Q4 2020 Acasti Pharma Inc Earnings Call

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Thank you for calling what called do you.

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Oh, good for Acasti Karma.

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And your company name.

IRA A.I.E.R.A.

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Good day, ladies and gentlemen, and welcome to your cost de pharma fiscal year 2020 business update conference call. All lines have been placed on to listen only mode and the floor will be open for your questions and comments. Following the presentation. If you should require assistance throughout the conference. Please press star zero to reach a live operator.

At this time, but it's my pleasure to turn the floor over to your host Alexandra Bodie Investor Relations Ma'am the floor is yours.

Thank you good afternoon, everyone and welcome to across these pharmacies fourth quarter and year end fiscal 2020 conference call.

The call with US today, our Jim Darby President CEO, Pierre Lemieux, Chief Operating Officer, Chief Scientific Officer, and co founder Ryan Gross Chief Commercial Officer, and John first of all the way, we Vice President Finance.

I have any questions. After the call we would like any additional information about the company. Please contact Crescendo communications.

She wants to fix that in 110 choose your I'd also like to remind everyone that statements on this conference call that are not statements of historical or current stock constitute forward looking information within the meaning of medium security laws forward looking statements with and was in forward looking statements within the meaning of U.S. for federal security laws.

Such forward looking statements involve known and unknown risks uncertainties and other unknown factors that could cause actual results of a coffee could be materially different than historical results.

Or from any future results expressed or implied by such forward looking statement.

In addition to statement, which explicitly describes such risks and uncertainties readers are urged to consider statement labeled with the term belief beliefs expects intends anticipate.

Pendulum should may well planned continue or other similar expressions to be uncertain in forward looking listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this conference call forward looking statements. In this conference call include but not but are not limited to information.

Your statement about a coffee strategy future operation prospect in the play as a management a copy of the ability to conduct all required clinical enough clinical trials for Craig.

Putting the timing of and result that those child <unk>.

<unk> potential to become the best in class cardiovascular drugs were treating severe hypertriglyceridemia a coffee the ability to commercially launch Capri Sun. Its continued operation the timing and outcomes. They unblinding of trilogy to a copy the ability to report topline results for trilogy to within the contemplated timing as well.

One of the company's ability to report key secondary and exploratory endpoints and both trilogy studies within the contemplated timing and a copy of the ability to file and then be nice.

On the trilogy studies the forward looking statements contained in this conference call or are we qualified in their entirety by this cautionary statement. The special note regarding forward looking statements action continuing to copy latest annual report on form 10-K, and most read the management discussion and analysis, which will be filed which will be avail.

A little on SEDAR at Www Dot theater Dot com on at the right Www Dot dot com and on the Investor section of our copies website at Www Dot a coffee pharma dotcom.

All forward looking statements in this conference call are made at the date of its conference call. How she does not undertake to update any such forward looking statements, whether as a result of new information future events or otherwise, except as required by law a forward looking payments between here and are also subject generally to assumptions risks and uncertainties.

They are described from time to time in a coffee public securities filings with the Securities and Exchange Commission and the Canadian Securities Commission, including a copy of limited annual report on form 10-K in most recent mdna.

I'd now like to turn the call over to Jim Delvina. Please go ahead again.

Thank you very much Sally and I want to welcome everyone participating on the call today, our primary focus for this call will be to share the results of our post hoc data analyses and audit findings for trilogy, one as well as their plans going forward timed line trilogy to now that we've received feedback from the FDA, it's really a.

Pleasure to finally be able to Shira trilogy, one findings and data with you.

John follow also briefly review our Q4 in fiscal year end result.

No as reported in our press release. This morning, we have identified a phenomenon in the truth be one data that we referred to as pre randomization triglyceride normalization.

[laughter] agree this phenomenon occurred during the qualification period of the study that is between the last screening visit or visit one and the pre randomization visit or visit for which was just prior to patients starting on drug or placebo.

So while our initial topline results from trilogy, one were disappointing due to the unusually large and unprecedented placebo effect. We now have a much better understanding of this pre randomization triglyceride enormous normalization phenomenon that we believe contributed significantly to the trilogy one outcome.

We appreciate your patience as we work through our way through this investigation over the last several months and we're pleased to finally be able to share our findings with you now.

As previously disclosed at the end of April we provided always the background information on truly be one and the accompanying data to the FDA and we recently received their response as you may have seen in our June 19th press release and as stated in the current statistical analysis plan for trilogy one.

Yeah. It confirms that they will still required that pivot doble or primary endpoint Africa's see analyses for trilogy to be performed on the full intent to treat population that is inclusive of every patient who was randomized regardless of whether or not he or she actually complied and took the drug or placebo.

Or whether they actually even completed the trial. It's also important to note that the FDIC supported our contracted additional post hoc analyses I'm interested you one data for exploratory purposes.

We're carefully considering you have to use comments on the trilogy, one data and we will continue to conduct further post hoc analysis based on their feedback.

We are also now working to finalize the statistical analysis plan for trilogy to which we plan to submit to the FDA by the end of July and as noted in our public disclosures. We continue to reap remain blinded to the truth you two data and believe that we will be ready to unwind and reported topline data by the.

End of August we also expect to report key secondary and exploratory endpoints from both truly be wanting trilogy to sometime after the unblinding of the trilogy to topline results.

Now based on our analyses and the review of all of the data. Thus far we remain optimistic that we may still have a viable path forward to filing in D.A.. If trudy to successfully meets its primary endpoint and we can get a significant P value after combining the results from the income to treat populations for both.

Most of our trials.

