Q3 2021 Cerevel Therapeutics Holdings Inc Earnings Call
Okay.
Good morning, welcome to <unk> Therapeutics third quarter 2021 financial results Conference call.
At this time, all participants are in listen only mode.
Later, you will have the opportunity to ask a question during the Q&A portion of the call.
Please note that this call may be recorded I will now hand, you back <unk>, Vice president of corporate strategy and Investor Relations.
Thank you good morning, everyone. We appreciate you joining us for our third quarter 2021 results call.
On today's call you'll be hearing from Dr. Tony Coles, our chairperson and Chief Executive Officer, Dr. Rey Sanchez, our Chief Medical Officer, Dr. John <unk>, Our Chief Scientific Officer, and Mark <unk>, Our interim Chief Financial Officer. Please.
Please refer to our press release from this morning detailing our Q3 performance as well as our updated corporate presentation, both of which are available on our website.
Like to remind you that we will be making forward looking statements that reflect our current views related to our financial performance future events and industry and market conditions as well as forward looking statements, including the potential attributes and benefits of our product candidates and the format and timing of our product development activities and clinical trials.
We strongly encourage you to review the information that we filed with the SEC regarding specific risks and uncertainties.
Now hand, it over to Dr. Tony Coles chairperson and CEO of <unk> to provide an overview of our achievements and outlook.
Thanks, Matt and good morning, everyone. Thank you for joining us today.
Earlier this year, we announced topline results from our phase <unk> trial of CBL to three one imports selective positive allosteric modulator or Pam and schizophrenia.
Compelling data represented our first major step toward realizing our exploration.
B Premier Neuroscience company.
In the early part of the third quarter, we secured $350 million follow on offering and redeemed our outstanding public warrants now we're well equipped with the people the capital and the momentum to execute on our programs and bring much needed medicines to patients as rapidly as possible.
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Last month, we held a virtual R&D event, where we discussed CBL 87, one a <unk> partial agonist in development for dementia related apathy.
And related to additional data for CBL to three one.
These are just two of the mini programs in our broad portfolio, all of which leverage our deep understanding of neuro circuitry and receptor subtype selectivity to drive therapeutic benefit while minimizing side effects.
Specifically, we are advancing CBL Q3, one rapidly into phase III, we shared the broad outlines of our development program. During R&D event, a few weeks ago, which Ray will review again in just a moment.
And we will provide additional details on the timing and design of that program by mid to late first quarter of next year.
We also expect additional data readouts in the next few years across other programs in our pipeline we.
We anticipate two data readouts for <unk> in 2022 with data from our phase one acute anxiety trial now expected by the end of the first quarter of 2022.
And the readout from our phase II focal epilepsy trial in the second half of the year.
Also in the second half of 2022, we expect a phase two readout of <unk> 71 in dementia related apathy and in 2023 of course, we expect data from our phase III program for <unk> in both early and late stage Parkinson's.
In addition, we have a robust early stage pipeline, including multiple programs in development for substance use disorder and major depressive disorder. We also have state of the art laboratories, and discovery capabilities at our brand New Cambridge crossing facility, where we intend to identify new neuroscience.
Drug targets, including some with disease modifying potential with.
With the depth of our pipeline that spans all stages of development, we are well positioned to deliver a number of important catalysts in 2022 2023 and beyond.
Now, let me ask Dr. Rey Sanchez, our Chief Medical officer to provide the latest updates on our clinical development efforts.
Thank you Tony and good morning to all of you today.
Today I'll be reviewing our late stage programs, starting with CBL to three one in development for the treatment of schizophrenia.
<unk> is designed as a once daily oral medication without the need for titration that is highly selective for <unk> four over other muscarinic receptors.
We believe this selective targeting enabled CBL to three one to drive any secada effect, while avoiding serious Gi <unk>.
Extra pyramidal akathisia and metabolic side effects that are commonly observed with non selective muscarinic agents <unk> approved antipsychotic agents.
In June of this year, we released positive top line data from our phase one B trial CBL to three one.
In this trial, we enrolled 81 subjects randomized in a one to one to one ratio to receive 30 milligrams QD or 20 milligrams PID.
Of CBL to three one or placebo.
Both doses of <unk>, three one demonstrated clinically meaningful and statistically significant antipsychotic effects with no meaningful differences in gastrointestinal side effects.
<unk> extra pyramidal symptoms or weight gain compared with placebo.
30 milligram once daily group demonstrated an absolute improvement versus baseline of $19 five points, while the 20 milligram twice daily cohort showed an improvement of 17 nine points on the pans total score.
