Q3 2021 ATAI Life Sciences NV Earnings Call
Good morning, Adam.
Welcome to the a tie life Sciences third quarter, 2021 financial results and corporate update conference call.
Currently all participants are in a listen only mode.
This call is being webcast live via the news and events section of the company's website at Www Dot are tied out life and it is being recorded.
For opening remarks, I would like to introduce Chad Messer, Vice President of Investor Relations and strategic financial the tie life Sciences. Please go ahead.
Thank you.
Welcome everyone to the third quarter 2021 time life Sciences corporate update conference call.
The press release reporting our financial results is available in the investors and media section of our website www dot a tie dot life and our quarterly report on Form 10-Q ended September 32021 will be filed today with the SEC.
Joining me today are Florian brand, our co founder and Chief Executive Officer, Dr. Srinivasan, <unk>, our co founder and Chief Scientific Officer, and Greg Weaver, Our Chief Financial Officer.
During today's call, we will be making certain forward looking statements that are intended to be covered by the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
While these statements represent management's current expectations and projections about future results and performance as of today <unk> results are subject to many risks and uncertainties that could cause results to differ materially from those expectations.
In addition to any risks highlighted during this call. These statements are subject to additional risks described in our filings made with the Securities and Exchange Commission, including our final prospectus filed with the SEC on September 32021.
You are cautioned not to place undue reliance on these forward looking statements, which speak only as of today November 15th 2021, and except as required by law tie disclaims any obligation to update such statements.
I would now like to turn the call over to a tie CEO Florian brand.
Oregon.
Good morning, and thank you all for joining our 2021 third quarter earnings call today.
To begin I will provide a few introductory comments and reiterate the strategy underpinning our vision to heal mental health disorders. So that everyone everywhere can live a more fulfilled lives.
Then my co founder and CSO Sweeney will review highlights from our drug development pipeline.
Finally, our CFO, Greg will provide the quarterly financial reports followed by the Q&A.
Building on the momentum of our successful IPO on NASDAQ in June we have continued to advance our innovative and diversified pipeline focus on differentiated approaches to address important unmet patient needs and mental health.
In addition, we anticipate further growing our drug development pipeline and enabling technologies to a buy and build approach and we'll remain highly active in business development.
In response to the heterogeneous mental health patient population, we plan to tailor our treatments to individual patient needs are using a diverse set of biomarkers supported by digital therapeutics and robust insights from all multimodal approach.
Just last week, we were excited to see strong positive phase II data from Compass pathways. The very first company that'd be funded to research the therapeutic potential of psychedelics.
This clinical trial investigators company's proprietary formulation of psilocybin come through 16.
To demonstrate a rapid onset of effect and durability in treatment resistant depression and.
In a few minutes <unk> will provide further detail on these important results.
Later this year, we anticipate another top line data readout of our phase II, a biomarker study with our Oh are seven and cognitive impairment associated with schizophrenia or C. I S.
We were encouraged by the interim data readout earlier this quarter and we are eagerly anticipating the full results of this study given the lack of progress in developing treatments for C. I, a N, which still has no approved treatments.
As for our discovery stage assets earlier this quarter, we announced the launch of side projects precision Psychiatry company focused on developing therapeutics for mental health indications.
Electronics will study metabolic mechanisms associated with depression symptoms with a goal of deriving more tailored treatments to better meet individual patient needs. We expect to launch clinical trials in 2023.
We have also seen great progress in our enabling technologies for example, <unk> bio which is developing a sole gel based excipient technology to effectively transport compounds directly from the notes to the brain recently completed a preclinical proof of principle study.
We anticipate applying this technology across various drug candidates in our pipeline.
In September our company Introspect launched user acceptability study of our digital therapeutic up in patients with treatment resistant depression undergoing ketamine therapy.
In addition, our PCI company Ciber will soon begin testing a virtual reality and your feedback based proof of concept device to support the clinic patient experience.
We are currently optimizing the device ahead of inclusion in the clinical trials are India, and Paas viral rubik's, yeah and demographics I'd be.
We're making great progress towards our goal of a broad pipeline of novel transformative mental whole therapies tailored to patient's needs.
I will now hand over to sweeny to take us through some of our key pipeline updates and upcoming milestones.
Sweeney.
Thanks, Laura in summary, we have a broad array of exciting assets in or nearing the clinic.
This call I will focus on the programs are the most near term visibility and highlight upcoming milestones.
I'll start with toughest pathways and its development cabinet comp 360.
The latter is a proprietary formulation of synthetic suicide than I thought.
H T. Two a receptor agonist being developed as an oral potentially rapid acting antidepressant.
We'd like to offer a huge congratulations to the cop 360 team.
Last week, Compass, which we own a strategic stake at 19.4% and that's positive topline results from its phase two be randomize dose controlled double blind trial of cop 360 for the treatment of treatment resistant depression or T. R. A T.
The 233 patient study met its primary endpoint.
Statistically significant six six point reduction from baseline to week three are the Montgomery Asbury depression rating scale or Madras are widely used measure of depressive symptomatology.
The trial demonstrated a cop 360 treatment resulted in a rapid response with statistically significant changes in the mattress noted 24 hours post dose when comparing results from 25 to the one milligram dose arms.
Further durability of efficacy was also found as measured by response and remission rates at 12 weeks.
Finally top 316 was generally well tolerated with more than 90% of treatment emergent adverse events mild or moderate in severity.
