Full Year 2020 Concert Pharmaceuticals Inc Earnings Call

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Ladies and gentlemen, thank you for standing by and welcome to the concert Pharmaceuticals fourth quarter 2020, Investor update call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone and.

Now I'd like to introduce your host for today's program Justine Koenigsberg Senior Vice President Corporate Communications and Investor Relations. Please go ahead.

Good morning, and welcome to concert Pharmaceuticals, fourth quarter, 'twenty, and 'twenty investor update joining.

Joining me this morning with prepared remarks from Roger Tung, our President and CEO, Jim Cassella, Our Chief Development Officer, and Marc Becker, our CFO and he will also be joined by Nancy Stuart Our Chief operating officer for the Q&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 and our most recent 10-K filed with the SEC.

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 with that I would now like to turn the call over to Roger.

Thank you Justine 2020 was here like Milwaukee.

Our team stayed strong throughout the year, maintaining focus and executing on our goals.

We successfully navigated through challenges unprecedented in the last century and I'm proud of what our team accomplished two accounts for a business.

One major milestone of 2000, and 'twenty was our evolution to a late stage clinical development company.

Just on the data generated to date for CTV slide 43 across multiple phase II clinical trials.

We believe that we have a compelling and potentially best in class treatments alopecia area.

We've moved to pace and are enrolling patients and our first phase III clinical trial for <unk> 543 drive a one as a reminder, FDA has granted breakthrough therapy and fast track designations for CGP side 43 based on the clinical data the severity of alopecia area out or is it.

Disease, and the unmet needs and successfully treated.

We're fully committed to advancing CTV side 43 to make a meaningful difference in patients' lives of patients with alopecia Areata, though.

Our current development strategy for <unk> 543 is designed to support the filing of an NDA.

With the FTA and early 2023.

Our team deserves recognition for successfully navigating per clinical trials during COVID-19.

Earlier this month, we announced top line results from our phase II clinical trial of <unk> 692.

Adjunctive treatment of schizophrenia.

These results were not what we hoped for or expected.

The body of evidence and the field supporting G series as an adjunctive treatment for schizophrenia led us to advance 692 into phase two proof of concept study and.

Unfortunately, <unk> 692 did not meet the primary or key secondary endpoints.

Our team carried out very well executed trial, but we're obviously disappointed with the results.

Individuals with schizophrenia or in need of new treatments to improve outcomes across bowls, the symptom domains and we hope that other is exploring new opportunities a lot of success.

We do not intend to further develop 692, and we will reallocate those resources to CTV $5 43.

As we've described in the past alopecia, Areata and represents a sizable market opportunity with blockbuster potential.

Additionally, we have a number of pipeline candidates that we are assessing.

The ongoing execution of our business as well as our overall strategy of developing a novel compound with groundbreaking potential LP share yada.

And as long as to where we are today as a late stage development company.

And I'm truly excited for what 2021 Hasnt stores and.

We expect to see significant clinical and hardwoods and the year ahead.

And I look forward to keeping you updated as we move forward towards key inflection points and the clinic and email business.

With that introduction, let me turn the discussion and kitchen to provide zone development update.

Thanks, Roger and.

I want to reiterate Roger's commentary applauding our entire team for their efforts to advance our pipeline during unprecedented times.

We were able to advance our <unk> 543 clinical program and alopecia Reata and we completed our proof of concept phase II study with TTP 692 in patients with schizophrenia.

This past November we began enrolling patients with alopecia reata any thrive a E. One trial.

This is the first phase III study for <unk> 543 intended to support registration.

Currently clinical trial sites and the U S and Canada are actively recruiting patients and we expect to continue seeing growing momentum there as well as in the EU where sites will be coming online soon and.

We also intend to initiate our second phase III study thrive a too.

And the first half of this year, which will share a similar trial designed to thrive and he won with the exception that we intend to enroll fewer patients for that study in.

In addition, we plan to initiate some other clinical studies to support and round out our overall NDA package and to support product labeling.

Data from the first phase III trial is expected next year and under our development plan and the NDA is projected to be filed in early 2023.

As Roger mentioned, we have a great opportunity with <unk> 543, now in phase III development.

We are very excited about the progress we've made and the impacts ETP and $5 43 may have and the patient community.

