Q3 2022 Cerevel Therapeutics Holdings Inc Earnings Call
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Yeah.
Good morning, and welcome to the <unk> Therapeutics third quarter 2022 financial results Conference call.
At this time all participants are in a listen only mode.
You will have the opportunity to ask questions during the Q&A portion of the call.
Please note that this call maybe recorded.
I will now hand, the call over to magically Street, Vice President of Investor Relations.
Please go ahead. Thank you.
Good morning, everyone.
We appreciate you joining us for our third quarter 2022 earnings call.
On today's call you'll be hearing from Dr. 20 calls, our chairperson and Chief Executive Officer, Dr. Rey Sanchez, our Chief Medical Officer Dr.
John Ritter, our Chief Scientific officer, and Mark <unk>, our interim Chief Financial Officer.
Our president will join us for Q&A.
During our call today, please refer to our press release from this morning detailing our Q3 2022 performance as well as our updated corporate presentation, both of which are available on our website.
I would like to remind you that we will be making forward looking statements.
Our current views related to among other things the potential attributes and benefits of our product candidates and our format and timing of our product development activities and clinical trials with.
We strongly encourage you to review the information that we filed with the SEC regarding the specific risks and uncertainties.
I'll now hand, the call over to Dr. Tony Coles, chairperson and CEO of Cerro del button.
Our achievements.
Thanks, Matt and good morning, everyone. Thanks for joining us for our third quarter 2020 to business results call at Cerro Bell.
<unk> is to become the Premier Neuroscience company, our recent financing of $599 million puts us in a strong position and now with more than $1 billion of capital on our balance sheet to fuel our pipeline.
Here at Cerro Bell, we innovate across all aspects of our business from drug development to clinical trials to capital formation, and our strategic and creative approach to financing following positive data from a PR is a prime example of this approach.
We have more than doubled our financial resources, which we expect will fund our operations into 2025.
We have multiple mid to late stage clinical trials across four therapeutic areas along with several planned proof of concept and early stage discovery programs.
By advancing a broad neuroscience portfolio that we believe is unmatched among our peers, we seek to deliver potentially transformative medicines to the millions of people living with schizophrenia.
Arkansas disease, epilepsy, dimensioned related apathy panic disorder, and Alzheimers disease psychosis.
We have confidence in our deliberate and differentiated approach to treating neuroscience diseases through which we focus on three core elements first targeted neuro circuitry develop which is developing a deep understanding of how the brain is wired.
Receptor subtype selectivity, which enables us to narrowly target our therapeutic interventions and third differentiated pharmacology, which enabled us to precisely designed potential therapies for the diseases, we're focused on.
And our progress continues in June we initiated a robust phase III program for <unk>.
Our novel Muscarinic enforced selective positive allosteric modulator, or Pam and adults living with schizophrenia.
We're all aware that the patient need in this area is tremendous more than 2 million people in the U S liquid schizophrenia, a disease that dramatically affects families loved ones and entire communities at.
At Cerro Bell, we're committed to advancing our <unk> program on an accelerated basis to bring this potentially transformative therapy to as many individuals as possible as soon as possible.
And we believe it more equity has tremendous potential beyond schizophrenia bi.
By the end of this year, we plan to initiate a phase one safety Tolerability and pharmacokinetic trial in healthy elderly volunteers.
To support future development of <unk> in Alzheimers disease psychosis or ADP.
The behavioral and psychological symptoms of Alzheimers, such as delusions, and hallucinations and paranoia exert enormous talwar patients their loved ones and the cost of care.
I'm very pleased to share that in recognition of the significant unmet need in this particular syndrome.
We recently received.
Fast track designation from the FDA for <unk> for the treatment of hallucinations and delusions associated with Alzheimers disease psychosis, we are eager to explore <unk> potential in this and other conditions.
Our work with them rapidly in schizophrenia, and ADP is however, only one part of the circle story across our pipeline, we are bringing forward therapies for other serious neurological conditions by targeting new pathways with novel approaches to rig up at our selective Alpha 235, Gaba Pam.
There's another circle program with multiple potential indications for.
But first diseases epilepsy, the fourth most common neurological disorder.
As we recognize epilepsy awareness month in November we reflect on the fact that one in 10 people will have a seizure in their lifetime and one in 'twenty six will develop epilepsy.
We're studying the drug about in focal epilepsy through our phase two realized trial, which is on track to read out in mid 2023.
And earlier this year, we announced positive acute anxiety data for <unk>.
Do we go about trial demonstrated for the first time proof of principle in the clinic that a compound targeting alpha <unk> five and sparing alpha one can generate anxiolytic activity and at the same time may be able to minimize the side effects that limit benzodiazepines to only episodic use.
We selected panic disorder, as an additional indication important to rig or bad as panic is the second most common anxiety disorder and can be the most debilitating.
Expect to initiate a phase II proof of concept trial in 2023.
Let me turn now to our most advanced program tobacco Dawn.
The first <unk> partial agonist in development for the treatment of Parkinson's disease.
We believe our registration directed phase III program has the potential to establish <unk> as the cornerstone.
A therapy.
Across the spectrum of Parkinson's disease, the preferred monotherapy choice for the newly diagnosed patient and the ideal adjunct therapy to levodopa as the disease progresses.
Although certain of our data readout timelines in this program are under review.
All three of our phase III trials in early and late stage Parkinson's disease are ongoing along with the corresponding open label extension.
So.
As you can see several is advancing with clear purpose and our late stage pipeline has the potential to deliver important medicines to individuals living with neuroscience diseases, who need and deserve new treatment options.