In summary, we are highly encouraged by this data, saying, both a rapid and durable anti depressive effect and a difficult to treat population with limited treatment options.
We believe these results not only bode well for the continued progress of this program.
Confirm our belief that our pipeline of psychedelic drugs with different routes of administration durations of actions and pharmacology can help improve the lives of patients with serious mental health disorders by improving the current standard of care.
That's almost a perception neuroscience, which is developing P. C N. One O one a glutamatergic modulator for the treatment of T. R. A T.
In September we initiated the phase Iia trial of P. C on one on one.
This randomized double blind placebo controlled trial testing, an IV formulation of our academy will be conducted across multiple sites in Europe and the U S. I think central ninety-three patients diagnosed with T. R. A T.
We anticipate the study running through late 2022.
In parallel we intend to conclude it.
One comparative bioavailability study to bridge for the IV formulation for subcutaneous formulation of P. C. One O. One one that we believe will support at home use.
As we've mentioned before we're excited about this potential aspect of differentiation, particularly from the perspective of scalability and commercial potential for product delivered at home.
These trials builds upon extensive preclinical and strong preliminary clinical data that supports the hypothesis that are ketamine, maybe efficacious associated doses and contrast that academy.
Preclinical models are ketamine has demonstrated higher potency greater durability, and lower abuse potential compared to S. Ketamine.
In February 2021 perception announced positive phase one results demonstrating the safety and Tolerability of P. C. N Y O Y and 58 subjects treated at doses of up to 150 milligrams IV.
And additional details of this trial were made available.
Timber.
In summary, we found that our ketamine had no or minimal associated effects at the 30 and 60 milligram doses, respectively. And these are the doses that are being tested in the phase Iia trial.
In April 2021 recognizor initiated a 32 patient phase Iia proof of mechanism study for our L. Zero seven a Gaba glutamate and cholinergic receptor modulator for the treatment of cognitive impairment associated with schizophrenia or C. I S.
The phase Iia trial is designed to evaluate the effects of oil dipped below seven on safety Tolerability and quantitative electroencephalogram or acute EEG based measures that are viewed as biomarkers for cognition.
This builds on our previous study involving a scopolamine challenge in healthy volunteers, which demonstrated that our I'll talk about a seventh both improved verbal memory and partially restored the shifts in QE spectral power induced by scopolamine.
I'll note the results of our recently completed interim analysis of QE G data from the eight patients in the first cohort were encouraging.
We have started spectral shifts the QE Chi there were similar qualitatively and quantitatively to what were previously seen in the Scopolamine Challenge trial.
As a result of Thai advance a portion of our future milestone payment aiming to accelerate the initiation of the subsequent phase two trial.
Broadly we anticipate that this will be a double blind placebo controlled proof of concept study focusing on a more traditional cognitive endpoints, including subsets of the matrix battery.
We expect to announce topline results of the phase Iia trial before the end of the year and we will be reviewing a confluence of data, including spectral shifts on Kiwi Chi evoked potential information and changes in measurements of cognition to help us support a decision. If it continues at the clinical advancement of this drug candidate.
Next Gaba Therapeutics primary program is G. R X 917, and oral formulation of a dude rated version of that of boxing.
Mechanistically at a box in the <unk> 917 had been found pre clinically to increase the production of neuro steroids, including Alex like dental and the IV formulation of which was approved in the United States in 2019 for the treatment of postpartum depression.
This mechanism of action is thought to underlie EDA proxies rapid onset of axiomatic activity, which is similar to that observed with benzodiazepines, but without the sedation cognitive impairment or abuse independents risks associated with this class of compounds.
Further I don't think I've seen has an extensive safety database, which we believe will greatly derisk. The future developments you are X 917.
Like at a boxing, we hypothesize that T. Rx 917 will provide rapid anxiolytic activity with improved tolerability compared to current treatments for anxiety and the duration is intended to enable less frequent dosing and door low doses with <unk> 907 ban out of boxing.
In June 2020, one we initiated a randomized double blind placebo controlled phase one trial in Australia, what financing of up to 76 healthy adult.
The study is a single sending dose multiple ascending dose design, focusing on safety and Tolerability pharmacokinetics as well as the pharmacodynamics using quantitative E G.
Based upon the mechanism of action of G. R X 917 Ware.
Do you think that Q E T as a target engagement biomarker looking for increase relative spectral power in the beta bad such changes have been demonstrated with IV yellow pregnant alone and related compounds and were also noted in our phase one trial of EDA proxy that we conducted in 2019.
The single sending dose element of the <unk> 907 phase one trial was recently completed the multiple ascending dose component of Alpha trial is ongoing.
Topline data for the entirety of the G. R X 917 things one trial are expected by the middle of 2022.
Moving to <unk> I'd be weird developing P. M X one theatres, there or to an oral formulation of IV game, a naturally occurring psychedelic compound as a treatment brokered use disorder.
In September we dosed the first subject in the phase one component of an exploratory phase one plus to a trial at the M. A X one theatres there too in subjects in the U K.
The phase one slash two way trial is designed to assess safety tolerability pharmacokinetics and efficacy and the results will inform future studies in patients with opioid use disorder.
We expect to obtain safety data from the phase one portion of this trial in early 2022.
Lastly, a quick update on the Doj, which is developing structurally novel psychedelic compounds using a machine learning based computational chemistry platform.
And if he is genex is created and pharmacologically tested over 250 novel compounds generated by this platform.
