe. Then we will get that data and then we will be in their position between new cheered. The seven to one so as you said that is little bit out of our controlled by.

Our partners that have committed and we are working very diligently do moved up program forward.

Duke Kim: Got it. Thank you.

Got it thank you.

Our next question comes from do Kim with BMO Capital. Please proceed with your question.

Duke Kim: Our next question comes from Duke Kim with BMO Capital. Please proceed with your question.

Duke Kim: Hi, good morning. Thanks for taking my question. First, on 501, I just wanted to confirm that you started dosing patients in the bipolar study. ClinicalTrials.gov hasn't been updated yet. And is there any reason that 501 would behave differently in bipolar patients? Do you think that 501 will be able to calm, let's say, a manic episode and differentiate that from agitation?

Hi, Good morning, Thanks for taking my question first on fiber one I just wanted to confirm that you started dosing patients in the bipolar study.

Hi, Paul Toms Dot com hasn't been updated yet.

And is there any reason that fiber one.

Hey differently and bipolar patients.

Do you think that fiber one will be able to calm, let's say, a amanda episode and differentiate between agitation.

So though this is very mild we haven't started building pay shouldn't same bipolar and the clinical package, our golf will be updated shortly I will pass it on again to Rob did thing go to answer the second part of your question about bipolar why we think that that Doug will behave similarly like his kids.

Vimal D. Mehta: So this is Vimal. We have started dosing patients with bipolar disorder, and the clinical trials.gov will be updated shortly. I will pass it on again to Rob Risinger to answer the second part of your question about bipolar why we

Robert Risinger: So we have initiated dosing. We've dosed a large number of patients with bipolar disorder in the Serenity 2 trial, and we're seeing a robust reduction in agitation in some patients. Of course, the trial continues and is blinded. So we're monitoring data as it comes in, and one-third of the patients are receiving placebo. We know that is a fact, and we're seeing data that is consistent.

Okay.

So so we have initiated dosing, we've we've dose a large number of patients with bipolar disorder in the serenity two trial, we're seeing a robust reduction and agitation a in some patients of course. The trial continues and is blinded. So we're monitoring data as it comes in at.

On a one third of the patients are receiving placebo, we know that there's a fact so.

We are seeing data that is consistent and in case of light.

Frank D. Yocca: and in case why will it work?

So.

So, though this is a frank and just to add to this we know there's a lot of science behind the role of nor up in that front in mania.

Frank D. Yocca: So this is Frank, and just to add to this, we know there's a lot of science behind the role of norepinephrine in mania, which tends to drive the agitation events that occur in these bipolar patients. And we know that norepinephrine is quite high. So knocking that down, we really believe that we have a very targeted approach here for these types of patients. Great, that's helpful. And on the financial side, could you provide how or how we should be thinking about operating expenses for 2020? You have a meaningful ramp in the 501 program.

Which which tends to drive the agitation events that occur in these bipolar patients we know that north enough front is quite high so knocking that down we really believes that we have a very.

Targeted approach here for these types of patients.

Great that's helpful and on the financial side.

Could you provide house.

Or how we should be thinking about operating expenses for 2020, you have a meaningful ramp and the fiber one.

unknown: [inaudible]

Vimal D. Mehta: Multiple Clinical Trials, and when do you start thinking about building the commercial infrastructure for 501?

Multiple clinical trials and when do you start thinking about building commercial infrastructure or fiber one.

The door that that's a great question.

Vimal D. Mehta: So, that's a great question. As you remember, both our Serenity-1 and Serenity-2 trials as well as our dementia trial Tranquility were already funded before we did the raise in February last year. So the additional capital will allow us to move forward with the opiate withdrawal trial, push forward with the late stage dementia trial if our data from phase 1b slash 2 is positive, and also allows us to start hiring the chief commercial officer and do the pre-commercialization activity. So that's where we expect that this additional way that we recently did, it allows us and gives us more flexibility and kind of, I would say in opiate withdrawal symptoms, be And Richard can outline in terms of the operational how long this cash can provide us with capital.

As you remember that our boat is sitting there do you want to do trial as well as dementia in fact, Anquillare de what already funded before we did a they in February or last month. So the additional capital will allow us to move forward.

I Hope you had withdrawn pilot.

Push forward with the late stage dimension.

Our data from phase wouldn't be pledged to is positive and also allows us to do start hiding other chief commercial off with a and do the pre commercialization activity. So that's where we expect that these additional days that we recently, Dave It allows us and gives us more flexibility and.

ER and and kind of I would say no appeared withdrawal or seventh or be able to move forward today, India faster and they start again outlined in terms of the operational or how long a this cash can provide it does that cap rate I'm.

