Q3 2022 Xenon Pharmaceuticals Inc Earnings Call
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Good day and thank you for standing by welcome to the Q3 2020 to be non Pharmaceuticals, Inc. Earnings Conference call. At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and.
The answer session to ask a question during this session you will need.
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Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Sherri Allen Chief Financial Officer. Please go ahead.
Thank you and good afternoon, everyone. Thank you for joining us on our call and webcast to discuss <unk> third quarter 2022 financial and operating results. Joining me are Ian Mortimer, <unk>, President and Chief Executive Officer, Dr. Chris Kenny.
<unk> Medical officer and Dr. Chris <unk> been on.
Chief Commercial officer, and I will open today's call with sorry, Ian will open today's call with a summary of progress across our pipeline, Chris Kenny will provide additional detail around our recently launched <unk> hundred one phase III program and I will summarize this quarter's financial results progress within our partnered programs and our anticipated company.
Millstone events.
<unk> will be available during our Q&A session to address questions around our commercialization strategy.
Please be advised that during this call we will make a number of statements that are forward looking including statements regarding our and our collaborators development plans anticipated regulatory interactions and submissions anticipated results and related timelines.
Potential efficacy safety profile addressable market and commercial potential of our proprietary and partnered product candidates.
We can see of our trial designs and anticipated enrollment the potential receipt of milestone payments and royalties from our collaborators our expectation of having sufficient cash to fund operations into 2026, and the timing of potential release of future clinical data forward looking statements are subject to numerous risks and uncertainty.
Many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings.
Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward looking statement today's press release summarizing <unk> third quarter 2022 financial results and the accompanying quarterly report on Form 10-Q will be made available under the investors section of our website at www.
<unk> Dot <unk> dot com and filed with the SEC and on SEDAR now I would like to turn the call over to Ian.
Thanks, Jerry and good afternoon, everyone. Thanks for joining the call I'm truly excited to open today's call with confirmation that we have launched our <unk> one phase III program, thereby continuing to build upon our leadership position in the <unk> and driving our mission to provide new therapies for patients with epilepsy.
The xenon team is focused on executing on our ambitious development plan for <unk> hundred one, including our two phase III clinical trials and focal onset seizures called export to export trade and the phase III clinical trial in primary generalized tonic clonic seizures called exact.
These comprehensive phase III plans build upon the foundation of the compelling data generated with Oksana 11, one to date.
And statistically significant reduction in every seizure reduction endpoint at all doses tested in <unk>, Paul and even greater seizure reduction data and the open label extension with greater periods of seizure freedom.
The adverse event profile of <unk> is consistent with other <unk> that are active in the CNS. These positive data along with feedback from Kols and primary research findings support our firm belief that <unk> hundred one could play a significant significant role in treating epilepsy.
In addition, <unk> hundred one's differentiated profile includes a number of desirable attributes such as an only in class the potassium channel mechanism and a dosing regimen of once a day with no titration, while providing meaningful and statistically significant seizure reduction after only one week of dosing.
Ultimately our goal is to deliver a differentiated therapeutic option for the unmet needs within a broad population of epilepsy patients and our progress over the past quarter has been significant.
Turning now to our ongoing phase II <unk> clinical trials. This study is examining <unk> hundred one in major depressive disorder or mbd.
In parallel with an investigator led phase II <unk> study being conducted by our collaborators at Mount Sinai.
Our decision to examine <unk> hundred one in MTBE was based in part on promising clinical results with the <unk> dose 300 milligrams tid as a treatment for MTBE and Ana Danya as well as encouraging preclinical data with both <unk> and <unk> hundred one.
It is also important to note that depression is the most common comorbidity within the epilepsy patient population.
We have further refined our guidance within the with the expectation that we will receive topline results from the <unk> study in the third quarter of 2023 as we've made good progress on site initiation and patient enrollment today.
In addition to the clinical development activities supporting our robust exon 11, one program. We continue to advance our ongoing <unk> 496 phase III epic pediatric clinical trial evaluating <unk> in patients with <unk> in Q2, developmental and epileptic encephalopathy or Casey on Q2 D E.
These are patients who are one month to less than six years old in the study.
As with other clinical trials examining orphan or ultra rare indications, it's often a challenge to identify screen and enroll eligible patients and while there is significant interest from parents caregivers and physicians to provide a precision medicine to this important unmet medical need. This is also a young and fragile patients.
<unk> population, which sometimes makes travel to clinical sites difficult.
Taking into account these challenges around epic's enrollment rate to date, we've adjusted our expectations around the completion date of the study to 2024.
Based on what we know about the <unk> mechanism of action and further supported by physician case studies with <unk>. We believe <unk> has the potential to positively impact the lives of these young patients.
