Q4 2022 Marinus Pharmaceuticals Inc Earnings Call
Greetings, everyone and welcome to the Meredith Pharmaceuticals fourth quarter and full year 2022 financial results and business update call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
A question for us at that time, you May press Star one.
This is now my pleasure to introduce your host Sasha do money Ellis Senior Vice President of corporate Affairs and Investor Relations.
Go ahead.
Thank you and good afternoon with me for Meredith are Dr. Scott Braunstein, Chairman and Chief Executive Officer, Christy Schaefer, Chief Commercial Officer, Dr. Joe Houlihan, Chief Medical Officer, and Steve Feltz, still Chief Financial Officer, and Chief operating Officer.
Before we begin I would like to remind everyone that some of the statements. We're making today are forward looking statements under the securities laws. These forward looking statements involve substantial risks and uncertainties that could cause our clinical development programs future results performance or achievements to differ significantly.
From those expressed or implied by such forward looking statements. These risks and uncertainties and risks associated with our business are described in the company's reports filed with the Securities and Exchange Commission, including Form 10-K, 10-Q, and 8-K I will now turn the call over to our Chief Exec.
<unk> Officer, Scott Braunstein.
Thank you Sasha and welcome to our call in 'twenty 'twenty. Two we continued to make important progress advancing our oral and IV can ask alone programs driven by the cross functional commitment, but the mayor and his team at.
At the forefront of our achievements was the landmark U S approval of the telling me in March and the subsequent commercial launch in late July .
Tell me represents the cornerstone of our rare epilepsy franchise and its U S approval validates our belief in the potential of <unk> differentiated mechanism of action and our ability to grow the commercial franchise.
Importantly, we are pleased to report our first full quarter of sales, which are reflecting robust demand and give us confidence we are meeting the needs of this underserved patient population.
Christine will provide further details on our commercial progress, including key launch metrics and an update on payer coverage.
In parallel with our first product launch, we made significant progress advancing our broader clinical pipeline, including our second generation formulation program and our two critically important pivotal trials for both the IV and oral franchise.
We remain focused on expanding the value proposition of Gonna Epsilon for rare epilepsies and believe that a second generation formulation is an important piece of that puzzle.
We are pleased with the early data we have seen in our phase one dosing studies, which Joe will discuss shortly and look forward to seeing this program advance through the clinic.
In a very short period of time and with a focused investment we now see a new and expanded pathway for the Oregon Epsilon franchise. Although it is early we are also on track to replicate this developmental success with a second generation IV formulation.
Furthermore, we believe that the adjustments made to support recruitment and enrollment in the phase III raise trial in refractory status epilepticus are trending positively and we've been met with enthusiasm by a growing number of participating sites.
Just this month I have met live with key investigators from Tampa, Baltimore, and Boston and they are highly motivated to participate given the unmet medical need in this life threatening condition.
The protocol Amendment has been fully implemented and topline results continued to be expected in the second half of 2023.
I would like to also acknowledged that the other IV programs raised to an RSC for European registration and the reset and establish status continued to press forward.
While all three trials progress we will continue to focus our primary efforts on the raise the U S pivotal program and have begun the commercial investments that we believe can help drive a successful U S launch.
Let's move on to the current oral franchise, we are working closely with the <unk> community and will continue to raise awareness around the phase III Trust TST clinical trial, which is now recruiting in the U S and Europe with additional site Activations expected over the coming weeks and months in Canada.
Israel, Italy, Belgium, Australia, and China last week Meredith participated in a panel discussion hosted by the TLC Alliance and we will use these types of forums to continue to educate the community about this clinical trial. One that we believe is first of its kind in a highly refractory.
<unk> TLC population.
As we have learned with C. D D efficacy and Tolerability are key attributes to success in the refractory epilepsy population.
And we are confident that changes to the titration schedule give us the maximum opportunity for a successful phase III outcome, we remain on track to disclose topline data in the first quarter of 2024.
I would like to provide an update on the status of the <unk> marketing authorization application in Europe , we submitted our day 120 responses to the MAA in November .
We received the day 180 report, including a list of outstanding issues in January .
The list contains a number of major objections, including our choice of regulatory starting material, which is expected to be the biggest hurdle and bringing this medicine to patients in Europe .
The formulation of the Tommy recently approved in the U S contains the same starting material.
<unk> is expected to present its opinion on the MAA in the second quarter of 2023.
We remain committed to working closely with the MAA the advocacy community and our partners at Orion Corporation to advance this important medicine.
There remains a broad global opportunity for good acts alone, we announced a collaboration with Tunisia Biotechnology in November 2022 for the development and commercialization of <unk> in China.
Tunisia has moved quickly on the regulatory front and as a result of our combined efforts. We plan to include Chinese sites within the Trust PSC trial.
Development plans are also underway to maximize the RSC opportunity.
We continue to explore additional ex U S commercial alliances, including the Mena region, and Japan and expect to expand the commercial footprint of the telling me in 2023.
Before I hand, it over to Kristy I want to share some exciting news we received a notice of allowance from the U S patent and trademark office on March 1st for additional claims related to our clinical therapeutic regimen for the treatment of status epilepticus using IV can ask alone.
This would be our second newly issued patent for the IV franchise.
We believe the allowed claims will strengthen our IP portfolio and our status Epilepticus program.
Additionally, as many of you know see fans feel since joining the organization nearly two years ago has played an integral role in the launches of telling me helped strengthen our balance sheet and has been an important contributor to our strategic planning he established himself as a leader within the organization and has driven a.
Number of important agreements since taking over as Chief Financial Officer.
I'm pleased to share that Steve will now be taking on the expanded role as Chief operating officer. In addition to his responsibilities as CFO .
Finally, we are pleased to announce the appointment of Christine Silverstein to our board of Directors and audit Committee in January Christine brings a deep capital markets background and extensive expertise in corporate strategic planning business development compliance and risk management.
So financial and strategic acumen combined with her experience neurology and rare diseases make her an outstanding addition to the board.