We believe <unk> future is bright driven by the strength of our pipeline and our programs and our early stage discovery initiatives and we remain committed to changing what is possible in neuroscience now let me turn the call over to Dr. Rey Sanchez, our chief Medical officer to provide some added color about our lead programs.
Right.
Thank you Tony and good morning to all of you.
As Tony has outlined cerebellar is well positioned to pay new paths in neuroscience.
Our pipeline seeks to address some of the most challenging neuroscience diseases and brings forward new treatment options with enhanced tolerability profiles.
Let's first turn to <unk>.
As Tony mentioned, we recently initiated both phase II empower trials of <unk> in adults living with schizophrenia.
I am delighted that we are dosing patients in these two trials and I'm eager to see the results, which we expect in the first half of 2024.
We are very encouraged by the robust results we saw in our phase one b trial as we move into a potentially Registrational program.
These two adequately powered three arm trials are being conducted worldwide and will each randomized 372 adults living with schizophrenia and experiencing an acute exacerbation of psychotic symptoms.
The first trial will test them rapidly 10 milligrams and 30 milligrams once daily versus placebo and the second trial will test <unk> 15 milligrams and 30 milligrams once daily versus placebo.
Running these two trials in parallel enables us to fully explore the therapeutic dose range of and rapidly while minimizing the number of treatment arms with the help of reducing the variability observed in clinical trials as well as placebo response.
These trials also reinforces <unk> commitment to diversity and the needs of individuals living with schizophrenia with the focused inclusion of groups often underrepresented in clinical trials.
In order to potentially accelerate a registrational package for an <unk> in schizophrenia. We recently initiated a 52 week open label safety extension trial known as empower three.
Moving now to the potential of a rapidly as a treatment for all timers disease psychosis.
As Tony mentioned, we plan to initiate a phase one trial evaluating the safety Tolerability and pharmacokinetics in elderly healthy volunteers 65 to 85 years old by the end of this year.
Design of our multiple ascending dose trial will evaluate five doses in five cohorts lasting 14 days each.
Now us to delineate a dose range for later stage trials.
We are pleased to announce today that FDA has granted fast track designation for <unk> for the treatment of hallucinations and delusions associated with Alzheimers disease psychosis.
Fast track is an FDA process designed to facilitate the development and potentially expedite the review of drugs to treat serious conditions and fill an unmet medical need.
The designation will allow for early and more frequent communication and meetings with the FDA regarding the development of this important program.
Turning now to rig about.
Alpha Q3, five selective Gaba a receptor positive allosteric modulator currently under development for epilepsy and being designed in panic disorder.
As Tony mentioned November is epilepsy awareness month, and we are pleased that our ongoing phase II focal epilepsy trial known as realized trial is on track to read out in mid 2023.
More than 3 million Americans live with epilepsy, but despite its prevalence.
Still many myths and misconceptions in the stigma can lead to discrimination isolation negative perceptions of.
A stigma can have a trickle down effect into all aspects of a person's life and the lives of their caregivers and loved ones are the physical consequences of unmanaged epilepsy can be devastating even lead to death.
Data show that at least 1 million people in the United States is uncontrolled epilepsy, and we aim to bring a new treatment option to build this the significant unmet need.
As we discussed last quarter.
We also plan to pursue <unk> as a potential treatment for panic disorder, which is the second most common anxiety disorder.
Panic disorders characterized by panic attacks and presents with a range of debilitating symptoms, including a rapid heart rate.
And pending Doom weakness dizziness, just orientation, even chest pain, which can make some people feel like they are experiencing a heart attack.
We're developing a phase II proof of concept trial for panic disorder, which we plan to initiate in 2023, we will provide additional updates including the trial design. Once we have completed our interactions with the FDA.
As a reminder, our program follows a very encouraging positive data from our drink about phase one healthy volunteer hyper copier trial in acute anxiety earlier this year.
These results provide strong evidence of <unk> potential to be a differentiated daily maintenance treatment for anxiety related disorders, while minimizing tolerability concerns in contrast to benzodiazepines.
Now turning next to <unk> or D. One D. Five partial agonist, which we are developing for Parkinson's disease as both a monotherapy and adjunctive treatment to levodopa for symptomatic motor control we've.
We believe that to map it on conserve as a potential monotherapy early in disease. After the bar advanced Parkinson's patients.
<unk> can be a preferred adjunctive treatment with levodopa.
With <unk> longer half life potentially improved tolerability profile reduced incidence of dyskinesia as adjunctive treatment may allow for 24 hour motor symptom control and delay the need for L dopa dose escalation.
We continue to dose in all three of our phase III trials and a 58 week open label extension trial known collectively as the tempo trials.
Additionally, we are encouraged by the high rollover rate of 95% in our open label extension program.
Tony mentioned earlier that we are currently evaluating data readout timelines for Nevada.
Enrollment in the temple trials has been impacted due to the residual post COVID-19 landscape challenges in other factors affecting clinical trials and other related organizations.
We therefore anticipate a delay in the temple III readout beyond the first half of 2023.
Currently conducting a review of the timelines of the full tempo program and we'll provide an update on the timing of the data Readouts for all three trials in the first quarter of 2023.
Turning to CBL, a seven one our second <unk> partial agonist as you will recall in the second quarter of 2021, Sara well received fast track designation from the FDA for the development of CBL 871 in dementia related apathy and recognition of the significant unmet need in this area we are.
Currently conducting a phase Iia exploratory trial in this novel indication.
Dementia related apathy effects, 50% to 70% of people with the disease and is associated with worsening outcomes an increased burden on caregivers.