Before turning the call over to Chris I want to reiterate the immense amount of progress made across our pipeline in 2022 and I'm looking forward to additional clinical inflection points in 2023, I'll now ask Chris to provide some more detailed comments on our <unk> hundred one program and multiple phase III clinical trials.
Thanks, a lot Ian let me begin by thanking the xenon team for all the hard work, which led to the successful initiation of our phase III <unk> two clinical trial last week.
Designed similarly to support the phase <unk> clinical trial results ex told two will run in parallel with an identical study codecs or three.
Each study will enroll approximately 360 patients who will be randomized one to one to one.
For once daily dosing of either 15, or 25 milligrams of <unk> hundred one or placebo.
Our dose selection for the Phase III studies was informed by the safety and efficacy data and external as well as by PK PD modeling, which we completed earlier this year. The primary efficacy endpoint is the median percent change or MPC and monthly seizure frequency from an eight week baseline.
Through the 12 week double blind period, with <unk> compared to placebo using X tole data to support our model, we have greater than 90% power for the primary endpoint in both doses.
Based on the strong phase <unk> efficacy data is reviewed by in we're including the secondary endpoint of week, one median percent change in seizure frequency within the statistical hierarchy of the phase III focal onset seizure trials to build upon on the differentiated profile of <unk> hundred one.
With our <unk> one phase III program now underway. We're also continuing to execute upon our plans to pursue an additional epilepsy indication.
We expect our phase III exact clinical trial to enroll approximately 160 subjects with primary generalized tonic clonic seizures or PG Tcs.
The subjects will be randomized one to one for once daily dosing of either 25 milligrams of <unk> or placebo. The primary efficacy endpoint is the MPC and monthly seizure frequency from an eight week baseline through the 12 week double blind period of <unk> compared to placebo.
We're excited by the opportunity to study <unk> hundred one and primary generalized tonic clonic seizures in parallel with our trials focus on patients with focal onset seizures.
Of note.
<unk> hundred one shows anti seizure activity in both maximum electric shock seizure or mes and penciling Tetrazole preclinical models, both of which are known to predict efficacy for primary generalized seizures.
Furthermore, other anti seizure medications like <unk>, Tam valproic acid and Lamotrigine suppressed photo sensitivity and generalized epilepsy patients as did in earlier potassium channel modulator, thereby potentially predicting efficacy and PG tcs with ixia on aluminum one.
Additionally, in our phase two B X tole clinical trial, <unk> demonstrated broad impact across all focal seizure subtypes, including focal seizures that progressed to generalize seizures.
On the regulatory front following the release of our compelling phase II data from our <unk> 11 O. One X Tole study, we align with the FDA during an end of phase two meeting on key elements of our phase III program to support a new drug application or NDA.
To briefly summarize we plan to submit an NDA upon successful completion of ex told to our first exon 11 O. One phase III clinical trial, along with the existing data package from the phase two B X tole clinical trial and additional safety data from other clinical trials in order to meet regulatory requirements.
We're also aligned with FDA on key elements of a single phase III clinical trial to pursue an additional indication of primary generalized tonic clonic seizures.
Ongoing X Tole open label extension or OLED continues to generate important long term safety data for <unk> hundred one and focal onset seizures at the request of study investigators and based on the potential to continue to provide significant benefits to patients we're extending the original ex told.
Hello, Lee from three years to five years.
We expect to present additional data at the American Epilepsy Society meeting in December and we look forward to connecting with all of you there are.
Our team is driven by our belief that there is a significant medical need for new therapeutics to treat epilepsy and exiting an 1100, one has the potential to significantly improve the lives of these patients.
I'd now like to turn the call over to Sherri, who will summarize our financial position partnered programs and upcoming milestones Sherri.
Thanks, Chris before I make a few comments on our third quarter financials I'd like to turn briefly to our partner program with Neurocrine.
There are two separate phase II clinical trials underway, one studies evaluating MDI 90, 1352 in adult patients with Buffalo onset seizures with data expected in 2023 and another study is examining is used in pediatric patients with <unk> related epilepsy.
Cited about the progress being made by Neurocrine and we look forward to the clinical data expected next year.
I will touch on some highlights from this quarters financial statements and would refer you to our news release and 10-Q report for further details.
Cash and cash equivalents in marketable securities were $752 2 million as of September 32022, compared to $551 8 million as of December 31, 2021. The increase was primarily the result of the completion of our public offering in June 2022 and <unk>.
<unk> of our prudent financial management, and strong cash position, which allows us to fully support our <unk> one phase III program development as well as the rest of our planned clinical preclinical and discovery efforts with sufficient cash to fund operations into 2026.
Looking ahead 2023 represents another key area for.
Clinical inflection points within our pipeline, including expected data readouts from ex Nova and our partner program with Neurocrine in adult focal seizures.