Now I would like to turn the call over to our Chief commercial officer, Christy Schaefer for updates on the commercial launch of the told me.
Thank you Scott.
I'm pleased to provide you with an update on our continued progress as we execute on the U S commercial launch of the Tommy.
As a reminder, we launched the Tommy on July 28, 2022, and generated $560000 and initial net product revenue in the third quarter and the fourth quarter. The first full quarter. Following launch as the Tommy had net revenues of $2 3 million, bringing the total for the fiscal year ended this.
<unk>, 31st 2022 to $2 9 million.
We received over 40 completed C D. K O five deficiency disorder prescription enrollment forms in the fourth quarter of 2022 and over 90 total completed C. D. D prescription enrollment forms for the fiscal year ended December 31, 2022 inclusive of clinical trial patient transitions and naive commercial.
Patients, we continue to see a steady build of treatment naive commercial patients and a healthy distribution of prescriptions from centers of excellence large epilepsy centers and local community physicians with prescriptions coming from our growing and diverse prescriber base of more than 60 unique accounts.
Since launching the Tommy we have been particularly encouraged by the progress. The team has made with market access more than 75% of C. D. D patients, which completed enrollment farms were able to receive reimbursed therapy by the end of 2022 and most of these prescriptions were filled within 30 days or less.
We are pleased to announce that adds up to February 28, 2023 total payer coverage for its at Tommy increased to approximately 220 million lives, including both commercial and government programs.
The Tommy has received favorable coverage determinations from 35 payers, representing close to 125 million commercial lives, which represents 79% of commercial plans.
We expect most of the remaining coverage statements in the first half of 2023.
Medicaid access has been confirmed in all U S states as well as Washington, D C and Puerto Rico, representing approximately 95 million lives.
We believe this early success speaks to the strength of our market access and patient services capabilities as well as an appreciation for the unmet medical need and an impact of the disease on C. D D patients and their families. We.
We continue to see a steady build of treatment naive commercial patients and a healthy distribution of prescriptions from both C. O is large epilepsy centers and local community physicians.
We are delighted with the response and feedback we have received from the patient community regarding Orsini specialty pharmacies white glove approach and dedication to supporting patients and families throughout their treatment journey.
Thus far the average patient maintenance dose is approximately 50% above the initial titration dose, which is in line with our label and expectation.
Upon our experience to date, we have not seen anything in the marketplace that warrants us to change our forecasting structure.
We have seen a handful of adult and young adult patients being treated consistent with the broad uptake in patients two and above.
Our momentum has benefited from the strength of our digital marketing tools publication strategy and robust education and awareness efforts ahead of and following launch we.
We see continued steady engagement rates on ours at Tommy patient and healthcare provider websites, which confirms the effectiveness of our authentic patient centric marketing approach.
The field interactions are being supported by the launch of our speakers Bureau, and the execution of a significant number of programs that have been well received with great attendance.
We plan to expand that the Tommy's speakers Bureau to add more clinical voices to the C. D. D trader community filling a need for peer to peer education of this atomic clinical data TDD diagnostic indicators and the importance of early diagnosis with.
With the solid foundation, we have established we are well positioned and extremely excited to grow our promotional strategies in several ways in 2023.
The C D D. Diagnostic journey is one area, where we think we can offer meaningful support for health care providers and families and we continue to further our understanding of the current C. D D genetic testing and diagnostic paradigm in the U S.
These insights will help inform our next steps to support unencumbered. The C. D D diagnostic journey and determining our expanded offering of education tools resources and solution.
Planning has also commenced to activate a caregiver ambassador program to share experiences are families who have initiated treatment with the Tommy and what that experience has meant for their loved one and their families.
These stories are planned to be incorporated into our branded promotion along with a webinar series for the C. D. D. Community that also features health care providers, who can educate on the clinical profile of the Tommy we feel there are many opportunities to continue to grow our brand and we are committed to supporting C. D D families in meaningful ways throughout the year.
Now I'll hand, the call over to our Chief Medical Officer, Joe Houlihan to discuss our ongoing development programs.
Thank you Christie and Hello, everyone in.
In addition to the strong commercial progress we've made in 2022, we continued to generate consistent and compelling data that highlighted the potential of <unk> differentiated mechanism of action and its safety and efficacy profile to benefit patients.
<unk> two year open label extension data and CDK <unk> deficiency disorder.
Over the course of the year data from our clinical portfolio or presented at major medical meetings, including the annual meetings of the American Epilepsy Society Neuro critical care Society and child Neurology Society.
So results of our studies were published in top tier medical journals.
<unk> lancet neurology and epilepsy.
Most recently the results of the phase III placebo controlled study of Oregon acts alone and PC DH 19 related epilepsy were published in epilepsy research.
Can actually lead to a greater median reduction in seizure frequency compared to placebo and was generally well tolerated.
If you recall, we reduced the scope of this study to a proof of concept for several reasons.
The study results did not achieve statistical significance. We believe it's important to continue to keep the patient and advocacy community informed about the data generated in clinical trials with can exelon.
Now I'd like to share some exciting updates on our clinical development programs, starting with our efforts in developing a second generation can actual.
I am pleased to announce encouraging results from our phase one second generation can exelon formulation studies, where we recently completed the third and final cohort in a single sending dose trial utilizing doses up to 1200 milligrams in healthy volunteers.
We saw a linear dose exposure relationship up to this higher end of the dose range and a profile that has the potential for <unk> dosing with a longer percentage of time at a blood level above our minimum effective concentration.
The next step is a multiple ascending dose study looking at repeat dosing, which will be initiated in the second quarter.
Along with some additional PK modeling.
Study will be important for defining dosing in our pivotal clinical trials.
Dili, we'd be able to move straight to phase III, rather than having to do dose ranging in phase III.
The initial clinical indication, we will pursue as Lennox <unk> syndrome or.
A severe form of epilepsy that begins in childhood with neurodevelopmental impairment and intractable atonic tonic in generalized seizures.
