Q2 2020 Concert Pharmaceuticals Inc Earnings Call

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Ladies and gentlemen, thank you for standing by welcome to concert Pharmaceuticals second quarter 2020 financial results Conference call. At this time all participant lies our listen only mode. After this.

Because presentation, there will be a question answer session.

The question during the session you when you press star one of your telephone.

Please be advised to today's conference is being recorded.

If you acquire any further assistance please press star zero.

I'll now like to hand, the conference over to you speak today, Justine Koenigsberg, <unk>, Vice President corporate Communications and Investor Relations. Thank you. Please go ahead man.

Thank you good morning, and welcome to concert Pharmaceuticals second quarter 2020, Investor update joining me. This morning with prepared remarks, our Roger tongue, our president and CEO, Jim could sell out our Chief Development Officer, Mark Becker. Our CFO. We will also be joined by Nancy Stuart Our Chief operating officer for.

The key when a portion of the call.

As a reminder, today's discussion will include forward looking statements about our future expectations plans and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected a description of these risks can be found in our most recent 10-Q filed with the FCC.

Any forward looking statements speak only as of today's date and we assume no obligation to update any forward looking statements made on today's call.

That I would now like to turn the call over to Roger.

Thank you, Steve good morning, and thinking for joining us today.

I'm pleased to report we've made important progress across both were clinical programs.

Before I review the key highlights were programs, however, I'd like to make a few comments relating to the crew turbulent environment.

Coordinate chain has affected each of us indoor communities in many ways that concert or top priorities are to support the safety over employees the patients participating in our trials and stuff or clinical sites, while advancing the operational goals public company and maintaining the integrity of our clinical trials we.

In the stage manner, and ensuring that we have appropriate safety controls and systems in place reopened or facilities tour led based R&D personnel.

For the broader comes through team many of US can do our jobs remotely and we will continue to do so for the foreseeable future. When there is not a pressing need to be in the office.

We continue to be in close contact with our existing and planned clinical sites.

Or practices relating to our ongoing trials are aligned with regulatory guidance industry best practices and on the site by site basis local rules and ordinances.

Maintaining a nimble response of approach has enabled us to successfully keep or ongoing studies have been running.

For the CTP 692 phase two schizophrenia trial I commend are achieved four rapidly developing and implementing approaches and strategies to minimize disruption through spring in early summer.

Keeping safety is our top priority for current trend continues to indicate complete enrollment of the CTP 692 study by year end.

Preclinical program accomplishments for the first half of 2020 extend beyond CTP 692, and position us to continue to advance CTP 543 in LP share area.

Following a successful into phase two meeting with the FDA earlier. This year, we applied for and were granted breakthrough therapy designation for CTP 543 for adult patients with moderate to severe alopecia areata.

Breakthrough designation is intended to expedite the development and review of medicines aimed at treating a serious or life threatening disease, where there is preliminary clinical evidence that the investigational therapy may offer substantial improvement over existing therapies.

Hey works with sponsors of breakthrough therapies by providing a dedicated team to facilitate efficient trial design provide timely advice and streamlined development review.

We're pleased that the FDA granted breakthrough therapy designation to CTP 543, and look forward toward increased interactions with them.

There are currently no FDA approved treatments for alopecia Areata and CTP 543 has the potential to be one of the first to market.

Both 543, and 692 or tremendous potential advancements for patient care and for cancer.

We look forward to our ongoing evolution as a late stage drug development company and to keeping you updated on our continued progress.

Ill now turn the discussion to Jim for more color on the development front.

Thanks Roger.

As we discussed previously we are in full execution mode to start the first phase three trial with CTP 543, and the fourth quarter. This year.

This is a major focus of our clinical development team as well as our company overall.

As we've discussed we're planning to conduct two randomized double blind placebo controlled phase three trials in adult with moderate to severe alipay shariati to support our end da.

Patients will be randomized to receive one of two doses of CTP 543, or placebo in a randomization schedule that gives patients only a one in seven chance of being assigned to placebo.

This schedule along with the opportunity to roll over into our ongoing long term open label extension study, where all patients are on active treatment our major incentive for trial recruitment.

And our completed phase two dose ranging trial patients treated with either eight milligram or 12 milligram of CTP 543 twice daily met the primary efficacy endpoint in the percentage of patients achieving a 50% or greater relative change from baseline at 24 weeks using the severity of allocation tool or Saul.

We also saw statistical significance for both dose groups compared to placebo at more stringent response thresholds using salt generated data, including those patients who achieved a salt score of 20 or less.

We recently released these clinical results in connection with the American Academy of Dermatology is virtual meeting after the end person meeting was cancelled in March.

Our slides are available on our website.

I'm pleased to say that our results were also highlighted and their late breaking news publication.

At week 24, 26% of patients in the eight milligrams twice daily cohort and 42% of patients and the 12 milligram twice daily cohort achieved a salt 20 or less.

These results are statistically significant with a P value of less than 0.05 and less than 0.001 versus placebo respectively.

