Q2 2021 Aptinyx Inc Earnings Call
Good afternoon, and welcome to day after next second quarter 2021 financial results conference call.
At this time all participants are in a listen only mode. Following the formal remarks, we will open the call for your questions. Please be advised the call is being recorded at the company's request at this time I'd like to turn the call over to Nick Smith, Vice President corporate development and Investor Relations at Phoenix.
Nick Please proceed.
Thank you operator, good afternoon, everyone and thanks for joining us on today's conference call to discuss apps and excess financial and operating results for the second quarter of 2020.1.
Release, describing the financial results and recent highlights is now available on our website.
Today, and our call Norbert Riedel, our Chief Executive Officer or view, the recent business updates and then Andy Kidd, our President and Chief Operating Officer will review progress across our development programs, followed by Ashish Conner, Our Chief Financial Officer, and Chief Business Officer will review the financial results and.
In addition, Kathryn King our senior Vice President clinical development, and Harold Merck, Our vice President of medical and Pharmacovigilance and be on the line for the Q&A portion of the call before.
Before we begin I'd like to remind everyone that statements made during this conference call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially any forward looking statements are made only as of today and we disclaim any obligation to update these forward.
Looking statements.
Please see the forward looking statements disclaimer and our financial results release issued this afternoon and the risk factors and the company's current and subsequent filings with the SEC.
I would now like to turn the call over to Norbert to kick things off.
Thank you, Nick and Hello, everyone.
We appreciate you taking the time to join US on this afternoon's call.
Before we get to the discussion of all productive second quarter.
I am pleased to share that we have set a plan in place.
Transitioning to all of CEO over to Andy Kidd.
Our current president and Chief operating Officer.
While we are announcing this plan now.
The change and lowest endless possibilities will not become effective and.
January of 2022.
This success and plan has been well thought through.
And follows on the appointment of Andy to the whole of President.
Which took place last December.
Given his deep knowledge of the business and just like if I kind of building and growing teams.
The board of directors, and I are confident and DST ideal person true.
Nick over the role of CEO.
Since joining after Nick since 2017.
Andy has been crucial to the success of our organization.
Leading many of our internal functions and serving as the lead to executive on our product development teams.
And he is intimately involved in all aspects of how up isn't it.
He has been a great teammates for everyone within the organization and.
I have no doubt that you will excel and the whole of CEO.
I am looking forward to continuing my partnership with him doing and after this transition.
And so R&D execution progresses, and an exciting pace and we move closer to the important.
Please go ahead.
Now is the ideal time to be initiating this leadership change to ensure continuity during a period of potentially significant growth next year.
And as part of this plan I will transition into the role of executive Chair and.
And we will remain actively involved alongside and D and the other members of our board who and Halloween.
The major milestones ahead.
I remain fully confident and departments of our innovative technology platform to deliver novel therapeutic options for patients suffering from underserved CNS conditions.
And I believe this transition plan is consistent with our focus on recognizing that value for patients and for shareholders.
Aligned with the upcoming transition I am pleased to have and deliver the updates and our clinical programs.
So Andy Please proceed.
Thank you Robert.
And this is an exciting chapter for after next and I'm honored to have the opportunity to lead a fantastic group of colleagues.
I've had a great experience at <unk> since joining and 2017 and I'm looking forward to continue and the important work. Our team is doing to bring these medicines to the patients that need them.
They are on the cusp of some crucial milestones and I am glad to discuss the recent progress across our programs and also highlight several important plans for the future.
Let's start with NY X 295, which we're developing as a novel therapy for 2 indications and the chronic pain area painful diabetic peripheral neuropathy and fibromyalgia.
At present each of these indications affects millions of people and just the United States alone and together represent a substantial unmet medical need.
Especially important to better alleviate pain symptoms with therapies that are safe, well tolerated and with abuse potential.
We're currently conducting a phase <unk> study of NY X $2.95, and each of these 2 indications.
We believe that Nyse's 295 has the potential to address many of the unmet needs in this space and could be a novel and differentiated therapeutic solution for patients suffering from chronic pain.
We've continued to make significant progress throughout the summer and enrollment and both of our phase <unk> study is tracking very well we remain on schedule to readout and data from both studies and the first half of 2022.