The post Covid landscape challenges in clinical trials are also impacting CBL, a seven one and as a result, we are no. We no longer expect the data to read out in the first half of 2023.
We are reevaluating the timelines for our trial and we will provide an uptake timeline into first quarter next year as well.
I am pleased with the progress, we're making across our portfolio and I'm confident that <unk> will bring forward important therapies to address significant unmet needs of so many people living with devastating neuroscience diseases.
With that I will turn it over to Dr. John <unk>, Our Chief Scientific Officer to review, our early stage portfolio John .
Thank you Ryan and good morning, everyone I'd like to begin by providing an overview of our earlier stage clinical and preclinical programs.
We have an active program to identify and enforce selected full agonist clinical ready ready molecule as part of our goal of creating an industry, leading <unk> selective therapeutic franchise.
We believe this novel program will provide additional clinical indication optionality as we consider the therapeutic potential of its mechanism of action as demonstrated utility in treating psychosis Mrs.
This additional program will give us an opportunity to complement our <unk> program and expand our presence in additional neuroscience indications.
We will be presenting preclinical data characterizing the vitro profiling in vivo efficacy data in EEG biomarker data across both the society for neuroscience meeting in November and the American College of Neuropsychopharmacology meeting in December .
Second I'd like to highlight our Kappa opioid receptor antagonist program CBL 354, which continues to progress in our ongoing phase one single and multiple ascending dose trials in healthy volunteer subjects.
We believe this mechanism of action has the potential to address major depressive disorder and substance use disorder based upon prior clinical and preclinical data generated with compounds that selectively target the kappa opioid receptor such as our compounds CVR three five port.
Preclinical data characterizing the in vitro and in vivo data in CVR <unk> four will be presented at both the <unk> meeting and the <unk> meeting.
These presentations will include nonhuman primate imaging data characterizing the selectivity of CVR <unk> four receptor occupancy at the Kappa opioid receptor over the Mu opioid receptor as well as efficacy results showing reduction of oxycodone withdrawal symptoms pre clinically.
We are also carefully evaluating a series of PD <unk> sparing compounds are well established small molecular targeted profile with that therapy potential in multiple disease areas, including major depressive disorder schizophrenia, and neuro inflammatory conditions are.
Our selected PD four inhibitors spirit of PD for D receptor subtype, which is believed to contribute to the Gi side effects that have historically entered the development of nonselective <unk> four inhibitors in neuroscience indication trials due to the limitations on exploring the full therapeutic dose range has been tapped by intolerable side effects, such as nausea and emphasis.
Yes.
Our teams continue to have an ongoing presence at key medical meetings, which is an important part of our drug discovery efforts. Most importantly team members attended the 14th annual Parkinson's disease Therapeutics Conference hosted by Michael J Fox Foundation.
This conference focuses solely on Parkinson's drug development and creates an opportunity for top Parkinson's researchers and business development professionals to convene and learn about what is new in Parkinson's disease therapeutic space on full display with the Parkinson's progression markers.
A large foundation sponsored cohort study aimed at identifying biomarkers of disease onset and progression.
<unk> recently became a partner member of the <unk> initiative, and we look forward to the great insights Ob clean Vitus Cross industry group.
Overall, we continue to build our robust drug discovery engine and our research labs in Cambridge, causing.
With additional ongoing discovery stage and pre R&D programs focused on areas of large unmet patient need.
Bridging our differentiated understanding of disease based neuro circuitry and world class chemistry to develop and explore their therapeutic potential small molecules are selected receptor activity and potentially improved efficacy and tolerability.
We believe our research engine, which is driven by a team of incredibly dedicated and talented scientists will fuel future innovation for many years to come and we look forward to keeping you updated on our progress on these earlier stage efforts as appropriate.
I'd now like to hand, it over to serve as interim Chief Financial Officer, Mark <unk> to review, our financial performance for the third quarter.
Mark.
Thank you John and good morning, everyone as Tony mentioned earlier during the third quarter, we completed a $599 million financing and we now have over $1 billion in cash with runway into 2025. This impressive capital raise is just one example of our judicious and strategic approach to funding and prioritizing our broad and deep portfolio.
Programs and investing in the ongoing discovery efforts to replenish our pipeline.
I am pleased to provide an overview of several strong financial position and our third quarter 2022 financial results. Please refer to this mornings press release for full details of our financial update.
For the third quarter total operating expenses were approximately $95 million, which includes R&D expense of $71 million in G&A expense of $24 million relative to the third quarter of last year R&D expenses increased by approximately $31 million. This increase was primarily due to the continued advancement of <unk>.
<unk> <unk> and <unk> programs.
<unk> and our preclinical and discovery efforts and increased personnel and other infrastructure costs as we expand capabilities to advance our pipeline.
As expected R&D expenses relatively consistent on a sequential quarter basis, and we expect it to remain relatively consistent through the rest of the year.
G&A expense for the third quarter increased by approximately $9 million over last year. This was primarily due to higher personnel cost, including equity based compensation as we support the continued growth of our organization G&A.
G&A expense may increase slightly for the balance of the year.
As of September 32022, our cash cash equivalence and marketable securities totaled 1.13 billion.
In closing, we remain well capitalized we expect our cash resources to fund our current operations into 2025, we look forward to multiple value, creating data readouts over the next couple of years and we will continue to think creatively and opportunistically about further strengthening our balance sheet.
With that I'll hand, the call back to Tony for closing remarks. Thanks, Mark as you can see we're advancing our broad and diverse set of programs and building. What we believe is rapidly becoming the premier neuroscience company with the potential to deliver significant value for both patients and for shareholders. We're advancing novel programs.
