Q3 2022 Concert Pharmaceuticals Inc Earnings Call

Okay.

Ladies and gentlemen, thank you for standing by and walk through the concert Pharmaceuticals third quarter 2022 investor 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 special need to press Star one on your telephone I would now like to turn the call over to your host Justine Koenigsberg you may begin.

Good morning, and welcome to concert Pharmaceuticals, third quarter 2022 Investor update.

Before we begin I'd like to mention that in addition to our corporate website is a source of information. We encourage you to follow along and our social media platform, including Twitter, Instagram and Linkedin and recently added Instagram as a social media platform and collectively and you can find corporate news as well as information geared towards our science culture.

And any initiatives on these platforms.

Joining me this morning with prepared remarks are Roger Tung, President and CEO and Mark Beck, our Chief Financial Officer.

Nancy Stuart our Chief operating officer, and Jim cause I'll, let 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.

Statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

Some 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 for joining us today, we are at an exciting inflection point for concert as we continue our journey from a late stage development company to becoming a commercial organization.

Going forward, we will now refer to as GTE 543 generated JAK <unk> inhibitor <unk> named <unk>.

We believe that LP Sherry audit is a largely untapped multibillion dollar market and that to walk so loopnet potentially as the best overall or profile of agents studied to date in that disease.

The positive inconsistent phase III results amongst drive aae, one and tried to international clinical trials.

<unk> as a potential best in class treatment for alopecia area.

After releasing top line data from our first pivotal clinical trial in the second quarter of 2022.

Past August we released top line results from stride AI too.

Timber we presented additional results from stride one during the late breaking news session at <unk> Congress in the law.

These data showed significant and clinically meaningful scale the growth for both doses of directional at 24 weeks compared to placebo early onset of effect and high degrees of patient satisfaction.

In both trials <unk> slip.

The primary and key secondary endpoints with both doses evaluated.

Importantly, we now have over three years of <unk> treatment experience and some of the patients participating in the open label extension study, giving us a sizable safety database to support our planned NDA filing in the first half of 2023 and supporting future commercialization.

Its been gratifying for us to be able to present the excellent thrive.

And to share additional detailed results with dermatology experts and clinicians.

And we will continue to present data for Dulux loopnet and grow awareness within the treatment community in the months ahead.

As a Prime example, we were very happy to have Dr. Kim of Yale University presented the thrive AA one results at the 2022 ETB Congress during the late breaking news session.

Building on the previously released topline results showcase salt churn scores are more stringent measure of hair regrowth in.

And the effect of <unk>, an eyebrow and high luxury growth.

As with the Salt 20 primary endpoint data, we believe <unk> Loopnet continues to demonstrate impressive efficacy by these additional measures.

As we parse the extensive data from the phase III trials, we look forward to sharing additional analyses with the medical community.

Beyond the quantitative hair regrowth, David described by Dr. Ken we feel it important to highlight two other key attributes of <unk> slipped nuke, which are rapid onset.

Perfect and high patient satisfaction.

Both of these measurements were built into our statistical analysis plan as key secondary endpoints and both showed significant results versus placebo and the thrive AA trials.

Specifically onset of effect at the Salt 20 level in thrive one was statistically significant as early as eight weeks and in Detroit <unk> as early as 12 weeks.

When we look at relative change versus placebo and salt scores, we see significant changes favoring to <unk> as early as four weeks.

The salt scores continue to improve throughout the course of the study.

And as we've described previously continue to improve beyond the 24 week study completion and patients who continue to receive two excellent notes in the open label extension study.

Regarding safety data from the trial NIH studies, the <unk> safety profile in both trials was similar to that we observed in the phase two which we believe is well suited for the treatment all appreciate area.

Later this months Dr. <unk> will present additional drive one results at the World Congress for her research in Australia, which will look which will include a look at the effect of <unk> lithium stratified by disease severity and by duration of current hair loss episode.

We expect that Youre rux Loopnet will be an important addition to the market where effective treatment options are only beginning to emerge.

Clearer than ever that alopecia area, there is a large and compelling therapeutic opportunity a common autoimmune disease that affects millions of patients worldwide and that offers blockbuster commercial potential for <unk>.

In concert we had a core team in place for some time to prepare our NDA filing, which we plan to submit in the first half of 2023.

The data from our large phase III trials forms the basis of our NDA application. However, there are several supporting studies and of course CMC work that we had conducted or are ramping up to support the filing.

We have a well defined plan going forward.

Every confidence that our team will continue to consistently execute to our timelines as they have throughout the program.