Lead candidate selection is currently ongoing which will further bolster our extensive early stage pipeline.
We will provide a more detailed update on this and other early stage programs and associated milestones as we enter next year.
I will now turn the call over to Craig for an overview of our financial highlights.
Thank you training attack continues to maintain its excellent cash position with cash and equivalents totaling $430 3 million as of September 30th 2021.
As compared to $453 6 million as of June 30th 2021.
The three months net use of cash of $23 3 million was driven by $27 2 million in investments in platform companies and net operating expenses.
Offset by <unk>.
$2 9 million in net cash proceeds from the conversion of convertible notes and payment of IPO related costs in the quarter.
And consistent with prior guidance, our cash runway is expected to fund our operations into 2024.
Third quarter 2021 total operating expenses were $33 6 million as compared to $61 3 million in Q2.
The decrease in total Opex of 27.7 million was driven primarily by a decrease in the noncash stock based compensation of $25 5 million as compared to Q2 in.
In addition, looking back in Q2, we recorded.
Acquired onetime in process R&D expense of 8 million from our initial consolidation of neuro nasal.
Okay.
These decreases were offset by an increase in R&D expenses, excluding stock based comp of $1 1 million.
From $6 9 million in Q2 to 8.1 in Q3, as we added R&D personnel and advancements in our clinical programs.
The increase in G&A expenses, excluding stock based compensation.
A $4 8 million from $8 seven in Q2 to $13 5 million in Q3 was due to growth in our G&A costs related to personnel and benefits and D&O insurance all related to building and operating a tie as a public company.
Yeah.
And a brief comment regarding the decrease of 25 million in stock based compensation was that in the current Q3 total of $12 2 million in stock based comp represents the.
The run rate of normal vesting conditions going forward.
Again, I'll hand, the call back to Florida.
Thank you Bracken stream I would like to thank the entire <unk> team as well as all the support of investors for their contributions to all we've achieved this quarter.
While we believe the for profit model is the fastest way of bringing new solutions to patients in need.
So I understand that the mental health crisis will not be solved by for profit models alone.
So I'm proud to report that in October we announced the launch of our new philanthropic program type impact.
We believe that commercial and nonprofit entities must stand shoulder to shoulder to check all this global crisis, Utah impact program will initially be funded by 1% of the gross proceeds from our IPO and equity contributions from shareholders and founders.
The program will support and collaborate with nonprofits and institutions that <unk> vision of healing mental health disorders.
With our strong balance sheet and broad portfolio, we continued to solidify our leadership position as an innovative drug developer within mental health.
Our differentiated model has been validated by partnerships with large pharma and academic institutions.
By design, our company is structured to maximize the probability of success in drug development, but a combination of three elements.
Unique portfolio approach the focus on developing components with probably the evidence in humans and the milestone based approach to capital allocation.
We are pleased with our progress in Q3 and look forward to the further value driving catalysts across our pipeline.
Most notably we expect the topline data we partner for its phase two <unk> by the end of 2020 one.
It was by the Gaba phase one data early 2022.
We look forward to providing updates on our progress as we continue to drive our business forward.
With that we're happy to take questions.
Thank you.
At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
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Our first question comes from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.
Yeah, Good morning, Florian and team thanks for taking our question and congratulations on a good quarter of progress since coming public recently had a quick question on <unk>.
O R. L 007 instead.
And specifically.
You know that.
Yeah, really what could be a win out of the upcoming phase two a and it sounds like I'm I'm wondering if that's a nice to have not a need to have in terms of designing a phase two b and can you imagine being in phase two b in the second half of 2022.
Then I'd like to ask you about the color any color that you can provide on the eight patients in the first court cohort any any further information in terms of the observations spectrum shift that you saw.
Yeah. Thanks, Charles So as I've discussed on previously basically there were a couple of things that we're looking for in the phase two way the first sort.
Tier with spectral shifts some quantitative EEG that were qualitatively and quantitatively similar to what was observed previously in the Scopolamine Challenge Phase one trial. The next tier down from that if you will where the evoked potential. So we let the mismatch negativity and P 170 M. P. Three hundreds with an odd ball.
And the final sort of tier are the a cognitive assessment specifically.
Specifically really focusing on verbal memory.
But also sustained attention. So those are sort of three tiers I will say right off the top of this trial really wasn't set up or.
Or designed adequate power to in terms of size for cognizant.
To truly assess robustly the cognitive impacts of the compound and what we're really looking for there is some sort of correlation with some other marker. So the first eight patients did show quantitatively quantitative EEG results.
Actual power shifts that were comparable to what we saw earlier and that's what we found encouraging and that's of course, what's allowed to the investment.
A portion of the milestone to get the next trial up and running a little bit sooner I mean, hopefully save us about a quarter.
Obviously, we'll be looking at the totality of the data from all four cohorts.
Before making a go no go decision on that next trial.
I haven't got an yeah go.
Got it.
No I'm I'm, sorry, I think that you were going to address the timing question.
Yeah, we really havent guided on that to be honest with you, but I mean, you know.
We said broadly that once this trial wraps up where are we starting another trial.
Okay and then one additional question and then I'll hop back in the queue and that is on comp 360 saw the data here recently and now that you have at least two or three other programs in depression, and I guess I'm wondering if that resolves.
Impact your assumptions in any way regarding the sizing or timing or control paradigm.
For further studies and treatment resistant depression.
And maybe I guess I'm wondering what you think about the primary endpoint of three week efficacy versus durability any further color on your impressions from that come 360 trial.