Achieving the salt score of 20 or less indicates an 80% or greater presence of scalp hair, which has been shown to be clinically meaningful by both alipay geriatric patients and treating physicians.

Based on these significant results from the phase two study and the importance of the measure the percentage of patients achieving a salt score of 20 or less will be the primary efficacy endpoint for our upcoming phase three program.

The concert team is diligently working to begin phase three testing in the fourth quarter of this year. Additionally, the enthusiasm among investigators and study sites has been tremendous we look forward to moving the program through phase three but the goal to offer patients a new and meaningful treatment option for Alipay share yada.

Briefly on CTP 692, we're pleased to have had the opportunity to showcase the program at the American Society of clinical Psycho Pharmacology virtual meeting in late May.

The data we presented provided a strong foundation to advance the program into phase two.

For the first time in a scientific meeting we released non clinical findings showing that seemed to be 692 produced approximately 1.7 times higher drug exposure relative to the sharing in areas of the wrap brain like frontal cortex in area importance of schizophrenia.

Also during a pharmaceutical pipeline session at Sep, we presented our CTP 692 phase one results to a well attended zoom audience.

As a reminder, up to four grams of CTP 692, given for seven consecutive days demonstrated a favorable safety tolerability and pharmacokinetic profile.

Importantly, key blood and urine markers of kidney function did not indicate any signs of renal impairment in the phase one trial, giving us confidence as we advance the program and our ongoing dose ranging efficacy trial.

CTP 692 has an attractively long half life of about 19 hours in humans and so it's very well suited for once daily dosing.

With the increased PK exposure of CTP 692, compared to this airing in humans and its increased brand exposure found in RAF We believe our dose range of one two and four grams administered once daily is appropriate to fully assessed the potential benefit of CTP 692, and the phase two trial.

As Roger mentioned enrollment in the phase two trial for CTP 692 is ongoing and we expected to be fully enrolled by year end.

As a reminder, the treatment duration is 12 weeks with an initial extended screening period to assure eligibility of incoming patients.

We're working closely with each clinical trial site and wall enrollment slowed for detection of patients and studies staff. During the early days and peak of the Kobin 19 pandemic, we continue to see progress on the trial.

Let me reiterate how extremely excited we are about CTP 543, moving into phase three pivotal testing in Q4, and the expected completion of enrollment in the phase two CTP 692 trial by year end, let me pause here and turn the call over to Mark.

Thank you Jim as I review, our second quarter 2020 financial results. Please reference the financial tables found in today's press release.

Revenue was 6.4 million for the second quarter 2020, due to the recognition of noncash deferred revenue related to the exploration of certain development options under our 2013 licensing arrangement with Celgene.

Research and development expenses were 14.8 million during the second quarter of 2020 compared to 14.5 million. During the same period in 2019. The Q2 20 increase was primarily related to CTP 692 phase two development expenses on a year to date basis, the increased spending on.

CTP 692 was offset by savings related to CTP 543 platform and other R&D expenses as we move through 2020, we expect that R&D expenses will increase as we continue to develop CTP 692 for schizophrenia and prepare to advance 50 543.

Into phase three testing for Alipay Shari out in the fourth quarter of this year.

General and administrative expenses were 4.7 million during Q2 20 compared to 5 million for the same period in 2019.

The Q2 20 decrease is attributable to lower professional fees and employee costs and decreases in legal fees provided further savings on a year to date basis.

Our net loss for Q2, 20 was 13 million or 41 cents per share compared to a net loss of 18.7 million or 78 cents per share during the same period in 2019.

Finally, we ended the second quarter 2020, with 144.7 million in cash cash equivalents and investments under our current operating plan. We continue to expect our cash to fund the company into the second half of 2021.

Concert continues to advance its two wholly owned assets that each have blockbuster commercial potential and we're looking forward to becoming a late stage drug development company. This concludes our prepared remarks, and we'd be happy to open the call to questions.

Ladies and gentlemen, if you have a question at this time please press the star and the number one key on your telephone.

Sure move yourself from the Q. Please press the pound once again at Star one to ask a question on our first question comes from Joon Lee with two is securities. Your line is open.

Hi, Thanks for taking my question and congrats on all the progress.

So you recently got breakthrough therapy designation, Cora alopecia, Areata and some of the Pushbacks that we've gotten from investors is that a is mostly cosmetics. So let's look of dialog went into the fourth to be getting breakthrough designations for our pizza, our yet and I have a follow up thank you.

Hi June this is Roger thanks, very much for the question.

So ft hedges for some time no considered alipay Sherry outage fee is serious disease. As a reminder, we had fast track designation, which is also reserved for.

For more serious diseases for some time.

In.

Several years ago FTD held at Ti.

[laughter] patient focused drug development initiatives on meeting, which was only the I believe twentyth that they had ever.

Hello.

And there was a record breaking number kind of patients who attended and at that meeting. It was very clear I think two coal attendees how series the effects of the agencies were on the psyche of individuals who has the who could have eloqua Sherry out Oh so.