I'm, particularly pleased by the dedication of our team who have implemented measures to streamline enrollment of qualified subjects and the ongoing pandemic, while prioritizing the safety of all involved and the studies and we.
Look forward to providing additional updates on timelines as enrollment progresses.
Let's move onto NY X 458, or a product candidate in development for the treatment of cognitive impairment associated with Parkinson's disease, and dementia with lewy bodies.
And cognitive deficit stemming from Parkinson's and dementia with lewy bodies can place a significant burden on the overall quality of life for both patients and their caregivers.
Unfortunately, there are no available therapies available today and it can sufficiently address the decline in learning and memory and executive function brought about by the progression of these neuro degenerative disorders.
We're very excited by the prospects of N Y X 458, given its novel mechanism and compelling preclinical data in nonhuman primates.
We're currently evaluating NY X 458, and a phase 2 exploratory study to assess safety and tolerability and to detect therapeutically relevant activity on cognitive deficits.
Elisa specific measures and attention memory and executive function.
To recap on some of the study details. This is a 2 arm double blind study comparing a 30 milligram dose of N Y X 458, with placebo and approximately 100 patients over a 12 week treatment period.
I'm very pleased with the steady progress we've made over the past few months on enrollment and.
And we remain on schedule to reported data from this study and the second half of 2022.
While we are starting and Parkinson's and dementia with Lewy bodies, we recognize the broad relevance of positive NMDA receptor modulation and the opportunity to further develop and why X 458 across numerous cognitive conditions.
Finally, we will discuss NYSE 708 free and our plans for the next stage of clinical development and post traumatic stress disorder or PTSD.
<unk> is a very serious and common mental health disorder that can affect people from across a range of backgrounds, who has been exposed to a variety of harmful trauma.
The current pandemic has served as a stark reminder of the impact of this disease.
There are only 2 currently approved pharmacotherapy and PTSD, both ssris that were occurred.
And with more than 20 years ago.
Due to inconsistent efficacy and Tolerability and this remains an area of significant unmet need.
In June we outlined our future development plans and PTSD, which will consist of 2 well powered independent studies evaluating daily doses of <unk> 783.
These studies will build on the learnings from our phase II exploratory study and which NYSE 73 demonstrated encouraging activity on PTSD symptoms.
Both studies will be randomized double blind placebo controlled studies.
And is expected to enroll approximately 300 patients include a 10 week treatment period.
Good day and use the FDA accepted endpoint of caps 5 total score as the primary endpoint.
1 study will evaluate once daily dosing of 50 milligrams of NYSE 73 against placebo.
<unk> milligram dose performed well and the prior phase III study and we believe the signals we observed in that study show its potential to deliver clinically meaningful effects and a larger study.
The other study will evaluate once daily dosing of 150 milligram against placebo.
Our earlier clinical trials demonstrated a strong and safety and Tolerability profile and our selection of 150 milligrams is based on positive preclinical efficacy data.
A significant reason we've decided to conduct 2 separate studies is to mitigate placebo effect and reduce variability.
It's well described that larger numbers of arms and psychiatric studies can increase placebo effect.
In addition, as you increase the number of arms and sites and psychiatric studies. You also introduced multiple additional sources of variability that can significantly impact the ability to separate from placebo.
We've worked on the study designs with a number of leading experts and also incorporated the feedback received from the FDA during our type C meeting in April.
Based on our discussions and that meeting if the data are sufficiently positive. We believe these studies can potentially be registration and supportive of course that consideration will always be a matter for review by the FDA.
With these clinical plan is finalized we expect to commence the 15 milligram study and the fourth quarter of 2021, and the 150 milligram study and the first quarter of 2022.
As we approach the initiation of these studies, we remain incredibly excited about <unk> 73, and its potential to address a significant unmet medical needs associated with PTSD.
Across our programs and there was a lot of positive momentum and the coming year is shaping up to be a very exciting 1 I look forward to keeping you updated as we approach these multiple important free nights.
With that I will now turn the call over to Ashish to review, our second quarter financial results.
Thank you Andy.
As we make progress across each of our programs. We are fortunate to be supported by a strong cash position.