A wide range of neuroscience diseases, Parkinson's schizophrenia, epilepsy dementia related apathy just to name a few.
We have the pipeline the people and the capital we need to truly transform what's possible in neuroscience and we are proud to be on the leading edge of the next great frontier and medicine.
Thank you for joining us this morning, I want to thank our teams, whose dedication and commitment make all of this possible I also want to extend my deepest gratitude and appreciation as I always do.
The clinical trial participants and investigators who contribute to the development of these important therapies.
With that operator, let's open the call for questions.
Thank you.
To ask a question you will need to press star one one on your telephone please standby as we compile the Q&A roster.
One moment please for our first question.
Our first question will come from EMEA graphic of Evercore. Your line is open.
Hi, guys. Thanks for taking my question.
A couple here if I may 1st I think there is a little bit of investor confusion around how exactly the blood pressure is being measured and the ongoing study.
Mark do you mean, specifically the question is really around.
How the two hour measurement like the timing of two hour measurement, which was shown for some of the prior studies versus how the 24 hour sort of average for the day is measured for this trial and to what extent that would or would not have ramifications on the waitlist statistics that structure versus relative to baseline. If you could just speak to the timing of measurement secondly.
The trial. This eight week study was fully enrolled as of July as Brooklyn trials that Gulf. So I would've thought we shouldn't be getting an update by now so if you could speak to timing of the data in house already et cetera. Thank you very much.
Okay. Okay. Thanks for the question.
First one is really very very easy.
Didn't use two different methodologies one for the phase <unk> study in terms of cost measurements.
And the ambulatory blood pressure our process that were using for that phase one study.
Why don't you actually just breakdown.
Really simple distinction between those two and almost question specifically about timing and maybe take the second half of his question as well regarding our expected study conclusion.
So omar good.
Good morning so.
The phase one B trial, we actually just had as Tony mentioned at Cup measurements.
A couple of times, a day, but in the ambulatory blood pressure monitoring trailing in fact at baseline at week 40, We gate, we monitor blood pressure every 20 minutes during the waking hours in every 30 minutes during the time that they are asleep. So it is a 24 hour assessment.
That word then you get a mean so then you will look at the mean change from baseline at week eight.
That 24 hour cycle, which as you know we will give you a more precise reading in terms of the sustained systolic blood pressure effects over time.
And then in terms of the data readout.
So the trial is still ongoing.
And we will.
Have that data available later in the year when we conclude the trial.
We will also share that data at the appropriate time and really.
And then an appropriate venue as well so stay tuned for that.
Hey, Omar Thanks for the question operator, we'll take the next question. Thank you.
For the next question.
Our next question will come from Michael <unk> of Jefferies. Your line is open.
Hi, guys. Thank you good morning, two questions for us.
On <unk>, obviously, you are commenting on.
Petrol change in timeline can you just be a little bit more specific.
What you mean by a push COVID-19 landscape scape challenge and other factors.
And.
Maybe put a little more meat on the bone as to what the different compounding things are and how much of a delay talking about because I guess, it's sort of it related to enrollment completion.
And then second question was the other announcement around direct about hitting xiety.
Can you comment on what sort of drove that is that.
A better comfort with the Tolerability safety profile as I remember from the first readout that caused a little bit of.
Investor concern and obviously in.
The fact that you have another ongoing studies going on at the same time. So maybe there are some learnings from from what Youre seeing there maybe just comment on anxiety. Thank you.
Okay Mike.
Mike I think just really quickly by way of context for the trial delay. This is nothing new across the industry. We've actually been researching that particular set of challenges that companies are facing.
Actually look at submitted data insights information, suggesting that 80% of trials have been delayed in 2022. So we think that this is exactly on par with what's happening in many instances across the industry I'm going to ask ray to give more comment, but I will quickly note that our inpatient trials as distinct from.
The outpatient Charles we are discussing for for it to wrap it on in a separate one our inpatient trials continued to enroll well. So there is no interruption or delay we're expecting for any of them rapidly to empower studies and raised already commented on the AVP M study, which has enrolled very well and we expect that to conclude this year such as.
Draw the distinction between our inpatient studies for us and these two outpatient studies as well and this is a phenomenon we are finding across the landscape, but nobody will have more details because this teams Bryan kipp deepen this particular topic, Rick why don't you take that one and then we'll come to the degree of a bad anxiety question. Good.
Morning, Michael So as you know and I think Tony mentioned that there has been in a residual effect.
Due to the Covid era, and Youre seeing basically the effect at the site at the trial site level as well as at the <unk> levels and other associated organizations.
And there is a bolus of trials that really are trying to catch up with the personnel really can't catch up as quickly.
We're seeing delays due to those reasons as well as.
Individual hesitancy it at times.
Certain populations to participate in trials all of which have been captured as Tony mentioned in the data insights article that.
Metadata provided recently, so we're working very diligently to come up with.
Plans to try to catch up as quickly as we can and really some risk mitigation plans without diluting the quality of the data. So we'll stay tuned for that but.
Again, I think a challenge that the landscape is experiencing that we're trying to obviously you bridge that gap as well.
And I know, where you provided some color in your prepared remarks on the choice of panic for the rig about our ongoing conversations with the FDA, but what would you add to try to amplify Michaels question. So Michael just that.
No there hasnt been a drug approved for panic disorder, since 2005 and 17 years.
And so we are currently in process of designing a trial, that's very consistent with the precedent that has been set and the landscape. Historically have wanted want to get the alignment from the agency in order to ensure that we are a viable program moving forward. So stay tuned for that as we can.