Yeah. Thanks Charles.
Before I hand, it back to Sydney, maybe let me quickly take the opportunity to again congratulate the entire compass team philosophy weeks data readout. So that was a really big moment for us as you know our compass was the very first company that we funded in this space and we perceived as greatly validating for their sole assignment assisted therapy.
But also for to your point the other psychedelic assist the therapies that we have in development I'm sorry.
All in all last week was greatly encouraging for.
For the countries 60 data, but for psychedelic approaches and manage their health.
Writ large.
And with that maybe you want to comment a little bit further on.
The details.
Yeah, So Charles.
I've seen your first point around design I mean, it's certainly you know these are some things that will be looking into and I'll give more detail. There are some fundamental differences with what we're doing.
Versus what are accomplished at I mean of course, so Simon is very long duration psychedelic effect.
Funds that were designing are much shorter and of course. This question of how duration of psychedelic effects impacts durability is something that's a bit open at this point our trials were always configured for re dosing.
And I think that's an important element and we're gonna be figure.
Ultimately, we want to use digital therapeutics to help guide those re dosing decisions. So that there's some flexibility I, obviously cant speak to how Congress is going to approach. This.
So.
In terms of the Big picture I would say the design hasn't fundamentally changed but obviously there'll be a lot of detailed learning.
As we pick through this as we take this data and more data becomes available to us. It's usually the three week endpoint and I think that was a pretty reasonable endpoint and again you know.
Let's be honest the trial accomplish really now that on that three week end point.
Particularly when you start comparing it to some of the S. Ketamine data you're familiar with the approval package for ice ketamine, it really like a tree a shorter term Charles four week trials that were known as transform one two and three are transform wanted three actually fail transform to was the one that.
It was really the basis of approval in terms of the short term efficacy and they had a much smaller.
At least squares mean change in Madras, a 4.0 that compared to $6 six an hour. So you know that's over 50% increase.
And the size the magnitude of the response.
So ours is based on a single administration, whereas.
S Ketamine as two administrations per week, that's how the trials were configured as well so substantially improve logistics.
For this study and for Cop 360 versus Academy.
Thanks for the added color congrats on the progress.
Our next question comes from the line of Mena Pretreat, Oh Gosh with Citi. Please proceed with your question.
Hey, guys. Thanks for taking my question. So just on the perception Neurosciences cannot update can you talk a little bit more about the bridging study that youre planning on conducting for the subcutaneous dose and when we could see data from that study.
Yeah, so as you're aware the current trial is using an IV formulation of our Academy. This is very comparable to how Johnson conducted there as Academy program. The initial trial was really based on an IV formulation.
Of course as I mentioned in parallel we are doing the bioavailability study.
That is fundamentally looking at the PK of this IV formulations use a 40 minute infusion versus subcutaneous formulations that were that are in development now and the idea of course is to try and match as closely as possible.
The IV infusion.
Profile. The PK, you know within sort of the bioequivalence limits I mean broadly speaking so we want to make sure that it's on markedly shorter, but youre not seeing more peanuts et cetera that could impact safety and efficacy.
In terms of Windows endpoints when those results are anticipated roughly contemporaneous with the phase III results.
Okay perfect. Thank you.
Thank you. Our next question comes from the line of Richard Bear All with Cowen and company. Please proceed with your question.
Good morning, everyone. Thanks for taking my questions I've got.
At least two just following up on my next question.
One O one and.
I guess first I guess, starting with the phase two what's the scale that's going to burst.
Warm magnitude of disassociated with Baskin and potential sort of separation from its provider profile and then I'm sorry.
And you talk about that Teekay and pack them on from the sub Q.
And what you want to see how should we be thinking about sort of peaks and area under the curve as far as the cause he got side effects versus Africa.
Yeah.
If you bring a peak.
One could.
Could you improve could that be one of the reasons that there would be less just association, but is there a fear that that contributes to efficacy how should we be looking at that PK curve.
What scale should come back with that Green smoke auto what are what kind of companies.
Yeah. That's a great question. So in terms of the scale is of course, we're going to be looking at the cats that seems to be the the.
[noise] scale of choice for a lot of these trials and of course, it's what was used in a number of the academy in studies as well as in the Ark and that's of course in the U S Ketamine label.
There are some challenges with the cats I mean, its resolution is not great. So we're also looking at things like the five D. S C.
That's the end of <unk>. So those are the other trials that are I mean, the other instruments that are really things that were that were focusing on.
In terms of the you know this question around AUC versus peak peak et cetera, that's a really good one I mean, assuming that we see the efficacy that we're hoping for with this next trial. Our initial client it's really match that as closely as possible rather than you know deviating too far.
Brahma.
One would anticipate that a higher peak would probably result in increase are you now or.
Or decreasing tolerability.
How that impacts efficacy is a little bit more difficult to really assess a priori. So again our goal is to really try and match as closely as possible. The current PK profile.
Okay got it and my follow up is on generated approximately 907.
You mentioned that Youre looking for again.
E C G spectral shifting in the beta band can you talk to what.
What percentage shift in the beta band has been seen from the other Gaba urgent drugs you know, what's the threshold where.
You're looking for and you mentioned that the single.
I think like Hyndman does stay down.
Would be available and I think early 2022 should we be able to see it in the single dose or.
Or would that be from the multiple ascending dose question.
Yeah. So on the first point, we're not really giving a lot of detail in terms of the magnitude of spectral shifts I mean, we are looking for robust changes in spectral shift there.