Given the overlap in seizure types and etiologies with other disorders, where it can exelon has therapeutic potential such as CBD and THC we.
We believe that lgs represents a promising opportunity to address the continuing unmet need in this patient population.
We're targeting finalization of the plans for clinical development in the second half of this year. We're also advancing the development of <unk> pro drugs for both oral and IV administration and.
An oral pro drug candidate has been selected and preclinical development is ongoing.
And we expect to select a lead IV candidate shortly.
Moving to our Phase III Trust GSE trial in tuberous sclerosis complex.
Pleased to share that we are actively screening and enrolling patients targeting 90 clinical sites predominantly in the U S and Europe with additional site Activations expected in Canada, Australia and China.
We're encouraged with the high level of enthusiasm in the medical community for this trial and anticipate top line data in the first quarter of 2024.
Now I'll move on to our IV programs.
Scott mentioned the protocol amendment for the Phase III raised trial in refractory status Epilepticus has been broadly adopted at our clinical trial sites.
We're expanding the number of participating raise study centers in the U S as well as Canada and Australia.
In November we held an investigator meeting in the U S to emphasize the importance of this study for patients and to educate our sights on the updated protocol.
Investigators have expressed considerable optimism about the potential of the amended protocol to allow recruitment of a greater number of eligible patients, particularly patients transferred from other centers to study sites or from the emergency room to the ICU.
We're working closely with sites to support timely study enrollment actively monitoring what's working well at a site level and identifying where we can provide additional support for trial recruitment and execution.
These protocol changes inside engagements are critical to enrolling appropriate patients for the phase III study and replicating the success of the phase II trial.
In addition members of our scientific affairs and clinical development teams have been on the road maintaining intensive site engagement and responding to questions about the protocol and study procedures.
Mariner Scientific affairs has a group fully dedicated to supporting study enrollment and engaging with res principal investigators and other site personnel.
With these enrollment initiatives more sites being activated on a global scale and a reduction in the impact of Covid on health care systems, we're seeing an uptick in enrollment and remain on track for data in the second half of 2023.
As a reminder, based on previous conversations with the FDA, we expected a positive raise study will be sufficient for filing in the U S.
There is also the potential for expansion of the age range of eligible patients. The trial is currently designed to enroll patients 12 years of age and older. However, we recognize that there's a high incidence of status epilepticus and children.
We're currently working with the FDA to determine what information would be required to support the inclusion of patients below the age of 12, and our studies, which could expand the pool of eligible patients and further support enrollment.
As we've previously mentioned there is the option for an independent data monitoring committee to conduct an interim analysis when two thirds of the participants approximately 82 patients have completed the study.
We will make a determination in the second quarter, whether we will move forward with an interim analysis later this year.
While conduct of an interim analysis often affects the statistical power of the study should it continue to full enrollment the interim analysis for the raise study is designed to have a minimal effect on the efficacy outcome of a fully enrolled trial.
We're also happy to share that we have successfully manufactured a modified IV formulation of <unk> alone with a new buffer and expect to incorporate it into the res trial in the second quarter of this year.
We believe this formulation change will lead to increased product stability and are targeting a shelf life of at least 24 months.
Registration batches the modified formulation are expected to be placed on stability shortly.
Planning continues for the raise to study in refractory status for European registration, which is expected to begin enrolling patients in the second half of 2023.
Moving on to the phase III reset study and establish status epilepticus, we remain on track to begin U S enrollment this year.
The first phase of the study is designed to determine the optimal regimen of can ask alone for established status.
And we will include up to eight sequential cohorts of five patients each with the results from each cohort used to determine dosing in the next.
We expect to complete the first cohort by the end of this year.
We're excited with the momentum of our programs going into 2023, focusing on our late stage clinical trials second generation formulations of <unk> alone as well as our continued support for Tommy in CVD.
I appreciate the cross functional efforts from our R&D regulatory and scientific affairs teams and executing our studies and engaging with the clinical scientific and advocacy communities.
Now I'll turn the call over to Steve Fan Steele, who will provide you with a financial update.
Thanks, Joe and good afternoon to everyone I am pleased to be able to share our financial results for the fourth quarter and full year 2022, as well as initial guidance for 2023.
Before going into our results I'd like to touch briefly on what was a very active fourth quarter on the financing front.
In the quarter, we successfully completed a follow on equity offering which raised $64 5 million of net funding.
We are very pleased to bring in several new investors to the Marin story as a part of the offering.
Additionally, we completed a revenue interest financing agreement with Sungard Health care partners, which brought up $32 5 million upfront and returned for future payments on U S. Net sales of <unk>, including so Tommy.
Additionally, we received a gross upfront payment of $10 million from Tunisia, as a part of our development and commercialization collaboration with them for the Chinese market.
These three deals added over $100 million in cash to our balance sheet, which when combined with our existing cash results in a year end 2022 cash balance of $246 million.
Our cash is projected to be sufficient to fund our operations into the second half of 2024 inclusive of maintaining the required minimum cash balance of $15 million required under our credit agreement.
I'll now move into our financial results in 2022, we recognized product revenues of $2 3 million and $2 9 million. The three and 12 months ended December 31 2022.
Note. This revenue consists of the Tommy product sales in the U S separately, we recognize barter revenues of $1 8 million and $6 9 million for the three and 12 months ended December 31, 2022, respectively as compared to $1 5 million and $6 4 million in each of the same periods in the prior year.
Our actual 2020 to BARDA revenue of $6 9 million was at the bottom of our guidance range of between $7 million and $10 million.
We also recognize collaboration revenue of $3 million in the fourth quarter of 2022 related to the upfront payment associated with our agreement with 10 Asia.
Research and development expenses increased to $21 4 million and $79 9 million for the three and 12 months ended December 31, 2022, respectively, as compared to $18 million and $73 5 million for the same periods in the prior year.
The change was due primarily to costs associated with increased R&D headcount and clinical trial activity.
Selling general and administrative expenses increased to $14 7 million and $56 8 million for the three and 12 months ended December 31, 2022, respectively as compared to $10 6 million and $37 3 million for the same periods in the prior year.
