Q2 2020 Lexicon Pharmaceuticals Inc Earnings Call
[music].
Welcome to the lexicon Pharmaceuticals second quarter 2020 financial results and business, Okay Conference calls.
At this time all participants are in listen only mode falling managers, we prepared remarks me will hold a question and answer session.
As a reminder, this call is being recorded today July Thirtyth 2020.
I will now turn the call over to Kim Dr., Kimberly Lee head of Investor Relations and corporate strategy. Please go ahead.
Thank you, Chris, though the morning, and welcome to the Lexicon Pharmaceuticals second quarter 2020 financial results and business update conference call joining.
Joining me on today's call I want LCOS Lexicons, President and Chief Executive Officer, Alex Santini, Executive Vice President and Chief Commercial Officer, That's a Pablo Lapuerta Executive Vice President and Chief Medical Officer, Dr. Praveen styles Executive Vice President of research and development and Jeff Wade Executive Vice President corporate an administrator.
Affairs, and Chief Financial Officer after formal remarks me well open the call left for Q1 eight.
Earlier today lexicon issued a series of press releases, one announcing our financial results for the second quarter 2020, a second press release announcing our agreement to sell de Mello and associated assets to Sarah for up to $224 million, an upfront and milestone payments plus mid teens royalties on net sales and delivery truck.
Mr. any final press release announcing our realignment of our research and development assets with a focus on our phase two Alex nights. Your one one neuropathic pain program, Egypt, which is available on our website at www Dot luxe assortment dot com.
And in the case or the financial results and asset sales press releases to our SEC filings.
A webcast of this call along with a slide presentation will be accessible in the Investor Relations section of our website.
During this call we will review the information provided in the release is providing update on a clinical programs and then use the remainder of hard time to answer your questions.
Before we begin let me remind you that we will be making forward looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of Ellis Night, you won one demelo set of closing and our other candidates.
These statements May include characterizations of the commercial performance I'm sure mellow expected timing and results clinical trials of Telotristat ethyl political frozen Alex Night, you won one and our other drug candidates and the regulatory status and market opportunity for those programs. This call may also contain forward looking statements relating to our growth in future.
Operating results discovery and development of our drug candidates strategic alliances and intellectual property as well as other matters that are not historical facts or information.
Various risks may cause our actual results to differ materially from those expressed or implied in such forward. Looking statements. These risks include uncertainties related to our ability to complete the sales are mellow the timing and results of clinical trials in preclinical studies of Lx Night, you won one and our other drug candidates.
And disciplined strategic alliances and other third party relationships, our ability to tape had protections for discoveries limitations imposed by patents owned and controlled by third parties and the requirements a substantial funding to conduct research development and commercial activities.
Or list and description of risks and uncertainties that we face. Please see the reports filed with the Securities and Exchange Commission.
I would now like to turn the call over to our president and CEO what else coats.
Thank you, Jim and good morning, everyone and thanks for joining us on the call today I mean, today's presentation will be made on behalf of all the extraordinary men and women here at lexicon, who worked tirelessly everyday to advance our science into the hands patients.
Let me jump in and talk about her second quarter, we made very good progress on some level business in our pipeline, while effectively managing our resources and spending.
I will elaborate on some of the key achievements and we'll then turn the call over to Jeff and for being for updates on our financial results and pipeline developments respectively.
Starting with the level, which he wasn't that sales of $9 million in the second quarter 2020.
That's up 21% front of corresponding period and 29 team.
Earlier. This morning, we announced that we entered into an agreement with the server therapeutics for the sellers, a mellow and related assets.
Sarah will pay lexicon, approximately $169 million in cash you're closing, which includes a $155 million upfront payment.
Approximately $4 billion for existing inventory.
Actually come may receive additional development regulatory and sales milestone payments.
Up to an aggregate of $65 million for the development and commercialization of to looks that equal in patients with stellar track cancer.
Additional lexicon will be eligible to receive mid teens royalties on net sales is a mobile and biller truck cancer.
As part of the transaction Sarah has agreed to assume the currently ongoing tell a b C phase two clinical study of the levels and dillard attract cancer patients and all-purpose employment or at least 20 lexicon employees currently dedicated consumables.
The transaction is expected to close in the third quarter of 2020.