With that said I'd like to now share a bit more information about the interesting journey that we've been on since reporting our topline results back in January and I'd like it provides you with a brief summary, an explanation of our trilogy one findings.

Now when we reported our topline trilogy, one results. We indicated that we had achieved a 30.5% median reduction in triglyceride levels. Among all patients receiving Capri at 12 weeks and a 42.2% median reduction in triglyceride levels in a subset of patients receiving country, while on background Stanton therapy.

And also at 12 weeks.

Additionally, we reported a 36.7 median present median reduction in triglyceride levels. Among all patients receiving Capri, a 26 weeks. Despite the positive results in the country arm due to an unusually large placebo response that resulted in medium reductions and triglyceride levels of 27.5.

Person in 28% at 12, and 26 weeks, respectively trilogy, one did not reach statistical significance.

And as we stated previously the observed reductions in triglyceride levels in the placebo group were far greater than anything seen in previous prescription Omega three trials in Hypertriglyceridemia. In fact, they were at least two to three times greater than what would have been expected not only were weak caught by surprise butter expert clinical advisory.

As a key investigators and other partners in the trial, we're all equally confounded by these seemingly inexplicably results.

So the obvious question was why why were placebo results, so strong and trilogy, one and what could have caused this outcome.

We immediately ruled out any misallocation of treatment or a mix up of Capri and placebo capsules.

Well as a any implication that the placebo that was actually using the trilogy studies, which is simple cornstarch could have done the cost cornstarch is generally regarded as safe and is a commonly use placebo in the pharmaceutical industry, it's well known to be in a nurse and inactive excipient with low.

Nutritional value.

Now the protocol for trilogy wanting to head input from and was approved by the FDA and followed essentially the same standard design as had been you my all other companies, who had previously run trials and severe hypertriglyceridemia.

The eligibility criteria and the design of the screening qualification phase is that the study were written to ensure compare ability with these pro prior trials and to minimize differences.

Having said that there are actually were a few slight differences in the trilogy, one patient population as compared to previous studies. For example, we had a slightly higher percentage of diabetics and patience on status and also as required by the FDA. We included patients who were stabilized on fibria.

But all of our post hoc analyses confirmed that these differences did not contribute to the significant placebo effect.

We thoroughly investigated the effect of various other category Olga categorical demographic and baseline characteristics such as alcohol you raised diabetes.

Concomitant use of diabetic men medications and or status a we've looked at all of these things a in the effect on triglyceride normalization in an attempt to further identify or eliminate possible contributors to this phenomenon.

Specifically various factors were compared between treatment arm, such as wash out or discontinuation of lifted lowering medications that screening use of lift bid lowering medications that randomization and subsequent changes. These medications during the study you Savannah anti diabetic medications that randomization.

And any subsequent changes in those metrics during the study bottom line, we did not find any imbalance in any case between the treatment groups that was likely to explain the unusually large placebo effect seen intrudes he wants.

So that left us with two possible hypotheses for further investigation for something else related to how the patients were screened and qualified for the study or how the trial was conducted may have contributed to this unusually high placebo response.

Or second and this outcome.

The side or the second possibility was that this outcome was simply due to chance or what is referred to as regression to the mean, however, because of the magnitude of the placebo response, we felt that chance was unlikely to be at least the sole contributor to this phenomenon.

Routine monitoring activities were conducted throughout the tools you one trial by RCR ROE and by us to ensure adherence to the protocol and to detect potential protocol violations.

However, as previously reported as we began to analyze the data we identified some unexpected and inconsistent findings that we suspected may have contributed to this unusual placebo effect.

Given these observations, we then focused our efforts on a comprehensive and rigorous post hoc review of the data.

In parallel to conduct a thorough independent audits of patient data and records at the five clinical sites, who had been among the highest enrollers.

And who had also experienced the largest placebo responses.

Some of the best experts in the field were intrigued by our data and graciously offered their help including of course, our principal investigator Dr. Jewish massive variance. These experts provided us with their thoughts ideas and guidance as our investigations move forward and as we ultimately compiled all of the data into our briefing.

Package for the FDA.

And as you probably saw in our press release today, the post hoc analysis of the truly one data revealed a rapid significant and sustained reduction in triglyceride levels at the two visits during the patient qualification period, which took place between the last screening visit or visit one.

At the time of the patient randomization at visit for which we also referred to as weeks zero.

Very importantly, a significant percentage of the patients had triglyceride triglyceride levels that went up dramatically. During this qualification period, and then drop significantly prior to being put on drug or placebo, we're referring to this phenomenon as pre randomization triglyceride normalization.

And the coffee believes that it may have contributed to an artist factual overestimation of triglyceride reduction and consequently, a significant underestimation of the post randomization treatment effect of Capri.

It's also very important to note that this pre randomization triglyceride normalization effect was much greater in the placebo group as compared to the Capri treatment group.

Further compromising the ability of the study to detect a clinically significant drug treatment effect.

As a result, our post hoc analysis indicated that this phenomenon was a major contributor to the unusually large placebo effect that we saw in trilogy one.

Now we've not found a single root cause that explains this normalization phenomenon. We have several theories as to what may have caused this but unfortunately, there's no way to corroborate our hypotheses based on the data and the audit findings. The most likely possibility is that the affected patients from the trial may not.

Had been adequately fast it during the qualification visits in spite of those patients claiming to the clinical site administrators that they had been fully fasted. This could have artificially elevated their triglyceride levels. During the qualification phase, which would have increased the average of the three triglyceride values used to calculate their baseline.

On value and thereby allowing them to be accepted into the trial.

It's important to keep in mind that triglycerides can be highly variable and significantly affected by fat in the diet. This is why it's important that a patient is fully fasted when they get their blood drawn for triglyceride analysis. For example, we know that following a meal triglycerides will dramatically increase up to two two and a half times they tell.