Drivers of the change were increased head count and commercial support for the U S launch of the Tommy for.
For the full year 2022, total operating expenses inclusive of R&D and SG&A were $136 8 million, which was below our guidance of $150 million to $155 million and was driven by the timing of certain activities, including our API Onshoring initiative in general spend management.
The company reported net losses of $34 3 million and $19 8 million for the three and 12 months ended December 31, 2022, respectively as compared to net losses of $28 3 million and $98 8 million for the same periods in the prior year.
As a note. The 2022 net loss includes the onetime gain of $107 4 million from the sale of our priority review voucher in Q3 2022.
These totals also include noncash stock based compensation expense of $3 8 million and $14 9 million for the three and 12 months ended December 31, 2022, respectively, as compared to $3 million and $13 9 million for the same periods in the prior year.
Cash used in operating activities was $112 9 million for the 12 months ended December 31, 2022, as compared to cash used in operating activities of $55 5 million for the same period in the prior year for.
For the fiscal year 2023, we are projecting U S. Tommy revenues to be in the range of $15 million to $17 million in BARDA revenues to be in the range of 8 million to $11 million.
We project, our GAAP operating expenses inclusive of SG&A and R&D expenses to be in the range of 165 million to $175 million of which we expect approximately $16 million to be noncash stock based compensation.
The increase in operating expenses is driven by several critical incremental activities, including the initiation of our API Onshoring program, which as a reminder is 70% funded by BARDA CMC Ivy investments related to commercial readiness, our second raise trial for the EU market and full year annualized <unk> of the Tommy launch in <unk>.
Port costs.
Now I will turn the call back to Scott, who will provide concluding remarks.
Thanks, Steve 2022 was a transformational year for the Mariners team and we are thrilled to enter 2023 with a strong balance sheet positive momentum advancing our two late stage clinical programs and encouraging data surrounding our second generation product development.
As always we remain committed to delivering shareholder value and we will continue to expand opportunities to serve patients. They may benefit from Vitol me with that I would like to thank our employees for their hard work and dedication to advancing our mission.
Operator can you now open the call to questions.
Certainly at this time again, if you do have a question that will be star one on your telephone we'll hear first today from Brian Abrahams with RBC capital markets.
Hey, guys. Good afternoon, congrats on all the progress congrats to Steve on the expanded role and thanks for taking my question maybe.
Maybe just starting on.
On SC on the rave study I was wondering if you can elaborate a little bit more on what youre seeing with regards to some of the to the protocol modifications I guess with regards to the types of patients going onto therapy.
Seizure burden.
And then I guess your sense of how the pace of enrollment is proceeding now in your latest thoughts on whether or not you.
Would potentially taken interim and then I had a follow up.
Thanks, Brian This is Scott and I have Joe with me. This is the first time. The Marinus team is all in a conference room together in a long time, so it's kind of fun.
Maybe I'll, just I'll make one or two comments and I'll pass over to Joe.
It was the really the fall of last year. When we kind of gave you gave a comparison between the early enrollment trends and raise in our phase two data and we'll plan to do that again around the time that we'll we'll send the data to the DSM B and so I don't think we can specifically comment on any.
<unk> update and the most recent weeks and certainly as we see enrollment continue to expand.
This is a very active process and I think youre going out to be patient with us that realistically.
Is that something we're going to be updating on a regular basis I think from a site perspective, as Joe and I, both said on the call.
Really enthusiastic about where we are today the team's working hard we're seeing that in the enrollment numbers.
I think generally we feel like we've got the right investigators the right sites that are going to drive high quality patients the appropriate patients for the study.
And certainly we're really still focused on patients more than anything who's next treatment would move to general anesthesia, and guaranteeing or expecting that will drive a low placebo rate in the study and I think most importantly, we are still very confident about those type of patient.
Being enrolled Joe any other comments you want to make specifically I will just add you asked about seizure burden and so far those seizure burden.
In the phase III closely replicates the phase II.
This protocol amendment.
Should even more closely bringing patients that even more closely replicate the population in phase II.
Patients there was actually a misunderstanding the patients who were intubated couldnt come into the trial, but.
There were.
About half the patients in the phase II study were Intubated on trial entry.
And so thats, one thing thats going to facilitate enrollment of more patients.
The amendment will allow more patients coming in on intubation.
For transfer to the hospital or from the ER.
Got it and then maybe if I could a follow up on the oral you recently had the publication of the PCH 19 data that you mentioned.
Can you give us any sense of the potential for reimbursement.
That indication and sort of the day.
Interest in <unk> amongst physicians.
You used to tell me there I guess, how much how much expectations for off label use are baked into your guidance or would that be all upside and I'll hop back in the queue. Thanks.
Brian we've been pretty pretty open about just reporting our CBD numbers overall and although the epidemiology for PCA 19 is very similar from a number standpoint compared to CBD.
We've spoken to quite a few physicians in the community and the unmet need is dramatically different there is really only a small subgroup of patients who suffer from PCH 19, who have intractable seizure. So I think we think about it as a much smaller market opportunity. We certainly think the phase two data in the <unk>.
Location is something that the payers in compendium can look at and review and see that data in the public domain. We think thats important we have seen a few spontaneous prescriptions, but we don't see it as a meaningful part of the prescription story in the near future, but certainly it's nice to know.
That payers understand that these patients who have retractable PCA shine team.
Could potentially benefit from Vitol me and I think that its really important than in those rare cases, there is access potentially available to them. So it's really nice to see.
That's really healthy we havent. Thanks again, Scott you got it Brian Thanks for the questions.
Okay.
And again for questions that is star one at this time, we would like to ask that you. Please limit yourself to one question with one follow up well hear now from Joon Lee with tourists securities.
Hi, Thanks for the updates and for taking our questions.
Impressive that you're able to provide guidance at such an early stage of the launch what is the reimbursement rate.