Before concluding our prepared remarks, I'll briefly summarize some important milestone events ahead.
With <unk>, our first phase III clinical trial in Sos now underway, we expect to initiate <unk> III and the exact clinical trial and PGE Tcs in the near term.
Our <unk> trial, and MD is ongoing and we expect to have top line results in the third quarter of 2023, while in parallel we are supporting the Mount Sinai ISG and MDT.
We continue to advance our epic phase III clinical trial in pediatric patients with KFC in Q2 day with completion anticipated in 2024 throughout this year. The momentum has continued to build across the announced business.
Our team is highly engaged and excited to be part of <unk> mission to deliver new neurology therapeutics to patients in need for those of you attending Aes. This year, we look forward to connecting with you in Nashville and on behalf of my colleagues on the call. We look forward to providing progress updates in the quarters ahead I'll now ask the operator to open the line for any questions.
<unk>.
At this time, we will conduct a question and answer session. As a reminder to ask your question you will meet.
Our one one on your telephone and wait for your name to be announced.
The speakers have asked that you limit your question to one question for Richard.
Do you have an additional question. Please press star one to re raise your hand and be re enter to the queue. Please standby, while we compile the Q&A roster.
Our first question comes from Paul Matisse.
Your line is open.
Sure.
Hey, great. Thanks, very much and congrats on all the progress.
Wanted to ask you are an epilepsy commercial demographics question in light of the IRA and kind of confusing sort of fallout of drug pricing legislation, specifically on what do we know about epilepsy drugs and the proportion of sales that come in the Medicare population there is some.
Data out there that we've come across suggesting that pace.
Patients who are enrolled enrolled in Medicare have a higher rate of epilepsy than the general population and I was just sort of curious when you think commercially.
Where a drug like <unk> 11 O. One if it's successful could fall on the radar in terms of IRA exposure. Thanks, so much.
Thanks, Paul Chris One second is on the call. So he can address that.
I would say it's early days, we have done some work and provide can provide our first about car perspective right now.
We can use of impact is a little bit of a proxy as well, but Chris you can provide the details.
Yes, absolutely Thats, a great question and something Thats been on our mind since the legislation was passed so as Ian mentioned it still is very early days here and there was a lot to that will unfold in the coming years, but to directly answer your question what.
What we know today is approximately a third of the epilepsy epilepsy population is covered by Medicare and depending on what your product profile looks like it could either be slightly enriched or slightly below that number depending on the attributes and we expect that 1100 one's profile will be right in line, if not hopefully better than the elderly.
So we could be slightly enriched for them from that standpoint. When you think about that that then becomes a real proportion of sales as you grow the.
Overall sales for the product over the over the lifeline of the product and therefore, you can imagine at some point in time in the product lifecycle, we could fall into what I would consider as an at risk bucket for price negotiation, but if that occurs two things has to be considered the first is we've done exceptionally.
Well from a sales standpoint over the life over the lifetime of the product.
<unk>.
And the risk factor really comes in late and the product's lifecycle. We don't believe we're going to be a product that is going to have.
Sure.
1 billion dollar exposure early in the product's life cycle, and certainly from a Medicare standpoint, specifically.
So our view is that as the product sales grow.
Likely to be in that range of competitive products, but not early very very late in the product lifecycle if were quite successful.
Yeah.
Great. Thanks, Chris.
Please standby for the next question.
Okay.
The next question comes from Andrew Tsai.
With Jefferies. Your line is open.
Hey, Thanks, and good afternoon, thanks for taking my questions.
<unk> on the initiation of the Phase III program. So maybe my question. This time will be about the competitive landscape.
I would love to get your latest views.
Another compound started phase one recently.
Would be curious to see why you think you are differentiated for that compound and well in other words, how would you describe what the hurdle is for a competing KD seven in focal epilepsy and then second to that is when you think about enrollment for Exxon to three.
Do you foresee any impact whatsoever to enrollment or is it reasonable to expect some data in 2020 for for instance, thanks.
Okay. Thanks, Andrew I'll start and then I know, both Chris Counihan, Chris One second what Ken jump in on some of those.
Their perspective as well so I think initially you're talking about the competitive landscape. We focus on a couple of different things one I think we need to focus on.
Molecules that are at a certain advanced stage.
That are going through kind of mid to late stage clinical development and then obviously on the market the two.
Rams, we know extremely well, it's our program in an aircraft program that I think are kind of in that mid and move into late stage clinical development.
Specifically around the JV I think.
The X Gen 1100, one data, which is the only program in development right now that has clinical efficacy data has de risked.
Overall field and we're not surprised the competition is going to increase but I think we're really comfortable on where we are in the development of <unk> hundred one and the profile of that starting to emerge for that product as well not just the compelling efficacy and you and others know about some of the subgroup analysis, we've done but also the other attributes.