Subject to the satisfaction or waiver of customary closing conditions.
This transaction allows house.
On our business around our research and development assets with a significant focus on or Alex nine to one weren't program, which for being will highlight shortly as well as on other early stage candidates. So also allows us to officially use our resources and importantly significantly reduce our debt.
Thanks.
Moving to full repayment about $160 million secured term loan.
Jeff will talk more about this later.
We ended the second quarter would approximately $202 million in cash and short term investments and we continue to prudently managing our balance sheet.
With that I'll now turn the call over to Jeff.
Thank you I know.
So again I will discuss key aspects of ARX <unk> second quarter 2020 financials more financial details can be found in our form 10-Q, which was filed yesterday evening.
Now please refer to slide five bar presentation.
As indicated in our press release today revenues for the second quarter decreased to $9.2 million from $9.7 million for the corresponding period in 2019.
She is primarily due to an absence in this years quarter, a boat tablet sales observed mellow to upsell and a decrease in collaborative revenues, partially offset by an increase in U.S. net product sales.
Product revenues for the second quarter of 2020 were $9 million from that sells jermeland in the U.S.
21% over the prior year quarter.
Cost of sales related to sales UBS ramallo for the second quarter, 2020 was zero point $7 million compared to $1.3 million in the prior year quarter.
Research and development expenses for the second quarter increased to $57.3 million from $12.6 million for the corresponding period in 2019, primarily due to increases and external clinical development cost relating to sort of the pleasant subsequent to the termination of the seem to be alliance.
Selling general and administrative expenses for the second quarter were $14.1 million compared to $14.3 million for the same period in 2019.
Net loss for the second quarter was $69.1 million were 65 cents per share as compared to net loss of $23 million were 22 cents per share in the corresponding period in 2019.
For the second quarter of 2020.
Net loss included noncash stock based compensation expense of $4.3 million.
Second quarter of 2019 net loss included noncash stock based compensation expense of $3.8 million.
We ended the second quarter of 2020 with $201.9 million in cash and short term investment as compared to $271.7 million as at December 31st 2019.
The effects of the smell a sale in corporate realignment on expenses will be reflected in an upcoming form 8-K, but I can say that this transaction will extend our financial runway.
Turning to our financial guidance for 2020, we're revising our 2020 operating and R&D expense guidance that was previously communicated on our last earnings call. What the understanding that will provide further updates following the closing of the term Shira agreement.
We are reducing total operating expenses to be in the range of $230 million to $250 million down from $235 million to $255 million.
We expect R&D expenses to be in the range of $175 million to $185 million down from $180 million to $190 million.
Notably, we will have meaningfully higher R&D expenses in the third quarter. Some people have in the fourth quarter has become much nearer over the course of the third quarter to completing the wind up at the surgical flows in type two diabetes program and outcome studies.
We continue to expect SGN expenses for the year to be in the range of $55 million to $65 million.
We expect non cash expenses to be approximately $24 million for total operating expenses up from $22 million due to the impairment loss on buildings that we recorded this quarter.
Finally canopy committed to pay electric on $260 million under the terms of settlement agreement ending that collaboration.
Total the first installment in the amount of $208 million was paid in September of last year.
The second installment in the amount of $26 million was paid in March and the final installment in the amount of $26 million is payable this September.
The $52 million and payments this year will not affect this your revenues because the full revenue impact of the settlement was recorded in 2019, but they will obviously benefit our 2020 cash flow.
As one L. mentioned earlier, the divesting of our absolute mellow now allows us to focus on our R&D pipeline.
We're extremely excited about our most advanced cannabis likes nine to one one from neuropathic pain for reasons that we will delve into shortly.
The drugs this spread Canada is a potent highly selective oral small molecule inhibitor of adapter protein to associated kinase or 8-K one.
Yeah, Hey, one is a target we discovered in extensively characterized in the drug discovery Alliance with Bristol Myers Squibb, and we hold exclusive development and commercialization rights for Alex nine to one one.
Neuropathic pain is a lesion or disease of the smadar century nervous system and can manifest itself and painful conditions like diabetic peripheral neuropathy pain.
Up to 17% the general population worldwide has chronic neuropathic pain and about 33% of global opioid sales are for neuropathic pain with these sales growing at an estimated compound annual growth rate of 2.5%.