The peak after four hours and then go back to baseline only after more than nine hours of fasting for this reason, we believe factors such as Miss reporting or under reporting of the patients fasted condition may have contributed to this normalization effect.

Again, we cannot prove this at this time, but it's still remains our primary working hypothesis.

No based on the National Cholesterol Education program working group on LIFO protein measurement.

Fasting triglyceride levels of healthy individuals can typically vary by about 10% or so within a one to two week time period and that variation tends to be random going in either direction up and down. However, this variation can be a bit greater in certain physiological in disease States and we know for example that subjects.

Very high triglycerides as was the case centralising, one maybe somewhat more susceptible to experiencing wider week to week flick fluctuations.

Whatever the extend and magnitude of the triglyceride variation scene and truancy, one was much larger than they expected, 10% and what tipped us off that something else, what's going on was that the variation only win in one direction. It only went down and the reduction was quite significant.

The overall pre randomization reduction in trick triglycerides across all subjects and trilogy, one was 20%.

And very importantly, a full one quarter of all subjects experienced a triglyceride reduction equal to or greater than 38% and remember this is before they were randomized on drug or placebo.

Finally, the medium triglyceride normalization reached 30% or more and 12 of the highest enrolling sites.

Therefore, we believe that this free randomization triglyceride normalization effect was not likely do only to the typical individual day to day triglyceride variation and again, while we're hypothesizing that additional factors such as misreporting or under reporting of the patients fasted state may have contributed to this normalized.

Patient phenomenon in trilogy one.

The audits of the affected patients information data were not able to confirm this and I'd like to add again that while fasting glucose levels could have potentially provided some additional information regarding patient compliance during the qualification phase of the study.

It was not required by the protocol for the reason that as I mentioned earlier, it's uses unreliable and metabolic we impaired subjects such as those with type two diabetes.

Are those was metabolic syndrome as they tend to have much higher levels of glucose as compared to normal individuals.

So keep in mind that about 50% of the patients and trilogy, one had diabetes.

Now I Wanna mention that the other major finding that came out of our post hoc analysis was that about 40% of all randomized and eligible subjects had triglyceride levels at randomization again defined as visit for a week zero and before they started on drug or placebo.

That were outside of the protocol specified average qualification thresholds for patients with severe hypertriglyceridemia.

And again those limits are.

Greater than 500 milligrams per deciliter and less than 1500 milligrams per deciliter.

So it doesn't become quite clear to us that the extent and magnitude of pre randomization triglyceride norm normalization had a substantial impact on the ability of trilogy, one day accurately determine the therapeutic effect of cookery on the primary endpoint in true patients with severe hypertriglyceridemia.

Now, let me take a moment to further explain the actual impact of this normalization effect on our results.

As per our statistical analysis plan for choosing one and I should add consistent with previous studies conducted in patients with severe hypertriglyceridemia.

We used an average of three triglyceride values for the calculation of the baseline corresponding to time points. During the two qualification measurements at week minus one and weak minus two and again at week zero, which is the visit just prior to randomization.

So once we recognize the significant effect that this artifact factual pre randomization reduction of triglycerides had on this study outcome.

We conducted a new post hoc analysis using a revised single point triglyceride baseline value collected just at week zero just prior to when the patient was randomized and started on drug or placebo.

We now refer to this as weaker zero.

This week zero triglyceride level as the revised baseline only those subjects meeting the protocol specified triglyceride thresholds of having triglyceride levels greater than 500, but less than 1500 milligrams per deciliter at weeks. There were included in this post hoc analyses.

This revised approach corrected for a significant amount of the artist actual pre randomization triglyceride reduction there was seen in the subjects that were most affected by the large placebo effect.

After these patients through were removed a total of 42 out of the 69 subjects remained in the placebo group and a 101 out of the 173 subjects remained in the Capri group.

And were included in the post hoc analysis, representing 61% and 58% of all randomized subjects respectively.

Not surprisingly the significantly smaller sample size resulted in reduced power to detect a treatment difference of 20% as specified in the statistical analysis plan and as compared to the plan sample sizes in the original analysis plan.

[noise] Nevro. Nevertheless, the results do suggest clinical relevance, even if it tissue statistical significance with was not demonstrated.

Furthermore, based on the post hoc trends implied by these summarize results. It is plausible that a larger number of patients such as those and trilogy too could enable us to achieved statistical significance.

Upon removing subjects with triglyceride levels below 500, and above 1500 milligrams per deciliter at week zero.

Subjects, receiving countries showed a 28.1% median reduction in triglycerides compared to a 15.4% median reduction among subjects receiving placebo for an unadjusted difference of 12.7% after 12 weeks and a P value of 0.29 compared to the original announced.

Since the revised baseline reduce the placebo response by approximately 12 percentage points.

From a minus 27.5% to.

To a minus 15.4% this actually represented a 44% reduction in the pricy placebo response, while the response in the Capri arm remain mostly unaffected and with reduced only slightly from a minus 30%.

Versus a minus 28.1% so that was only about a 6% difference.

After 26 weeks of double blind treatment the efficacy of Capri showed good persistency of effect with a 32.6% median reduction of triglycerides compared with a 14.6% median reduction in the placebo group, reaching an unadjusted difference of a minus 18%, which.

Trended towards Signet statistical significance with a P value of 0.08.

Compared to the original analysis, the revised baseline reduced the placebo response at 26 weeks by approximately 13 percentage points.

From minus 28% to a minus 14.6% so roughly a 46% reduction.

