Q2 2022 Concert Pharmaceuticals Inc Earnings Call
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Good day and thank you for standing by welcome to concert Pharmaceuticals second quarter 2022 financial results Conference call. At this time all participants are in a listen 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. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Justine co.
Koenigsberg Senior Vice President corporate Communications and Investor Relations you.
You may begin.
Good morning, and welcome to <unk> Pharmaceuticals, second quarter, 2022, Investor update which will include a discussion of our recently reported phase III results for <unk> 43 in alopecia Areata.
He tells him the topline data are available on our corporate slide presentation, which can be found in the IR section of our website.
Joining me this morning with prepared remarks are Roger Tung, President and CEO , and Marc Becker, Chief Financial Officer Nancy.
Nancy Stuart our Chief operating Officer, and Jim Cassella, Our Chief Development Officer will join the team for Q&A.
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.
Description 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 Justin and thank you everyone for joining us for today's update.
During the second quarter, we reported several key positive developments related to our <unk> 543 program in alopecia area led.
Led by outstanding Phase III top line data from Detroit 80, 81 study.
We're extremely pleased that our tribe to study released earlier this week produce similarly impressive topline results confirming Andrew underscoring the rapid high level of efficacy observed with <unk> hundred 43 in the treatment of moderate to severe alopecia areata.
Our team is moving a pace to further review and fully consolidate our clinical and non clinical data.
Fencing to filing a new drug application with the FDA, which is planned for the first half of 2023.
Let me describe the market opportunity that we see before us.
We envision that <unk> 543 will be well positioned to address an important unmet need for a large underserved population of patients with alopecia areata.
Given the extensive patient need and the strong clinical profile, we've seen to date with CCP 543, we believe it has blockbuster potential.
Just on current market assessments, there are multiple hundreds of thousands and potentially up to approximately $1 5 million patients in the U S with sizable subset, having moderate to severe disease with.
With positive and consistent top line results from both a registration studies.
Believe that TTP at $5 43 has demonstrated highly competitive product profile.
We were one of the first companies to seize the opportunity to develop groundbreaking treatments for alopecia Areata and now that we have a positive phase III data in hand, we're one step closer to providing what we hope will be the best in class treatment for patients.
Both of the phase III.
Clinical trials were randomized placebo controlled double blinded multicenter studies evaluating the safety and efficacy of $5 43 in adults, aged 18 to 65 years old where 50% or greater scalp hair loss.
Both trials were conducted in the U S, Canada and Europe each.
Each study included two doses of <unk> 543, eight milligram and 12 milligrams twice daily compared with placebo for 24 weeks.
Primary endpoint for both trials is the percentage of patients achieving an absolute salt score less than or equal to 20 at week 24 treatment, which we believe represents a clinically meaningful result.
So, whereas the severity of alopecia tool is a measure to determine the amount of scalp hair coverage by assessing all regions of the sculpt that contribute to the total score which ranges from zero to 100.
A salt score of zero corresponds to know scalp hair loss, both salt score of 100 corresponds to a total lack of Harold scalp.
In the thrive AA one study the primary endpoint met statistical significance in both the eight milligram twice daily and 12 milligram twice daily dose groups compared to placebo.
The treatment difference for both dose groups of CTV at $5 43 versus placebo at 24 weeks at a P value of less than 0.0001.
Right.
<unk> also met all the key secondary endpoints at both doses. These.
These key secondary endpoints include the statistically significantly higher levels of patient satisfaction with <unk> compared to placebo after 24 weeks of treatment.
Significant hair regrowth as early as eight weeks.
Similarly, we saw consistent results in <unk>, our confirmatory phase III trial as.
As we announced earlier this week to thrive to study met the primary endpoint for scalp hair regrowth and statistical significance in both eight and 12 milligram twice daily dose groups relative to placebo.
Treatment difference for both dose groups of <unk> 543 versus placebo at 24 weeks had a P value of less than 0001.
Additionally, with regard to our key secondary endpoints, we again showed highly statistically significant patient satisfaction relative to placebo at both doses of CTV part three.
And we continue to see a rapid onset of effect.
Statistically significant differences from placebo and obtaining salt 20 or better as early as 12 weeks introducing.
Treatment with <unk> hundred 43 was generally well tolerated in both trials demonstrating safety profile that we believe is well suited for its proposed indication.
Based on the results of thrive AA one in <unk>, we continue to believe that Cte $5 43 has the potential to be the best in class treatment for adults with moderate to severe alopecia areata.
Many patients are impacted with alopecia areata in the prime with their lives and for many people the disease causes severe consequences broadly and negatively impacting their ability to live their lives.
With respect to treatments just starting to become available we hope that awareness for alopecia Rialto continues to grow and that it's truly recognize the serious autoimmune disease and not misunderstood to be an inconsequential cosmetic condition.
On the cusp of great change for the alopecia Areata treatment community and concert is pleased and proud to be part of it.
Let me pause here and turn the discussion to Mark who will provide an overview of our financial results.