In closing, let me underscore that we are highly committed to bringing to a rux lithium to market as quickly as possible.

Extremely proud of what our team has accomplished and where we're headed.

Pause here and turn the discussion to Mark to review, our third quarter financial results.

Thanks, Roger as I review, our third quarter 2022 financial results. Please reference the financial tables found in today's press release.

Search and development expenses were $24 4 million during the third quarter of 2022 compared to $21 9 million during the third quarter of 2021, we continue to incur clinical costs associated with the open label extension studies for <unk>.

As a reminder, the North American extension study is expected to continue until approval.

General and administrative expenses were $5 3 million during the third quarter of 2022 compared to $5 5 million during the third quarter of 2021.

The decrease in general and administrative expenses relates primarily to decreased non cash stock based compensation and external professional services.

Our net loss attributable to common stockholders for the third quarter of 2022 was $28 9 million or <unk> 58 per share compared to a net loss attributable to common stockholders of $26 7 million or <unk> 78 per share for the same period in 2021.

We ended the third quarter of 2022 with $148 9 million in cash cash equivalents and investments under our current operating plan, we expect our cash runway to extend through the second quarter of 2023.

To summarize then recap Roger's comments, we are very excited about the potential for <unk>. It not only addresses a large underserved market opportunity, but it has the potential to be the best in class.

Based on the overall treatment profile.

We're on track with our plan to file our NDA in the first half of next year and believe we will have a meaningful treatment option that could significantly help patients who suffer from alopecia areata.

This concludes our prepared remarks, and we would be happy to answer any questions.

Ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your Touchtone telephone, we will pause for a moment, while we compile the Q&A roster.

Our first question comes from Maury Raycroft from Jefferies. Your line is open.

Hi, good morning Congrats.

Congrats on the progress and thanks for taking my question.

You've shown data from the two phase threes.

Alopecia with primary endpoint top 20 score, that's roughly 10% better than the major competitors Pfizer and Lilly.

Can you talk about how meaningful the data is in the context of other factors like dosing convenience safety and.

Safety to doctors and patients.

Good morning, Jim here. So thanks for the question.

So I think youre right.

The data we have clearly offers an advantage over the.

They are sitting there very interested in that data.

From Lilly and Pfizer in charge of the overall effect I think we also like to highlight that we have.

I think meaningful differences in terms of the onset of activity, especially when you look at the Salt 20 score.

We're looking at changes from baseline as Roger mentioned in the presentation I think the other thing that is also important to highlight is the level of satisfaction that we see.

In our pivotal studies.

We're both studies have shown a high level of satisfaction that the key secondary endpoint.

As we noted in our previous discussions.

We have a generally consistent and well behaved compound here.

We did not see.

Any thrombotic activity in the phase III program.

Have side.

Side effects that I think are consistent with the JAK class.

We're all our top adverse events were were things that were seeing.

Other JAK inhibitors, but also consistent with what we've seen in the phase II program. So I think in terms of what we're seeing in the phase III and what we're seeing for the compound overall, we have a very consistent safety profile.

Not unlike what you would expect to see with the JAK inhibitor, but very well behaved very consistent so I think in terms of that we have.

Well established safety profile.

And safety profile and a very good actually best in class efficacy.

I'll pause there see if you have any other questions.

Yes. Thank you for the perspective very helpful. And then wanted to ask about gating factors to filing that you've discussed.

The need for supporting studies, the phase II durability data and open label extension data can you talk about progress that's been made since your second quarter update call.

Have any specific gating factor has been completed yet.

Yes, so neal.

An NDA is.

It is a rather large and complex.

Document.

We have made meaningful progress in the supporting studies and conduct those studies.

We have worked on all the other.

Aspects of data that needs to be included in the NDA filing as you know there were three major components of the NDA. There is the clinical section there is a non clinical section and then theres the chemistry manufacturing controls. So the team is very experienced we're working diligently on wrapping up.

All the details that need to go into the NDA. So we've made a lot of progress we're working steadily on it and we are on track to file in the first half of 'twenty three.

Got it okay. Thanks for taking my questions and I'll hop back in the queue.

Thank you one moment for our next question.

Our next question comes in generally with Trust your line is open.

Hi, Good morning. This is last time for June .

<unk> to the NDA filing could.

Could you handicap, the timeline and any sense I understand you just gave some color around the factors that need to take place, but anything that could speed up the process. It would have been early 'twenty three event or something like a letter that.

Latter part of the first half.

I think at this point.

And keep it in generality of the first half we are really making the progress that we.