The effects or really more than cosmetic consent that they change C.

The life trajectory of many individuals who has the disease and at this point I think there's very little question that FDA and of course, the individuals who had ability shariati considered to be serious disease.

Okay and so the follow up question as you have disclosed starting to steady in fourth quarter I would you need a second confirmatory study as for the full approval and if so once in spades, starting that second confirmatory study.

[laughter].

We assume that we will have second study.

We need to get to the CH number of patients who are exposed to drug which were acquired.

A significant number of post individuals in this logistically easier to have two studies rather than one.

Our expectation is that the second study will start next year.

Great and then my final question is that so you'll be corporate 26% and 42% achieving salt score of 20 or less.

Number one what was the placebo response and secondly, if.

Yes.

In the salt score scale more or less linear with the percent Harold loss.

Thank you.

It is but.

Jim could you answer that please.

Sure Hi June so yes, so so for the for the.

Placebo response, we had under a 10% placebo response for the Salt 20.

And the Salt score is John is an assessment by the train writers of the amount of hair loss on the scalp. So I mean, its linear to the extent that be train raters can detect these changes, but should but yes. It pretty much goes hand in hand with the.

With the amount of hair loss on the scalp.

Great. Thank you so much.

Okay.

Thanks.

Our next question comes from Maury Raycroft with Jefferies. Your line is open.

Hi, This is Kevin here for Maury.

Just wanted to ask so you mentioned that you had the 42% of patients on the 12 milligrams twice daily that achieved that salt score of less than 20.

Which is the primary endpoint for your phase three I just wanted to ask about responder analysis are you planning on looking more running it's got a exploring differences in.

Baseline characteristics for these patients what what makes a responder versus a non responder.

Jim.

Hi, It's a great question I think there's so many things that go into.

What makes a responder and non responder and for the purposes of our registration program. We don't plan on doing those kinds of studies. However, our focus is right now is to really make sure that we understand the relationship between the drug and the recovery of of hair regrowth, So we'll be focusing on that.

We know that we have similar baseline characteristics of the individuals coming in and I think this would be.

These will be studies.

Down the road as we get more understanding of these JAK inhibitors, and Alipay shariati, but for the registration program. We don't plan on doing studies like that at this moment.

Great.

A little screw up.

Yes. This is Roger I'll also add that we've seen very good responses from patients who have had extensive even complete also care relative to patients who have had.

I see more limited laws superior to date, although as Jim says the nothing formal studies.

Great. Thank you and then just a quick other question on the.

Pending patent case is there anything you can you can tell us surrounding that if a with with piece have if there's any.

Potential further delays due to the pandemic et cetera.

Sure well it just as a reminder, the.

The pending patent case.

Well, it's something that we're tracking is a lot less important to us as companies since we have the issuance of a subsequent pattern which is.

Independent from that 659 patents, which.

Provides coverage of the.

Exclusivity if the compound through 2003 seven.

Four of the drug I should say.

Our responding specifically to your question, we know that the Supreme Court is assessing.

Whether or not to hear the case and we believe that they may do so on this fall.

But regardless.

We do not expect to secure a result from their their analysis hub until the end of.

Lately session next year.

That's helpful. Thank you.

Thanks, Jim.

Thank you and our next question. Please see Yang with Mizuho. Your line is open.

Hi, good morning, Thanks for taking my questions.

Yeah with regard to disciplined by 43 on what the gating factor to five per second thanks.

[laughter].

Thanks for the question, Jim do you want to answer that.

Sure Hi defect. So yeah. These are these are large studies and we are focusing on getting the first study started as we as we mentioned so the second phase III study will also be a major effort and getting underway. Some of that is logistical so that we will be really focused.

Being on getting our our new sites up and running.

Which will likely be different sites that were using for the for the first study. So in some ways, it's a little bit of logistics and and coordination to get the both these shows up and running we anticipate that we could get that second trial started within six months in the first.

Thank you again with that.

Dan.

Continue on CTP 543, the or IP situation, so with the pharmaceutical composition.

Packing.

Okay. If you go beyond LPC do you expect these happen to protect 543.

Additional indication.

Well thank c. we.

The patent the 669 patent covers not only method of use NLX Sherri healthy Sherry out of it also covers the doses in the among the regimens that we use generous successful phase two study and coach the extent that we apply those two.

Other uses hum for CTP 543, it will cover those.

As a reminder, what we stated before is that we have additional patents.

That we have over applications I should say that we have filed.

Or in a process of being filed so we expect therapy substantial coverage of 543, four LP Shariati imports were uses.

Thank you again and thank you reconcile back on that that's all I had.

Okay. Thanks.

Ladies and gentlemen, I'm not showing any further questions. At this time I would now let's turn the conference back to Justine Koenigsberg ready for the remarks.

Thank you we'd like to thank everyone for joining us. This morning, Barclays now will be participating virtually at the Wainwright and Cantor Conference next month, and we hope to have the opportunity to meet with many of you at one of these events. This concludes today's call. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Everyone have a good day.

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