Go through that process, and then be able to clarify to all of you what that trial design and timeline will look like but we will start to trial in 2023. The good news is that we think we've got a winning compound for this particular opportunity and clinical development. Just takes time and our approach has always been to be methodical and disciplined so we.
Design the trial correctly. The first time in this input from the FDA, we think is going to be very important but so far so good the data looks good and hopefully we can address.
Some of what we saw in the phase one study in healthy volunteers. Okay. Operator, we will take the next question.
One moment.
Our next question will come from Paul <unk> of Stifel. Your line is open.
Great. Thank you very much.
I just want to clarify something on the <unk> timing of the disclosure or is that going to be disclosed still this year. So do you just completed this year.
And then beyond that I just had two other sort of prepared questions one on <unk>.
There's some data out there that suggest around a quarter of schizophrenia trials for effective drugs fail.
Given you have more money in the bank now have you thought about initiating a third pivotal study at the hedge given.
Just to mitigate the downside risk on bad luck and what that could mean for filing and launch timelines and then on the Capex program you referenced external data and I know that Theres the J&J study.
It relates to PSC in depression.
How closely you're watching the trial readout from Nomura.
If those data are positive or negative from their mbd study, how much of that influence whether or not you actually start the PSC trial in depression.
Okay, Paul Thanks for those.
I'd say on the <unk> study, which was your first question, what what you hear us saying, what we're guiding to that study. We expect will conclude this year, obviously I don't know yet whether it will be early or late December , but we expect or even later this month, so give us the opportunity to wrap the study understand the data.
And as it will not be uncommon, we will make the best decision about when and how to disclose those particular data. So stay tuned for that we know that everyone is very interested in this data we are as well and it will be our.
Duty to get this to you as quickly as we understand what we see in the data.
We'll add and underscore a really important point and I've said this before right I've said this before and will continue to reiterate this the results of the AVP of trial, we do not believe will be gating to a review or an approval of an NDA and I want to underscore that and make that very clear those results. We do believe will inform and help labeling negotiations.
<unk> when we get to that point with the FDA. So I want to branch. This as a matter of what we expect will provide a high quality label and instruct physicians on how best to use them Bracco Dean and all patients. Obviously, the fact that we're doing this particular trial and that we have received fast track designation for our Morocco.
And ADP, obviously, an older and more vulnerable population suggest that they are not significant concerns about this particular topic, otherwise the agency and others wouldn't wouldn't be as supportive as they have been.
US moving these programs along so I'd just add that context, because sometimes we get very focused on that the micro point and I'd like us to zoom out and understand the significance of this and the relevance relevance of this in terms of what we expect will be a great therapy to treat patients.
Let's take the second.
Question that pulse postpartum graco team and whether we would consider a third study as a hedge rate I know you have some thoughts on that yes.
Yes, so Paul it's a good question.
We really want.
First to see what the phase II data readout looks like on both of those trials.
Obviously those trials are positive they do have potential for them to be pivotal.
To your point.
Obviously, you may need additional trials to ensure that you have the two registrational trials you need for to submit an NDA. So I think that's something that we definitely.
Considering and have considered moving forward, but we do want to focus really on completing those phase II trials first before we take any further steps.
And if you would take the core question.
Talk a little bit about the landscape in it.
Actually be useful because everyone may not be up to speed as Paul is but just share perspectives on the J&J data that they've released the promise of this particular mechanism in MD and talk also about what we know about the other competitors.
Sure Thanks, Tony and thanks, Paul for the question so.
The cap opioid receptor antagonist approach has been actually one that's been sought after for quite a long time, there's been previous compounds at a pad activity as.
Let's say non selective kappa opioid receptor antagonist in the past that has shown some evidence for having anti depressant effects I think that we've seen other companies try to pursue through multiple pharmacology approach.
The opportunity to go after the Kappa opioid receptor antagonism is depression target.
Complications with multiple pharmacology approach.
Most excitingly in most recent has been they've reported data that has come out of <unk>.
Johnson <unk> Johnson around the approach they've taken with having a selective compound, which which is a compound that we're very familiar with the compounds showed.
Opex and treating major depressive disorder.
<unk> to that but we've seen subsequent to that what we've seen is is it actually J&J has now announced that they are actually initiating phase.
Phase III program.
<unk> started one of those phase III studies, there is likely to be another one and then also announced the start of an open label and so J&J seems to be very convinced on the action of that molecule and the potential there as mentioned another competitor in the field as Nomura and as you know that was a compound that was picked up from black.
<unk> is part of the formation of Nomura, Yes, we are very interested in seeing what that study reads out I would say that what we.
Well Ricardo <unk>.
The inclusion exclusion criteria and how those trials have been designed and the differences between what J&J approached us.
Positive proof of concept they've demonstrated versus the inclusion criteria that Nomura has incorporated in their study looking.
Putting a lot of emphasis on <unk> as part of their enrollment and so we are watching very closely we know a lot about both molecules, but we also know very well our molecule plus we have internal preclinical data is helping us make decisions on how we're going to pursue next steps after we get through the phase one studies that were in.
And part of it as I mentioned, we will be talking about at some some conferences that are coming up but what we've learned particularly about our receptor occupancy selectivity to capo overview, which is obviously something that we're interested in as well as other companies and regulators and so I think that it will be exciting when it was publicly available.
Global but we do see a lot of potential for this mechanism is one that has been validated clinically although with non kind of ideal compounds J&J clearly is convinced.