In addition relative to placebo both treatment groups had statistically significant reductions of $12 seven and 11 once respectively.
To put this into context previously approved medications have historically shown a 10 to 15 point or greater improvement relative to baseline or a 5% to 10 point improvement on a placebo adjusted basis our.
Our trial results were further supported by clinically meaningful improvements in the pans positive and pan's negative subscales as well as the CGI S.
The safety and Tolerability data from this trial were also very encouraging.
CBL to three one was not associated with extra pyramidal side effects akathisia or weight gain.
Treatment emergent adverse event rates were similar across all three arms and very low rates of gastrointestinal Aes were observed importantly, there were no discontinuation is related to cardiovascular or gastrointestinal side effects.
As expected, we observed modest asymptomatic elevations in heart rate and blood pressure with CBL to three one which attenuated over the six weeks of treatment and were not clinically significant.
We'll continue to monitor heart rate and blood pressure in our phase II program.
Given the strong any psychotic activity in the favorable tolerability profile observed in the phase one b trial, we are rapidly advising advancing to CBL to three one into phase two development for the treatment of schizophrenia.
At our R&D event on October seven we presented new pharmacokinetic and pet receptor occupancy data, which are essential to informing our next steps for CBL to three one.
We plan to present additional PK PD data at the annual meeting of the American College of Neuropsychopharmacology in December.
Based on the data we have seen to date, we will be pursuing once daily doses without titration and our phase III program.
The selected doses will include the 30 milligram once daily dosing regimen that demonstrated impressive results in the phase one b trial.
Our plan includes one or more adequately powered placebo controlled phase II trials to fully explored the dose range for CBL to three one.
Trial designs follow established precedent for drug development in schizophrenia, which includes six weeks of inpatient treatment Ah patient profile similar to part B of our phase one b trial, and our primary endpoint of change from baseline on the pans total score.
We are looking forward to providing the full details of the phase III program by mid to late first quarter of next year.
The next expected data readout for Sarah but will be for <unk> or alpha <unk> selective Gaba a receptor positive allosteric modulator or Pam in acute anxiety.
<unk> is currently being studied in a phase one randomized positive in placebo controlled proof of principle trial in healthy volunteers.
We can now say that we expect to have some data for this trial by the end of the first quarter of next year.
Those results will inform how we advance this compound in one or more anxiety related indications.
We're also dosing to rig about in our phase II global proof of concept trial in focal epilepsy.
One is the realized trial.
As well as its corresponding open label extension trial data in focal epilepsy continues to be expected in the second half of 2022.
Now to round out the discussion of our late stage programs, our phase III Global tempo program <unk> in Parkinson's disease is progressing nicely with.
We continue to dose in all three of the phase III trials temple III in late stage, Parkinson's and temples, one and two in early stage Parkinsons. In addition, we are.
Dosing, both rollover in de Novo patients and 10 before our 58 week open label extension trial, we expect data from $10 three in the first half of 2023 and data from <unk>, one and two in the second half of 2023.
Now that I've reviewed the updates towards three lead clinical programs I would like to turn it over to Dr. John <unk>, Our chief Scientific officer to provide updates on the rest of our pipeline John.
Thank you Ray good morning, everyone.
Our R&D event last month, we discuss CBL 871 R. <unk> D side dopamine receptor partial agonist in phase II development for the treatment of dementia related apathy.
These are among the most common neuropsychiatric comorbidities associated with dementia is the remains a devastating condition without a currently approved treatment option.
Our 75 subject randomized phase III trial is designed to test two doses of CBOE at 713 milligrams and one milligram once daily relative to placebo over 12 weeks of treatment.
We will be assessing patients had a range of established efficacy measures to understand the overall therapeutic potential of <unk>, one and to determine the most appropriate fit for purpose metric to evaluate changes in this condition.
We have now dosed the first patient in this trial and we anticipate clinical results to be available in the second half of next year.
In June we received fast track designation for <unk>, one in the treatment of dementia related apathy, which has the potential to enable early and more frequent interactions with the FDA as well as eligibility for rolling NDA submission and priority review.
We're looking forward to interacting closely with the agency and determining the best path forward for developing a treatment in this novel indication.
In addition, we are advancing a number of earlier stage clinical programs, including Cvs $93, six or D. Three preferring dopamine receptor antagonist for the treatment of opioid use disorder.