Richard I. Steinhart: Sure, Vimal. So what we've said, Vimal is right, it'll allow us to do additional things and accelerate programs. And what we've said is that cash should take us well into 2021.

Sure of animal so what we've done what we said at demos right that allow us to do additional things in accelerate programs and now what we've said is that the cash should take us well into 2021.

Richard I. Steinhart: Great, thank you for taking my question. Sure.

Great. Thank you for taking my questions sure.

Our next question comes from Brahms <unk> H.C. Wainwright. Please proceed with your question.

Raghuram Selvaraju: Our next question comes from Ram Selvaraju with H.C. Wainwright. Please answer your question.

Raghuram Selvaraju: Thanks so much for taking my questions. Can you hear me?

Thanks, So much for taking my questions can you hear me.

Vimal D. Mehta: Yeah.

Yes.

Okay very quickly I was wondering if you could just give us a sense of what do you expect the potential sequins all the data release to be with respect to tranquility versus the serenity, one or two studies. If you have a sense of which of those would be likely to mature first and also.

Vimal D. Mehta: Okay, very quickly, I was wondering if you could just give us a sense of what you expect the potential sequence of data release to be with respect to Tranquility versus the Serenity 1 and 2 studies. If you have a sense of which of those would be likely to mature first, and also if you could tell us in what kind of order you might be able to provide us with updates on how enrollment is going or provide us with a specific time frame around which, for example, completion of enrollment has been accomplished in the Serenity studies. And also, if you expect the Yale biomarker study to come out ahead of both Tranquility and Serenity, please.

If you could tell us a in what kind of sequence you might be able to provide us with the updates on how enrollment just going or provide us with specific.

Timeframe around which for example, or completion of enrollment has been accomplished in the Serenity studies and also if you expect the Yale biomarker study to read out ahead of both tranquility and serenity. Please.

Vimal D. Mehta: Sure. Great question. Thank you, Ram.

[noise] show a great question. Thank it or in terms of then rolled my like you know we had announced that on December 30, a that we have initiated they started he's they started he has been going as well as we could have expected on what do we observed in our phase when B study in terms of enrollment of the patient.

Vimal D. Mehta: In terms of enrollment, like you know, we announced on December 30th that we had initiated the study. The study has been going as well as we could have expected or what we observed in our Phase 1B study in terms of enrollment. Schizophrenia Serenity started first, then immediately followed by Serenity 2, and we have, as Rob indicated, those patients in both, multiple patients in both Schizophrenia 1, Serenity 1, and Serenity 2.

That's good Sylvania sitting there do you started first then immediately followed by saving to do and we have as Rob indicated those patients in both.

Multiple patients in both schizophrenia, one a definitive on and sitting they do.

Vimal D. Mehta: Tranquility, a dementia trial, we are conducting in this environment, which is in a long-term care setting for the first time. I don't think anybody has conducted a trial which is for acute treatment of agitation in dementia-related patients in that setting. So we had some learning, but as far as we've been into it for 60 days or so, we announced it on January 7th, enrollment is progressing very well with that. In terms of the sequence of how the data readouts may happen, as you can imagine, the Phase III trial, which is a pivotal trial, is more regimented, and you need to have all the enrollment and database lock, hard database lock. So that itself will determine when we can announce the data. In the Tranquility trial, it's an ascending dose study, and we continue to test various doses.

Hi, thank under their dementia than we have conducting in this environment with using their long term care setting for the first time I don't think anybody has conducted at trial, which is what acuity mundorff vegetation and dementia related patient in that setting. So we had some learning but as far as being.

And do it for 60 days until we announced it on January seven.

Enrollment is progressing very well with that violent swings.

In terms of the sequins, how the data read out in May happen as you can imagine the phase three trial, which is pivotal trial is more ready mandate and there you need to have all the enrollment then a database lock hard hard data base law. So that it's sad will determine vendor you can announce the data and.

Thank you eluded, Brian It say ascending dose study and we continue to test videos Ddos is and ones. We our team has a good handle on their doors and we have the necessary data that we can take it to the F.D.A. for discussing that next steps then we will be in a position.

Vimal D. Mehta: And once our team has a good handle on the dose, and we have the necessary data that we can take to the FDA for discussing the next steps, then we will be in a position to discuss with the state what the top-line data is from the dementia trial. So that's the goal of the study. When will we achieve that goal? In terms of the Yale biomarker study, it's a small study with about 20 patients or so. The trial is ongoing. In due course of time, we will get a better handle on the if the data we expect to be finished fast, and once we have the data, that is literally biomarker data which kind of supports our current trials that are ongoing and supports the mechanism, and gives us a window into the future, what indications we can expand into. So that's where I would say that the sequence will look like. Senatory 1 and 2 continue to be the company's major focus, and with dementia, continues to be the focus to generate the data that will allow us to move it into the next stage. And with biomarkers, develop a deeper understanding of the mechanism with or without the drug VXL501.