In the fourth quarter and overall gross to net and what can we expect in terms of reimbursement rate and gross net for the first quarter 'twenty three and I have a follow up.
Yes, hi, Jay and steep and so here I'll touch on the gross to net piece.
So we have kind of consistently said, we expect gross to net discounts to be in the low 20% right around there. We still think that's the right expectation, we're still seeing approximately 60% of more patients with Medicaid coverage. We know that's a 23% discount separately, we have co pay programs for commercial payments.
We did we did see upside in the back half of last year I think our gross to net deductions were around 15%.
In Q4.
And that's really driven by a few dynamics of having a second half of the year launch.
One is simply a lot of patients are through the co pay so they don't need as much support for that the other pieces, we simply didn't have access to all state Medicaid programs, which we now do.
So now that we expect to have kind of more Medicaid patients coming in we see it stabilizing this year around that 20% gross to net deduction.
Great.
The final question is if and when you do an interim look when you have an opportunity to expand the trial or stop the trial either.
I think IP or utility basically trying to understand the golar.
For rates.
Yes.
The interim.
This is being done for the potential to stop for efficacy.
Stopping for futility.
Is really hard to demonstrate so the primary goal is whether or not we can stop for efficacy at that point.
Yes.
Julian I'll, let her next.
Oh I'm, sorry, operator, let me just add a little color June to your question I think when we initially powered the study we had very conservative assumptions about a 30% efficacy delta on both primary endpoints, we had really very limited data on our key secondary endpoint I think we continue to be confident that the delta between placebo.
Bo will be significantly greater than 30%, that's our hope and expectation.
And certainly now one of the key elements that goes into an interim is our belief that when we look at our key secondaries, specifically looking at days in the in the ICU, we have an 80% power at that interim to show a two day or more benefit and so you add those pieces up and I think to Joe's point. It gives us a lot of car.
<unk> that not only can we hit efficacy.
The interim analysis, but really show a meaningful health economic benefit which is going to be critical for the launch of the drug.
Operator, I'll turn it back to you.
No problem, we'll move next to SBB Securities Marc Goodman.
This is rudy on a call for Mark So thanks for taking my question.
Can you kind of talk about the trend of new patient starts going into 2023 and for how long it takes to fulfill.
Prescription, maybe just walk us through the process.
Yeah.
Hi, there thanks for the question.
Considering the fact that we've seen about.
30, new prescription enrollment forms in Q3, and then another 40 in Q4, we seem to be very pleased with the progress and continued momentum that we see moving into Q4.
Excuse me into Q1.
With that progress we're tracking at about 40% increase in total prescriptions over Q4 at this time.
And can provide more color.
Hello <unk>.
Okay.
Yes, I'm, sorry, I forgot that note I apologize for that right now.
We initially planned for around 90 days to get through that prescription fulfillment process and we're very pleased with the fact that right. Now we are tracking at around 30 days, 75% of our patients right now have received reimburse therapy three during Q4.
We continue to see those enrollment curves going and moving forward into Q1.
That's very helpful. Thanks.
Okay.
Okay.
We'll hear next from Andrew Tsai with Jefferies.
Thanks, Congrats on a progress thanks for sharing all these updates I did have one clarification question on the.
The interim analysis.
Pardon my summary, but I.
Hopefully we captured it correctly is that if you did hit on the interim.
It is possible the study completely stops due to overwhelming efficacy.
The other scenario would be study continues as is for the final analysis, but it may be unknown, whether there was a trend as opposed to perhaps the drug not showing anything is that the kind of the right scenario, we should be thinking about.
Yes.
<unk>.
If there is efficacy at the interim.
The trial it takes about two months to clean the data and do the analysis.
That would be conducted by.
Blinded statistician.
In conjunction with the data monitoring committee.
If they see efficacy at that point.
Then they will notify us the decision is made whether or not to stop the trial.
If.
They do not show efficacy, we won't know anything I will just say continue the trial without modification.
And then we will complete two 124 patients, but we won't know anything about the direction of the study the direction of the results.
Would just be continue without modification.
I would point out too.
And I think I said this in the prepared remarks.
We don't pay a substantial penalty for doing the interim.
Right.
It's really a minimal effect on the statistical power if it goes to completion.
And Ed just for one additional clarifier what should we.
Choose to do an interim analysis in that period, while the data is being cleaned reviewed by the DSM B. We will continue to enroll patients during that period of time, we would view those patients important for the overall.
Safety.
Within the label for the FDA requirements and ultimately we would collect that data set as well, let's assume we on day, one we choose to do an interim analysis at the <unk> when the DSM V comes back to the company, we might have enrolled 510, 15 or 20 more patients and that would be Chris.
<unk> to evaluate that double blind portion of the study with the final FDA filing.
Very clear thank you so much very clear.
And secondly, as a follow up in terms of the guidance $15 million to $17 million or 2023, just curious.
To the extent you guys can share is what kind of assumptions are being baked in on the lower and upper end.
I guess the question is is.
Is this a realistic type of guidance or is it a conservative one such that you can beat and raise throughout the year. Thank you.
Hi, Andrew This is Steve I'll address that question look we've tried to be really reasonable with our assumptions and I think we've talked about some of those in the past I think we feel pretty tight about the gross to net deductions being in that 20% range.
It is still early we just have that one full quarter of launch so far but we feel pretty confident when we look at our bottles per script and we're seeing it just over five and the naive patient population. That's a reasonable number as we look forward. We do think that will increase slowly over time as patients age.
We're seeing a steady buildup of patients this isn't a bolus situation.
We know that these patients have a lot going on it's a complicated decision lot factors in so we expect to see kind of the steady build of patients over time and then.
From an attrition standpoint again, it's still very early but using the marigold phase III open label data, we know that over 60% of the patients are still on drug at two years.
There will be some that will attrit, where they just won't reach the right.
What level can axon or for other reasons, but.
But we think for the vast majority of the patients call it 70% or so.
To stay on the therapy for a long period of time with annual attrition more in the single digits. After that initial initial three to six month period. So that should give you a kind of the broad outlines of how we came to the 15% to $17 million range.