The drug in terms of no titration the week, one efficacy I think theres, some really desirable attributes specifically of 11, no vaccine 11, or one that we've seen in the clinic that we havent seen being matched with another molecule. So as we think about the competitive space option, we're actually thinking about where this would fit in commercially.
And maybe Chris can comment on the commercial market in the branded space, because I think thats really how we should be thinking about where 11 O one with them.
Absolutely thanks, Ian so.
As we've said in the past and we still strongly believe supported by our market research. The attributes of 11 O one are quite compelling.
And likely will result, as this being a product that is very meaningfully used in the marketplace. We've talked about this before but we often see one or two generic therapies used in advance of transitioning to a branded market and we think about 11 O one as being the product of choice in that future branded opportunities.
Now that <unk> has lost exclusivity really creating an opportunity for our product to fit into that environment. The attributes associated with 11 O. One are both interesting from a mechanistic standpoint, obviously <unk> adds a new mechanism into the armamentarium for this disease, but one.
Can't overlook that unique components of 11 O one that really separate it from all available therapies today, when we think about a rapid onset of efficacy the lack of requirement for titration QD dosing all of these things are potentially unique to 11, one one and while other TV <unk>.
May emerge.
They'll have to compete with what is from our perspective, I'm very very compelling clinical profile, that's likely to be used broadly once introduced into the marketplace.
Thanks, Chris and then Henry Yes, just a question on <unk> three so.
So we haven't given formal guidance on when we May expect data I think the best we're comfortable talking about kind of the best information we have today.
We really use the X tole study as a proxy the X Tole study took about two and a half years to complete obviously.
Differences.
Phase III program.
Are the studies are a little bit larger but within the same ballpark.
Of the X Tole study <unk> was initiated or started before the pandemic.
And then continued through the through the pandemic and we definitely saw an impact in those early days of Covid in the spring and summer of 2020 that had an impact on on screening of new patients in recruitment.
And also we obviously just everything we've just talked about and Chris has mentioned, it's just the profile of 11 O. One I think we have a really compelling pitch to investigators and for them to have a conversation with their patients on participating in the phase III program.
And can I just build on that this is the other Chris.
Yes.
Just thinking about getting to an NDA I mean, theres a few things that you need.
You need 500 unique exposures.
Need several hundred exposures for six months and at least 100 exposures for a year.
You need at least a couple of studies to confirm efficacy and so when you think about where we are right now past phase one past dose finding past indices to one study that we're positioning as pivotal we're really one study away from being able to have an addition, too.
Complementary safety data and NDA, So I think we're.
Pretty close.
Thanks, Chris makes a lot of sense. Thank you. Thank you guys. Okay. Thank.
Thank you Andrew.
The next question.
Please as a reminder, just one question per churn theres, the big lift in the queue here.
Our next question comes from Tess Romero with Jpmorgan. Your line is open.
Hey, guys. Good afternoon. Thanks, so much for taking our question so.
Just a few questions from Matt as we think about ex yoga here. So.
How are the two doses of 10 and 20, Meg QD selected versus 15, Megs 25 Q D.
We often are this is a monotherapy study. So can you clarify what is a washout period for any prior anti depression that that the patient may Anthony Kim Ann.
Any other clarity on why the severity score.
Greater than or equal to <unk> 20 was chosen for the shops in the AMD 17, thanks, so much.
Thanks.
Yes.
Chris wondering if I can start a little bit just on some of the background on how we got to the dose selection and think a little bit of the history is important there and then I don't know if you've got kind of at your fingertips.
The answer on washout period, if not we can always follow backup with test and then we should just talk about the patient the moderate to severe patient population that we're enrolling.
So just in terms of our MDT study Youre right. This is a three arm study two active doses and placebo 50 subjects per arm.
10, and 20 milligrams that work shows.
We had started thinking about MTBE, even before the <unk> data readout a year ago.
Given a lot of the background that we have stated multiple times, including in the prepared remarks today.
So we have designed that protocol and then when we unblinded and the initial draft of the protocol was to look at the 20 milligram dose.
Drug supply for that dose we knew.
That it was the mid dose that was active in Transcatheter transcranial magnetic stimulation.
And we were ready to go and then when we unblinded.
Data what was interesting to US is that we also saw statistically significant seizure reduction data at 10 milligrams and the 10 milligram dose.
Looks very much like placebo in terms of its AE profile and so we modified and amended the protocol to include that 10 milligram arms, but I think it's going to be really interesting to see both a lower dose 10 milligrams in the higher dose of 20 milligrams.
And the AE profile and the activity, we're seeing that those two doses.
In external <unk> study.
I would also add.