We're looking forward to seeing how the antidote inclusion criteria for tomorrow plays out, but we also have had some strong data internally pre clinically. There is also helping us direct our investment program, but overall, it's an exciting opportunity because of the multiple areas that this mechanism can play a role.
Suffice it to say we are excited about the prospects here because if we can add major depressive disorder to schizophrenia to Parkinson's to epilepsy is yet another indication we're working on that would be great for patients operator, let's let's take the next question.
Thank you one moment please.
Our next question will come from <unk> Ahmad Bank.
Bank of America. Your line is open.
Hi, Good morning, Thanks for taking my question, maybe just a follow up on a comment you just made as regard to the results of the blood pressure study.
How does it in any way impact your commercial opportunity because we have another job.
But for any other language on on blood pressure increases do you think it would impact the opportunity negatively at all if you were to fall.
Admiral and.
At this point just based on the mechanism would it be surprising to see a one to two point elevation.
And Mercury and results in Europe .
Thanks.
Thanks for the question and it's a great pickup because that was exactly the message that I was delivering in my earlier comment we actually don't think well, let me say what we do think we do think that this is a mechanism related phenomenon. So that the muscarinic agents are likely to induce a presser effect. This is.
What competitive data appears to show.
From a labeling point of view there might be some provisions that the FDA would provide.
There is something to consider there, but commercially we don't expect to be put at a disadvantage because of what we find and expect that given the efficacy in a relatively clean side effect profile for this compound. In addition to the once daily dosing and no need for titration and what we think is a unique advantage, which is the selectivity of the infor.
Receptor subtype interaction that those all provide a really compelling argument for a strong commercial potential as well as a really important therapeutic benefit as a differentiator for patients. So physicians will obviously make their minds when all of these agents come to market, but this pressure effect increasingly appears to be.
<unk> mechanism related and we think there are significant distinctive benefits that are more equity than we'll have in the marketplace that will bear out. So we don't expect an impact on the commercial opportunity.
I think Thats, Jr. Unless you want to add anything else on the mechanism.
I would disagree Toni we do believe its mechanism based but.
May be relevant to the question is the fact that what we also think it's transient increases and the increased tolerate and so on.
Our preclinical evidence as well as what we've seen clinically suggest that while there is a pressure effect seems to be very transient and tolerate and what the agency is interested in the <unk> studies, whether they're sustained effects.
Now what we've seen in any study pre clinically or clinically that those effects would equate to an effect over the period of dosing that we're performing in these studies.
Thank you Jr.
Alright, Thanks for the question the operator will take the next one please.
One moment.
Our next question will come from Matthew Harrison of Morgan Stanley .
Your line is open.
Hi, Thank you for taking our questions. This is Max score on for Matthew Harrison I was just wondering how should we think about the potential risks and tolerability profile of <unk> and 65 to 85 year olds and do you expect dosing to be significantly different compared to younger individuals'. Thank you.
Okay. Thanks Max.
Yes so.
As you know we are going into the Alzheimers disease population and older population 65 and older.
We really don't expect <unk> profile.
Any less tolerated by that population than the younger populations gets a perennial.
We are going to start a multiple ascending dose trial as we mentioned earlier later this year that will delineate the dose range.
We would probably most likely will achieve a similar dose range, but we don't expect any of the characteristics that we know we know about it <unk> to inhibit are moving forward in any way.
In that older population or for there to be any.
Significant effects in terms of side effects tolerability.
And I had just related to that.
Importantly, and this is I think a really key thing we don't expect any of the Gi or cholinergic effects that are associated with everyone.
I'd, just underscore that because it goes to the central thesis of what we do as a company with targeted receptor selectivity. If we're right and we think we are because we have clinical data to support that both scientific and clinical data, which suggests that the cholinergic and other Gi related side effects that you see with some agents aren't likely to be a factor here. So it's a great question.
Obviously cholinergic side effects, a real problem in the elderly.
And you have to dose adjust to address for those things. So our expectation is that the once daily dosing from a targeted and for Pam <unk> should be beneficial, but we'll collect the data and we will see and we will govern ourselves accordingly.
Operator, why don't we take the next question.
Thank you one moment.
Our next question will come from Madhu Kumar of Goldman Sachs. Your line is open.
Hey, guys. Thanks for taking our question. This is rob on for Madhu.
First for <unk>, how should we think about the importance of psychosis versus cognition endpoints, particularly in Alzheimer's and then for <unk> in epilepsy, how do you think about the development landscape in this disease and sort of where it's drug fits in.
Okay, Great I think you can take take both of those if you will notably the importance about the psychosis versus cognition and ADP right. So.
They are they are different as you know that we are.
Really evaluating psychosis in this population, which is seen in up to 40% or maybe even a little bit over 40% of the population that suffers from all timers disease in terms of hallucinations and delusions really and so that's where we're really focusing on a very different.
Our approach to evaluating cognition, which would be a different patient.
Population and a different in a different.
Point in trial design and so forth. So our objective really is to address the very debilitating.
Syndrome in patients with Alzheimer's disease psychosis.
Moving forward.
Jarrod.
Harrington that question always a question about the <unk>.
One component, which most people are thinking to cognitive central covered benefit. So if you were just go through the four in one distinction because I think thats inherent in the question.
Operator, we're going to ask you to reopen the line for Goldman Sachs. Because the second question, we could not hear so Max will ask you to come back in the queue momentarily. So while Jay I was answering that operator, if we can queue up the second question. After the next the next couple go ahead.
Sure Toni Thanks, and thanks. Thanks for the question. So yes, I think when you're looking at the treatment as Ray said there is very different.