And yeah, I mean, that's basically as much as were saying at the moment.
I don't think we've really ascertain when we're gonna be leasing which data yes, yes. That's S. A D data that's a decent part of the trial is wrapped up.
The quantitative EEG data will be coming from both U S. A D elements and Andrea maybe element and attack yeah, maybe forms a bit of a replication sample for the S. E T data.
I think we'll probably end up waiting for both before going into any kind of detail on these results.
Okay got it thanks for taking the questions and I'll hop back in queue.
Thank you. Our next question comes from Judah Frommer with Credit Suisse. Please proceed with your question.
Yeah, Hi, Thanks for taking the questions first I was just hoping we could maybe back up a little bit on on 007, we've gotten a few questions I'm just maybe unpacking the design of the phase two a trial kind of you know.
Our next steps in and in terms of the cognitive endpoints.
Endpoints that youll be looking at you know always kind of.
Designed within the plan and you know once you get those.
Is is when you talk about kind of the decision, making point is that an incremental two way versus it to be or how should we think about that.
Yeah I think.
Well I'll take that first the last question first so in terms of what the next trial looks like where we're still trying to figure we're still working on that to be honest with you.
You know in Europe, the way I tend to well the way I interpret to weigh versus to be to be it could be supportive of an end of phase two meeting and again, that's kind of where some of the decision, making wise I didn't quite understand the first question.
Nearly a we will be using parts of the matrix battery you know the consensus battery in terms of endpoints.
And maybe the entire thing in May just be part of and these are some of the considerations that we're focusing on now there are some pretty important designs is.
Considerations that we're still working through our of course durability or duration of efficacy is something else that are still under consideration.
Okay and do you have the size of the active and placebo arms and in the next portion.
We will have placebo yes.
Okay do you know how many patients yet.
No it's going to depend on it hardly honest design, yeah got it and of course, you know part of it is really getting a good handle on what we're seeing you know in terms of some of the effect sizes trials. So I think that will give us some color around what we can expect that's going to obviously drive Sun's empowering decision.
Okay, perfect and then on on Gaba.
This maybe just.
Just a housekeeping item, but I think in the in phase III, you had talked about expecting the phase one data early 2022 now mid 2022 did it did.
Anything change in terms of you know recruiting timelines are impacted by Covid in any way.
Yeah, well you you hit the nail on the head on that one so we did see a recruitment was a little slower than we anticipated all the way through the trial I mean, if you think about Australia, they do depend on.
Students for these trials. They also depend on folks that are kind of traveling through both of these were heavily curtailed.
During some of the Lockdowns that they have so things definitely slow down there's a bit of a of a clearing of backlog that's occurring at the sites at the moment. So you know, we're obviously pushing very hard to get our cohorts in sooner.
We just decided that it makes sense to be on the conservative side and push out push out the guidance.
Got it Okay and last one just on kind of a cash runway tied to the pipeline.
<unk> programs that you have right now how should we think about you know I guess parallel prioritization.
Of cash towards various programs right, you'll you'll want to get you know presumably these programs that are that are further along.
As far as I can get.
As you get towards the end of that cash runway, but is there any way to talk about priority or prioritization amongst the programs you've highlighted today.
Yeah, Thanks, Judah Greg Weaver.
That's a good question.
Give a lot of thought to the allocation of the cash going forward.
Mine, we have runway now at $430 million right through 'twenty, two and 'twenty three.
And we're in the planning stages right now in Q4 like most companies laying out details around our 2022.
Priorities, but I think it's safe to say, we're going to continue to drive on all fronts. We've got a very strong balance sheet.
No reason to think it will be de prioritizing anything I think we're going to continue to push on the phase two programs.
Several moving into phase, one and 2022.
Along with US for I mentioned earlier BD continues to be an area of focus for the company will continue to push on that front as well.
Yeah.
My words to that.
The pedals to the metal.
Got it thank you.
Yeah.
Thank you. Our next question comes from Andrew Tsai with Jefferies. Please proceed with your question.
Okay. Thanks, Thanks, and good morning, so on a double or a seven one more question is just.
It sounds like there was also a quote unquote promising signal on ERP biomarker data. So maybe P. 100 P. 300. So I guess the first question is is it fair to assume you're seeing some kind of trend around say P 300 reduction and secondly, it would be you know perhaps give us some.
Next what how much benefit P. 300 for instance shows for the other drugs that do benefit cognition or even schizophrenia, just some framework would be helpful. Thanks.
Yeah, I don't want to oversell, what we're seeing at the moment in terms of you know this from the first cohort.
As I mentioned, it's only eight subjects.
Again, it's a little it's a little early to really get into the details as I mentioned, we're really focused on the spectral shifts and replication of the results from the previous trials. So that's really really what we focus on that first goal or we will look at the entirety of the data at that point, you've got a really good advisory boards will give me, giving us some color on how.
To proceed and how the magnitude of the changes that we're seeing are really compare to other compounds.
Across both well both sets of evoked potentials.
The mismatch.
Mismatched activity as well as the Piedmont 7300, as part of alcohol to us. So again I don't think we're really in a position to get into the details of that just yet once you have the totality of the data we will do so.
Makes sense, thanks, and so.
Just thinking about your own data I guess can you confirm how many dose cohorts of data we are getting fair to assume you looked at the lowest dose cohort and the interim look and then.
You know should we expect some kind of dose response.