We believe we have the potential to offer patients a new treatment option that is clinically meaningful and differentiated from existing therapies.

We will be very focused on the continued execution of the thrive a program in alopecia Areata and this year as we move closer towards registration.

Before we open the discussion to questions. Let me turn the call over to Mark to review the 2020 financial results.

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

Revenue was $7 9 million for 2020, primarily due to the recognition of non cash deferred revenue under our previous agreement with Celgene.

Research and development expenses were $61 6 million for 2020 compared to $59 8 million for 2019. The increase in 2020 was primarily related to <unk> 692 phase II clinical development expenses R&D expenses are expected to increase in 'twenty, one as we continued to advance our <unk>.

<unk> hundred 40, <unk> program towards registration and alopecia Areata.

General and administrative expenses were $18 9 million for 2020 compared to $20 3 million for 2019.

The decrease in 2020 is primarily attributable to lower legal fees are.

Our net loss for 2020 was $74 8 million or $2 40 per share compared to a net loss of $78 2 million or $3 29 per share for 2019.

Finally, we ended 2020 with $130 million and cash cash equivalents and investments during the fourth quarter. We raised net proceeds of $22 5 million through our ATM.

As a result under our current operating plan, we expect our cash to fund the company through 2021.

We are extremely pleased with the progress we have made to become a late stage clinical company and the prospect of having our first NDA filing in early 'twenty three.

Look forward to keeping everyone updated on our progress this.

This concludes our prepared remarks, and we would be happy to address any questions.

And certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.

And our first question comes from the line of.

Maury Raycroft from Jefferies Jefferies. Your question. Please.

Hi, This is Kevin on for Maury.

Thanks for taking my questions. My first question was.

You mentioned that you're looking.

Looking at other clinical studies to support your NDA package and product labeling we noticed a drug drug interaction study.

And clinical trials Dot Gov.

And with <unk> at all or are there other.

Drug drug interaction studies, you plan on starting and running and what are your expectations for this study.

Jim could you take that sure yes. Good morning. This is Jim So that's right as part of the normal NDA package, we will check the boxes on things like drug drug interaction studies. So that we have all the information when we submit the NDA and we can provide proper guidance.

For the labeling so.

As we continue to progress the overall development program for 543, where we will be doing those types of studies in parallel with our phase III. So that we will have all that information ready for the NDA submission.

Great. Thanks, and then just a quick one on the patent from.

Can you just talk about what the latest developments are there I think it looks like the arthritis case will be heard in.

And March on March 1st and.

And can you talk about whether a ruling on patent and 149 effects the rest of your pipeline.

Yes. This is Roger and thanks for the question.

And so.

As you as you indicate the <unk> patent is proceeding through the courts and.

Depending upon how the Uh huh.

The Supreme Court rules on it.

Could have either narrow or broader ramifications and obviously, we can't comment on that until we hear what CEO, Greg towards takeout is on it.

As far as its effect on the rest of the pipeline.

Every compound is a case by case situation and.

And we don't believe that all of the specifics related to the 149 patent.

And <unk> necessarily relate to any other patent that we have.

The tax differ on a case by case basis and.

Every legal situation has to be taken on its on its own merits.

Great. Thank you Roger and ill hop back in the queue. Thanks.

Right.

Thank you. Our next question comes from the line of Jason Butler from JMP Securities. Your question. Please.

Hi, Thanks for taking the questions.

Another one on the the NDA prep activities.

Can you just remind us what work you'll be doing over the next year or 18 months in terms of manufacturing and supply chain and preparations for commercialization.

Jim Yes, sure Hey, Jason.

No a great question because.

Sometimes we focus on clinical but we know that there is so many other things that need to be done.

We have a great team a lot of experience and that front.

I can say that we are doing all the things that are necessary and appropriate.

To make sure that we have are.

Our proper.

<unk> batches registration batches commercial activities going on and and those things are all on track.

Okay, Great and then just a.

Roger and in terms of thinking about the next pipeline assets and prioritization.

Obviously, you are looking for things that are.

Compounds and then the platform can have the biggest clinical impact on ore from.

From a profile, but apart from that what are your other factors that you're focused on for example.

Does it need to have some kind of therapeutic adjacencies to two for example, alopecia or are there other factors that you're thinking about one priorities and prioritizing the the pipeline advancements.