Designs of the studies that you would want to perform to demonstrate the difference between the psychotic benefit and the cognitive benefit I think theres been discussion.
About the potential for treating cognition, particularly in Alzheimer's disease with the muscarinic approach.
Historically, the <unk> receptor has been one that in preclinical models.
Primarily rodents, what's been demonstrated is that compounds that are in one selective activators.
<unk> agonists have demonstrated cognitive benefit in rodent models.
It has not been demonstrated at all to my knowledge is the fact that once you get into the clinical setting and you look at populations and demonstrate cognitive deficits like Alzheimer's patients.
That in fact that compounds it activate and show kind of a benefit in rodents don't translate to a benefit in one of the.
References I use for that is a compound that was developed by Merck that was highly selective about a thousand fold selective for <unk> over the other muscarinic.
That was a really well performed set of data that they've gotten to show target engagement and activity. However, when that compound went into an Alzheimer's population in both cognition and activities of daily living were looked at and there is absolutely no benefit in Alzheimer's population as far as cognition and so that's probably one of the best quality molecule.
That I can point to that's gone into that transitional.
A study from preclinical to clinical and it's not actually demonstrated cognitive benefit and to the point about the endpoints.
Endpoints I don't think that.
And the populations that have psychosis.
And one has ever been really taken into a study in patients with psychosis to actually demonstrate an appropriately designed study of benefit on cognition, because it would be a very different study design and the typical kind of Pan study that is typically done has shown anti psychotic benefit and so really I think that there is no no strong evidenced it in one <unk>.
Imports of cognitive benefit.
Either alone or in a cognitive deficit population like Alzheimer's or in a combination of looking at a psychotic population and showing a cognitive benefit in the <unk>.
The design study so.
I think that.
Could import show cognitive benefit I think the answer is potentially we do have preclinical data that says that the <unk> mechanism alone with selective compounds does benefit cognition, but again, the translational piece and a decline in can actually join the appropriate study has not been done.
Just just to flesh this out the combined answer for both of you cognition is not what we're looking for ADP, that's right and that's what we're looking for is an improvement of psychotic symptoms not cognizant of cognitive benefit and so we have to separate the two and keep them really distinct because this is not an anti all timers therapy to improve cognitive benefits. This is.
As a therapy to diminish the delusions and hallucinations associated with psychosis and Thats, a really important distinction that we will come back to time and time again. So I. Appreciate the question and we'll keep framing. It so everyone really doesn't understand with a therapeutic benefit in gold is here and Tony if I could add that if you wanted to evaluate cognition you would not want to do it in a.
Patient population that was experiencing psychotic symptoms. So this is a very even within the Alzheimers group, it's a very different population than the one.
Evaluating for <unk>.
Okay, great. Thanks, Ray operator, we'll move on to the next question I know Youre trying to open the line of Matthew Kumar. So they can ask the second question is if there is still there, but let's take the next question in the queue, while youre working on that alright. Thank you first of all.
To Rob Palomo Goldman Sachs. Please hit Star one again to get back into the queue. So you can ask your second question.
Got it.
Okay.
Our next question will come from.
Mohit Bansal of Wells Fargo. Your line is open.
Great. Thank you very much for taking my question so.
From my side, one is that.
So your initial trial Sofia was in <unk>.
In patient file if I understand you correctly, while the blood pressure study is outpatient do you think it will have any.
Ramifications on the on the outcome there also.
Competition, you also noted that.
There was indeed tiedemann adverse events related adverse events of hypertension.
Desire to order Pizza is time, so does this give you confidence in that.
Over a period of eight weeks it would probably be more modest.
Impact if there is any and last one is on <unk> and <unk>.
Cognition I understand.
These but these trials probably five weeks of <unk> long. So you may not see any benefits on transmission, but do you think in longer term.
On cognition.
Show up if there is indeed, a benefit of emlen on cognition.
How do you think about that thank you.
Okay.
Great.
You can take you can take both he'll have a comment on the second one.
But in terms of please draw the distinction provide the description between the inpatient versus outpatient question on BP. So.
So.
Both trials, both the six week phase II trials and the phase one B trial are all in patient trials in patients with an acute exacerbation of psychotic symptoms. The ambulatory blood pressure monitoring trial is also an eight week inpatient not outpatient and inpatient trial and the reason for that.
Is to ensure that we minimize the variability so we can get a more precise.
Accurate reading over the eight week period, so just to ensure that everyone understands that all of these trials are inpatient trials not outpatient. So that's a really important distinction and to date in the phase <unk>. We saw no treatment emergent AE that was associated with hypertension, and I think that was implies.
The second part, but but bear me out on that range. So we only in the 30 milligram group, which we're evaluating in the phase II program is our top dose we only saw one.
Treatment emergent adverse event.
Increased blood pressure out of 27 patients or approximately 4%.
There were actually two patients on placebo roughly 7% so again.
I've really minimal number of treatment emergent aes due to increase blood pressure as I, just outlined but no difference between placebo so to placebo and one of the treatment and one in the treatment and that's really an important distinction because we're obviously always comparing to placebo and these placebo controlled trials and that was the point I was making.
As to <unk>.
Cognition I think it's really important to follow rates line of thinking here that if you are testing for cognition, you can't do it at a psychotic patients.
And that's a really important things so with the duration of these particular trials you've got to focus immediately on the scales that help you assess the improvement in psychotic symptoms delusions and hallucinations and then separately answer a cognition question and just to add to that that invariably when you have a psychotic patient that gets better.