While the response in the Capri arm remain mostly on affected reduced from a minus 36.7% to a minus 32.6% or roughly a 10% reduction.

As important sub and important subgroup of patients are those with triglyceride levels above 750 milligrams per deciliter.

We know from the previous Hypertriglyceridemia studies that the higher the baseline triglyceride value typically the greater the reduction that is seen when these patients are treated with the therapeutic Amiga three interestingly that was not the case with the original topline analysis of trilogy, one reported back in January we were troubled by this time.

Back that this subgroup of sicker patients actually seemed to show a smaller reduction in the Capri group than those who had baseline triglyceride levels much lower between 500 750 milligrams per deciliter.

When we conducted this subgroup analysis on these patients with triglyceride levels above 750, using the revised baseline at visit four weeks, Sarah and corrected. This discrepancy from the original topline analysis. These patients represented 41% of the subjects retained in the post hoc analyses.

And within this group the median triglyceride reduction in the subjects, receiving Capri increase does would be expected, reaching a minus 36.3% at week 12, and a minus 43% at week 26 in comparison, the median triglyceride reduction for the placebo group was a minus 11.8 per.

Sent at week 12.

And our minus 14.4% at week 26, resulting in unadjusted differences of a minus 24.5%, an a minus 28.6% respectively in favor of country.

With P values of 0.22 and 0.15, respectively.

So you can see this the post hoc analyses of truly trilogy, one data using a revised single point baseline showed a meaningful trend towards correcting for the unexpectedly large placebo response observed in the original analysis and allowed for a clearer understanding of the impact on the triglyceride primary endpoint and the potential therapeutic.

Effective Capri over the full 26 weeks of treatment.

Overall these results based on the revised baseline indicate a trend towards improved efficacy of Capri to reduce triglycerides as compared to placebo. However, as discussed the medium difference in triglyceride levels between Capri and placebo from the trilogy. One post talk analysis still fell short of reaching statistical significance at week 12.

Which is the primary endpoint due to the reduced number of patients and the resulting reduced statistical power of the analysis for this reason and based on the results of our phase two data. We're moving quickly now to Unblind. The trilogy to results, we eagerly anticipate the outcome of those topline results.

In the important secondary and exploratory endpoints that will follow shortly thereafter.

While the triglyceride reduction achieved by country based on the revised baseline analysis compares favourably to that of other Amiga three therapies. Most recently studied in Pis pivotal phase three trials in severe hypertriglyceridemia.

These data will remain as polka post hoc analyses and for now at least the FDA considers them to be exploratory.

Therefore, we do not believe that we will be able to use the study purely on the basis of these post hoc analysis. However, we do believe that they can be used to show a trend towards that positive treatment effect in favor of Capri.

Furthermore, I've trilogy to can achieve a positive P value and it's the pooled integrated efficacy results with trilogy, one using the intent to treat population are also favorable we plan to discuss with the FDA, whether they would accept this data and supportive in India. We would plan to discuss this with them that at our pre India.

Meeting later this year.

Now consistent with a company's prior disclosures, it's important to keep in mind that the FDA may still require us to conduct another confirmatory phase three trial in severe hypertriglyceridemia patients to support the filing of of an end da in which case, it's possible that the design.

The sample size and the duration of such a third trial could be different from the previous two trilogy studies.

Finally, I'm sure you're wondering what the odds are the trilogy, two will be affected by the same pre randomization triglyceride normalization effect that we saw in trilogy one.

Honestly hard for us to say as we remain blinded to the trilogy, two data and therefore, we have no idea. If the same phenomenon also occurred having said that however, there's a chance that we could see some degree of the same placebo effect and trilogy too. However, we believe we do see it it could potentially be to a lesser degree and he.

Here's why we know this a contribution from the five highest enrolling sites is much lower in trilogy too as they contributed only 12% of the patients and 22 versus 36% of the patients and trilogy one.

And we had more sites randomizing fewer subjects in trilogy, too as compared to trilogy. One. We also saw more uniform enrollment across all of the sites and trilogy too in other words, we had fewer of these high enrolling sites. So the odds are that any given site would have less influence on the overall outcome of the trilogy due to.

Two trial.

Also in the event that localized practices may have contributed in some way to the pre randomization triglyceride norm and as a normalization phenomenon than we would expect this effect to be much more diluted in trilogy too as well.

Furthermore, while this study's share the same design they were conducted in different geographies. Although a few of the same sites in the U.S. did randomized subjects in both studies, specifically as I mentioned before only 12 sites the randomized subjects and trilogy. One also randomized subjects and trilogy, two and keep in mind. There was a total of 71 site.

Right and trilogy too.

These 12 sites accounted for 62% of all randomized subjects and trilogy, one, but only 19% of the patients in trilogy too.

And again, while all of the five highest enrolling sites and trilogy. One also enrolled patients and trilogy too that contributed to only about 12% of the total patients.

So for these reasons, we believe the two studies can be regarded as being completely independent from each other.

So with that I'd like to now turn it over to John France level, Lee our VP of finance to present, our Q4 and year end results.

Shop as well.

Yes, Thank you John.

Before I begin I'd like to point out that our consolidated financial statements I've been prepared in accordance to us guests as opposed to IRS into Pat.

As we have reported as best we are also now reporting our results in us dollars versus Canadian dollar.

So turning to our results for the quarter R&D expenses before depreciation amortization and stock based compensation expenses were 13.2 million.

A year ended March 31st Twentytwenty.

Compared to 26.9 million for the year ended March 31st when you 19.

That 13.6 million decrease was mainly attributable to a 14.4 million decrease in a research contracts.

Partially offset by an increase in salary and benefits.