You can appreciate this fact alone demonstrates the significant unmet need in neuropathic pain, but the unmet need extends to non opioid drugs as well, we're limited efficacy and desolate limiting tolerability as a problem.
There's a tremendous need in the field for drugs with better efficacy and pure side effects.
Neuropathic pain as a field in which very few novel mechanisms of action had been introduced or even our under investigation, which there is far less innovation and competition and then fields like cancer.
Even so last year, the neuropathic pain market worldwide reach nearly $6 billion.
Diabetic peripheral neuropathy pain or D. P. M. P is one of the most common types of neuropathic pain accounting for about 20% the drug sales for neuropathic pain.
It is a condition that involves damage to the peripheral nervous system caused by hyperglycemia and other diabetes related factors.
D. P. M. P can involve pain of numbness, tingling burning sharp and alike.
Her often look wise to the extremities, having an impact on the feet in hands.
The prevalence of this condition is expected to grow significantly at a nearly 4% annual growth rate driven mainly by the increase in prevalence of diabetes.
An estimated between 60 and 70% of people with diabetes eventually develop D. P. M P.
There are only four approved therapies for DPM P and outside of these drugs. The market consists of off label usage try cyclical any depressants and opioids.
Current treatment options are limited by a lack of efficacy side effects and abuse potential.
The burden on the health care system. It's also significant with an estimated annual expense of managing B P. M P being four times more than the cost of managing diabetes alone.
So there remains a definite need for therapeutic option like Alex nine to one one that has a novel opioid independent mechanism of action and excellent safety profile and ease of use with once daily dosing.
You may recall or scientific platform has enabled us from physiology and genetics to drive drug discovery and we're proud to say that Alex nine to one one originated from this platform.
The platform involved assessment of the functions of almost 5000 genes over a broad range of physiology and behavior to identify drug targets with compelling biology.
Specific to in effect that would be desirable for treating disease without targeting related side effects.
It was from the genome 5000 program that 8-K, one knockout mice were first discovered that the phenotype, indicating resistance to neuropathic pain as seen in the study results.
Our initial screen identified results in the second phase of the form on Pall model, which was initial signal of potential for inflammatory or neuropathic pain.
Our subsequent research and put a more rigorous assessment using the spinal nerve ligation model, which assesses pain behavior based on the equivalent of attached or compress nerves.
Both models said compelling results standing out in terms of efficacy because a uniquely compelling neuropathic pain target.
And our in vivo assessment of the functions of almost 5000 jeans and.
And for which knockouts were healthy demonstrate that no other real phenotype apart from pain resistance.
We actually have to development candidates for this mechanism of action a different came at types that originated from intensive work conducted over a number of years by teams of chemists and biologist from both lexicon and Bristol Myers Squibb in a joint neuroscience Lance.
Books drug candidates have successfully completed I, indeed, enabling studies with elects not to one one being taken into clinical development and the other candidates I in D. ready.
BMS mid to out of neuroscience and focus more on immuno oncology, let's kind of teen rights to the full program, including full development and commercialization rights to Alex 91, one.
I'll now turn the call ever to were being who will highlight the data underlying that's very exciting program and specifically the data supporting likes nine to one one and its development.
Thanks, Jeff.
This has been a very exciting Joe let me put up.
Discovering that looks like a one one potential in preclinical models and now bringing it to the clinic.
As shown on this slide you studied it looks like the one one and multiple models, including kept those or colson induced DP UNFI models and rats and debartolo.
It's also correct Margaret post Herpetic neuralgia.
As you can see mechanical allodynia.
Which is a material fan saw the greatest production, one milligram and pretty milligram per kilogram. It looks like the one one reducing spend up to 65% diabetic animals.
The reduction in neuropathic pain behavior was also seen after a single dose and after seven daily doses of it looks like the one one following your viral infection in the very sela voiced of rat model.
Moving onto Slide 14, you also have compelling preclinical data and broadens that suggest the potential of it looks like the one one.
To award goals limiting side effects, such as Walker in Pittsburgh theme, but standard of care like Gulf offensive and Pregabalin.
Slide 15 shows our mechanistic work in preclinical models.
Which has drugs unique.
