Q4 2021 Concert Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, thank you for standing by and walked through the concert Pharmaceuticals fourth quarter 'twenty 'twenty. One finished results conference call. At this time all participants are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you need to press star one on your telephone if you require any further assistance. Please press star zero I would now like to turn the call over to your host Justine Koenigsberg you may begin.
Good morning, and welcome to concert Pharmaceuticals fourth quarter 2021 Investor update.
With me this morning with prepared remarks are Roger Tung, our CEO and Marc Becker our CFO .
<unk> comments today will be brief so we can jump right into the Q&A portion of the call where we 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 your expectations plans and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.
Scripts and of these risks can be found in our most recent 10-K filed with the SEC any forward looking statements speak only as of today's date and we assume no obligation to update any forward looking statements made on today's call with that I would now like to turn the call over to Roger.
Thank you Justin and thank you everyone for joining us for our fourth quarter update.
2022, it is the year for <unk> $5 43.
Finish line is in sight and assuming success in our phase III program in alopecia Rialto.
We intend to move as rapidly as possible to file NDA with the FDA in the first half of 2023.
As we look back on this past year concerts team executed extremely well on the <unk> five for each preclinical program, particularly in light of the challenging and changing COVID-19 landscape during the past couple of years.
Team's focus and responsiveness and implementing an initial clinical plan responding to shifting conditions has paid off.
Treatment of our 2021 milestones positions us strongly for the year ahead.
This will be a data rich year for concert with the first five years 43 phase III data Readouts expected next quarter.
Let me outline the status of our CGP $5 43 program and expected upcoming data Readouts.
We have fully enrolled both of our pivotal trials stride, one and try to.
These trials collectively enrolled over 200 patients in the U S, Canada and Europe .
This was no small feat and we did it within the timelines and goals initially laid out before the onset of the COVID-19 pandemic.
We expect to report top line results this year from trials one in the second quarter that's right.
Topline results are expected to follow soon thereafter in the third quarter.
All patients in the trial AA trials and other <unk> 543 efficacy studies are eligible to enroll.
<unk> label long term extension studies, whereby they will receive active treatment.
We will also continue to collect long term safety data to support our NDA.
North American open label extension study has been ongoing since April 2019, providing us with a wealth of additional data.
According to a recent paper there could be up to about $1 5 million alopecia areata patients in the U S with a sizable subset having moderate to severe disease. Currently there are no FDA approved treatments.
However, even with other potential players in the market given the extent of patient need and the clinical profile that we've seen to date with <unk> 543, we believe it's a blockbuster opportunity.
Patients have waited a long time, and we hope to provide them with an important therapeutic option.
All of these factors from our strong execution of the clinical program to the market opportunity gives us momentum and confidence as we prepare to move our focus from late stage development to commercializing <unk> $5 43.
As I conclude my remarks, let me emphasize why were excited about $5 43.
First CGP 543, as a potential best in class compound for alopecia Areata with multiple phase III clinical trials supporting its efficacy and safety profile.
Second outpatient area audit, because a very large untapped market opportunity and the medical dermatology space for which to date JAK inhibition is the only mechanism that has demonstrated consistent clinically meaningful efficacy.
We expect it to be a key player in the alopecia area of the market.
Lastly, even beyond our currently issued patents. We believe we will have IP protection for <unk> 543, many yourself.
Our team has consistently demonstrated its ability to execute.
We intend to do the same in 2022 and as mentioned it will be a data rich year.
We have sufficient cash to bring us past data readouts for both GTP 543 phase III clinical trials.
With that let me turn the call over to Mark who will review our financial results.
Thanks, Roger as I review, our 2021 financial results. Please reference the financial tables found in today's press release.
Revenue was $32 6 million for the year ended December 31 2021.
<unk> to $7 9 million for the same period in 2020 Rep.
Revenue during 'twenty, one primarily related to the $32 million cash payment received from vertex for the purchase of the potential future milestones under our 2017 asset purchase agreement related to VX 561.
Research and development expenses were $87 6 million during 2021 compared to $61 6 million during 2020.
The 2021 increase was primarily related to the ongoing <unk> 543 phase III clinical program.
General and administrative expenses were $22 5 million during 2021 compared to $18 9 billion for the same period in 2020.
2021 increase was primarily attributable to higher external professional service expenses and noncash stock based compensation.
Our net loss for the year ended December 31, 2021 was $80 1 million or $2 33 per share compared to a net loss of $74 8 million or $2 40 per share for the same period in 2020.
We ended 2021 with $141 6 million in cash cash equivalents and investments, which we expect to fund the company into the fourth quarter of 2022 based on our current operating plan.
In November we raised $65 million from Bbs and <unk> capital. The raised consisted of three components the sale of common and preferred stock warrants and a portion of the potential future AVP 786 royalties under our existing licensing agreement with Avenir.
We have the potential to receive an additional 103 million upon the full exercise of the warrants.