AGA being data that obviously, they have data that drug generated data both in epilepsy and depression as well and the depression work was done at their mid dose of 900 milligrams.
So we can we can do some of our own modeling in terms of the draw your exposure and the activity that we may see at the doses that I've talked about for for for 11, one in major depressive disorder.
I'll pass it to you if you want to say anything else on the dosing and then the washout period.
The scores the baseline scores coming interpretations.
So the easy question is about the <unk> show, which is that they have to be washed out for at least a couple of weeks for the drugs with a longer pharmacodynamic or pharmacokinetic.
Elimination half life is four weeks for <unk> or five half lives.
As far as the dose goes.
One of the things.
I can make an argument that this drug should be better tolerated in patients in this population because they are not taking concomitant medications.
As is the case in the epilepsy or.
You could say well maybe this population of patients is more prone to adverse events in epilepsy. So you could kind of argue both ways in terms of Tolerability and ultimately we just need to complete this study on blamed the data.
And C. So I think that that played into a little bit of the dose selection as well.
And then Chris the last question was just on.
The baseline greater than 20 on MDM shops, right. So that was through conversations with key opinion leaders to basically define a population of patients that have moderate to severe depression.
I will let you know that we are enriching for an <unk> in addition to depression.
By virtue of the fact that you create a population MDT population, there's already quite a bit of anhedonia as it is and so that additional cut off of making sure that there is a sufficient amount of anhedonia doesn't actually substantially change the population that much it's largely enriched based upon the depression.
Because there's already a fair amount of Antonia on those patients.
Thanks, so much for taking our question.
Thanks, Tom.
The next question.
The next question comes from Jason <unk> with Bank of America. Your line is open.
Hi, Good afternoon. This is dana on for Jason Congrats on the progress this quarter and thank you so much for taking our question.
Our question is just on sort of the emerging pipeline of potassium channel activators.
<unk>.
Can we get your view on the Gaba receptor selectivity and Tolerability index data from bio havens kv, seven activator and potential benefits.
Maybe if we could get your view on the competitive dynamics regarding product profile differentiation such as potency. Thank you.
Sure. Thanks, Dan.
I'm happy to answer those questions and I would say some of.
Some of our answer we have talked about previously just about some of the unique attributes and differentiating features of <unk> hundred one, but you had a very some very specific questions. On one is on potency. So 1100, one if we go back to the first generation molecule is <unk> 11 O. One is about.
15% to 20 times more potent on targets. So on <unk> 72 in the CNS versus a lager bean and it's more potent than the biohazard molecule.
So <unk> the molecule from a currency point of view on target of somewhere between 11 O one and.
And as AGA being so the potency advantage and again I think that can be addressed by dosing but.
Let's see.
The most potent molecule in clinical development in terms of the cave mechanism is 11 O one.
In terms of Gaba. So some of we don't believe that these drugs.
Have their effect through a gaba mechanism either efficacy or safety.
And on the.
Any data that's being generated.
We don't believe 11, no one has any activity on Gaba a 10 micro molar.
Some others are.
Shown some of that data.
And just to remind you that 10 micro molar is more than 50 times the <unk>.
With the concentration of 11 O one in our human clinical trials. So it's not even that assay is not done had a relevant concentration.
So I think we're very comfortable that these are kv drugs.
That's the mechanism that we're seeing the efficacy.
And we're also seeing the side effects. These are on target side effects of things like dizziness.
Sometimes that questions around somnolence actually if you look at the somnolence rates in X tole Theyre very consistent with other various successful anti seizure medicine this drugs like Capra.
<unk> or <unk>. So again, we believe that we have a very active drug in the CNS, that's driving both the efficacy and also the AE profile of the drug.
Okay.
Please standby for the next question.
The next question comes from Brian Abrahams with RBC capital markets. Your line is open.
Hi, good afternoon, and thanks for taking my question.
So on MDT I note.
<unk> <unk> hundred one relative to <unk>.
There is more potent in terms of target modulation has better durability and better safety, which has led to comparable or better effects in epilepsy, but.
The complete mechanism by which <unk> seven channels regulate depression, I think is not completely understood I guess I'm curious.
Are there any differences with regards to receptor subtype selectivity or bio distribution or binding properties to.
We should be thinking about that could impact how 1100, one behaves and depression relative to <unk> are there any preclinical depression models for instance that you've looked at that might've shown either comparable or even better activity preliminary one thanks.
Yes, Thanks, Brian I think is a really really interesting question, maybe I'll just talk a little bit about.
The profile.
And then Chris Kennedy.
Chris just presented actually at a conference.
At a neuroscience conference there was talking about mechanism and the opportunity for 11 O&M depression, So Chris I think you can probably.
Just because you're just given a great talk on it around some of the mechanism.
As it relates to both reward circuitry.