To increase as counts and related benefits.

This lower research contract expense is primarily as we stated so just phase three clinical trial program getting closer to completion.

Our general and admin administrative expenses again before stock based compensation.

Expenses were 4.6 million for the year ended March 31st Twentytwenty.

An increase of 1.3 million from 3.3 million for the year ended March 30, Onest 2019.

This increase was mainly attributable.

To 450000 dollar increase associated with the company's insurance policies.

As well as an increase of 830000 dollar in corporate accounting and legal fees associated.

With the implementation of our new ERP system.

And the conversion of our financial reporting from IR for us to us jobs.

Our loss from operations again for the year ended March 31st Twentytwenty was 24.4 million.

Compared to a loss from operations of 34.4 million for the year ended March 31 2019.

The decrease was due mainly to a reduction in research contract expenses.

As the phase three clinical programs will decrease is getting closer to completion.

Our net loss for the year ended March 30, Onest 20.

25.5 million.

30 cents per share compared to a net loss of 39.4 million or 73 cents per share for the year ended March 31st any 19.

The decrease in this loss is primarily due to reduction of their research development expenses again as a phase III clinical program.

What getting closer to completion.

Lower net financial expenses.

Entered a change in fair value of our war in their derivative liability.

Now turning to cash and cash equivalents and our search terms investment.

Total 14.2 million as of March 31st Twentytwenty.

Fair to 25.8 million.

For the year ended March 31st 2019.

We believe that existing cash will fully fund the company's operation.

Into the first quarter of Twentytwenty ones first calendar quarter quarter of 2021.

In addition to our annual filing to be filed this afternoon.

We will also filed a shelf registration statement with an expanded as the market facility.

As many of you are aware, we have had an ATM facility in place for some time.

And I've been very careful and prudent in our use of you Jim.

Not as we have is going to use filer, we were required to convert our existing S. Three filing U S. Three with a corresponding ATM in order to keep this program in place.

Keep in mind that when we convert our when we convert our if three.

It will start in Q3 year clock.

So with that.

That is the reason that will take the opportunity to increase the size of this facility 200 million.

Generally speaking.

EMS provides an answer an attractive and flexible alternative and lower cost of capital compared to traditional financings, which often come with big discounts and warrants.

Yes.

I'd like now to turn it back to John Thank you.

Okay. Thanks, so much on Francois.

Through route to wrap up our prepared remarks, we made steady progress throughout fiscal 2020, although we were disappointed by the outcome of trilogy. One we now have a better understanding of what contributed to the unprecedented placebo effect and we remain cautiously optimistic about the outlook for trilogy too. We're now carefully considering the FDA comments on.

Trilogy, one and we will consider or continue to conduct further post hoc analysis based on their feedback we're working to finalize the statistical analysis plan for trilogy to which we plan to submit to the FDA by the end of July and we currently expect to report topline data by the end of August 2020, we also.

Plan to report the key secondary and exploratory endpoints from both trilogy, one and trilogy two trials as soon as possible after the unblinding of trilogy to results.

On one final note, we're not slowing down and we remain focused on the end goal, which is delivering value for our shareholders. In addition to completing our phase three trials in fiscal 2020. We also began important pre commercialization activities, including advanced planning for the scale up of our manufacturing preparation of R. and D.A. as well as advice.

Lansing partnering and other market development objectives. We're also pleased to have been awarded additional composition of matter and method of use patents in Canada, United States, Mexico, China, Hong Kong, Chile, and Israel since the start of fiscal 2020 alone.

These are very important invaluable patents and add to the growing portfolio of intellectual property for Capri overall, we continue to believe in country and despite the recent bumps in the road, we're committed to doing everything in our power to seeing this through and achieving a successful outcome.

With that operator, we can now open the call to any questions.

Thank you ladies and gentlemen, the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time, if you're using a speaker phone we ask that while closing your question you pick up your handset to provide the best sound quality.

Again, ladies and gentlemen, if you do have a question or comment. Please press star one on your telephone keypad at this time.

Well take our first question today from Leland Gershell with Oppenheimer. Please go ahead.

Hi, good afternoon Jan Thank you.

For the very comprehensive update on what sounds like a very thorough analysis.

Two questions for me just to clarify so so would you be able to.

Analyze trilogy to using a week zero.

These line single point or.

Because of the FCS commentary about using the prior.

He would you not be able to.

You analyze told you to according to the single point based on their behalf to use the.

The three measurements between screening and randomization.

Yes so.

With the FDA clarified is that we could not eliminate patients.

And so we have to do the analysis with the full and intend to treat population.

We do have some flexibility around the analysis however.

We do likely will not be able to use a single point endpoint. However, having said that I think the FDA has allowed us to use the single point is line.

As as the further in further post hoc analysis.

Okay and would you be hopes is when you when you analyzed.

Post talk the tools you one data to get the.

Patients at week zero.

Between the 500 1600, obviously, a 40% reduction in the number would you be able to tell us whats the numeric mean baseline at weeks Euro.

Was for the placebo and drug groups and what they were at the end of the study.

Thanks.

I don't have that information in my head, but peer do you do you by chance have that information.

Well there was a I mean the baseline.

As you can imagine losing.

Hi.

Almost 40% of the use of population when we this decided to us.

Two years only one baseline so.

Just say the baseline value one from.

It was around 670 milligrams of distributor.

When down to 550, so there was a major degrees of the baseline overall, so and that which is another open by the way too.

Stronger such as seats and for the rest of all that was a week 12 and 26.

And I'd tell you right now I don't have the numbers and sort of needs to be precise, but there was a significant baseline.

You know by removing these patients that were.

On the using.

