Q3 2021 Concert Pharmaceuticals Inc Earnings Call
Good day, and thank you for standing by welcome to the concert Pharmaceuticals third quarter 2021.
As a result conference call.
At this time all participants are in Wuxi.
Only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Mind you. This conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to Justine Koenigsberg. Please go ahead.
Good morning, and welcome to concert Pharmaceuticals, third quarter 2021, investor update joining.
Joining me this morning with prepared remarks are Roger Tung, our CEO and Marc Becker, our CFO our prepared comments today will be brief so we can jump right into the Q&A portion of the call will then be joined by Nancy Stuart Our Chief operating Officer, and Jim Cassella, Our Chief Development Officer.
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.
<unk> of these risks can be found in our most recent 10-Q 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 2021 has been all about the execution of our CGP Slide 43 pivotal program for Alopecia Areata.
With each success milestones our team continues to advance <unk> 543 to help bring this important new agent to commercialization.
Along this path, we announced last month that the stride one trial is fully enrolled.
This was a large undertaking to enroll more than 700 patients in an international trial involving yearly 80 sites, all we'll deal with dealing with the pandemic I'm proud of the outstanding job that our team has been doing to manage the trial in line with our projected timelines.
Looking past enrollment of our first pivotal trial, we remain on track to file a <unk> 543, NDA with the FDA in early 2023.
Continue to expect top line results from both phase III trials next year.
Right a one results are expected in the second quarter and tries to results were expected in the second half of 2022.
Let me just a setback for some perspective on <unk> potential in the therapeutic landscape.
Very excited about the data we've developed to date with 543.
Unlike other autoimmune and inflammatory diseases with currently approved therapies alopecia areata as to date proven poorly responsive to the mechanisms of action outside of JAK inhibition.
Based on the results we've compiled so far with 543 as well as top line data releases for other compounds being developed in the field. We continue to believe that 543 has potential to be best in class compound.
During the past quarter, we had the opportunity to present findings from our ongoing $5 43, North American open label extension study with the <unk>.
Second JAK inhibitors drug development summit.
Has this presentation summarized over 100 patients have been dosed with $5 43 for at least a year and a half.
Importantly, our high percentage of eligible patients have elected to continue to participate in the extension study.
As we presented treatment with TTP at $5 43 in the study continues to be generally well tolerated.
Adverse events consistent with those reported in the phase two studies.
The findings showed that the salt score assessing her rig growth were maintained or improved and the vast majority of alopecia areata patients who continued in the study.
To sum up we remain steadfast and focused on our execution of the CGP 543 clinical program on track for our pivotal data Readouts next year and we believe we have competitively advantaged checking for treating alopecia areata.
Bubble, we hope to bring Ctrip is $5 43 to alopecia areata patients as soon as possible let.
Let me pause here and turn the call over to Mark.
Thank you Roger as I review, our third quarter 2021, and financial results. Please reference the financial tables found in today's press release.
Research and development expenses were $21 9 million during the third quarter of <unk> 21, compared to $16 3 million during the same period in 2020 the.
Q3, 'twenty, one increase was primarily related to the ongoing TTP $5 43 phase III clinical program.
General and administrative expenses were $5 5 million during Q3 21 compared to $4 5 million for the same period in 2020 the.
The increase was primarily attributable to higher external professional service expense and noncash stock based compensation.
Our net loss for Q3, 'twenty, one was $26 7 million or <unk> 78 per share compared to a net loss of $18 9 million or <unk> 60 per share during the same period in 2020.
While we ended the third quarter of 2021 with $103 7 million in cash and cash equivalents I'm very happy to say, we completed a financing last week, whereby we raised an additional $65 million. This financing with BV ethanol raw capital consists of three components the sale of common and preferred.
<unk>.
Warrants and a portion of potential future AVP 786 royalties under our existing licensing agreement with Avenir.
We will have the potential to receive an additional 103 million upon the full exercise of warrants issued in connection with the agreement.
As a result under our current operating plan, we expect our cash and cash equivalents to fund the company into the fourth quarter of 2022.
If all of the warrants are fully exercised we expect to be funded beyond the anticipated submission of a new drug application for <unk> 543, which as Roger mentioned is expected in early 2023.
With added financial strength will allow us to continue advancing the seats.
543 Phase III program are key pipeline focus.
As Roger mentioned at the start of the call concert has achieved several key milestones setting the stage for 2022 to be an important year for us.
$5 43 for alopecia Areata is advancing in two late stage clinical trials, we expect data Readouts from both studies next year.
Ongoing execution of our clinical program makes us optimistic for the future as we hope to have the opportunity to bring <unk> $5 43, a potential best in class treatment to market.
This concludes our prepared remarks, and we would be happy to address any questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Jason Butler with JMP Securities. Your line is now open.