We anticipate our current cash will enable and readouts from multiple phase II clinical studies in 2022 and fund our operations into the year 2023.
Beginning with the balance sheet, we ended the second quarter with $129 million and cash and cash equivalents compared to $141 million at the end of 2020.
The majority of our spend was focused on research and development related to our ongoing clinical studies across chronic pain and cognitive impairment.
R&D expenses were $14.8 million for the second quarter compared to $8.4 million for the same periods and 2020.
We expect R&D expenses to increase throughout 2021 based on our 3 ongoing clinical studies as well as the initiation of our phase II program.
And PTSD toward the end of this year.
We reported G&A expenses of $5.1 million for the second quarter compared to $4.8 million.
Same period and 2020.
And finally, our net loss for the second quarter was $19.9 million.
Compared to a net loss of $12.6 million for the same period and 2020.
With that I'll now turn the call back over to Norbert.
Thank you Ashish.
Next 12 to 18 months have the potential to be a transformation of purely it flipped and me.
With a strong financial position and a dedicated team.
Focused on the continued execution of these 4 programs.
Pick this to be a very exciting time.
We are happy to take your questions now.
At this time, if you'd like to ask a question. Please press Star then the number 1 on your telephone keypad.
To withdraw your question press the pound key.
And your first question comes from the line of Laura Chico with Wedbush Securities.
Good afternoon, and thanks for taking the question and congratulations to both Norbert and Andy on the upcoming transition.
Maybe 1 question on the succession plan and then I have a follow up.
Norbert and I think you alluded to this and the prepared remarks, but I'm wondering if you could expand on that the timing and the rationale for the move now.
Versus later and again congratulations to both of you.
Yes. Thank you Laura Thank you for the calculation and so I'm glad you asked the question. So first of all the cash.
Transition will not be effective until January of 2022.
I have always looked at succession plan and he has 1 of the key responsibilities of any CEO and.
And so we have worked on this really with the board and they're very thoughtful and flat and flew way.
All the way back to starting with the promotion of Andy to President and COO last December.
And when you ask why now.
And this post new leased and I'm going to be at the helm of this organization literally 6 years.
B as we come to the end of this month, it's been a terrific privilege to serve as the CEO of the company.
But I also built owned and 64 years old this coming October and <unk>.
Once you spend more time with my family I want to have more time father activities and <unk>.
Commitments I house.
And we see a very clear commitment to app to Nick in the form of being the executive chair of the board and.
And remaining and employee of the company.
The timing I fell towards the idea of the board felt the same way.
After we had completely disclosed next steps and all our development of PTSD.
And we are still far enough away from all of our data readouts in our pain studies.
And that seemed to be an ideal window not as true in any way call. It stakeholder I'll share with our concerns.
There are of course very sensitive to that and so that's basically the framework that led us to announcing its 2 day.
And for it to be seamless and smooth it will actually be giving and even more time now to it.
And basically translate this change into.
And the PB now in January and for the actual transition overall and.
It's I think.
It's a very very accentuated, we way off leadership changes.
So I leave it with that law, but thank you for the commentary.
Thank you maybe 1 quick follow up there.
And this is probably a naive question, but with respect to the phase 2 readouts coming up and the first half of 'twenty 2 both of the studies. We noticed are showing primary completion dates of June and and the clinical trials that Gov listing. So I'd just like to better understand the communication strategy here should we be anticipating separate readouts from the trial.
Or would this be in a single announcements, thank you and congratulations again.
Yeah, So Laura.
We've mentioned before and Thats, both price and rolling out plan.
We will not be able to comment further on this.
And at least until we are closer to completing enrollment and at that point I think we can provide a little bit more guidance, but at this point. We are still very confident that first half of 2022 is the timeframe for the rebuild of both studies.
And your next.
And your next question comes from the line of Marc Goodman with SBB.
Leerink.
And thanks for taking my question.
And on the LIFO Mark.
1 quick question regarding the phase 2 b trial.
7.3 can you remind us about the rationale for selecting the 1 Cte d'ivoire and dose.
The U shaped dose response, you observed so far and do you have any.
And so you mentioned, the preclinical data and to support <unk>.
And more color there thanks.
Yes happy to answer that so.