The baseline next week.

Okay. Thanks, and should we expect when you do reports, it's easy to data, even though you are using the ITC analysis that you will also.

Actually its indicated report there will be zero only baseline analysis similar to what you Didnt trilogy one.

Do you want to take that yes, definitely I mean, the you know we're going to be planning to publish these information of course, because there is a forward to be told.

And then both analyses should be Gerry.

No. So for regulatory purposes of course, you know the primary endpoint was to use the three values as a baseline.

But the fact that Weve you know this is conducted post talk analysis.

A lot of says for us to tell a world, though you know behaves and what happens and how this placebo.

Factors impacting the results because at the end of debate. The question remains you know.

Does to pre work or not.

And so I think there's others from settlement that when you get rid of this to seaboard effect and when you eliminate.

Some of the the patients as were below 500.

Before before starting the treatment.

The product is telling us something you know that there's a treatment effect is taking place over time, so that's encouraging.

We need to.

He was to say that then we need to report this reduction was offended.

Is the you know we've agreed the rules, but was isn't provision at some point now we're still need to go through the some of the whole stuck analyses. We don't have some preclinical study report doesn't yet it's going to come.

From our RCR over what we have all those two sets of data.

We will.

Certainly share that information, which is critical in key.

For us okay.

Thank you and then my last question.

Relates to clean up the overlap between what you had discussed previously on previous calls about.

Five sites.

That were the higher Enrollers, but also maybe add.

Regularity is and how they've handled patients in the trial and the.

Of unprecedented.

In the randomization correction that you saw between the screening and randomization.

Is it is it's fair to say that there was a fairly tight association between those sites and the degree of this correction over those three visits.

Just wanted to be clear on that versus the other sites and told you one perhaps not having as much UBS and sex.

Observed in these in this correction of the treatments right at the field as well thanks.

Eric you want to take on the normalization is across all the sites, but I'll just say those five sites were selected for an investigation as you know.

Because there were high on rolling so for US it was a easy to really focus our attention in those five sites, so definitely let's lifestyle.

Besides really demonstrated the higher.

Normalization effect placebo effect.

But overall when you.

The views this thing for us was too so.

Get rid of those five sites for instance.

[noise] and and it's not translating if you're willing to something.

Full or you know is it's it's not it's really not helping in the outcome of the the treatment to think of Capri, So its and thats because we've realized I think the five sites allowed us to dig into this story.

When you start analyzing across the board to all the sites you realize that allows space and all of them and I've reserve and losing at least 18, 20% of their triglycerides holds.

Overall, I would have been very quick and easy ways to fix this but.

Not that not not lead to that that outcome on for something.

[noise], let's work stoppages Wi Fi me Leland accounts religious too so John said it in the a in what is reported to you just a minute ago.

It's really just you as a less of those sites less patients from the coming from those sites.

So you know we should expect.

Much less placebo effect.

So it's hard for.

For us to say still but.

I think we're on the.

They were in a much better please.

And again keep in mind that this is signs.

When we spoke with our experts sometimes you know we your words, what a world.

On Lucky this is by chance.

I know it doesn't sound just claims effect, but I guess, it's part of the yeah.

We're running phase three trials.

It's part of the picture Unfortunately.

Okay. Thanks, so some back into queue safely island.

Well take our next question from Mike Montani with B. Riley. Please go ahead.

Thanks for those won't go so appreciate the detailed update.

Definitely been assassinating six months.

Going through this.

Just quickly big misstep back.

Is there like what kind of so you'll make peak of this on this like how do they get has there been another studies is something like this has happened how do you think this and salons.

As you said that hypoglycemia trials, Oh I'm just curious your thoughts on that and then I have specific questions.

Yeah.

Well you know.

It's hard for us to pin down the what the actual cause was again, we believe that.

So perhaps many of these patients were not fully fasted as you know as I stated earlier I think you know.

We will discuss this exhaustively in house I mean are there ways that you know in the future in future protocol as you can somehow you know ensure that the patients were fasted.

You know and you are relying to a great extent on them you know telling you the truth is whether or not they've eaton and the last nine hours right.

Because that can most definitely throw off the the triglyceride results.

And we as I mentioned earlier you can look at at doing you know glucose looking at glucose levels, but in these patients that have diabetes and metabolic syndrome.

It's not always indicative you know I mean, I think it's one measure we probably would add in the future.

You know I think also yeah I'll comment on this and let peer John Ben but.

I think to the extent, we could have stock with.

More I would say routine clinical sites that are actually treating the patients.

These high Enrollers sites were more of these clinical trial factories, if you will and they take people in off the street and they don't have the history with those patients.

So there is theres not that.

Connection with the patient.

You know on the flip side you know, it's it's not easy to find these patients with severe hypertriglyceridemia. So.

We do believe if we could have ensured that we had you know true a severe hypertriglyceridemia patients in the trial.

It might have reduced as some this effect to some degree Pierre I don't know if you want to add anything.

Well. Thank you just said it all John.

The differences between our protocols.

And our competitors previous protocols I mean, there there there's there's a small differences and so.

So to explain this oh this difference and placebo a this this was unprecedented for sure and.

And maybe over time, you know there's also [noise].

You know either better management of those patients or you know the their religion demands so.

Again, we can prove it but we could have thought that some of the sites were now geared to redefine those patients and we know we some of the ways to make them eligible improvement.

But maybe over time you know there's there's.

Again of intelligence from those sites in order to find those patients so but again, even though it's not something that would improve and I'm just pure speculation from a from our Marburg.

You Miss or a mix of all these things do you know.

Fasting.

You know.

The fact that like John said it seemed as.