Expect to make were on the timeline.

We set out and I don't think we can really give any more clarity around the first half, but we are on track, we're feeling very good about it and and we're making a lot of progress.

That's fair thank you.

And the guide for your cash runway through second quarter of 2003, I guess this would imply a step up in spend.

Does the guidance actually include the initial launch preparations or is this essentially all tied to the open label extension study and the <unk>.

Cost.

Around the NDA filing can you just provide a little bit more color on the puts and takes of this cash guy.

Sure Hey, Les it's mark thank.

Thank you nailed it I think that's exactly right I think the open label extension is included in there and the cash guidance does include a fully burdened commercial effort I would say so there are a lot of pre commercial costs.

Hey, Dan there as well as NDA prep filing fees et cetera. So.

That is why there is a step up.

Got it okay. Thank you I guess last one for me then.

In regards to the 149 patent appeal just provide any available updates if possible and then on the 659 I guess based on todays filing it looks like <unk> has denied their request for the final decision reconsideration does this essentially provide closure or has the count.

Or is the counterparty.

Potentially you can pursue other options there. Thank you.

Hi, yes. Thanks, Thanks for the question list structure.

So with respect to the 149 patent that is currently in the quarter Appeals, we have filed our appeal to the <unk> initial decision.

And we're in the process of going back and forth with insight on that we think we have very good arguments there and are looking forward to.

The adjudication by the court of Appeals.

In the case of 659 patents, we were of course very happy to see that.

The pizza had denied the request for.

For reconsideration from insight.

That patent has an extremely strong rounds right now they do.

Do have the right to file an appeal, but we think that given the very consistent and lengthy analysis given to their case.

The judges.

Really nailed.

The decision here.

<unk> com.

Micro situation there. So we feel very strongly that the 669 patent is on solid ground.

Excellent. Thank you for the color.

One moment for our next question.

Our next question comes from Sean Kim with Jones trading your line is open.

Hi, good morning.

Now that you have booked phase III trial results and also the pricing scheme.

Our competitors specifically over in yet.

How are you thinking about pricing for $65 three arm as you move forward to filing and prepare for potential commercialization.

Hi, This is Nancy Ann Thanks, so much for the question yes.

We have said is we expect that our pricing will be in line with other JAK inhibitors, and the auto immune tariff space, including Illinois.

Net price parity is what we will be going flat.

Okay, great. Thank you and also another question from me so as far as Dawn Gorgon phase to circulate our pre sponsor all iqos whats the expected timing of trial completion.

Results.

How the results kind of tying to debate the plaintiffs questions, David we're happy with that.

Thank you.

Jim So yeah.

That is an ongoing study it will be the base is basically in two parts. The first part of that study, where we looked at the dose reduction in dose termination will be included in the NDA filing there is going to be an ongoing part of the study that will continue post filing where we looked at re dosing again so so.

We are on track to have that first part and the NDA filing and Thats, what the FDA is expecting.

Thank you.

Again, ladies and gentlemen, thank you have a question or a comment at this time. Please press star one on your Touchtone telephone one moment for our next question.

Our next question comes from Jason Butler with JMP Securities. Your line is open.

Hi, Thanks for taking the question just thinking about as you continue your awareness and education work ahead of the launch.

When you talk to opinion leaders or prescribed potential prescribers.

What you think is resonating what the message is that you think are resonating that confirm part of the launch messaging you've mentioned things like that.

The speed of onset, but what are you hearing back from physicians.

Hey, Jason This is Jim so a great.

Great question.

A.

A lot of enthusiastic support for our program and the data from the Kols.

Thank you.

We talk about in terms of the overall effect that we see with new retrofitting.

The early onset of effect patient satisfaction, all resonate very well with the Kols. So we hear that back from them and I think that's also a very important part of the messaging. So I think we've got those.

Three legs to stand on.

That is pretty well recognized within the community.

Great great. Thanks for taking the questions.

One moment for our next question.

Our next question is a follow up from Maury Raycroft from Jefferies. Your line is open his line just left the queue and I'm not showing any questions at the time I'll turn the call back to Justin for any closing remarks.

Okay well. Thank you for joining us. This morning next week, we'll be at the Jefferies, London Conference and our head of development and <unk> will be participating in a fireside chat on Wednesday, and we hope you all tune in and in the meantime, if there are any follow up questions. Please don't hesitate to reach out this concludes today's call.

Ladies and gentlemen that does conclude today's presentation. You may now disconnect and have a wonderful day.

The conference will begin shortly to raise Johan during Q&A, you can dial star one one.

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