It's a little bit of a trade off and <unk>.
Mentioned, the and very few shaped dose response, that's 1 of the factors that went into our thinking and selecting the 150 milligram dose.
The other 2 were were the ones I had.
And the fact that from a safety and Tolerability point of view, we're not constrained.
Yet by by safety and Tolerability and selecting doses.
And then our preclinical data so as we were selecting a dose and we were thinking about the fact that we do have some preclinical data that shows that doses that are higher and the range may be effective.
But we're also concerned to your point about going too high and dose. Because then we would be worried that the adverse U shape.
Fact wood would be visible so it was a balanced and the tradeoff between those 2 factors and I think what we liked about 150 milligrams and it seems to be both well within the effective preclinical range, while also being.
Well differentiated from the 50 milligram and so Thats why we settled on 150, but very much was informed to the point and your question with the University of Chicago.
Thanks, that's very helpful and good luck on the sea and condition.
Thank you. Thank you very much.
And your next question comes from the line and Charles Duncan with Cantor Fitzgerald Fitzgerald.
Yes.
Norbert and.
Andy and team for taking my question and let me add my congratulations to both of you and new opportunity set going forward.
But I did want to ask you a few questions with regard to 783 in particular on the clinical trial design.
Could you help us understand here.
We will be conducting the 2 studies, there and you seem relatively large compared to some we've looked at and so that's good news.
Also will you include all comers.
Or all types of phenotypes for enrollment and then do you allow cognitive behavior therapy to occur during the study.
Thanks Charles.
Thanks for the congrats and yes happy to answer all of those questions I think.
For the for the duration sorry for the location of the studies.
We're going through kind of feasibility right now.
I think it's certainly quite possible that would be payable to conduct both of those studies within the U S.
And Thats, certainly our our thinking going in.
To that but we can confirm that.
A little further down the line with actually selecting specific sites.
It's our intention though.
And then with respect to the phenotype of the patients and all comers.
I think our goal as we've talked about before is to enroll abroad and representative population with PTSD, that's quite important and something we discussed with FDA something we believe is important.
And so in terms of.
And the various different parameters around trauma.
And patient background and sort of characteristics.
There will be some diversity there I think 1 we've talked about as times of trauma, we intend to include.
Patients with all durations of time and strong outside of 12.
12 months, which is the minimum and with the cap and will likely be very high.
Or at least 20 years or so.
But within that we will undertake some stratification to achieve what we think is a representative sample actually for clinical trials, which is to have a population skewed towards the shorter and of time since trauma.
In terms of where the media and being.
Less than 10 years and so forth.
<unk>.
With respect to cognitive behavioral therapy, we will not allow.
Certain types of psychotherapy, and the study and cognitive behavioral therapy is 1 of them.
Exposure therapy.
And another.
And a couple others really what you would consider evidenced based and more intensive forms of psychotherapy for PTSD or not.
Alive during the study we do allow other forms of psychotherapy.
Provided there is no change to the regimen of cyclophosphamide that occurs during the study to be in the background.
And let me share however.
Yes, Yes, you answered the question and very well Andy last question is.
Regarding reduction of variability or placebo effect.
Do you intend to have enrollment criteria.
Net.
And require a certain baseline <unk> score and <unk>.
And no change or limited change from screen day randomization.
So I think with respect to placebo effect there are quite a few things that we'll be looking at to attempt to manage the placebo effect I think some of those are things that we'll talk about it and more detail at the time that we are initiating the studies and then of course, we can we can go into.
Detailed but I think more finality on some of those things.
And that will include the role that screening might play in that I think it's probably better to comment in more detail as we kick off the studies.
Super Thanks for taking my questions and again, congrats to you and and to Norbert.
Thank you.
Your next question comes from the line of free to borrow with Cowen.
Good afternoon, guys. Thanks for taking my question, so I have a.
A question on <unk>.
And.
Yes.
Thank you.
And Parkinson's disease dementia with Lewy body.
And Andy you mentioned that youll be looking at endpoints and.
Attention memory and Italy.
Yes.
And it gets attention memory and executive function.
It is.
If I ask you just sort of rank order those endpoints and importance to the disease and also sort of which of those 3 cognitive function.