Very clear thanks again congrats.
Thank you Andrew I appreciate the questions.
And Charles Duncan with Cantor Fitzgerald has our next question.
Okay Super.
Congratulations on all the progress and thanks for taking our questions I had.
Had a question on raise and then really made my main questions are on the second generation can ask alone and so just quickly on raise I guess, there's been a debate among some investors whether or not the broadly adopted chain.
Changes in the protocol, resulting in more or less heterogeneous patient population and how do you feel about that relative to the trade off for timing.
Okay.
Yes. Thanks, Charles This is Joe Houlihan.
So I don't think it's going to introduce more heterogeneity genady into the population.
Jay.
The range of etiologies.
Seeing so far in phase III mirror very closely phase III.
And.
The treatment is really more of a final common pathway of status.
Then dependent on etiology, although ultimate patient outcome, obviously depends on etiology.
So we don't see that the amendment is contributing more heterogeneity.
And on the flip side I think the thing that's much more powerful that Scott mentioned is the change to the protocol that the next treatment. The next likely treatment would be IV anesthesia.
That is going to I think increase.
The sensitivity to detect a treatment difference on that second endpoint.
And get us patients again that that are consistent in terms of their severity, but also as I mentioned mirrored the patients in the phase II study, yes, and Charles I'll add stat.
Status epilepticus by definition is a heterogeneity of disease of heterogeneity and.
And as Joe mentioned the phase two there was no evidence that the disease states underlying status was at all affected by treatment <unk> was an independent predictor of success and what I loved about the phase II that we start every etiology I was a little worried in the phase II.
Two particularly sites like Duke and break on that see a lot of Glioblastoma is that we would get a disproportionate number of glioblastoma and the phase II and we did it because in real world status. Israel is quite interestingly has five or six major etiologies and as Joe said Thats what were seeing in the phase III I think the critical.
That we are spending our energy on is really making sure that these protocol amendments still lead to patients whose next step would be general anesthesia. I think we're very fortunate when patients are screened they are in constant contact with our medical team our medical team is talking to those physicians.
Henry <unk>, who was our lead investigator from the phase III, who many of you know are in many of those calls Dr. Gass Your module gas your who wrote the phase two protocol is on many of those calls. So every one of these patients who are enrolled in the trial, we've not only.
Are aware of but we are in constant communication with those investigators and we continue to believe the quality of the patients are far and away what we need them to be to really show the value proposition of the drug Joe is going to add one comment yes, one other thing that occurs to me.
That is at the baseline before they're treated we do a score called the <unk> status epilepticus severity score and that also seems to be mirroring.
The what we saw in phase II.
So that is probably a good measure of heterogeneity more so than diagnosis the severity of the status that's based on.
A number of clinical factors that scores so far looking similar to phase II.
Very helpful added color looking forward to that data if I may just one follow up with regard to the second generation can ask alone.
Intrigued with that I'm wondering if you could provide any additional color on why you think that could be a b I D dosing and then any any sense in terms of the size of the trial for the phase three inland next crystal.
So.
The reason the first part of your question Charles that we are seeing kinetics.
With the single dose studies that really support the IV dosing I mean, the goal is to see.
Increased exposure increased AUC and relative to <unk> and so we're seeing.
Being a good.
Bump in the AUC with a slower decay of the.
Plasma concentration and then we've modeled the <unk> dosing.
Done some pharmacokinetic modeling from the single dose results and that looks very favorable we're seeing a good.
Minimum plasma concentration at what we think may be the target dose.
So that.
That was a limitation.
Especially in the early.
Focal epilepsy studies when they gave it twice a day the semen would drop below the minimum effective concentration are in fact the modeling.
We did modeling for both the suspension to current formulation and the re formulation.
And given the suspension of <unk>.
We actually saw similar actual results in one of the focal epilepsy studies.
And it was reproduced by the modeling.
So we're very comfortable with the modeling results yes.
And I'd only add Charles I think do we actually think we need an MAA study probably not just from what we've seen but I think.
For us to think about leapfrogging, the phase III, having a comprehensive study understanding how the product does with different foods, which is so important in the pediatric population and seeing those curves. So that when we should we choose to go to phase III, we will really be able to my hope would be the target.
Two different blood concentrations as a critical part of that study. So again early days, but I would think about a phase III that has three arms two active arms and a placebo very similar to what you've seen.
With <unk> for example, their TST study their phase III study.
Do you think we have the ability to have some interesting regulatory discussions whether it be a single or single study or two studies I think we are thinking very hard about safety.
And what would be required from a safety database perspective, so more to come on that and we certainly haven't made a final decision I think what we wanted to communicate with you. This call is that the kinetics are incrementally better than we had hoped for and given that it makes it a a bit of a more of a.
<unk> potential to move quickly into phase III, if if we see a consistent signal from that study so.
It is really exciting we're seeing things that this franchise has never seen with its oral program before and we really are believers at higher blood levels on a chronic basis can can increase the efficacy of <unk>.
Already very favorable.
Product. So thanks for the question appreciate it and hope we got it all.
Yes, Thank you very good great.
Yes.
We'll hear next from Douglas Tsao with H C Wainwright.
Hi, good afternoon, thanks for taking the questions.
Just to clarify.
I think you said in terms of the interim analysis on the secondary endpoint in terms of.
<unk>.
Improvements in terms of days in the ICU.
We see something that has subsequently.
More comfortable in terms of the powering just given some additional work that you've done on the health economics front or just understanding how long patients are in the ICU that you feel more comfortable that you will be able to hit that given the power of numbers for the for the interim analysis.
Yeah. Thanks Douglas this is Joe.
So.
Yes. The short answer is yes, we're confident we will hit on the key secondary we have a number of health care utilization endpoints.
<unk> one is days in the ICU.
One of them is actually built into the hierarchy of analysis.
It's a stepwise analysis that the first primary at the second primary.
Two key clinical primaries, and then that health utilization endpoint is actually in that hierarchy of analysis.