We would have been more comfortable knowing that all the patients had a medical history.

Long term.

So you're right.

But but it's not the case and it was not part of the protocol as well so in terms of differences in the future we might impose.

And put into protocol in writing because it was not and none of the other protocols as well that did not impose on the site.

Long term medical.

Dossier.

On the patients themselves but.

This is something that can be probably added at the same time.

Sure I mean in the same time it would have adds a lot of time to these to those trials. So that's also to keep in mind. So the mortgage imposing restrictions and Susan Criterias, it's already to its difficult to find suspicious put a long list of.

Terry.

So it's taken us maybe three or four years before we could have completed.

Overall find me I think.

You know, we don't think the broader goes wrong or bad or just you know.

I think it was you know according to what was done in the past by others and even improved in some cases, so we'll decide between vibrant Sonora.

Trial as well it was a loss.

But overall this is what I can add on them with Gen. Though I've covered so thanks for that and I understand it's again, it's way too. So two quick specific questions can you maybe comment on the new buyers that you may have seen as opposed to of course is I'd, just saying do I understand lake superior risk.

Under Saddam Tonight, if it is and then.

The background visually supplement.

I know you said that big medication agenda with just curious if there was any background fish supplement using the randomization on what afterwards that you know that could be could be something worth highlighting just curious about that.

Well I thought the second question since the first one I didn't quite understood but.

To answer your question of course supplements fish oil or on other concomitant medications.

Given lifestyle lifestyle changes well it was it was looked at.

Two you know to determine whether or not the this these elements could have.

The served the.

The trial and we didn't find anything so honestly there was no.

On balance or anything to be poured here does that were that's changed the up demos.

The trial so it so it was looked up.

Good question.

But we can.

Ruled it out.

First question I'm, not sure I understood what Youre Yep Yep.

Buyers really when you look when you do your mean, just screenos the nuclear responders or and that is on this late just curious if that was different again I'd be versus goes down.

No I mean, yes, exactly so that's a good question so.

Our protocol, we had planned for Roger all the statistical power is based on potential standard deviation for instance.

Our protocol the was set at 40%.

And again, it's based on what I've seen in the.

Are you just trials and one that we did the.

No one else is versus.

Let's say the post hoc analysis, there was nothing much difference in their abilities. So the standard deviation was not that different.

You could have expected because you're using one value that you have a lot of variation you know using only one bedroom unsurprisingly were.

The same ballpark.

Comparing you know the original analysis versus or something else. So.

Okay, Great and just finally, one if you could comment on.

At the request that you had for them.

And then what specific outcome you were looking for and then as you think Albert gleaned bullets on strategy to disclose highlighted.

What is the desired outcome trial do that does hurt you get to that that good glad that you had for the dicey.

On you know I'm not sure I caught the first part of that Mayank, sorry that you said.

Could you maybe could you repeat it.

Yes, sure. So as you as you all this highlighted than you had the at the meeting the glass dice even request there was a number of items you wanted to discuss with them life.

Right and there was the desired outcome from that and it seems that they responded to yield that they've been response.

So as I'm, just curious what what will your desired make your views guys scenario.

In that in that meeting and how do you think trial. If you do could help you get there because that does that out.

Okay. Yeah. So if I understand you know and keep in mind that during Cove and the F.D. is not conducting meetings.

So this was handled we had to submit questions in writing and all of our background materials. You know in writing sweep we sent them an extensive package and a list of questions and they review the package and provided some answers back so it's really based on.

That you know as as we said that we will continue to do some additional actual post talk analysis based on the the FDA is response.

And then proceed with modifying the.

And finalizing the trilogy to statistical analysis plan.

Which will include you know the ability to do some of these post hoc analysis now that we understand what happened in and trilogy one.

And submit that to the FDA and then we'll proceed to Unblind and once we Unblind trilogy to the plan would then be to pool. The data from both trials to see if we could get to a favorable P value.

Now this would be combining the I.P.T. populations from both trials.

And so if if we believe it if we can get a strong positive P value, which will de too and if the pooled.

Efficacy results with trilogy, one using the ITC population from trilogy. One are also favorable that we would then plan to discuss with the FDA, whether they would allow us to use that data to proceed to file in India and again theres precedence for that.

You know you know in and I think.

We believe the post hoc analysis says has definitely shown as strong trend in favor of of Capri. That's what we were hoping to understand you know one what happened how do we explain the this placebo effect and when you correct for that placebo effect do you have you know, resulting.

Data that supports the.

Ah effectiveness of Capri, we believe we have that now so the next step is to Unblind trilogy to pull the data and see if we can get to a positive P value and if we do then I think it's a matter of a sitting down with the FDA in a pre N D. A meeting which would be held sometime later this year.

And to go through all the data discuss it with them and and get there.

Guidance on on whether or not we can proceed to filing in D.A. I don't know if that answers. Your question, but that was yes. That's very helpful. Thank you again I appreciate it and look forward to more updates.

Thanks, Mike.

Well take our next question from Andre Mackie Research capital. Please go ahead.

Our June high juror justify Andre.

Just a couple of questions in terms of the trilogy post talk analysis.

How many patients would need it would you have needed to show statistical significance.

I don't know that poor or do you have that number in your head.

I don't actually.

I I don't where you can get back to you all around us okay. Sir.

And just in terms I know you sort of answered this before but in the future based on that don't quite understand what happened in the pre randomizations.

In a future trial design or would you be able to prevent the same issue. If you ran another phase three trial.

Yeah. So so again as I said I think you know Leland kind of touched on on this as well I think.

And I guess my acted.

That.