Which would which we would expect to fund the company beyond the anticipated submission of our NDA for <unk> hundred 43 in the first half of 2023.
As Roger mentioned 2022 will be a data rich year for concert and continued success with TTP $5 43 gives us the foundation to advance this important drug to market. We look forward to keeping you updated on the upcoming key milestones for the company as the year progresses. This concludes our prepared remarks, and we would be happy to address any questions.
Yeah.
Ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. If your question has been answered or you were seeing with yourself from the queue. Please press the pound key.
First question comes from Jason Butler with JMP Securities.
Hi, Thanks for taking my questions, obviously, an exciting few months ahead.
Roger maybe just as Youre wrapping up a one.
Going through the kind of quality control process can you just walk us through are you seeing any impact from the pandemic are experiencing any surprises with with missing data or are you navigating that process without issue. Thanks.
Hi, Jason Thanks, very much for the question Thats really a clinical one that ill, let Jim answer.
Hi, Jason how are you so.
As you know it's been.
Quite a couple of years, we've been doing very well and conducting our trials during the pandemic.
Yes, I think we adapted early on we're not seeing any major issues here, Jason I think we're on track for the Readouts that Roger mentioned previously so I think we're in good shape.
Great and then just one more for me can you talk about the work that Youre planning in doing.
Between the phase III, Readouts and potential launch in terms of commercial prep.
On the education and awareness side, what Youre plans are thanks.
Sure.
So we are in the process of working with a couple of consulting groups right now.
We're also working with members of our board for commercially focused and we're in the process right now of doing.
Physician segmentation.
Looking at.
Targeting initiatives.
And really slipstreaming, who would say off of work also being done by our competitors.
There's quite a bit that's happening multiple initiatives that are going to position us to be in good position, we believe by the time of <unk>.
<unk>.
Late NGA and into launch.
Great helpful. Thanks for taking the questions.
Thank you.
Our next question comes from Pavel <unk> with Mizuho.
Great. Thanks for taking the questions.
Just a couple of obviously with the data coming up just to sort of I was hoping you can maybe frame expectations here a little bit.
One just in terms of timing I know you were saying second quarter clinical trials Dot Gov primary completion date is may so should we assume it's more sort of later part of the second quarter as opposed to sort of April just if there's anything you can comment there and then in terms of the actual data obviously.
Statistically significant results could you just sort of frame what youre, hoping for in terms of sort of clinically meaningful.
Data and then you talked about as being a potential best in class product just based on what you know now kind of where do you see as sort of the differentiating factors you are hoping to have relative to I guess your key competitors I guess Lilly and Pfizer in the space. Thank you.
Yeah.
Sure.
Go ahead, Roger go on Jim.
I was going to say hi, this is Jamie in terms of the timing I think.
The best we can do right now I would say that we are on track for second quarter.
And.
And I feel very comfortable though that we can't give any more color on the on the specific timeframe within there in.
In terms of clinical Meaningfulness I think this relates to the primary endpoint that we're using which is achieving a salt score of 20 or less there was work done early on.
And in publication that that suggested based on results from patients and experts in the field that having 80 or more percent scalp coverage.
Represents a clinically meaningful response, so that of course corresponds to a salt score of 20 or less so so thats. Our primary endpoints. So we're clearly designed to achieve what would be considered a clinically meaningful response. So that's why we have the primary endpoint of the salt score of 20 or less so in terms of best.
Best in class the data we have from our phase two using.
The salt 20 criteria.
See very favorable responses with our 12 milligram dose, giving approximately 42% response rate of those achieving a salt score of 20 or less and and something close to 30% for our eight milligram tid dosing so.
So just again not comparing apples to apples, but when you look at our data. So far we believe we have best in class profile compared to the other data that's been reported.
Okay, Alright, thank you very much.
Our next question comes from Mario <unk> with Jefferies.
Hi, good morning, and congrats on the progress and thanks for taking my questions.
Looking back at your open label extension study data only about 23% of patients discontinued, but the number of enrolled subjects continued to drop past week 60. So just wondering if you know how many of these patients kept taking 543 and what would you expect based on your observations to be typical duration of therapy for these patients.
<unk> hundred 43.
Yeah, Hey, Maury. Thanks, It's a great question I think.
I'm, sorry, <unk> are correct and I think there's one complicating factor in that when we had subjects that were dropping out during the open label extension study.
The data that reported was really in the heart of the pandemic and in a lot of cases patients were dropping out because it became difficult centers became <unk>.
Difficult.
We're not open their staff shortages et cetera, I think in general we're seeing a very favorable.
Profile in terms of a patient staying in the open label extension trials are 5001 trial the thrive.
The patients coming in from our phase two work they've been on drug for some.
In some cases three years plus so we've had a lot of patients that have continued to stay on drug there has obviously been.
People move.
People do.
Have other other life obligations, where they can't come into the clinic as often.
So I think those are some major reasons why people have not continued I think we're seeing a lot of enthusiasm for staying on drug as long as possible. So I think thats why were seeing good results in our open label extension in terms of patient staying in.