And that the mechanism.
Suggest you might see the first benefit and the greatest benefit.
What would you what would you think or how would you answer.
Yes, thanks for too.
To comment a little as well, maybe but I think the simple answer is that they're all clearly linked to NMDA receptor function actually.
And that depending on the individual patient I think they can all be extremely debilitating. So it's a little hard to rank them and those ways and I think.
The way that they interact with each other are also can be.
No.
And can be disabling so so that if you have deficits and both memory and executive function. For example that can be a more significant problem, but I think it is a difficult concept.
Just sort of talk about ranking them I think the good news is our mechanism should be applicable and that's why we selected them obviously as our mechanism should be applicable to all we have different tasks for each of them and I think at this point, what where I'm really more interested and as a holistic perspective on what does the drug could do across and within each of.
Those demands, but Harold I'll, let you comment maybe a little more.
Yes, so I think what's quite important to keep in mind is that.
And a strong exploratory element within this drive so the client is to identify the right patient population, we deliberately and extend that the patient population from originally just Parkinson's disease dementia to the biologics.
Biologic and very similar but broader concept of let's see.
Cognitive dysfunction in the Olympics.
Diseases and this allows us to dig a little bit deeper into the data window and the BTC.
We find the sweet spot for those subjects, who.
And the best and also in which areas will be subject responds, the best which would provide the best basis Paul.
Following particularly the pace to be twice that.
And Scott and then as you and your book.
Im sorry, just a quick follow up if you look at <unk> versus <unk>.
Have you had conversations with the agency.
And that.
Cognitive dysfunction and either.
Conditions.
Sort of.
Could you sort of understood.
Similar and I'm, just thinking about that.
Sample with ERP and how the agencies.
And understanding of the condition across different underlying pathologies and change over time.
Yes, I think it's a great question and it's.
Certainly a discussion to be had but I think the good news is that there is common underlying biology to harold's clients that means that it's quite relevant for us to be studying them.
Together with the same endpoints from the same drug.
And so I think we'll have to wait and see how those regulatory discussions unfold, but I think our.
Side of that is that we think theres, a common biology, and we think that these patients are all good patient for the for the drug.
Got it thanks for taking the questions.
And your next question comes from the line of Myles Minter with William Blair.
Hi, guys. Thanks for taking the questions and congrats to Norbert and Andy on the say our transition.
And <unk>.
My question's, a bit more higher level and it's more to do with Nick.
And the confidence that in the Patriots day trial designs that if positive day, they would serve as the pivotal trials.
Have the rates and FDA interaction with its hot say meeting and I'm just wondering like how confident you are coming out of that I just asked because this thing.
And I think down maybe free net backs that have recently been given by the division and psychiatry and alignment with salt with the FDA and then once the filing has gone in.
It's it's shopped at a few of US sorry, I'm just trying to get some clarity around your degree of confidence that this is definitely a at.
And at least to support the efficacy clients. This is what you need on nice deposits I read out positive.
Hey, Thanks, Thanks, Michael I think what we've been saying is that we have confidence these design and can serve as pivotal if sufficiently positive, but we understand that that is ultimately going to be a matter of FDA review. The meeting we had with a type C meeting it was not a complete and a phase II meeting we do.
Don't have.
A full agreement on everything that has to be contained within and NDA norm.
Where are we seeking that so.
So I think that the way we were positioning. These studies is that they are designed and the same way that pivotal studies should be designed for our FDA discussion and therefore is positive 1 are each of them both of them conserve.
As pivotal studies, but there would still be more work to be done and development beyond that.
You know there would be other aspects of an NDA for example, I think you've alluded to that that these could only really support.
Certain of the efficacy claims I.
And I don't think we were trying to position. It as these are the 2 pivotal studies that are needed I think our perspective is more of these are 2 independent studies.
And we would need.
And 2 positive pivotal studies to get an approval.
It's a matter of discussion as to whether those can be at different doses or would have to be at the same dose. So I think our expectation is that there will be another phase of development. After these studies because there is a good chance that these studies are positive can serve as a pivotal and then obviously by doing so hugely derisked that next stage of development.
Yes.
Sure understood and then maybe just a follow up Bob following up on <unk> question on the 783.