No.
They all hit in that healthcare utilization endpoint is statistically significant that would be considered a substantial level of evidence.
<unk>.
Would be appropriate for <unk>.
Promotion.
And it will be a high level of evidence and so we've looked.
At the powering assumptions not just for the primary but for the secondary and that that key healthcare.
Utilization endpoint is time on ventilator due to status epilepticus and Thats less confounded.
Days in the ICU may be confounded by.
Whether there is pressure on beds and so on.
So, but the time on ventilator and we've gotten advice about this from someone.
It was very versed in health economics, Adam <unk>.
Morale largest in Germany, who has done a lot of work with this.
And that is a much we'll be a much more sensitive.
Endpoint to look at but we're also looking at days in the ICU.
And.
We will see what happens on that one I also think.
We have adequate power to show a difference on that as well, yes, and the only thing I'll add Doug is this was something when we first met with the FDA and we thought about powering. The study did not really play we included into key primary endpoints, but we really didn't have the scientific team and I give Alex <unk> and his team a lot.
Credit who spent a lot of time, helping us really look at the literature think about where these patients would come out and what we would need to see in terms of an improvement to win on these key outcome. So to this discussion before we went to the FDA and asked to perform it in.
Interim our team vetted, what we thought we could win on and that drove the N of 82, specifically.
And certainly when we looked at it and have 60 for example, we still felt very confident about the primary but our ability to hit secondaries were significantly lower power to about 50%. So that <unk> 82 was the sweet spot from primary and those key secondary.
<unk>, even even at the interim we have 90% power on that on the time on ventilator endpoint.
Okay.
Great. Thank you and then just as a quick follow up.
Scott just to clarify so if you do the interim look you would still enroll patients and would ultimately the NDA filing based on the interim or would it be based on the full dataset.
Yeah, our basic assumption today is that it would be based on the interim as the primary label, we would collect all of the blinded data we would submit at all so there is a potential and there had been one or two cases, where you've seen that blinded data included in the label normally those things are pre negotiated.
We wouldn't expect it today, but the only the only piece I will mention is that the agency has said if you choose to do an interim remember there is a safety burden and of safety that we would like from the company. So we are continuing to not only enrolled double blinded to two.
Kevin additional number of patients that we can evaluate but should the trial be stopped for efficacy on an interim which would be our expectation should we take that look we would continue in all probability do keep an open label arm fourth data safety collection or you.
<unk> raised two as another venue to collect additional safety.
As part of our requirements for registration, but we've had these discussions about what we expect the label will look like I think base case is that it would look it will be primarily based on the patients in the interim analysis, but that being said, we will have double blind placebo controlled data on another set of.
Patient that we certainly would submit to the agency as part of the package.
Makes sense great. Thank you so much yes sure.
Okay.
Okay.
And from operator, we'll move next to Jay Olson.
Hey, Congrats on all the progress and thank you for taking the question have you seen any increase in the CBD diagnose history since the launch of <unk>.
Does the current factors that limit.
At this rate how do you plan to increase diagnosis and what are the largest drivers of volume growth or is this all mean 2023.
Yes.
Okay.
Hi, there. This is Christy I'll take the first part of this question. So from the CVD diagnosis client, we do a lot of analysis on the usage of the ICD 10 code across the United States and what we've realized is that our promotional efforts has have utilized.
I would much more than that at the end of 2022 into 2020 train which is supportive.
Not only identifying these patients coding them correctly, and then getting them properly.
<unk> so from a diagnosis standpoint that currently is how we're triangulating in finding these patients.
Currently we have found you know we made some assumptions on where these patients are being treated I'll remind you that there are eight CBD centers of excellence across the United States. However.
However, we do know that these patients go to the centers of excellence on a more limited basis, sometimes one every six every 12 months and then they are seeing more routinely at their home and physician.
The increase in these diagnostic rates may be limited if you will at the home possession and Andy's increased rates at the at the centers of excellence.
The other thing that we know is that in more rural areas. These patients don't have the capabilities to get to our centers.
Two a center of excellence, so RNA utilizing the code at the best of their capabilities, probably not right now. So in 2023, we have some efforts to not only be able to educate more distinctly we're increasing our speakers programs. We have a very distinct effort to increase awareness through our patient advocacy.
<unk> partners through partners that have patients on therapy to speak to families who has new diagnosed patients. So there is a lot planned for 2023 to increase awareness increased education and ultimately get to <unk>, it's more more specifically in this patient population.
Great. That's helpful. Thank you.
We'll hear next from Brian <unk> with Baird.
Hi, good afternoon, Thanks for taking my question Steve.
Steve on the promotion well deserved.
Just also wanted to get some additional guidance on your thoughts around the interim.
It sounds like Youre getting a lot of comfort that you shouldn't be powered based on what you've seen for <unk> to hit the interim so I really wanted to get a handle on what sort of delta assumptions you have the differences.
Between the primary endpoint for a full analysis went out.
Okay.
So.
The P value versus the alcohol you do take the interim I means it seems from my calculation thats like a 30% delta versus a 33% golf and I guess I'm wondering I'm, having trouble understanding why it's just not an obvious decision to take the impairment in that case. So my question is what are the factors to consider as to why you wouldn't pay.
The end goal.
Well this is Joe.
Thanks, Brian for the question so.
The study is well powered.
We were looking I think we have more data now on the secondary endpoints.
And wanted to be comfortable as Scott mentioned that it was powered to hit on the key health care utilization endpoints.
The assumption about the Delta is the same.
The reason we would.
Decide not to do the interim.
It would be if the enrollment is just gangbusters and by the time, we got done with performing the interim analysis. The study would be fully enrolled so there'd be no reason to do the interim.
And that and that would be the consideration and otherwise we're going to do it now.
Now.
We have assumed a little bit into the weeds, but.
There is a lot of assumptions you can use to build an interim analysis, how much how much alpha spend at the interim versus the end.
There is an alpha spend at the interim analysis. However, if you look at the actual outcomes on the endpoints the difference between a 4.05 of a fully enrolled study.