And the Upregulation.
And in these populations, where we've seen pre clinically and then the most recent publication, which I think is fascinating if people haven't read on.
<unk> Academy and the potential link to Casey there as well.
But in terms of.
I think Brian your Youre asking the question the right way, we've seen really nice data.
<unk> been in both epilepsy and depression and now we have the 11 O. One epilepsy data. So the missing box that we're tracking is the depression data for <unk> hundred one and so how much are these similar or different.
Our feeling is that there that there are similar as argument at 11 O. One do bind to the same binding site in the channel.
And we're not concerned about certain.
So activity in terms of ISO farms, there and part of that is just the way these channels form.
The brand as well so I think we're really comfortable that we have a good shot given everything we know with <unk> being.
In terms of some of the preclinical data.
As <unk> was run in a chronic social defeat stress model, which which I think really drove.
The potential mechanism and ideas around kv modulation in the brain, we havent run that specific model with 11 of one but we have looked at some other models.
A reward and depression pre clinically and 1100, one performed very well in those models both assets across just to give a little bit more on the mechanism and some of the stuff that we're excited about.
Yeah, Thanks, Ian and the only thing I'll add about.
The mechanism I think youre, asking a very difficult question because remember.
The seven 2% and seven three proteins are combining together to form. These tetramer is right and that's contributing to the <unk> current.
So I think it's very hard to tease that out I'm not so sure anyone will ever be able to answer. The question. You just asked on a mechanistic level and what's reassuring to me as a clinician is that you have one drug that worked in focal onset seizures Zagha Bean and then our data I think you said something along the lines of equal or better.
I'd argue that it's definitely stronger than he is all getting data I know that it's difficult to compare one study to another but when we do it all the time and when I do that the efficacy that we saw for those two highest doses was beyond what we expected based upon these all giving data. So obviously, we don't know if that's going to translate into MTBE. It's just very.
Reassuring.
The last thing, which is really kind of.
Indirect to your question that Ian was alluding to was the story there.
Scientists story around targeting <unk>, seven and depression, just got more interesting. This year as this study was being conducted.
And specifically what what's been published is that that.
It appears as though ketamine exerts at least some of its anti depressant effect through <unk> seven through that mechanism and so.
You know the fact.
That we could be tapping into as you know ketamine is a pretty potent anti depressant. The fact that we're tapping into that is the same.
Mechanism.
Without having any of the associated side effects at least from the studies we've looked at so far is pretty compelling.
So it's the mechanistic stories still unfolding, but seems to be getting more interesting as time goes by.
That's really helpful. Thanks, so much.
Thanks, Brian .
Please standby for the next question.
The next question comes from Marc Goodman with SBB Securities. Your line is open.
Hi, Thanks. This is Marty one for Mark.
One question today can you just talk a little bit about your thoughts on the overall.
<unk> market given the latest X Capri trends that you're following and then Pat loss of exclusivity.
The new inside their patterns, you're seeing there would be helpful. Thanks.
Okay.
Alright, thanks, Chris over to you.
Yes happy to happy to tackle this one so obviously the biggest.
<unk> in the last six months in our marketplaces velocity of exclusivity of Vimpat and the dynamics that are unfolding as we speak with.
Moving that very substantial commercial product to a predominantly generic environment.
What we've seen is that so far alagoas might uses stayed reasonably steady although it's still early days.
But we expect to see increased use of generic <unk> smart given the value proposition of that product offers.
Would expect that rises.
Likely the third most utilized individual product in the category based on it.
Advocacy and safety profile.
And that certainly will unfold over the over the coming year.
Finally, we've seen increased use of <unk> on which is not unexpected given the fact that ucb's a powerhouse in the commercial environment in this arena and a lot of the resources from our understanding of shifted to that product to continue to support its growth.
<unk> made continued continuing to track.
Early sales trajectory are indicative of what is a reasonably strong launch and we think thats good for the market overall.
As other products continue to replenish the.
Branded sales potential within the marketplace. There is still plenty of opportunity for novel mechanisms and in the future new branded agents to replenish the sales potential that's been lost by five impact at least from what we've seen from our research and what we're hearing from Kols in this space. So there isn't that.
Much outs happening in this space and we're likely the next major mover in this space and we hear from all of the competitive research that we do that 11 O. One is high on everyone's radar in terms of both the mechanistic differentiation as well as the late stage, it's really the only late stage therapeutic offering.
That could be added into the armamentarium in the coming years.
Alright, thank you.
Please standby for the next question.
Hum.
The next question comes from Laura Chico with Wedbush. Your line is open.
Hey, good afternoon, guys. Thanks, very much for taking the question.
One thing we've seen from a few other CNS clinical stage players has been a bit of constraint on recruiting for various studies euro staffing has gotten tighter.