Trial designs.
You guys do exclude patients with complex Patriots day.
Is that correct.
So formulate because there isn't a separate diagnosis of complex PTSD and the DSM, we will not formally be excluding patients with complex PTSD.
There may be other characteristics of complex PTSD that would otherwise be excluded but.
But as a specific exclusion complex PTSD will not be 1 of them.
Okay. Thanks.
Thanks for the questions and congrats again.
Thank you Mike.
And your next question comes from the line of Gary Nachman with BMO capital markets.
Hi, Thanks for taking my question this is ebb and flow through and and for gain and.
Yes, I just wanted to I had a question on NYSE 73.
Well.
So based on a type C meeting with the FDA.
And what would you expect that you would need to show on cash 5 total score to be had been considered as registration and supportive.
And based on your discussions with Kols what.
And is actually considered.
Clinically meaningful.
Yes.
Yes so.
The key.
The thing is obviously to be able to separate from placebo and successfully and we talked I think a lot and our remarks about some of the strategies that we're putting in place to do that.
And in the way that the study is powered in order to separate from placebo of course, it depends a little bit on how well you manage the variance and therefore, what difference and capped 5 scores you would need to separate from placebo I think our assumption is that a separation and the mid single digit from the cast 5 score.
It would be.
Are sufficient to show that separation.
It's interesting when you talk to Kols, though.
They talk more about factors like changed from baseline and the number of patients that have a particular magnitude of response rate from baseline and.
And the real World, obviously about how they think about whether a drug should be prescribed to a given patient. So I think it was a little bit of a balance of 1 thing to show a good response rate across a.
A reasonably strong number of patients, but then also satisfying of course the requirement to design the study and a way where we can separate from placebo.
With still a clinically meaningful improvement and kept 5 and and we think that somewhere in the single digits is probably <unk>.
With that.
Got it thanks.
And your last question comes from the line of Rob.
Oliver <unk> with HC Wainwright.
Hi, Thanks for taking my questions and congrats Norbert and Andy on the role transitions here.
Just wanted to clarify a couple of points related to the efficacy outcome measures and the 45 day trial. My understanding is that some of these outcome measures are specifically evaluating psychiatric domain, including suicidology can you talk a little bit about those and the context of these.
PDD and LDP indications as well as their potential implications. If you see robust impact on these measures for development to 45 day on a more neuro psychiatric level.
So thats specific measure and it's really being included as a safety measure. So it is very important and that study to assess safety and tolerability.
The key outcomes that we're looking at for efficacy.
Or the specific neurocognitive tests.
I'll provide a little bit directed towards the 3 cognition domains attention memory and executive function there are 6.
Neurocognitive tests and total.
Looking at those primarily as we assess.
So I think the specific scale you mentioned is more on the safety side.
Okay, Great and then with respect to the caps 5 measure.
Assuming that you see a significant impact on that particular efficacy measurement. What do you think the read through might be for utilization of 73 and <unk>.
Other stress related disorders, how readily.
<unk> if you will.
Well Mike.
Impact on the accounts 5 measured.
I mean, it's a.
It's a difficult question to answer because.
The caps 5 is clearly instruments, specifically developed for PTSD and see essentially obviously contains.
And diagnostic criteria for PTSD.
So it's a little difficult to comment on that I think.
<unk> because I know the pattern of response and different questions may lead people to draw different conclusions I think right now we're really mostly focused on PTSD with 703. The other indications that we have talked about as being interesting for us to develop 7 and 8.3 and.
And the area more of substance abuse and alcohol abuse.
And we will not likely see very much on that and this study because we are excluding and substance and alcohol abuse.
And from the study.
But I think we do still have plans to pursue those indications we had great preclinical data and those areas.
And I think as we would move forward in those areas.
1 of the very high up the list of areas and we would next go into in terms of clinical studies.
Thank you.
I'm sure there are no further questions at this time I'd like to turn the call back over to Norbert for any closing comments.
Thank you operator, and thank you all for your questions.
We appreciate your time and attention please be relative and enjoy the rest of your day.
Right.
Thank you for joining US today, you may now disconnect.
Okay.
And.
And again.
And the industry.
Sure.
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