Yes, thanks for the question Jason.

Clearly one of the benefits of the.

The product platform that we have is that there is the ability to point you didn't know per different directions, we had oh really.

And unusual situation with <unk> 692 in that it had a type of differentiation, which was which was.

Profound and unusual and unfortunately that didn't extend to them.

And then.

The efficacy of the therapeutic modality, which is really.

Course based on the underlying biology of the compound.

But as far as our next compound out.

We are looking at therapeutic adjacency and that wouldn't necessarily be and alopecia areata and but we are thinking very hard about the areas that.

<unk> 543 works on humans.

Allergy autoimmune disease inflammation, and dermatology and those are aspects that are that we're keeping in mind as we're thinking about the next one up.

Okay, great. Thanks for taking the questions.

Thank <unk> next question comes from the line of Joon Lee from two Securities. Your question. Please.

Yes. Good morning. Thank you this is actually less on for June.

And just a quick one for me on dose selection and is it possible that you can go with a different dose and the second.

Phase III study and also and the possible to go beyond the 12 milligram. Thank you.

Yes.

Yes sure yeah.

I think our dose selection is done and we've established.

Milligram, and 12 milligram PID doses and our phase III trial. That's those are the doses that we brought into our first phase III at this point and time, we're continuing to build the database for both safety and efficacy around both of those doses. So we will not be changing and the doses going into the second phase III program.

And the reason we have both of those doses is that both doses have been efficacious and safety profile that we are developing.

And going with two doses into the phase III as well as potentially into the commercial environment. We will have the opportunity for physicians and patients to be able to have selection of doses and customized and optimize whichever one is best for that patient. So so these are the doses that we're studying based on the data.

We've generated and will continue to have these day these doses and a registration package.

Great. Thank you.

Yeah.

Thank you. Our next question comes from the line that the day Yang from Mizuho. Your question. Please.

Hi, good morning, and thanks for taking my question just a couple quick ones.

The first one is around.

Additional opportunities and just.

Clarification are you looking for indication expansion beyond using Sage 543 or are you thinking about new molecular entities.

And you see structure. Thanks for the question I.

I think the answer is both.

We believe that due to its mechanism of action <unk> 543 has strong potential in other indications beyond alopecia, Rihanna and that's something that we'll be exploring more in the.

The coming quarters.

In terms of new molecular entities.

And have had for some time now.

Pipeline of compounds beyond the ones that are we explored clinically.

And the resources to be able to.

Extend out our pipeline beyond <unk> $5 43, and we intend to do so.

Thank you Roger and soon.

The next question is a purely these ex U S. The 543 is in late development stage and how do you think about ex U S opportunities and 543.

Well, we are going to be doing development <unk> $5 43.

Europe, as well as and the U S and we think that there are longer term opportunities for us there.

As we've made clear our previously our focus is on commercialization and U S.

We're certainly keeping an eye on the potential for the compounds outside of <unk>.

The U S.

Thank you for taking my question.

Absolutely.

As a reminder, ladies and gentlemen, if you have any questions. At this time. Please press Star then one.

Our next question comes from the line of Esther Hong from Pat Burke Your question. Please.

Hi, Good morning, Thanks for taking my question, so with CGP $5, three moving forward and late stage cancers, and a program can you discuss any prelaunch activities and take.

And place and any comment on commercial strategy. Thank you.

Hi, yes. Thanks.

Thanks for the question, we're working closely both with our board.

And which has several members who are experienced in.

And commercialization and marketing of Covid.

Agents, both and smaller and larger markets as well as external advisors to put together a prelaunch plan.

Little premature for us to be talking about it but we're very active in that area.

Thank you.

Thank you.

This does conclude the question and answer session of today's program I'd like to hand, the program back to Justine Koenigsberg for any further remarks.

Thank you Jonathan and thank you everyone for joining us. This morning I am. Please note. Our next healthcare conference presentation will be virtually at the H C. Wainwright and Oppenheimer conferences next month and details about these presentation will be available and the IR section of our website and this concludes today's call and thank you again.

And for joining.

Thank you, ladies and gentlemen, and for your participation in today's conference. This does conclude the program you may now disconnect good day.

Okay.

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