You were able to move X all through.
Quite turbulent time with Covid. So I'm wondering if you could comment on any steps you might be taking four <unk>, two and three to facilitate recruitment.
And obviously youre, just kicking things off but any potential headwinds you might see on the horizon that you are trying to avoid as you're getting started thanks very much.
Thanks, Laura I appreciate it.
I'll, maybe make a couple comments and then Chris Kenny.
If you want to add to it as well.
Yes, I'd say a couple of things that we're trying to do not just we've talked a lot about ex told to next two or three and Chris talked about it in his remarks today being consistent in terms of the protocol of actual we wanted to try to stay as true as we can we have a lot of success with external and we want to replicate that.
That also extends to clinical sites and investigators so.
One of the things that we're doing is going back to sites that we know we have had success with that know the product well.
And even when you think about some of the front end loaded stops in terms of contracting we already have a relationship with their institution. So I think there's some stuff. We can do kind of on the front end that we can take full advantage of that companies that are newer into the epilepsy space chance, but it will be something that we'll be monitoring as we go along Chris anything else to add in.
Terms of.
Making sure that we can move this as quickly as we can.
Just wanted to build on what you said about trying to replicate X tole and internally the folks who were successful who brought that study over the finish line are now still here with more financial and more people resources. So.
We've built we've beefed up the folks who are already here and then beyond that I would say the answers relationships.
Just internally, but with the relationship with the Euro is going really well and building on those relationships with the sites that were already in existence, and then expanding them further.
Okay.
I think thanks.
Yes. Thanks.
Thanks, guys.
Please standby for the next question.
Okay.
The next question comes from Danielle Brill with Raymond James Your line is open.
Hey, guys. This is Alex on for Danielle. Thanks for taking my question I think.
The theme on depression, just kind of curious looking ahead, what youre thinking about in terms of a go no go signal.
Is there an efficacy threshold that you want to hit.
Regardless of whether or not you could answer that.
Yeah.
Yes, Thanks, Alex.
Good question I mean, as we've talked about with many of you in the past.
Ex Nova study is designed as a proof of concept study I think we have really good rationale based on everything we've talked about today in terms of the <unk> data and the Logmein data informed us about not only how we design the study, but also design the stats for the study so our expectations.
In terms of the powering is that.
We don't need the same separation that is arguably the saw and the published data from last year to show statistical significance, but but.
My first time in I think are important.
From concept study of this drug to really inform us. So I think we were just we're going to finish the study unblinded the data and look at the totality of the data in terms of in terms of next steps.
Great. Thanks, so much.
Yes, Dan.
The next question.
The next question comes from Yadkin, Sydney Ha with Guggenheim. Your line is open.
And quick one for me.
In terms of the site mix could you comment on the U S O U S contribution that youre anticipating for the studies.
You can also comment on them.
EMEA regulatory feedback that you might have received and how that has been incorporated in.
And the client studies and then finally on the financial front. If you can just comment on how I should be empty expenses given that it's a broad program that you are undertaking.
Yeah.
Great. Thanks, Jonathan.
Hi, Ken.
Chris I can start on kind of.
The new site in European and feedback and then you can add to that and then Sherry can.
Can provide perspective on <unk> spend going forward. So just as a reminder, with <unk>. It was about about a 60 40 split between recruitment coming from Europe and recruitment coming from the U S.
And so I think today, it's difficult to predict exactly but I would say we'd be comfortable that we're probably going to be somewhere in that range for <unk> <unk> two.
We have as we've talked about in the past, we really wanted to prioritize our interaction with FDA.
And so we had our end of phase two meeting.
And have the minutes.
In June and then we submitted the phase III protocol.
And then after we got through that we were able to get our first U S sites up and running and.
And that was the initiation of <unk> two we have now engaged with European regulators and have feedback as well and we're taking that into consideration because we will get European sites on board as we go forward. So we're really comfortable that for kind of a major regulators within.
In U S and Europe .
Is that the feedback was incorporate at our sites.
All jurisdictions moving forward Chris.
Chris any any more details that you want to add to that.
Well just targeting the makeup that worked for Expo, which you've already said and then actually that trigger I wanted to say on the last question, which is that.
You know in order to move forward as efficiently as possible. There is an emphasis being placed on ex told to from an operational standpoint, and getting those sites up and running quickly to the question about.
Trying to take on the headwinds there are a number of activities that need to be done in parallel you talked to FDA about the whole program, but there are a number of other activities, where you can you can shift resources in favor of one direction or another and Thats what were doing in order to bring extra two over the finish line as quickly as possible.
Sure.
So yeah, I'll make some high level comments on the on.
On the Opex.
Absolutely, we expect to see our R&D spend ramp up now that we've got the phase III program initiated so.