Yeah. So this is actually up on clinical trials Gov for those that are interested that essentially this four cohorts here.
And as some of you may have heard I'm really we're really looking at the lower doses.
In both animal data in animal models and in humans, so far the lower doses of the ones that are primarily associated with no dropping a pro cognitive effect, whereas the higher doses, we're really more focused on analgesia. So that's why we're looking at in some detail. So 10 2040 and 80.
We didn't follow a linear store a typical ace ending seek one just because of the very well known safety profile of this compound. So we did look at the higher dose first and then we're going to backfill with the lower doses.
We're then going to be doing some we are definitely looking at correlation of course. It seems there's a dose response, but once again I really don't have that data. Those results you have to kind of talk about it.
Alright. Thank you thanks for all the color.
No problem.
Thank you. Our next question comes from Esther Hong with Baron Baird. Please proceed with your question.
Good morning, Thank you for taking our questions.
I just wanted to focus on the phase one dose ranging trial for intranasal M. A C or M. T. B I think data is expected before the end of this year what are your expectations for the study and I believe the trial. It's also looking at Biomarkers, which biomarkers are there I mean are you looking at thank you.
Thanks, Esther so that trial.
Did get pushed out in time Theres a couple of reasons for that most importantly is the biomarker.
So we are looking at M. R S a magnetic resonance spectroscopy.
And we are looking for alterations and you know.
Honestly it was sustained levels of that and put a fine levels within the brain.
As it turns out that's a very specialized it takes specialized equipment. It also takes a lot of personnel with a great deal of experience to do this adequately and we did pull onboard someone who has a imaging specialists to really within the ESI team has really helped us.
To kind of help this trial along.
In the end, we decided to bring this trial in the United States and run at Hunter and I N T.
The sites that can do this but ultimately we just say you know we looked at several different countries, including Australia, and New Zealand and ultimately just ended up concluding that we were most comfortable in bringing this back to United States and has the delay on this on this particular trial.
Thank you so much for your answer.
No problem.
Our next question comes from Brian Abrahams with RBC capital markets. Please proceed with your question.
Hi, there good morning, Thanks for taking my questions.
Maybe starting off on 907 generated into vaccine.
I was wondering if you could expand a little bit on your learnings thus far from the single ascending dose study in <unk>.
It's early days, but I'm just curious on the on the PK kind of what Youre seeing with respect to durations potential impact on future dosing frequency. If you have confidence based on what you're seeing that you can get to one or two times a day dosing what youre seeing with regard to safety relative to the non due to rated with them obviously.
This is a nice large safety database and then maybe following up on Rich's question on the quantitative EEG.
Realize it's again still early but do you have any sense of whether or not you might be able to get to a place that's either with multiple doses, that's equivalent or even better than what's been seen with the non two ready for them or with the Halloween down alone and then a couple of follow ups. Thanks.
Yeah, I mean again I, there's really not a lot that we're sharing on this particular on the sat element at the moment, we're still analyzing all that data and we'll put it all together and of course, we're also awaiting the mad results to kind of two pieces all of them together into a coherent story.
Certainly the expectation of.
That we have is that because we'll be able to push doses higher certainly exposures higher we may very well see an increase in quantitative EEG signals over that which was seen with a without a foxing itself, but and maybe approaching what you see with a direct agonist like Ala pregnant alone.
We haven't got that data yet to really be able to provide any color.
Okay, No that's fair enough and I guess, how does the half life compare for the duty rates versus non degraded for them.
Again, we don't have all of the data in hand, yet sorry, I really don't want to provide anything until we have that and can speak to it.
All right.
Got it Okay, and then on you've talked a lot about the.
Expectation to remain very active in business development.
I was wondering if you could maybe talk a little bit about the types of deals that you envision doing going going forward will these be more along the lines of enabling technologies platform is a product where do you see sort of the next dollars being spent on that front in terms of expansions.
Yes, sure happy to take this one.
You mentioned some of the areas that we're active in and we anticipate to remain very active in all of those so we truly believe in the potential of <unk>.
And the complementary benefit of digital therapeutics, So we anticipate to do more.
Yes to invest more.
In that area.
Which is also clearly linked to data, which will ultimately be needed in our perspective to tailor therapy is much more to the patient needs to move we're moving towards a precision psychiatry towards this area will be.
And remains of high interest to US. In addition on the enabling technology side. We also see potential there to add more complementary approaches are having a very very interesting discussions here and ultimately.
We truly believe that there is no one size fits all solution dementia hope we truly believe that you will need yeah, great great a great array of tools and treatments in this area. Hence we also see a great potential to add further further treatments and therapies.
Our existing drug development pipeline.
Got it that's really helpful. Maybe one more for me if I could.
I guess a question on the financials for Greg.
You talked about kind of the base SG&A.
<unk> spend I was wondering.
How should we think about the S debase SG&A run rate.
Going forward and how the mix of R&D and SG&A may evolve as the company.
<unk> continues to grow but also the clinical trials.
Advance and then I guess also along those lines you talked about the components of stock based compensation.
And that we're sort of at a normalized run rate now this quarter relative to last for for vesting.
Is this relative run rate well looks that we should be thinking about relative to overall spend because the proportion does look to be a bit on the higher end of peers. So should we think about this more as an absolute run rate, where the magnitude relative to Opex will I guess decline as opex grows in the company.
Mature thanks.
Thanks, Brian a couple of things there to unpack, let me take the last one first.