To discuss with those too bad what their topline data is from the dementia. So that's the goal of those started event do we achieved that goal.

And done so they gave biomarker study. It is small it's 30 with about 20 patients also our trial is ongoing in due course of buying but you get a better handle that if they did Ah Ah we expect to be finished fast and ones. We have the data that is literally a biomarker data.

Which kind of supports our caught on a trials that are ongoing and supported the mechanism m. gives us the window into future. What are they can be good shouldn't be can expand into so that's bad I would say that a that sequins will look like a scenario b one and two continues to be there.

Needs Me, then focus and with dementia continues to be though for cogen need that data that will allow us to move it into the next stage and with biomarker doubling up the deeper understanding of the mechanism or but without with or without their dog react field fiberlan.

Okay, and that's just to clarify assuming you get positive results from tranquility is it possible to envisage youre moving into pivotal the pivotal contacts with fiber one specifically in the dementia setting before the end of this year is that is that logistically.

Vimal D. Mehta: Okay, and then just to clarify, assuming you get positive results from Tranquility, is it possible to envisage your moving into the pivotal context with 501, specifically in the dementia setting, before the end of this year? Is that logistically feasible?

Usable.

Vimal D. Mehta: I think most important is going to be interaction with the FDA, that what our conversations are with the FDA where once we have the data in our hand and so I would say I will leave that question that we have not and we are not ready to provide any specific guidance related to where the dementia will be but our goal as a company is to collect sufficient amount of data as fast as possible to go to the next stage and have a discussion with FDA and start that trial.

[laughter] I think most important is going to be interaction with the idea that what our conversations I'd be theyve D.A. via a ones. We have that date I know at hand, and so I would say I believe that question that we have an art and we're not ready to provide any specificity.

Guidance related to bad that dementia will be but our goal as a company is to collect that we shouldn't amount or date I as fast as possible to go to the next stage and have a discussion with FDA and it started that Brad.

Okay.

Raghuram Selvaraju: Okay. We haven't really talked much about potential trial design parameters within the context of acute delirium, but I was wondering if you or Frank might care to comment on distinct efficacy outcome measures that you would apply in the acute delirium context to assess the activity profile of 501. In other words, these would be outcome measures that are particular to the acute delirium indication and different from what you would typically use to assess the drug's impact on agitation in the other contexts in which you are currently studying it.

We haven't really talked much about a potential trial design parameters within the context of acute delirium, but I was wondering if youre Frank Mike So care to comment on a distinct efficacy outcome measures that you would apply the acute delirium contacts to assess the activity.

We'll file a fiber one in other words outcome at these would be outcome measures that particular to the acute delivery I'm indication that are different from what you would use typically to assess the drugs impact on agitation in these other context in which are currently study.

So ROM its a good question that you're asking remember that we throw around the term delirium quite freely and remember that what we're trying to achieve really is we're focusing on these delirium patients who are agitate.

Frank D. Yocca: So Ram, it's a good question that you're asking. Remember that we throw around the term delirium quite freely. And remember that what we're trying to achieve really is we're focusing on these delirium patients who are agitated. So it's this hyperactive delirium, which is somewhere around 20% to 30% of the total patients. That's really what we are focusing on at first. Now, there was a study done back when Carrasco was in Spain where they were looking at the ability of dexmedetomidine given IV to calm patients who were refractory to haloperidol. And they basically used a very simple scale, which was the...

So it's it's this hyperactive delirium, which is somewhere around 20% to 30% of the total patients. That's our first that's really what where we are focusing in on at first now there wasn't study done back when.

Correct go in Spain, where they were looking at the ability of decks magnetometers, given ivy to calm patients who were refractory to how appear at all and they basically use the very simple scale.

Which was the.

Frank D. Yocca: I think we could potentially apply different measures to it to focus in more on the hyperactive portion of it. It's a very similar question I think you're asking through the questions that we have with dementia as well. Okay, what are the factors? What are the behaviors? What are the things you're looking for that you want to reduce? So, it's a great question; it's something that we will have to deal with as we move forward with this study.

Scale that we used in our IC had put their basket.

That is again the nation's can't exactly they were just looking very simply to say I think we could potentially apply different measures to wait to focus in more.