CBL 354, or Kappa opioid receptor antagonist in development for substance use disorder, and major depressive disorder, Mbd and CBO O 47, our selective <unk> inhibitor in development for schizophrenia and MDT.
We're also building out a robust drug discovery engine and our research labs in Cambridge crossing with multiple discovery stage programs ongoing we're leveraging our differentiated understanding of neuro circuitry and world class chemistry to develop and explore potential of highly sophisticated small molecules.
We believe this research engine will fuel regenerative pipeline of novel Therapeutics for many years to come and we're looking forward to keeping you updated on our ongoing progress.
I'll now turn it over to Mark Bowden reader, our interim Chief Financial Officer to review, our financial performance for the third quarter Mark.
Thank you John.
Good morning, everyone and thank you for joining today's call. Please.
Please refer to this mornings press release for full details of our financial update.
For the third quarter total operating expenses were approximately $55 million, which includes R&D expense of $40 million in G&A expense of $14 million as expected total operating expenses for the third quarter grew over prior quarters, which is primarily driven by the ramp up of our clinical trials.
And higher public company G&A costs, as we grow our business.
Relative to relative to the third quarter last year.
<unk> expense increased by approximately $16 million. This increase was primarily driven by the advancement of our late and early stage programs and increase in spending as we build out our laboratories in Cambridge crossing and an increase in infrastructure costs to support the progress of our pipeline.
R&D expense for the third quarter also included $2 5 million of equity based compensation expense relative to $1 million for the third quarter last year.
We expect R&D expenses to continue to increase as we advance our clinical programs.
G&A expense for the third quarter was $14 million compared to $10 million for the same period in the prior year.
G&A expense for the third quarter also included equity based compensation expense of approximately $3 6 million versus $2 $4 million for the third quarter last year.
We continue to expect G&A expense to increase over the coming quarters as we support the growth of the company, including the progression of our R&D programs and our public company infrastructure.
As of September 30, our cash and cash equivalents were $670 million.
Which includes proceeds received from our follow on offering in July and proceeds from the redemption and exercise of our public warrants.
With our strong balance sheet position, we're prepared to continue to advance our lead programs, including <unk> hundred 31, the rig about <unk>, while also pursuing earlier stage clinical programs in drug discovery initiatives.
And with multiple value creation opportunities expected over the next three years, we expect our current cash position to fund our operations into 2024.
I will now turn the call over to Tony for concluding remarks.
Thanks Mark.
As you can see we're advancing our broad pipeline and building what we hope will become the Premier Neuroscience company Neuroscience, we now as the next great Frontier Medicine at Cerro Pelon is at the forefront we expect multiple important data readouts in the next few years and are excited about the potential.
We have in our pipeline to transform the lives of patients and their caregivers. Thank you for joining us. This morning, I also want to thank our employees, who without whom we certainly could not do what we do without your passion your devotion and your hard work.
And I want to express my deep appreciation for the participants and investigators and all of our clinical trials for your continued contributions to the development of these much needed medicines with that operator, we can now open the floor for questions.
Thank you to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.
I would like to ask a question press star one.
Our first question comes from Michael Yee with Jefferies. Your line is open.
Hi, This is Dennis staying on for Mike. Thanks for taking the question can you. Please give a little bit more color on the upcoming <unk> data.
Sign and powering assumptions I think.
The prepared remarks, you emphasized that you will be presenting some data in the first quarter, which I thought was.
Interesting comment.
What are you planning to report and what would be considered promising.
Faced with anxiety trial and as a follow up can you put that into context with J&J is prior data. Thank you.
Sure. Thank you for the question Larry Why don't you why don't you take that question.
Thank you Tony and thank you for that question. So as you know we are using the carbon dioxide inhalation challenge model to understand the.
The potential signal our use of <unk> in treating panic syndrome.
This is a model thats been sensitive to drugs that had been used to treat anxiety disorders, including benzodiazepine and the ssris.
And our hope is that we will be delivering the.
Data readout of this trial by the end of the first quarter as you know.
This is a trial that is being conducted in healthy volunteers and the center for human drug research in the Netherlands.
Two period to sequence crossover design that has three cohorts that looks at 50.
<unk> 50 milligrams, a day 15 milligrams a day and also two milligrams of extended our PRASM Lam.
A day as well and the reason for including the <unk> treatment arm is that was also used in the Orexin. One inhibitor program that was conducted by J&J. So it will give us an opportunity to really juxtapose the data and better understand how we fare on the panic symptom checklist.
Which traditionally.
A clinically meaningful outcome has been two to three points.