Thank you Roger as I review, our second quarter 2022 financial results. Please reference the financial tables found in today's press release.
Research and development expenses were $20 9 million during the second quarter of 2022 compared to $20 2 million. During the second quarter of 2021, we continue to have clinical costs associated with the open label extension studies for <unk> 543, and as a reminder, the North American extension study at <unk>.
Specs it to continue until approval.
General and administrative expenses were $4 8 million during the second quarter of 2022 compared to $5 6 million during the second quarter of 2021 the.
The decrease in general and administrative expenses relates primarily to a decreased noncash stock based compensation.
Our net loss applicable to common stockholders for the second quarter of 2022 was $24 million or <unk> 59 per share compared to a net income applicable to common stockholders of $5 4 million or <unk> 16 per share for the same period in 2021.
We ended the second quarter of 2022 with $153 7 million in cash cash equivalents and investments.
This includes $73 $5 million of gross proceeds received in June 2022 through the combination of our follow on equity offering and the exercise of a portion of the warrants issued in connection with our November 2021 financing.
We expect that these two transactions will extend our cash runway into the second quarter of 2023.
The gross proceeds received through the follow on equity offering totaled $54 6 million before underwriting discounts and operating expenses, which included the full exercise of the green shoe.
Proceeds received through the partial warrant exercise by bvs in RA capital totaled $18 $9 million, we have the potential to receive an additional 70 million upon the exercise of all remaining outstanding warrants that we issued in connection with our November 2021 financing.
With two positive phase III readouts behind US we are optimistic about the future opportunity for <unk> 543, alopecia Areata is a large and underserved market that affects millions of patients around the world.
With CCP 543, we have the ability to make a major positive impact in the lives of these patients. We look forward to our planned NDA submission in the first half of 2023 and this concludes our prepared remarks, we'd be happy to address any questions.
And thank you as a reminder that asked the question you will need to press star one one on your telephone please standby, while we compile the Q&A roster.
One moment for questions.
And our first question comes from Jason Butler from JMP Securities. Your line is now open.
Hi, Thanks for taking the question so maybe just asked.
If you could give a little bit more color on.
Work that needs to be done between now and submitting the NDA.
Including regulatory interactions and then.
Also how youre advancing your plans to commercialize the product. Thanks.
Hey, Jason This is Jim Thanks for the question I'll answer the first part.
So things are progressing it it's great to have both of our positive phase III trials behind US. We just reported out the topline data for <unk>. Two obviously, we have more data coming in will be finalizing our clinical study reports for both <unk> <unk> two.
We have some other supportive studies to wrap up in the phase one world. These are mostly for labeling purposes and those studies are being conducted or have been completed and they are on track to support the filing.
So on the clinical front as you know we are conducting a phase II durability study and we'll be able to report out part of that data in the NDA as planned and the open label extension study is continuing as we've rolled over subjects from dry van <unk> as well as the phase III subjects. Our intent is to have a <unk>.
Large safety database to report in our NDA that will be comprised of the phase II and the phase III subjects that have rolled over our goal is to have a large number of patients in there. So as we continue to enroll subjects in there and they gain more time on drug will have a cut of those data and provide those in the NDA.
Well, so things are progressing very nicely.
On all of the clinical side of things and we're really on track to file in the first half of next year.
Okay.
Assay and.
I'll answer your commercial question, we are absolutely laying the groundwork to ensure commercial readiness and we're doing the appropriate activities.
All lines and even include things like payer evidenced planning to ensuring market access.
Early adopter mapping understanding the patient journey patient advocacy work medical communications.
Yes.
Great and just one quick follow up for Jim.
Just in terms of the extension study.
Whats patient retention been light.
Patients that enrolled earlier in the.
They have been in there for several months, obviously, we're at a really high enrollment rate or transfer rate from from <unk>.
But just what's the persist.
Persistence than like thanks, Yeah. So Jason it's a great question as you know we have had very high enrollment rate for example, with private <unk> we've had.
Greater than 95% of the subjects, who were eligible to roll over did rollover.
The study has been ongoing for a while we have patients that have been on drug for over three years and a large number of patients have been on drug for over two years and obviously as we count backwards. We've had a large number of patients on per year I don't have an exact number for you for the retention rate, but it's been very high so I would say it.
It is clearly showing.
The motivation of the patient to stay in the trial and but it is something that is very very high numbers and im sorry, I don't have the exact number because it changes the number in this trial changes daily now as we've rolled subject.
Okay, great. Thanks for taking the questions.
Sure.
And thank you and one moment for our next question.
And our next question comes from Joon Lee from <unk>. Your line is now open.
Good morning. This is less on for Julien. Thank you for taking my questions and congrats on the data.
Just to kind of look through the data and maybe not to nitpick, but what was the nature of the one SAE that was possibly treatment related in each trial I'll start there.
Sure.
Yes so.
We did have a number of Sce's reported in each trial most of those ftes were determined not to be related to study treatment, but in <unk>. One we did have one subject with possibility related SAE.