Properties associated with its mechanism.
We have identified that Alex nine to one one that's that's a final doersam horn as demonstrated by efficacy and neuropathic pain models, while Intrathecal Liberty.
No so since Youre correct.
It was a reduction in spontaneous fighting those final dorsal horn neurons it to one inhibitor pretty quick.
Non CNS Brendan Byrne into Britain did not show efficacy and these neuropathic pain models.
We also saw that that looks like a one wants mechanism was independent of the hope you're phosphate and we believe the mechanism is involved that's back to echo receptor pathway is but it did one inhibitors are not agonists.
Moderately obese federal sector.
In somebody preclinical you're not demonstrated I like the one one simpler to penetrate the CNS well <unk>.
Reduce band behavior, and Martin from Neuropathic pain, and having a mechanism of action that is independent of opioid pathway, which we all can agree is an extremely important correct.
On Slide 16, you can see that based on favorable preclinical data, we're advanced Alex nine to one one into phase one single and multiple dose studies.
Those supported our preclinical work demonstrating a favorable pharmacokinetic profile that supports once daily dosing with a good safety profile.
On slide 17, I'm happy to disclose.
We have initiated patient screening and girly DPN one.
She was a phase two randomized placebo controlled multicenter clinical study well that looks like the one one for the treatment of BPM fee that is expected to enroll approximately 300 patients 30, U.S. clinical sites. The primary efficacy endpoint under evaluation. In this study is the change from baseline or.
Sure one two week, six and average daily stand score or 30 P.S.
Based on an 11 point in about a code rating scale.
We look forward to making continued progress on this program and reporting to you.
We are currently preparing for it or do some phase two studies have been assigned to one one other periods of neuropathic pain based on the promising results and multiple preclinical models of neuropathic pain that I just shared with you.
And based on favorable phase, one clinical safety profile Balkan single and multiple dose studies.
Back to initiate a proof of concept study and post herpetic neuralgia.
The fourth quarter of this year.
I would love to on the call over back to aluminum.
Yep.
For being thank you Jeff Thank you.
I would just conclude by saying we're extremely excited about this compound always have been I think a few years go with JP Morgan I was asked what I'm. Most excited about that we're working on a lexicon.
I signaled to people keep an eye on our 8-K one target.
And here we are today, we have I've gone through phase one our confidence has grown in phase two and now we're going to build our efforts around this compound and what can come from it because I truly believe this is one of those compounds that you can ultimately built a franchise around with multiple indications within the new <unk>.
No neuropathic pain space.
So we will we will look for to share and more information with you as we.
See getting through phase two a asked for being has laid out and then start I worked in our second Oh Flint study for a poster Patrick on the route.
With that being said also want to take this opportunity I'm, just really think the extraordinary Oh commercial team medical team and our field team who have supported the mellow and got it to a place where it was remarkably successful the marketplace and put it into position where a company like to Sarah that has a portfolio of oncology assets.
Ah that we'll find a very good home that could be well supported a relative to the patient support we've created in the marketplace and the value that the I believe that they can add a as we go forward.
With that the milestones I think you can look forward to.
Is the closing of the to Sarah transaction, which we believe will conclude a in Q3.
And as we've already mentioned here dosing of the first patient in the phase two program for BP NPD would be a Q3 opportunity and then we will initiate our phase two study and post herpetic neuralgia in Q4 with that I'll I'll say, thank you and turn the call over to the operator to start.
Right.
Thank you as a reminder, if you would like to ask a question. Please press star one on your Touchtone phone. Once again data is star one to asking audio question.
Your first question comes from a line of Stephen Willey with Stifel.
Yeah. Good morning, Thanks for taking the questions.
Can you maybe just confirm that the intended repayments over the term loan is a byproduct of Oh coveted trip related to the transfer of the.
Hello.
And then.
Weve occur more and also has you know kind of the usual make whole prepayment premiums can.
Can you disclose what those are.
Jeff I'll turn over you.
Yes, so we Oh, we are.
I mean part of the reason for James transaction was to reduce our debt and so our intention is to use the proceeds to fully repaid the term loan.
And.
That was part of the intended to transaction. So it's this is more of an intent to pay down the line rather than having to pay doesn't pay off to learn because because the that's a transaction. We do have there, but there will be a modest.