And the Alpha we would have at the end.
Having performed an interim.
Is a difference in one patient outcome.
And so even though there is.
You have to hit a lower P value at the end if it proceeds to the end after an interim.
The actual clinical penalty you pay is very low, but the assumptions for the interim or the same 30% Delta.
And it still remains well powered.
Let me jump in Joe look Brian I am totally with you I don't think we have any expectation that the delta in this study is going to be 30%, we think it's going to be.
<unk> 40, 50 potentially 60%.
That being said I think in a small study one or two patients could potentially do one key things to your ICU days.
Or other health economic outcomes. So in general my bias would be to have more patients in this study to reduce that risk of an outlier Jo has reminded me the outlier could come on patient number 95 or 105, the same way it could come on patient number five so.
I'll keep that into consideration as well, but to this point I think the bigger and certainly gives us a little bit of comfort on out buyers more than anything else and really has minimal impact in our view of the primary endpoint that said I think every time a site now initiate in.
Treats a patient and get comfortable with the protocol theyre going to be a little bit better on patient number two and three that's normal and.
And I think as we saw in the phase two that comfort only led to equally if not greater success in terms of the utilization of the drug. So there is a comfort level is as our clinicians get into a sweet spot. There is an element of sites that are <unk>.
<unk> activating now in <unk>.
And starting to get busy that we give them.
Several months to participate in the study, but I don't think any of us are really losing a lot of sleep on the on the key powering assumptions.
It's just the small and always creates some some unknown risk, particularly on the placebo side. So nothing more than that I think it's more theoretical than practical.
But it is nice to have a lot of data points, while the study is ongoing.
What we've shared with you in terms of understanding understanding baseline characteristics and not being surprised by the types of patients being enrolled et cetera.
It is it is.
What we're balancing and.
We feel that we're fortunate that we have the luxury of the FDA support if we if we choose to take an interim.
We'll hear now from adjacent Butler with JMP Securities.
Hi, Thanks for taking the questions just a couple more on the novel formulations.
First one from the <unk> data do you expect to have well, let me update you there to make a meaningful interpretation of the somnolence.
And sorry, sorry incidents and then secondly, if you move forward quickly with the first three formulations formulation into a phase III trial in lgs, how should we think about the utility of the prodrug and how you could use that strategically moving forward. Thanks.
Yes.
Went on.
First part about the somnolence, Jason Thanks for the question.
Okay.
<unk>.
And so.
I think.
We do see increases in <unk> with increasing dose I think the major factor that's going to affect the rate of somnolence is going to be tight.
Titration rate, we've adjusted the titration rate in the current ongoing <unk> study.
Low and slow approach start the.
The escalations at a low level and then ramp them up towards the end of the end of the titration.
And I think that's going to be the major factor factor affecting somnolence.
I wouldn't expect a detailed read on somnolence, we'll get some idea from the study, but these are healthy volunteers and they aren't on the concomitant medications. They don't have the cognitive impairments and so on neuro developmental problems.
Really takes the clinical trial to get a good idea about that.
<unk>.
And in terms of the prodrug.
Scott can you comment on the pro drug piece of it sure and let me let me just back up I think on on the <unk> and the <unk> Jason.
Use this opportunity to share as we have that we continue to feel as though in the blinded phase III <unk> study we are.
Seeing improved rates of tolerability lower rates of discontinuation.
And I really think the work that Joe has done to create that new titration schedule.
We're seeing what we believe is going to be a meaningful impact in the PSC study and at the lower doses of our novel formulation. It behaves very similarly to <unk>. So we would expect to use the same type of titration almost the identical titration of <unk>.
For the new formulation certainly.
When you are absorbing much more drug you are going to get some bigger C. Max is but again.
We believe in a very reasonable fashion via titration, we don't see it as an issue today and we certainly we will get some additional insight on that front from the EMA study, but but were only doing some mild titrations in the.
Study at the at the 200 milligram dose so it's not truly a titration schedule it.
Or a titration study, it's an <unk> study.
And so just to be clear.
There are some of those differences.
Pro Jug has a few different value propositions I'll start on the IV side, it would really eliminate or need to use captisol and although our our partners at ligand have been very helpful. It's a lot of work to work with Captisol. It's limited the drug in it certainly has.
Going to have some limitations in very young patients, it's going to have limitations today in super refractory status.
It's an important opportunity for us to expand.
The amount of <unk>, we can given a day without tying it specifically to GAAP dissolved.
So it is really an important piece of our future that we are investing in today.
The oral side.
Right now the PK profile of our lead candidate on the prodrug side has the potential for once a day dosing certainly has the potential for unique IP profile has the potential for a significantly lower cost of goods and I think we're very fortunate right now that we have to.
Programs at look incredibly exciting and I think what we have to weigh as a pro drug is still.
A year plus away from <unk> and then the interim certainly given the.
What we're seeing with the.
The current new formulation I think we feel compelled to move that program along rapidly and we have the potential benefit of moving to the pro drug down the road for.
All of the reasons mentioned earlier. So this is really a fantastic problem that we have to solve for.
It should be might be our biggest problem in life choosing to great future compounds that can deliver higher blood levels and easier dosing for patients, which we ultimately think will drive greater efficacy, but to your point right now that new formulation program has is actually behaved better than.
We thought via the preclinical models, but again that that's the real reason, we're moving it.
Rapidly forward and we'll see how pro drug fits in time will tell so thanks for the question I think it was a it was a really good one with that operator, we're going to we're going to call. It a night. Thank you everyone for all your questions.
Appreciate the support again, we are really excited going into incredibly important year for the organization. Our commercial team continues to do great things, our clinical operations team and our clinical team is doing their best to move our clinical trials, along and we really feel we're at a major inflection point and we appreciate it.
All all of you, making the time Tonight. Thanks, so much operator, we'll we'll end the call.
Thank you and again that concludes today's conference you may now disconnect.
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Sure.
Yes.
Yeah.
Okay.
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