If you recall back in Q2 excuse me, we had a spike in our investing related to our IPO.
Noncash stock comp.
It dropped off significantly in Q3, so the 12 million number.
And I'm anticipating while its lumpy quarter to quarter is more indicative of what we'll see going forward not so much on a percentage basis, but.
Our benchmark for guidance going forward and noncash stock comp.
Of.
The actual.
Opex and R&D and G&A I think over the quarters ahead, we'll see.
An increase in R&D.
And I think more of a normalization of G&A.
So.
A couple of a couple of concepts there to consider one is if you reflect back on just head count. We started this a year 2021 with maybe.
30 to 40 employees and we've double that this year anticipating that that will continue to increase as we build out our capabilities internally.
The focus on R&D and G&A.
So I think the well.
Well, it's more heavily weighted initially on G&A I think that'll be.
More in balance as we go forward and so on.
I'll stop short of specific guidance as we're building out the game plan for 2022 right now but.
That would hopefully be helpful.
That's super helpful. Thanks, again for taking my questions.
Yes.
Thank you. Our next question comes from LMR P Rales with Roth Capital Partners. Please proceed with your question.
Yes, good morning, and thank you for taking my questions.
With the focus on comforting 60 last week.
I was wondering if you could.
Tell us how your city are there Ah depression programs might complement on psilocybin based therapies and you already started talking about door ketamine, but if you could perhaps further elaborate if god forbid all four would get approved how would they be used differentially.
Well.
You know certainly the pharmacology of several of these compounds different things out of it.
DMT or psilocybin right. So our academy is <unk> in nature, Southern RNA has the opioid space mechanism a kappa opioid based mechanism. So we anticipate I mean this is a hypothesis, but we anticipate being able to pick up different subsets of the TRT population using these different pharmacology that's obvious.
An important element as.
As we've discussed our ketamine asset is intended for at home use.
Other assets, we would anticipate being used.
In chronic basis.
There are some internal points of differentiation as well.
The DMT compound.
In many ways.
And to kind of slot into the infrastructure, that's being deployed for S Academy currently right.
So it's a much shorter duration compound we anticipate.
Re dosing without compare to satisfy them.
Obviously, the logistics a little bit simpler when their compound has a shorter half life and we in Canada. We also are developing in combination with our digital therapeutics.
Software and hardware base really to support the site and physician to.
To simplify the administration of the hospital opioid I mean, sorry in Costco secondarily in this context.
Okay do you envision a combination or a subsequent administration of these various compounds in the same patient.
Yeah. That's a really interesting question of course, you know theres different patients, but there's also different points in the patient's journey. One can certainly think of an induction and maintenance type of approach for some of these for example could you anticipate using psilocybin first.
To really get the patient.
Over the hump as it were and then looking at shorter acting compounds, whether they're TMT Our academy certainly that's all within scope.
Well that'd be developed as such probably not that that tends to be a very complex Saddam program, but.
In real World I can't I can only imagine how these things will be put together.
For individual patient benefit.
And again, we are looking at biomarker strategy.
Digital biomarkers or biological biomarkers, including metabolite profile and we didn't know that.
Products for example in that regard.
And hopefully.
The data from this will also help inform which compound is best suited for which patients and perhaps when given compounds is best suited for our patients again based on the patient's journey.
Yeah. Thank you so much.
Okay.
Thank you. Our next question comes from Schumacher Kearney with Canaccord. Please proceed with your question Manav.
Thanks for taking my questions I had a couple of product specific ones and one on strategy.
The first on D C and one O. One at what point do you expect to have more comfort around the potential for the product at home use that motor boat wait and watch until the approval kind of thing that's my questions.
I think that that will really occur once we have these data from the phase two way.
Right so.
As I mentioned in the.
In the call we have the 30 and 60 milligram doses that we're taking forward. We did provide some color on those you can see that those were.
Either non associated completely or minimum wage associative and quite different than what you see with US Academy, obviously that was in a healthy volunteer population things tend to look a little bit different in patients.
So we're looking forward to those data in that trial, and that's really going to help drive some decisions around that.
Got it because he's been on rising however, if the 30 milligram dose is profoundly.
Associative given what we know about the compound.
I missed it on the Amex, one two with your phase <unk> study design.
V 22, what would you qualify that success, especially relative to what we know already about the safety of flight of fiberglass.
Yeah. So we're characterizing a few things obviously.
The normal sort of safety and Tolerability parameters doing this in a very robust and.
A rigorous trial, that's obviously important making sure that there is no resolution. We know that for example, there is a lot of taxi.
Taxi and its up their cars with each trial and understanding what the Mac.
At the time of course, the resolution of all those instances.
As a signal that's been talked about in the literature around cardiovascular lifestyle.
And we're obviously looking very closely at our you know the.
The EKG or <unk>.
Charles I understand the magnitude of changes that we'll be seeing there all of these factors will be taken together to help guide dosing decisions for the phase III trial.
And my last question is on strategy.
Still quite fresh but have you begun to see any impact from the <unk>.
Phase II data set the tone of discussions are prices up assets in the secondary space that might still be looking for partners.
So a little early days, yet I don't know, Florida, and if you if you've heard or seen anything yeah. If I could you repeat the question correctly did you say, whether there was any impact of to ensure that I understood. It correctly.
On the on the prices of assets is that what you said, yes now that you have the 360 data second hand.
Have you seen any changes in the tone of your discussions with potential partners on the price of the vessels themselves given what we know about this data.