That was somebody who had.
Fever, and possible meningitis, there were some extenuating circumstances, there, but the investigators thought it was prudent to call that possibly related and thrive a too we had an individual in the eight milligram bid dose groups.
Five we had one subject who is possibly related and this individual had pneumonia associated with the flu and the investigator and their judgment thought that this could be possibly related because of the possible effects of JAK inhibitors on immunity. So I think those are the those are the two cases.
Where we had possibly related SAE is as I said there were other ftes in each trial that were determined to be not related to study treatment.
Got it that is helpful. Thank you.
And then when looking at achieving absolutes salt score of 20 or less can you comment on why you think separation versus placebo at the <unk>.
Higher dose was the 12 milligram dose was higher in year three.
The AA one study versus <unk>.
I think.
There's a couple of points difference between those I think it's clearly within the range of of each other there are a few points apart.
The important thing about the findings with with the 12 milligram dose as with the eight milligram doses that we have very consistent findings between both studies. These.
These data show that we have a high level of efficacy for both the eight and the 12 milligram PID I think these are reported to be.
The highest numbers that have been out there looking at the literature. So I think there are definitely within range of each other I think <unk>. Two is a very good confirmatory study. So I wouldn't say that there is a major difference between the two findings for the 12 milligram dose, but I think they do support each other as as <unk>.
The level of efficacy.
I'll also note that.
<unk>.
<unk> of response is continuing to move upwards through the 16 2024 week timeframe.
As Jim has reported previously.
<unk> continues to rise beyond the 24 week time point.
To a significant extent so I think what you may be looking at is just a little bit of a Connecticut phenomenon.
That patient group is.
Particular, 24 week pinpoint, but we think that the.
<unk> 540, Threep clearly continues to be greater than as estimated by that.
<unk>.
Got it. Thank you and then what is your strategy for dose selection.
Into the NDA filing.
Yeah, our plan from the beginning has been to investigate both the eight milligram and 12 milligram dose group because in our dose ranging phase II trial, we determined that those were the two effective doses and we rolled out another dose that was not as effective our strategy. All along has been based on conversations earlier in the program with.
Who thought that having two doses available to patients would provide a lot of flexibility for physicians and for patients to choose the best dose.
For the subject.
Our plan is to file both doses, we have good data for both and high efficacy for both and then make a determination as to what the recommended starting dose will be that will be a conversation with the FDA, but we do believe that the 12 milligram dose group is clearly one that has shown consistently higher results then.
The eight it.
It shows could benefit to a lot of patients, but generally is is better performing than the eight so obviously, our recommendation would be to start with the <unk>, but we will have those conversations our plan is to file both.
Okay. Thank you just last one if I may.
You mentioned that you will present open label extension study to with along with the filing.
Was that something you are going to share with the street as well prior to NDA submission. Thank you.
Yes, so I mean, obviously, we've been focusing on the phase III program in patients have been rolling over into the open label extension study.
We will need to do a more formal analysis of the open label extension data and our plan is to be presenting those data at some future meeting.
Great. Thank you for taking my questions and congrats on the data again.
Great. Thank you.
Do you.
And one moment for our next question.
And our next question comes from Maury Raycroft from Jefferies. Your line is now open.
Hi, This is Kevin on for Maury. Thanks for taking my question and congrats again on the great data.
Just wanted to ask with the two de risking phase III in hand, how are you thinking about partnering ex U S or even U S and what are some scenarios for what the timeline could look like there.
Hi, Thanks for the question Kevin.
In fact, very pleased to have that data with us now.
We've said before our intent is to commercialize ourselves in the U S.
So partnering ex U S wood would make sense, we don't discuss business development specifics, but I think it's safe to say that there is good interest in the asset that is continuing to accrete now that the second phase III data has been released.
And as far as the U S is concerned.
As Nancy indicated we're doing the work that's necessary to move us in a position to commercialize.
We've never ruled out a partnership but our first intent is to move toward ourselves.
Okay, great. Thanks, and then just just a follow up on an IP going forward. So.
Could you just lay out what you think are possible scenarios and what you think are likely scenarios.
As you move into filing and launch.
Well with respect to our own patents as you know we hedge.
A confirmation from the <unk> of the validity of our dosing in.
Our method of use patents.
<unk> is valid to 2037, which will be an orange book listed patents on approval of <unk>.
<unk> 543.
There is potential for extension of that.
Possibly out another year and we're continuing to work on the.
The composition of matter patents, which we.
Is valid and we believe that there are strong reasons why it should continue to be valid and we will continue to be valid. So that's that's playing out as we go along.
Okay, great. Thanks, I'll hop back in the queue.
Thank you.
And thank you.
And I am showing no further questions I would like to turn the call back over to Justine Koenigsberg for closing remarks.
Thank you, Jeff and thank you for joining us this morning, and if there are any follow up questions. Please don't hesitate to reach out. This concludes today's call. Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise Johan during Q&A, you can dial star one one.
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