On on the on the hyperactive portion of it. It's a very similar question I think you're asking is sort of the questions that we have with dementia as well. Okay. What are the what are the factors. What are the behavior is what are the things that you're looking for that you want to reduce so it's a great question, it's something that we will have to deal with.

As we move forward with this study so Saddam just couldn't be more direct all of this work is in progress delete imbalance in planning stage and conceding that bandwidth they'll dog. In addition, we have two phase three trials currently ongoing one opioid redrawn phase when b.

Vimal D. Mehta: So, Ram, just to be more direct, all of this work is in progress, the delirium trial is in the planning stage, and considering the bandwidth of the organization, we have two Phase 3 trials currently ongoing, one opioid withdrawal Phase 1B delirium trial ongoing, and opioid withdrawal is starting soon. So the dementia trial, opioid withdrawal is starting soon, so we are in the planning stage with the delirium, we are trying to understand the most market, the important market where hyperactive delirium results in agitation, and once we have zoomed in, we will come back and say what parameters we will measure, what the first trial will look like, but as a general company strategy, we have been to use Phase 1B slash 2 to find the So that's where we are with the delirium trial currently.

I believe in bad ongoing and opioid regardless of is starting soon so dementia valley ER opioid withdrawal in starting soon so we are in the planning stage with the Lady out what we're trying to understand the most market. The important market. We had high product did believe you ever resulting agitation and ones we have zoom.

Then we will come back and say what Pat I mean does we wouldn't major what the first started will look like what are the general companies strategy has been to U.S phase one be pledged too hard to find their doors, we already know from the private studies that their drug works and believe the ambition evenings effectively help at all patients it was.

So we have to find their doors to be able to move to the pivotal time, So that's where we ought to be that believe him targeting.

Raghuram Selvaraju: Okay, and then just very quickly on 701, I was just wondering if you envisage continuing to use Bempegaldysleucan in future triple combo regimens, or whether you are thinking at this juncture about potentially shifting to testing 701 in combination with a different IL-2 agonist?

Okay, and then just very quickly on seven to one I was just wondering if you envisage continuing to use them together. This looking in future Triple combo regimens or whether you are thinking at this juncture about potentially shifting to testing seven no one in combination with a different style to access.

Vimal D. Mehta: So I think we are committed to the relationship, and we continue to use that because that's already a work in progress, and I will let Vince mention that we continue to look at other combination approaches for 701 in combination. Vince? Yes.

So I think we are committed to the relationship and we continue to use that because that's already work in progress and I will let Vince mentioned that we continue to look at other combination approaches.

What's that when no one in combination Vince.

Vince: Yeah, sure. Morning, Ram.

Yes sure morning at ramp I think we'd done maybe touching missing out on a previous call them and as you know there well there are several aisle to spin off so they are I can publicity or for that are on our list of potential combination targets and approaches but it's the most said you know we're committed to the.

Vince: I think we'd maybe touched on this on a previous call. I mean, as you know, there are several IL-2 spinoffs out there. I could probably list three or four that are on our list of potential combination targets and approaches. But as Vimal has said, you know, we're committed to the collaboration we have ongoing with Nectar. And that said, they're not the only pegylated IL-2 in town. So we are having those discussions. Thank you.

Collaboration we have ongoing with NEC, Chuck and I said, they're not the only pegylated dial two in time. So we are having those discussions.

Thank you.

Thank you at this time I would like to turn call back to management for closing comments.

Vimal D. Mehta: Thank you. At this time, I would like to turn the call back to management for closing comments.

Vimal D. Mehta: Thank you, Operator. 2019 was a year filled with substantial growth and tremendous clinical progress, positioning us for a transformative year ahead. We look forward to continuing to share updates throughout 2020, as we are expecting key clinical updates in the coming months, including pivotal data readouts. Thank you again for joining our call today, and we look forward to seeing many of you at the upcoming Healthcare Investor Conferences. Have a great day, and please reach out to us if you have any additional questions. Thank you.

[noise] Ah. Thank you everybody into 2019, while the year to fill with substantial growth temperamental clinical progress positioning us for transformative year ahead, we look forward to continuing to share a big throughout 2000, and Wendy as we are expecting giggling, making up they seem to be.

Coming months, including favorable data read out.

Thank you again for joining our call today, and we look forward to seeing many of you at the upcoming health care Investor up on friends. They have a great day and please reach out to US if you have any additional questions. Thank you.

Operator: Thank you. This does conclude today's teleconference and audio webcast. You may disconnect your lines at this time and have a great day.

Thank you. This does conclude today's teleconference audio webcast you may disconnect. Your lines at this time and have a great day.

[noise].