Prepayment penalty and.
Associated with this repayment, but we expect to the proceeds of the deal to cover the.
The full repayment of alone, including the prepayment penalty associated with it.
Okay, and then just on 90 211, Ken Ken.
Maybe just give us a brought estimate of.
The cost associated with the two trials that you're planning to initiate.
When we might see some initial data emerge out of these trials.
And then.
Some color around the intellectual property of the I said I know that this was part of the 2009 I see collaboration with Bristol So.
Any commentary on those fronts would be.
Hello.
[noise] justified alternate.
Yes sure. So so these studies are you know there there at the the first study is a relatively large study.
It's a 300 patient study.
The the cost. This study is is gonna be.
A little north of $10 million from an external perspective, and we have the second study will be a little bit less because it's going be a smaller study.
We in terms of the.
Duration, our expectation is to be able to get results back late next year.
And in terms of the intellectual property.
You know we actually.
We discovered and we're the first published on this target we have that we spent a lot of time before we made any disclosure or publication of the target a working on medicinal chemistry and working on the target we have a number of different compounds, which we have said that we cover.
In terms of patent.
And that this is the this is a highly novel target highly novel.
Chemistry around which we have good good trunk patent protection.
On on a as as I mentioned, we have a couple of different came at types for which we have development candidates.
Okay. So should we think of composition of matter extending into the 2030 sources.
This is kind of a pre 2030 composition and then there was gonna be so.
I don't see upon either a term extension or so.
But the bands.
Hi, it's it's gonna be ad or that the extension actually I don't remember the exact term or it will I left and to the with patent term extension should last into late 2000, Thirtys and but it's a so I mean that should mean that were.
Kind of early 2000 thirteen's in terms of a patent duration.
Okay.
Do they stick.
Yep.
Your next question comes from the line of Alan Carr with Needham.
Alright, thanks for taking the questions.
I guess can you go but where do you think.
For the outflows in the inflows with the Casher and they had an 8-K I know you're building recently, but.
Make it can you come in time on that and then also.
So the focus obviously is nine to 11 now you have a.
Hey, a from platform your knockout platform way back when.
My recollection is that you had a number of.
Markets to to work with.
Well. This is lexicon essentially a 90 211 company for the rest of 20 and 2021 or do you expect to be.
Making some announcements around.
What's behind it with what's next it at lexicon. Thanks.
Jeff I'll give you the the first part of that question in terms of.
The 8-K.
In terms of they so so we will have some cost associated with this.
I think that are.
Our art.
Our guidance that we're providing it says can be relatively close to where we end up but that will provide some updates when we when we get closer to.
Ending that are basically closing the transaction.
So I you know as in terms of that in terms of the the.
Cost of the of the.
Observed mellow obviously.
Theres going to Sam basically the cost of that business going forward.
And we're going to not have the revenue associated with that going forward, but our R&D spend is coming down significantly as result of winding down the sort of a pleasant program.
And most of our R&D expenses.
In the near term are gonna be focused on Nellix 91, one I'll, let lynell talk about some of the other assets because there are other assets that we have.
We will continue to wear to work on.
Yeah. So let me start with Ah Ah to be very clear about something we're not giving up on type one.
So you can fully expect us to go back at it again, probably going into our fourth quarters Reengaging. The FDA on type one program.
And it fits very nicely into what we're talking about here, which is.
Diabetic nerve neuropathic pain and the associated issues. So it does fit very nicely. She would be successful at this point, it's a low cost a risk forced to approach the agency.
And should we be successful, there's a significant amount of upside I shouldn't be successful. So we're not giving up on type one that we should make that note.
The second one is that we have a whole line of products that or will be called one or three X project that we're looking in the areas of fibrosis and Nash.
We will have a much more to say about that in the and become a year.
And thirdly, we.
We have some early stage work that we're doing and the medchem space.
Also in the metabolic area, where we think we have a very.
Interesting and novel approach should would be should we be successful with the with the medchem. So.
There's a lot more we have to say going forward now that we are we are rolling back into a significant portfolio.
The R&D assets that we have not funded historically as we chase.