Cognitive score is also going to improve the pseudo specificity of that it's very different from having a patient population that had residual cognitive deficits and is stable and then you see improvement from that vantage point. So again, a very different approach a very different patient population and also may I add a very.
Our regulatory path forward to get that indication.
Okay. Good thank you.
Operator, we will take the next question.
Okay.
Thank you one moment.
Okay.
And next we have Rob <unk>.
He is your line is now open to ask your second question.
Okay. Thanks for your opening my line just a quick question on do we go about like how do you see the treatment landscape in epilepsy moving forward.
Okay I think.
But you can start with that one I will have some thoughts, but if you would that'd be great.
Sure well. Thank you for the question. So first off this is a patient population that I think we're all aware has significant unmet need.
Many of these patients are refractory patients patients that are in need of additional therapy.
One of the opportunities that we clearly see with the rig about is the opportunity to really have been so like efficacy. However, given the alpha one sparing nature of our compound really be able to potentially transition this marketplace from a PRN.
PRN based market to really have chronic based market, which would be a substantial opportunity obviously for <unk>, but also a substantial shift in the way that epilepsy patients are managed overall, so we see that as a major opportunity.
Okay. Thank you thanks for the question operator.
Have time for just a couple of questions more.
How many more do we have in the queue. There are two left.
Okay perfect.
Take the next question.
Thank you one moment.
Our next question will come from Charles Duncan of Cantor Fitzgerald. Your line is open.
Super Good morning, Tony and team. Thanks for taking our questions I had just two one on <unk> and one on the rig at that with regard to <unk> I know that you just started the amparo <unk> three trial, but do you could you provide us any.
The information on the enrollment in that open label extension or do you plan to talk about that and in the future persistence could be a pretty interesting observation on record.
Great Yeah. So the empowered III trial recently started only buy because of the patients who are currently in the phase II program had the option to rollover. So it's in early days.
We do plan in the new year to also include de Novo patients in order for us to meet the ICA mandated safety exposure that.
That is needed to file.
<unk> NBA when those trials potentially readout in.
In the future so stay tuned for that but that's something that obviously, we are monitoring very closely to ensure that it is not rate limiting to our submitting an NDA.
Down the road.
Okay very good but obviously, we're very excited that the programs.
Really going quite quite nicely.
Really excited to see what happens there operator, we will take take the next question.
Thank you.
One moment please.
And just a reminder to ask a question. Please hit star one one on your phone.
Our next question will come from Douglas Tsao.
Of H C. Wainwright your line is open.
Hi, Good morning, Thanks for squeezing me in just a couple quick ones first Tony maybe if you could just talk about what the financings that you're right.
<unk>.
Does that open up new opportunities for the company just be curious to hear that and two maybe on the panic disorder study.
Ray you referenced sort of to the most part following the <unk>.
Didn't but obviously.
The partnership with some time ago, and just given the sort of unique characteristics of Georgia that are there.
Sort of tweaks to the study design that youre, making to help better characterize the profile with the unique character of the drug.
Or do you think those would be sort of.
Born out in sort of the sort of more sort of traditional study design for lack of a better phrase. Thank you.
Okay.
Why don't you take that one and then Mark and I will take the financing sure. So thank you for that question. So in terms of the panic.
Program, obviously, we're currently designing that trial.
We are designing it.
Relevant to what the <unk>.
<unk> test has been that even though it's been a while since that person was 17 years ago, but there's not a lot of latitude really what evolving panic disorder and the trial design. So there is nothing unique in terms about the design or we're not.
Doing anything differently, because it's to rig about but what we do hope that we saw in the <unk>.
Ah Hypercalcemia trials at the Alpha two three cell activity.
Obviously gives us the opportunity to show the benefits of a chronic <unk>.
Dosing up to rig about to be.
Like a benzodiazepine be without the alpha one side effect issues and issues for chronic issues that limit chronic dosing.
It will hopefully help us.
Help us with.
Moving the program forward, but also showing the benefits of.
Great need that there is in this population.
And just quickly on the financing so we will conclude on time.
$1 billion on the balance sheet.
We clearly have the opportunity to fund the ongoing operations into 2025 and several data readouts.
In that timeframe, but mark why don't you talk specifically about what we think that this recent rates will do for the company and transforming it sure. So.
With the proceeds from this offering.
We really feel that we have the opportunity not only to continued development the development of <unk>, but we have the ability to evaluate the potential of <unk> in other populations such as ADP.
We have the opportunity to advance the rig or that in panic as well as our earlier stage programs such as <unk>.
CBL, while $3 50 for our corporate asset, but it will also give us an opportunity to accelerate registrational, enabling and market development activities for our lead programs, but again as Tony said is.
We have enough to fund our current operations into 2025 I.
I think the only thing I would add is that we are obviously looking forward to understanding competitive landscape and the market landscape. How these diseases are currently treated so we will be paying attention to the evolution of that landscape. What prescribers are interested in what patients need and really trying to get market insights that will help us provide better off.
<unk>.
Great. That's all the time, we have for questions and so I'll apologize in advance to anyone who did not get to today. Thank you guys for listening it saw a bit of full conversation. Thank you for your questions. Thank you for your attention. We are clearly optimistic about the prospects of not just what's happening with it.
Schizophrenia and rapidly, but with the recent fast track designation from the FDA on ADP as well as what's happening across the portfolio with direct about the news that we're expecting there in the middle of next year and the other programs that we have ongoing including rapid on to help transform the Parkinson's landscape, we've got a lot going on but really focused.
We are excited and thank you for your support and your attention good morning.
Thank you. This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
Yes.
Okay.
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