Hi, it's Roy on for Jason Thanks for taking our questions I guess the first one on <unk> just curious what the plans are for development ex U S.
With that drug and then congrats on the on the recent financing. We're just curious if it's changed how youre thinking about the pipeline beyond 543, or even including further development of 543. Thanks.
Hi, Thanks very much for the question. This is Roger So would you have development.
In the sense of clinical trial work that has gone going on ex U S. <unk> phase III studies include trials sites that are scattered throughout Europe as well as in Canada.
We do not have specific plans at this time for registration ex.
Ex U S. That's something that we're waiting on to them.
<unk> really focused on.
<unk> developed over the registration in the U S first as far as additional development for $5 43, an X $5 43 is concerned.
We are we continue to be interested both in pipeline expansion through additional indications for $5 43, as well as for additional compounds.
Our focus remains first and foremost on.
<unk> since we are currently.
In two phase III studies for it and we'll have more say subsequently.
Okay. Thank you.
Okay.
Thank you.
And our next question comes from Joon Lee with two Securities. Your line is now open.
Yes. This is less on for Julien Good morning, and again, thanks for taking my call and congratulations on the financing.
I have a few questions regarding your involvement in the new alopecia Areata disease severity scale can you provide more color on its development and what do you expect this approach to be implemented into clinical practice also how does the new scale compared to salt scores and could this be a replacement for salt and any impact on your ongoing trials.
NDA filing and lastly were there any additional findings from your participation that could potentially broaden our enhance the market opportunity for our AA and I have a follow up.
Hi, Adam.
This is Jim so as far as the scale go.
We think that there has been an important step forward. This was initiated by Kols, who really wanted to make sure that that the entire alopecia areata is taken into consideration when you start assigning severity scores to it so in the past.
He has been mostly based on the amount of hair on your body scalp.
Included so the terms alopecia universality in totality referred to.
Complete baldness on the scalp and universality.
Included loss of hair on the body.
The importance of the new paper.
Was really.
Both okay.
KOL, driven and with industry involvement was to highlight the notion that alopecia reata affects the whole bean and it includes other factors in there when youre trying to look at severity. So.
Address your question about will this replace salt no. It won't because salt is a measurement tool that allows you to assess the amount of scalp loss, but this also this new scale takes into account whether or not there are other factors too whether or not their emotional and psychological factors whether theres other burdens.
That will come into play and it will include the amount of hair loss, but its going to be more flexible on the amount of hair loss, but take into account other factors like psychological impact and things like that.
So that's on that scale.
Very helpful. Thank you for that.
<unk>.
And then second part what is your take on FDA expansion of box warnings for certain JAK inhibitors.
Do you see any potential bleed through to GBP 543.
Or is it premature to discuss labeling at this time. Thank you.
I think the FDA is is it building a knowledge base on JAK inhibitors, especially in the dermatology division, So I think that.
With the labeling they've come out with in terms of rheumatoid arthritis.
Clearly effects that therapeutic indications.
As far as the Dermatology Division I think theres still determinations on the atopic dermatitis drugs that have been submitted for approval and there is no read on those yet so I think it may be a little too early to know exactly where things are going in this space, but I think we might expect theres going to be some kind of.
Labeling.
In this space at some point I think the important point to consider especially for our drug in alopecia Areata.
Is that there is no approved treatment for alopecia reata. So its unlike these other indications, especially in rheumatoid arthritis, or atopic dermatitis, where there are existing drugs that are outside the JAK class. Jack is a very important mechanism for a lot of indications JAK inhibition is a very important there.
Puget class for alopecia, Areata and really it's a very effective.
Treatment it seems to be involved in the pathophysiology and Theres no other approved or effective treatment.
I think it makes alopecia area are very different.
And Jack and Jack is really important and really here to stay for treatment of alopecia Areata.
Got it if I may maybe I'll squeeze one more question can you provide a progress update on the modified beliefs formulation.
Thank you.
Sure.
It's an ongoing project for US I think it's fair to say that we have.
Work, continuing and we don't really have any anything to report.
In terms of.
Publicly available information at this point in time, but it is an important project for us and and we are making progress.
Excellent. Thank you.
Thank you.
Our next question comes from Maury Raycroft with Jefferies. Your line is open.
Hi, good morning, and congrats on the updates and thanks for taking my questions.
Maybe it's kind of a follow up to one of the prior questions.
Based on some of the commentary from FDA I guess, if you could talk about the degree of enthusiasm from from Kols enrolling for your phase III program.
<unk>.
The demand from patients and are there any specifics you can provide and how your phase III patient population compares to your phase III.
Yes, Hey, Thanks, Maury this is Jim again so.
I think we have a lot of enthusiasm for our program.