The diabetes marketplace and used our cash there, but this really gives us an opportunity began to open up that portfolio and start to funded and start to put more shots on goal as result of having the opportunity to have the the cash in place it appropriately in terms of his allocation so much more to say so yes onto.
[music], one one will be the primary focus for us.
Going into next year, but it will not be able to only focus and we'll have a lot more to say going into next year, but the other assets.
[laughter] clarification will now.
You mentioned.
Discussions with the FDA.
Around a type one diabetes, but what's the status and in Europe, and we plan to do there.
So I mean, you have approval over there.
Yeah, so that remains on hold because that's not where we want to deploy our capital at this moment, but we continue to a shift now from this conversation that we just concluded on the sellers and mellow and restart the conversation as cobot stores too.
Start to become less and less of an issue for us to have conversations secure.
About a rights of a product is approved for.
For type one diabetes. There. So this is a good opportunity to restart those conversations as I said before.
We were in good place to have those conversations before over 19, hitting those conversation is pretty much dried up and we have to make different choices.
But I do think we do have the opportunity now to start to Reengage about Europe as an asset so stay tuned on that one as well.
If you if you make progress in the U.S.
With the FDA is that something we commercialize over here is that something youd partner also.
No I think we would.
No I great question now that we will commercialize it here.
Its a you know the type one marketplace does not require significant a commercial deployment.
It's more of that especially to focus a market.
You don't have to have an army of commercial support to do so.
It's a very untapped market in terms of going beyond insulin. So is that it has a place that we can invest quite nicely that really sets us up for success with Alex nine to one one that will be specifically within the diabetes spaceport neuropathic pain.
Okay, great. Thanks for taking my questions.
You bet.
Our next question comes from the line of Liana style.
Plateaus with wed bullish.
Oh, Yes, hi, good morning, Thanks for taking your questions. This is I'm curious for Liana.
A couple to start actually could you guys clarifying regarding the tertiary transactions are met with sales.
There's no more how are you guys are going to monetize <unk> should be carcinoid syndrome diarrhea, there is that kind of because that could be sold off.
Yes.
Okay, Great I know you mentioned that in Alans question I, just wanted to clarify okay. So moving to the delivery track could you.
You guys are responsible for phase two development Howard's the decision to move to phase three.
Or maybe.
That decision now would be that decision will be to cerus decision.
Okay. So I'm not at that point, they're going to be press release, not nothing to do with.
Congrats.
That's a close of this deal all those decisions would be to service decisions.
Okay, all right a fantastic and then just moving back or moving over to.
Alex name to [noise].
11, you guys are going to read out some data at the beginning of year, Oh I believe for the neuropathic pain indication. If you guys discussed powering or where are you guys considered of your clinically meaningful effect what are you looking for.
Thanks.
Oh I'm not sure if we wouldn't have data that called out the beginning of this next year, but Jeff I'll, let you take that.
So we're expecting that data.
And Alex sent one one towards the end next year, we're looking at a at a pain scale and looking an improvement in the pain scale.
It's relatively well powered because it's a it's a large studies, it's 300 patient study roughly with.
With with three arms placebo and two doses.
So we yeah, we'd we'd we did feel like it was important to do a substantially sized study given indication.
Okay, Alright, Thanks, and then just last one on on a partnership talks with.
In type two.
Ongoing so a focus.
Thanks.
No we were not having any ongoing conversations and and and type two we're winding that program down and that if someone certainly has an interest will be it'll be ready for.
Oh filing here in the United States in and around the world, but lexicon is not actually engaged in conversations around soda our activity will be actively focused on Alex knocks you want to one and all the relative resources. It takes to bring that going forward. However in Europe as I've said before and the type one space you have an approved product variants, where I think you could have an opportunity to have.
Active discussions.
As we get on the other side of the Cobot 19.
Situation in Europe.
So that's what I will look more for true with that being said.
This is very fluid and so interested parties come come in and out of the process and should that happen, we'll certainly let you know.
Okay.
Thanks, Thanks for taking questions.
Once again in order to ask an audio question. Please press star one.
Your next question just on the line of your Gal Nasscom Love It with Citi.
Hi, this is coming up on thanks.
A question congratulations.
Yes.
First on Alex Thank you and I just wanted to clarify data.
Looking at potentially and up 2020 wise.
Hey.
First of all 300 patients.