You know, we probably would want to do fasting blood glucose levels, even though they're not as meaningful in that population I think we would want to get those levels just to see what they tell us and see if there's no significant change any surprises there throughout the qualification period.

On Anna and I don't know pair if you want to comment I mean, I know you guys had been kicking around some additional things that you know in terms of monitoring that you might do.

Yeah, I mean, as I said, some I think as well so the the medical history becomes also very important I think it gives you more confidence about the a eligibility of the patients as well so that's one thing.

There is also this you know potential compliance issue that might still you know again, we improve that either but that too would have been easy for us to.

This size or patients to say you know what didn't take the drug so and we have the data, but I think we couldn't do more you know to two to monitor if you will add at levels.

We've done it.

But maybe we could do more and and again, it's really a previous trials and other fields in the been management for instance, or sometimes some of the trials have failed because the patients we're not taking their drugs. So in our case it doesn't seem to be.

Issue, but I wouldn't think in a chance.

In the future. So that's something we could probably improve.

Not that it was an issue here, but I think.

Useful.

That's great. Thanks.

Thanks Andre.

We'll take our next question from Nathan Weinstein with Aegis capital. Please go ahead.

Hi, guys. Thanks for taking my question, it's clear you Ben.

Really working on going through trilogy, one and thanks for sharing the signings with us and so my first question relates to the fact adapted is going to require.

The analysis to before we performed on the full intensity I just was curious whether that Oh.

Oh was a surprise compared to your expectations going.

No not at all yeah, we honestly expected that I think we're encouraged by the fact that they allowed us to do the you know and we'll continue to allow us to do these additional post hoc analysis.

The other thing I should mention is that we we again, we don't have the answer yet a parent and the statisticians are working on this now, but we're taking a look at modeling what kind of results, we would need to get in trilogy too.

To be able to get an overall favorable P value in in a pooled analysis.

So that's that's an important.

Analysis that that's underway right now.

So so I don't know if that answers your question Ben.

Yeah. Thank you and so obviously all be watching to see.

What trilogy, two looks like but just sort of take a little weight off of a binary situation. If we think about a scenario where you do you have to run another phase three trial.

Prospectively speaking would that be.

Great and terms of the analysis and data and leveraging their way into a separate from the first two trilogy trials.

You know what appear do you want to answer that I I think it would be considered part of the trilogy program.

So it would be in affected trilogy, three if you will the question is and impair can jump in here, but.

You know the question is how big that study would need to be how long. This study would need to take because we we are ready just in trilogy to alone have more patients. Then for example, amarin had with with their marine trial I remember they just had one trial to get approval in severe hyper.

Triggers redeeming.

So so you know the question is how big will that trial need to be and could it go for 12 weeks instead of 26 weeks.

Pierre I don't know if you want to add anything yeah. I mean, it's part of the stories. So if we have trilogy a three.

I will be.

Use as.

All the trials, even our phase three trials.

Part of the stores you cannot just taking the trial and heightened site, it's out there and if they're going to be looking at this.

And so as I think in any of them usage as well. So we're not on the SIFI, but I'm not only because of a safety as well would become mine so definitely but like John said I think it's an important point, we have the biggest program and if we went through the three it's going to be even bigger than the others and those numbers now might be.

Very very useful for us so and this is what the China was open meeting.

Hi, good we have a this is the biggest program.

It's related to turn out to be positive, there's there's ways too.

She will mitigate the impact of provision one so that this is a magic of statistical analyses, but.

You know, we'll know more in the future about this but it's obvious that the more patients are better and it allows me to mitigate some of these you know Luke or you know a bad luck that we've seen.

So I would imagine that didn't trilogy, two is have to be done it will be you'll need to comes from some of the jobs.

We'll have so and that's why those books like analyses become important because you're you can show.

Yeah.

You know if you're really.

Limiting your population to this that you have it in a very interesting outcome and this is all you can define the future design.

Oh.

Yeah.

So yeah. So overall everything will be taken together for sure.

Thank you and if I could just ask one more question actually you guys were poor all those secondary and exploratory endpoints from the two so do you want to ensure due to almost sort of a confirmation of the trifecta effect and maybe you can do to build and someone to look more idle diabetic population than us.

Well thank you.

Yeah, I'm not sure I caught with the question was Nathan but but we absolutely are looking at all of that in the secondary and exploratory endpoints. None of that is then unblinded yet I'm. So we'll look at all of that after we Unblind trilogy too I remember it was really important to make sure we were clear on how.

Now the F.D.A. wanted us to handle the trilogy, one data before we fully did the analysis on all the secondary and exploratory endpoints. So so of course, that's really really important because we believe that Capri has some unique.

Advantages and we would hope to see what we saw on phase two you know that we had at least a neutral to a favorable effect on LDL neutral to positive effect, a increasing HDL a and then it's going to be very very interesting. The fact that we had 50% of our patients.

We're diabetics and trilogy, one we've got the population there to really look at what's going on with their hemoglobin Aone see and we don't know what the mix is yet in in trilogy, too, but but the you know we should have enough data there to really look at at those key a lit bit endpoints and.

You know be able to Oh show hopefully some advantage with country.

Yes.

Thanks, Dan I appreciate the color you bet.

Thank you ladies and gentlemen. This concludes our question answer session, we'll turn the floor back over to our speakers.

Okay, well I'm I don't have much more to add.

Want to thank everyone for listening in today, and we absolutely look forward to continuing to provide you with additional updates.

As soon as we have them and as soon as possible. So with that I'd. Just say you know everyone take care stay safe and we'll speak to you all soon bye bye.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation you may disconnect. Your lines at this time and have a great. Okay.

Oh.

Uh huh.

Oh.

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