As I mentioned, just previously JAK inhibition is a very important mechanism for alopecia areata.
We are working with all of the Kols and many many sites as Roger mentioned for our Phase III program.
We have done I.
I think really well.
In a very COVID-19 constrained environment for any type of clinical trial in recruiting for the phase III program.
We have a lot of enthusiastic patients looking to getting into the trial. So I think basketball all gone very very well. So I think that we hear a lot of enthusiasm. We we believe that our data set is very strong based on the phase III results, we have a very similar population.
As to our phase III trials, we have the same kind of entry criteria. The phase III, we're really expanded to bring up our safety numbers to make sure we have sufficient data to submit the NDA.
We have the same type of entry criteria coming into the phase III trial as we did for the phase two and of course, we're using salt score, which is the tool for assessing scalp hair loss now in the phase two we used a different numeric calculation for.
Our endpoint, but now we are using the achievement of a salt 20 score, which again, we were able to calculate for our phase II studies, we were able to power up our phase III program based on our phase II results and remember we ran three phase II trials. So we have a good basis.
<unk> for forming the power calculations for our phase III. So we come into the phase III program very confident that we have a good base of understanding for our drug and for what it does in the patient population in the same patient population is.
We have the same population between the phase II and the phase III studies.
Got it that's helpful and down phase III is blinded, but can you say anything at this point about the general status of this study, including dose adjustments and safety balancing at this point.
We haven't obviously, we've released the information that we finish the enrollment of our thrive a one study.
Our 708 patients actually enrolled in that study.
What I can tell you is that.
These are placebo controlled double blind studies.
We have.
The eight milligram PID in the 12 milligram dose groups compared to placebo.
Our randomized <unk> based on the positive findings we had in phase two were randomized <unk> to a greater proportion to active treatment and placebo, which has turned out to also be a very good recruitment tool, but as a reminder, we also have subjects rolling over into our open label extension study and to date, we've had a very high percentage.
Are patients rolling over so I think the data that we presented as Roger mentioned at the the Jac Conference earlier. This year. We did highlight that we have continued in the open label extension study that study started in April of 2019, with our very first phase III trial.
We do have a lot of long term safety data that we've been generating and a fair number of patients over 100 patients were on drug for a year and a half at that time that we presented at the conference. So I think the safety profile ends up being consistent in the open label compared to what we saw in phase two and I think we have a.
Continuing progress in generating our safety database for the NDA.
Got it that's really helpful and maybe just last question for me you had their recent financing just wanted to check if the rest of your Avenir royalties are tied to the additional $103 million in any way or are the rest of those royalties wholly owned by counter.
Hey, Mark this is mark the rest of those royalties are wholly owned by concert. So we still have the remaining royalty and thats not factored into the 103 to 103 is only for the <unk>.
A case, where the the warrants are fully exercised.
Got it okay. Thank you very much for taking my questions.
Thank you and our next question comes from extra Hong with Ehrenburg. Your line is open.
Hi, good morning, Thanks for joining Kemper Aster.
I wanted to ask what's the status of AVP 786, I know, it's currently in several trials in chromium.
Education, and Netherlands from concept schizophrenia trial expecting completion.
2022, just wanted to know if there any other update some added color. Thank you.
Hi, This is Roger thanks, very much for the question.
This time, we really don't have any further information as you know.
There is the Alzheimers agitation study a phase three that we will be reading out next year or so.
<unk> readout.
And the negative symptom study, which is a phase II study there.
There are also two other phase III studies that are scheduled to read out in the latter half of 2024.
So <unk> continues to invest very heavily in the compound and the prominence of the highlighted in their investor relations. So it's something that they are excited about but we have no further information beyond what's publicly available.
Thank you so much.
Thank you as a reminder to ask a question star one.
And our next question comes from Alex.
Your line is open.
Hey, good morning, Congrats on the progress thanks for taking the question.
Just thinking about future pipeline opportunities would you prioritize new indications for <unk> 543, or would you prioritize new molecular entities.
Hi, This is Roger.
Great question I think we have to.
Look at additional indication development with 543, given the amount of invest.
The investment we've made in it.
Sure.
<unk>.
Our enthusiasm for the compound and feeling of the high likelihood of it moving forward towards a registration.
Two registration.
But we also have interests in earlier stage compounds.
It's something that we're actively involved in as well.
It's hard for me to rank one over the other I think we're excited about both.
Great. Thank you.
Thank you.
And at this time I am showing no further questions I'd like to hand, the conference back over to Justin.
And that's great for any closing comments.
Thank you we'd like to thank everyone for joining us this morning, and we look forward to continuing to provide updates on our progress as a reminder, we will be participating next week at the Jefferies London, Tom Brian and of course, if there are any follow up questions. Please don't hesitate to reach out. This concludes today's call. Thank you.
Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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