Got it that's helpful.
And for the Phase III.
Pension can you talk more about what youre seeing there and how many patients are staying on study there.
I am sorry for the phase III extension for the <unk>.
Subjects rolling into the open label extension study, we have as we reported previously we had over 90% of subjects rolling in.
From our earlier work and we continue to see a very very high greater than 90% rollover into the open label extension.
Got it okay.
And just as a follow up to the earlier question on competition I think the latest commentary from Pfizer is that they intend to file in the first half of 'twenty two and you are indicating that you would like to file in the first half of 'twenty. Three how are you thinking about positioning with <unk> III <unk> entering the market relative to both Pfizer and Lilly timelines.
Yes so.
We remain to see what the actual timeline of approval is for both of those entities.
As you know there was.
A significant delay in approval of JAK inhibitors for the atopic dermatitis and so we'll have to see how FTE responds to the use of or the application of JAK inhibition in alopecia areata.
We think that we're close in terms of the <unk>.
Timelines to our competitors.
As Jim indicated the data that we have which has been consistent across multiple efficacy phase III studies has positioned us to be.
Hopefully potentially and hopefully the best of the entities in terms of its.
Its clinical profile. So we think we will be highly competitive.
Got it okay.
And maybe last question just on IP.
The oral arguments in February and a decision for the 609 patent is expected around May 12, I'm. Just wondering if you could talk about how youre thinking about outcome scenarios and next steps.
Well I think it's fairly straightforward in terms of outcome scenarios.
In a a win scenario, which we we believe the oral arguments went well for us.
We're certainly hopeful of a positive outcome in.
Wind scenario unless there was.
Significantly <unk> are we think that that close the case so it gives us.
Extra patent coverage into the 2037 timeframe.
Plus PGD.
Kidney lose scenario, we have the opportunity to either.
Either and petition choosy director for reassessment.
Assuming that she is.
Actually she has been confirmed.
Or go to the federal circuit.
Appeals court too.
To address what we would believe would be <unk>, because we think we had.
Strong arguments for the validity of patents.
That makes sense, okay. Thank you for taking my questions.
Thank you.
Again, ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. Our next question comes from Mr. Kang with Brandenburg.
Hi, good morning, Thanks for taking my questions.
So my first question is assuming positive phase III data from both trials at CTG five for three.
What steps remain prior to NDA submission.
Yes, Hi, this is Jim so.
Obviously once we get the phase III results that will comprise the the.
The major evidence for efficacy as well as the safety data generated from not only the <unk>.
Phase III trials themselves, but those subjects rolling into the open label extension study.
Obviously theres a lot of work that goes on to getting the NDA filed we are still wrapping up some of the.
Some of the other supporting studies that will be needed to include into the NDA. So I think we're on track to do all that and as Roger mentioned earlier, there's there's all of that work going on between now and the filing.
Any additional details on that supported studies.
Yes.
So some of those are phase one like in <unk>.
We've talked about before that just part of our standard package require something like a thorough Qt study. So shelves. So theres there studies like that we've also list.
<unk> in Cte dot Gov that we're doing a study that will help support labeling thats. Our durability study so as those studies wrap up as well those will be included in the NDA package.
Okay and then the second question is on commercialization.
Any details R&D.
Potential size of the sales force positions you're targeting.
Anything like that thanks.
Yes. So we're still early in the commercial assessment phase we have multiple streams of activities that are going on too.
To get to a five point in those questions.
We think that there is certainly been changes in terms of the size.
Size of sales forces for a given product relative to the pre COVID-19 timelines.
But.
That's something that we'll be working over the course of the coming couple of years to really nail down the best sensors and bring in the personal support it Nancy do you have any additional color.
I think thats exactly right I think previously when we looked at the number of terms in midterm, we thought our sales force and msos of about 100 or less than.
Appropriate, but now with Roger said, given how things are changing with the Covid landscape. We are assessing all of those.
Assumptions in addition to really nailing down.
Our forecast and making sure we're just commercial our readiness for.
Entering the commercial arena is solid with payer evidence and Kols mapping and the other activities that you would expect.
And just to be clear about that.
Our assessment is that it's likely a reduced number rather than an increased number of correct Thats correct.
Alright got it Okay, and then sorry, just one follow up to that and then just any.
Feedback from Kols that.
Have you looked at the data and what Theyre with their thoughts are with them on CTV five frankly thanks.
Jim do you want to answer that sure.
We have.
A lot of Kols working with our drug in the trials.
There's been a lot of enthusiasm from the very beginning.
And I would say that that enthusiasm continues as we continue discussions with the kols.
Thank you.
Alright.
And I'm not showing any further questions at this time I'd like to turn the call back to actually we do have extra swap off I'll, just turn the call back to Justin.
Thanks, Kevin. Thank you everyone for joining us. This morning, if there are any follow up questions. Please don't hesitate to reach out and this concludes today's call.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
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