Yeah Yeah.
Yeah to reiterate a Chinese point of I think that's that that's a very early so there was no direct impact that we that we realized in our discussions so far again I think for us it's highly encouraging highly validating for what we're doing and that holds also true for other complementary.
Compounds and technologies that we are evaluating to add to the platform.
Yeah.
Thank you.
Thank you we ask that you please limit to one question.
Our next question comes from the line of Patrick <unk> with H C. Wainwright. Please proceed with your question.
Hi, Thank you I'm. This is Jason speaking for Patrick and Thank you for taking my question. So my I just have one question is on Aro zero seven.
Can you discuss a little bit more about the mechanism of action for our older double suffering and what differentiates it from many of the other compounds being developed for <unk> and then kind of related to this is how is the phase II trial.
Can further validated the other potential differentiation.
<unk>.
Yeah Yeah.
Yeah. That's a good question so the kind of the pharmacology of the compound is quite complex. It doesn't bind the same sites as other traditional compound so it's difficult to do in vitro.
Binding experiment to understand you know.
The binding potency and efficacy against these receptors. So the way. This has been done to date and is using antagonist studies as I mentioned in animal models, Youre seeing trophic effect and lower doses analgesic effects at higher doses Gaba antagonist.
I think it's antagonist, yes, the Gaba b antagonists actually do mitigate some of the newer trophic effect.
We said on the call energy compound so.
Again, there it seems to be hitting multiple receptor systems to provide its benefit. Conversely, you know most Gaba agents do have a pretty pronounced.
You have pretty pronounced side effects that doesn't seem to be the case here. That's one of the reasons the doses were pushed pretty aggressively and existing clinical trials.
So how does this compare well a lot of those are cool it agencies or glutamatergic compounds are collecting compounds. So they're a little bit of difference in terms of their pharmacology.
I would suspect a lot of this is ultimately going to be it's going to end up being complementary to one another.
So you know.
I'm pretty encouraged I hope more than one of these compounds makes it through the gauntlet phase II and phase III Charles quite frankly.
Uh huh.
Huge unmet medical need in terms of patients.
And piecing it together with these different compounds and different content cost is going to be very useful even within the same patient.
Dosing them with more than one could be very beneficial.
Alright, great. Thank you.
Our next question comes from Nathan Weinstein with Aegis capital. Please proceed with your question.
Hi, Good morning tied team question on company's 60.
The rapidity of onset that was confirmed in the phase two b seems to highlight the benefit of <unk> versus <unk>.
Our eyes for example, so could I trouble you to opine on what that might one day mean for patients in terms of Houston in acute care or emergency mental health setting.
Yeah. That's a good question. So that's certainly the rapidity of onset as one of the motivators that was one of the motivators, presumably for Y S. Ketamine ultimately got a suicidal.
No indication in the label and one can certainly anticipate something like that happening with this compound right. So.
You certainly do have a day in the clinic and when someone walks into one of the morning, It's probably not the best time to be doing this but certainly after some initial stabilization. It does make a great deal of sense actually use this trial users compound in such a patient population.
Great. Thanks, so much.
Of course.
Our next question is a follow up from Ritu <unk> with Cowen and company. Please proceed with your question.
Hi, guys. Thanks for the follow up I'll keep it quick.
You I'm, sorry, and you spoke about digital therapeutics on bringing them into clinical development programs, our repo cost.
Can you talk can you speak to the regulatory discussions around building these programs.
Digital therapeutics.
Receptivity either yep.
Our European authorities.
On their incorporation.
Yes, yes, you can if you want to jump in okay.
So the various elements here have already been through the regulatory process right. So with respect to reset oh reset or kind of I 45, 10-K, it off a reset.
But reset always functionally sort of a combination product. So the combination you know the digital therapeutic in combo with the drugs in general concept is out there obviously combination products, whereas the cause the other.
Basically hardware and drug that concept is already out there. So I think the overall.
The elements have already been through the regulatory process.
We have not had a specific discussion with the FDA around this we will do so as we go through the process with our assets.
But again I think the general concepts have already been validated from a regulatory perspective E. M. A seems to be a little bit further behind on some of those it doesn't immediately impact us. However, as we go through the process and of course, if we get a chance to.
Educate along the way and of course, there's other companies that are thinking about general concepts like us.
Also be.
Noted that Abilify MISO did go through the FDA approval process, it's a little bit different my son is hardware partially hardware.
And it wasn't a digital therapeutic in the traditional sense. It was really more compliance manager, but nonetheless, Nonetheless, this concept of a digital element being a piece paired with a drug rather.
It is certainly out there so all the pieces are out already.
Does that answer your question.
Oh. Thank you thanks for the call Okay great.
Thank you Lee.
Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Florian brand for closing remarks.
Thank you operator, and thank you everyone. So much for joining us today and has been a pleasure to share our latest highlights construction.
As always including the importance of the highly encouraging from 360 data as we've discussed and its broader potential for psychedelic to mental health as a whole and we continue our positive momentum progressing our diverse array of treatments supported by our novel Digital Therapeutics and data insights that we also could discuss today.
In addition, also discussed we will remain highly active in business development.
Across a broad array of treatments, enabling technologies understanding that when it comes to ensure health and we are facing a very heterogeneous patient population and one size does not fit all so we are driving treatment approach with a very patient centric focus as we advance our vision to heal mental health with that I. Thank you all very much for dialing in.
And have a great week.
Thank you this.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.