Right.
Right.
[noise] docs type.
Demand for being Tioga it would be the final results for the phase two.
The DPN piece study, which I talked about.
Got it and then and the addition of Fannie and pest product.
And.
That one common at smaller should we expect a more timeline that here in the 21 for that study as well.
We are actually like Leonelle was mentioning we are going to start that study towards the end of this here we are in discussion.
But.
Clinical research organization contract clinical just sort of organization to figure it out.
What sites, we are going to use on boarded then Goldman grade. So I think at the next quarterly.
Investor call, we should be able to tell you the timelines for completion of that study, but if I was to just get it could be very similar time line as.
Diabetic peripheral neuropathy fans can.
So toward fan out next year I would.
Okay.
Okay. That's helpful. And then I just wanted to be it a little bit more background on how diabetics shreedhar.
And your site excuse that any sign of diabetic abella, yes.
What's the typical treatment plan there if they present in the pain after Christians inclined to treat or is there a threshold for you know mild to be is that.
Maybe if it goes on treated and Oh.
How he thinks that youre drag with into play but at the aircraft style moderate the air or do you think it could potentially be.
Yes, not playing into more severe cases.
So that the I'd, just say that the mild patients are awfully often not treated and it's more moderate to severe patients that are treated part of that has to deal with the.
The nature of the the treatment and part of it is because you know the the mild patients can function better.
With that without treatment and basically.
Tolerate the pain.
Perhaps better than the bid in the treatment itself.
It frequently you you see GABAA pension and Pregabalin being used I mean lyric have been until it.
Well its patent them.
Expired was it was a very substantial drug and that was you know what anchored and neuropathic pain.
And.
You know the challenge with those drugs is list price gap Penton and pre gab one is.
Is the.
Efficacy and not necessarily working for everyone and then also having thus limiting tolerability for patients sit for him. Those don't work you know some people are put on opioids, but obviously people are reluctant to use appeal. It appropriately reluctant to use up with opioids to to treat a chronic condition.
Like diabetic peripheral neuropathy pain.
And so it's it's a it's a very challenging area.
But I would say the for for for now most of the treatments and.
Moderate to severe patient plus and mild patient population.
No and what percentage of patients fall into that.
Right.
It's it's probably roughly.
Roughly.
Third the patients or fall falling in that category it changes over time.
Got it and just lastly from me.
Since our deal and same another turnblad.
Looking at your cash runway is it fair to say right sufficient to take you for phase two development well, there or is that not true.
Yes. It is fair to say that we said that would be able to get the Catherine laid that we have should be able to get us too.
To the the phase two results, we had said previously that the operating expenses.
That we could thunder operating expenses through them to 2021 with the timetable we're talking about here.
This transaction is going to extend that runway and so we should be able to get through phase two results and neuropathic pain.
With that with our current financial resources.
Great. Thanks very much.
Yeah, I also would add that.
It will get us through the we will we will manage our cash to get through the the phase two for Alex onto one one but also we will have cash it will be able to invest in the programs I talked about 103 acts and bringing a accounted for in terms of following an eye and D and the work that we're doing around met Kim.
On another program from metabolism. So so were projected out to Jeff's point, we can we can achieve all of the above.
And extend out through beyond 2021.
[music].
Thank you that's very helpful color.
There are no further questions I will now turn the call back over to Mr. coax for closing remarks.
Well again I want to thank everyone for joining us. This morning on this call I hope, we've been able to articulate how we're thinking about the future as we restructure our company.
To start to take advantage of the pipeline that we have a in advance our compounds from the clinic to patients.
I'm very pleased that smell has found that very strong home. It company that has oncology experience.
That could invest in it as part of this overall portfolio.
And ensure that patients have an opportunity.
Two.
To to experience Amello as we have set it up in a very successful way I also want to thank all of the extraordinary people who have made some mellow possible here at lexicon.
It's been sweet certainly when when something like this happens, but at the end of the day. It's the right thing to do to ensure that mellow received to kind of attention investment as required for it to grow and I just wanted to take the opportunity publicly and thank them for all their tremendous effort. We look forward to engage with you the talk more about Alex not.
One one in the rest of lexicons pipeline in future calls thank you.
This concludes today's conference call you may now disconnect.