Placebo adjusted on the scale.
<unk> the Orexin trial showed a three one.
Placebo adjusted difference so we will use the collective information and working with our advisers who are familiar with this approach. This design in this population.
To make a decision on our next steps and treating inside.
Thanks, Ray and I am sure everyone did here, but we are bringing our guidance for top line data to the first quarter instead of the first half of next year. So stay tuned we expect to have some data here very shortly thank you operator, we'll take the next question.
Our next question comes from Paul Matisse with Stifel. Your line is open.
Great. Thanks, so much for taking the questions.
A couple on <unk> as well I was wondering if you could just kind of remind us about the powering of this study and then kind of separately sort of taking a step back right to hope with the Alpha one selectivity hypothesis is that this can give you sort of the good of the benzodiazepine class without the bad so in this study specifically what have you.
<unk> to see from the comparator arm in terms of things like sedation rates evidence of tolerance or withdrawal and what do you see as kind of a clear cut avenues. In this trial just sort of prove out the alpha one selectivity hypothesis. Thanks, so much.
Okay. Thank.
Thank you Paul J RFP, if you would actually take the alpha wants to look at it.
Selectivity piece I know that we have gone through this before but I think let's just set the context for Paul's question talk a little bit about the mechanistic rationale for it.
That might be efficacious, and then Ray if you would answer the questions about the powering of this trial and then the.
<unk> side effect profile that we'd be looking for so first of all the mechanism Jr.
Sure. Thank you Tony and thanks for the question Paul Good to hear from you.
Yes, so as you may remember the intent of having an alpha one sparing alpha 235 compound is to be able to enhance inhibition in the neural circuits that underlie both epilepsy and Thats why were looking at focal onset epilepsy and a phase II study and as you know that is the more appropriate studied.
Look for tolerance and that is part of the trial design and so we believe it alpha one sparing will allow us to show that we don't have the tolerance as seen with the Alpha one directed compounds also as you mentioned.
Sedation piece. So we don't Alpha one is expressed in the circuits in the brain that under life sedation and so by avoiding that we've actually been able to go to very high receptor occupancies, including in clinical setting and not see the sedation and so what we wanted to do is demonstrate that 235 plays a role in the circuitry that underlies panic and.
<unk>, but avoid the time very common side effects that youre seeing with benzo use which is the dose limiting sedation that scene when you dose.
Even moderate levels of receptor occupancy so even 20% receptor occupancy you can see comparing levels of motor control and sedation and so what we wanted to do is demonstrate the ability to have that panic benefit to avoid any of the cognitive motor coordination.
<unk> effects that are commonly seen with nonselective benzodiazepines.
And so with that I will turn it back to Tony.
Ray just before our cortex next question Ray if you would talk a little bit about the powering of the study that was one part of Paul's question.
The relative.
Relative to clinical commentary you'd like to make great right. So Paul as you know this is a.
Proof of principle trial that is fairly small it's got three cohorts of 18 healthy volunteers in each cohort.
It's not powered to show any differences will look at of course, the confidence intervals and the like because the treatment duration is so short that issues like withdrawal and tolerance and the like we will not be readily evaluated just given the nature of the design, but what we do want to see us.
On the panic symptoms checklists relative to all PRASM land is really what that placebo adjusted difference shows.
And the minimum effective dose of 15 milligrams and the top dose of 50 milligrams a day and then of course look.
<unk> for some of the.
Adverse events or some of the side effects that that John articulated which are usually as you know driven by alpha one one of the things that we also want to understand is sedation versus somnolence as you know historically, we've seen some somnolence in the minority of participants with <unk>, but we have not seen <unk>.
<unk>.
The two are quite different in our labelled quite differently. So we'll also be looking for that in the <unk> treatment group versus the other the other treatment.
During a bad.
Great. Thanks, so much of a detailed answer.
Alright.
Thank you Paul Thanks for the questions operator, we'll take the next question.
There are no other questions in the queue.
I'd like to turn it back to Tony for any closing remarks.
Okay.
Guys. Thank you for joining us this morning.
We've been an eventful year.
In a very productive quarter with both the capital raise in the earlier your announcement of the 231 results, we're making great progress across the entire pipeline in 2022 should be a very important year for the company as well just given some of the data Readouts. We've got we've got a terrific team.
As you can see through today's call and we look forward to bringing further updates.
Weeks and months progress thanks for joining us today enjoy your day and happy end of the year take care.
Yeah.
This concludes today's conference call. Thank you for participating you may now disconnect.
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