So we will see an increase in spend around the phase III program.
Over 2023 and 2024.
As Ian mentioned earlier, our best proxy right now for the Phase III program is what we saw with <unk>, which from start to finish two and a half years. So the bolus of those costs will occur in fiscal 'twenty, three and 'twenty four.
In mind that those phase III studies will feed into an open label extension, which is three years in duration. So those costs for the open label extension will continue through 2005 and 26.
And then potentially that beyond that and then we are thinking about also commercial pre commercial cost when we get into 2025 and 20 <unk>, but as a reminder, we have a very strong balance sheet at $750 million in cash ending the quarter.
And we expect that that will take us into 2026.
Please standby for the next question.
Yeah.
Okay.
Your next question comes from David Wang with Aker BP.
<unk> Nikko Securities Your line is open.
Hey, Thanks for taking the question and congrats on all the progress this quarter.
I had a question around the regulatory path for the PG Tcs indication.
Can you just talk a little bit about any.
Expectations relative to the timing of that data versus focal epilepsy are you thinking of this as an NDA submission would you have.
Intend to have both product labels approved and.
Available at launch and does <unk> help you with.
The label that has helped you with the focal epilepsy launch.
Sure.
Thanks, David Good question.
I think that probably a bunch of us Kevin can jump in on this one I can I can start and then Chris and Chris questions around the label and launch and timing and stuff. So just as a reminder, we've anchored with FDA that will run a single study in primary generalized tonic clonic seizures oftentimes if you look at other companies and other molecules I would say.
The path of most companies do is they get they get these epilepsy drugs approved in focal onset seizures and then they run a post approval study in primary generalized and then they file an NDA what we're trying to do is to given the profile of the molecule we're trying to parallel process fees.
The study is a little bit smaller than primary generalized and we've chosen one dose in that study the high dose of 25 milligrams, which again is a very common approach. If you look at other molecules.
David It will come down a little bit to the timing, we do believe that we can run.
The exact study in parallel if we have the readout and we are ready I think it can be all part of the same package.
And if there is a delay than it potentially can be as part of an NDA. So I think it's a little too early to tell exactly what the timing is going to be but essentially we're trying to run in parallel. So we have data in both focal epilepsy in primary generalized and approximately the same timeframe.
No Chris Kenny if you want to add anything to that and then maybe Chris one CAGR and if you can just add too as you personal market in the label and what other companies have done in these different indications.
This is Chris cannot just be real brief on this I think it is challenging to predict because as.
As Ian just said usually it's done.
Series right you focus on fast and you go to primary generalized we're conducting these in parallel.
So are the recruitment rates that we're seeing in fees for relevant should it be faster should it be slower and so I think just in general with primary generalized it's more difficult to find those patients in order to compensate for that you need fewer patients we are targeting more sites, but theres. So many variables there that I think it's really difficult to predict.
<expletive>.
To add a little more content to the.
Predictably unpredictable theme and.
Summarize nicely Chris.
On the commercial side, we're really excited about the prospects of 1100, one as a broad spectrum agent being offering efficacy in both the fos market as well as the PGE Tcs opportunity, which is the second largest segment of the overall epilepsy population.
I'm excited that we've decided to do what no one else has done which is to run these in parallel and from a commercial standpoint. This gives us a unique opportunity to sell the broad spectrum mechanism either at the time of approval or shortly thereafter, if theyre in a staggered environment well before any other competitive product, which is everyone's already.
You mentioned typically begins with study post approval from a commercial standpoint that offers a real differentiation because one can have the conversation with the clinicians on day, one or a near day one about the full spectrum of the patients that are under their care and Thats one of the things that's going to be unique as an offering for 11 O one near launch.
Please standby for the last and final question.
The last question comes from Tim Lugo.
Your line is open.
Hey, guys. This is lachlan on for Tim. Thanks for taking my question I just wanted to touch on Samsung can you remind us sort of where you're at in terms of what youll need for an NDA, maybe both for <unk> and 49, six and walk kind of.
Supply you have secured with your current resources.
Thanks Lachlan.
The high level comments on CMC is is we're making sure that CMC is not on the critical path to a filing or approval and we're comfortable with that so we are continuing to work with with <unk>.
And by the time, we're ready for an NDA will have done all of the registration batches and validation and all of the CMC work that's required as part of the NDA and the approval. So im not sure Theres a lot more detail to share right now, but the critical path as we've as we've talked about previously he was getting next door to completed.
To file the NDA and focal onset seizures.
Got it thanks.
At this time I would like to turn it back to Jerry Allen Chief Financial Officer for closing remarks.
Great. Thanks, everyone for joining us today, operator, we will now end the call.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
Okay.
The conference will begin shortly.
As Johan during Q&A, you can dial one one.
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