Q4 2022 BioXcel Therapeutics Inc Earnings Call
Good morning, and welcome to the bio ox cell therapeutics fourth quarter and full year 2022 financial results Conference call. At this time, all participants are in a listen only mode.
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After the presentation, there will be a question and answer session.
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Just to remind everyone certain matters discussed in today's conference call and our answers that maybe given to questions asked are forward looking statements that are subject to risks and uncertainties related to future events <unk>, the future financial or business performance of the company.
Actual results could differ materially from those anticipated in these forward looking statements.
Risk factors that may affect future results are detailed in the company's quarterly earning report on Form 10-Q for the quarter ended September 30th 2022, which can be found at www dot biotech cell therapeutics dot com or on www Dot SEC, Doc Gov, and which will be updated in its annual report.
On Form 10-K for the year end December 31, 2022.
As a reminder, today's conference is being recorded joining us on today's call are Dr. Venmo Mehta, Chief Executive Officer, Richard Steinhart, Chief Financial Officer.
Matt Wiley Chief Commercial officer, Dr. Vince O'neill, Chief R&D officer of uncles XL Therapeutics, Dr. Rob Risinger, Chief Medical Officer of Neuroscience and Dr. Franke, JAKO Chief Scientific officer.
It's now my pleasure to turn the call over to Dr. <unk>, the CEO and founder of Bioethics cell Therapeutics. Please go ahead.
Thank you operator.
Welcome everyone and thank you for joining our call today.
By cell therapeutics fourth quarter, and full year, 2000, and trying to do financial performance and business highlights.
It was exactly five years ago that buyer extent out of your day became a public company and we embarked on our journey with a clear mission to bring the unique me, it's update biopharmaceutical company Marvel using artificial intelligence approaches to brain plasma.
In neuroscience and immuno oncology to patients.
We are proud of what we have accomplished.
We are even more excited about what lies ahead.
And so it is with great Pride and then Susie.
That I share with you why I believe that company have never been better positioned to potentially bring new treatment options for millions of patients.
There's a high unmet need and deliver significant value to our shareholders.
Yeah.
We are making great strides.
And being on our accomplishment in 2020, which was truly a Thompson you may begin.
Okay.
For buyers step out of your day.
Sharon we're commercial stage company.
Last year, we received FDA approval for our economy for the acute treatment all my moderate and severe forms of agitation and schizophrenia and bipolar disorder.
This broadly about and brought a new treatment option.
Four patients and then may send market, where there had been no.
Ovation in nearly a decade.
Most notably using our AI platform, we advanced from <unk> to.
So commercial launch in less than four years.
Oh, sorry, guys.
Condition.
Today, we are building on these accomplishments and remain laser focused on accelerating our growth in 2000 and joined Italy and beyond.
There are many reasons why we are so excited about our near term opportunities.
Plus our commercial execution of economy is fully underway, we believe that <unk> got it means a unique mechanism of action and the ability to have deep agitation.
And then insinuation on Saturday with no obvious analogs.
Good day.
Perhaps the progress with that what do you mean sure.
Going forward 26 standards that now.
Now with our commercial operation fully deployed with 70 seats in all major markets across the U S. We look forward to accelerating this is mark.
We are pleased with the market as Ive Shadow regarding me, which is supported by highly favorable market dynamics.
The response from health care providers has been extremely positive.
It's especially rewarding to hear about the difference.
Already making for patients families and health care providers.
Mad men share more details about our commercial progress and launch metric that we are excited about in his remarks that follow.
Second gardening through our robust clinical pipeline, we believe the upcoming quarter Ive made it presented a watershed moment for the company in.
In the second quarter, we expect to announce clinical data that's potentially support.
And market expansion opportunities.
Our lead notice that got a big program.
Final one.
We believe this agitation market remains under diagnosed and under.
Yes.
It is comprised of an estimated $139 million agitation episode.
Across bipolar in Florida is schizophrenia and Alzheimer's.
Our three priority indications across media is medical.
Well typically we expect to announce data from two phase three pivotal studies for 501 in the second quarter. These start anything close to.
<unk>.
And.
Thank you Todd.
Our tranquility program is designed to evaluate <unk> one for the acute treatment of as I mentioned related agitation.
Up 200 million agitation episode.
Got it annually in this patient population in the U S. We have.
Currently there are no approved FDA therapy.
The trial is fully enrolled and then and the data cleaning and verification process has begun.
And tranquility three we are accelerating enrollment of patients with moderate to severe dementia and other things.
Home.
With first patient dosing having occurred last December .
Got me interested in industry.
This program upon final one Jim I'll certainly been associated.
Associated with schizophrenia, and bipolar one or two disorder.
And there are no.
The two part trial.
Evaluating the safety and efficacy of a 60 microgram dose.
David bipolar two disorder and schizophrenia patients to support use of fiber one in the at home segment.
Yes, Tim.
Only $3 million agitation episodes are cut in the U S. Etfs ended Saturday.
Yeah.
And then any part D R.
Guaranteed three part one more than 90% of patients that have already enrolled.
We have completed enrollment.
We plan to enter that data cleaning and validation phase sharply.
Part two of that trial is expected to begin in the second quarter.
In addition, we anticipate reporting top line results from our phase one multiple ascending dose trial.
Has there been sort of in the second quarter.
They are out or what.
Anti depression.
<unk> prescriptions filled annually in the U S and abatement offset options are suboptimal due to slow onset of action and completed its Paul.
For the first time.
We are conducting chronic.
Dosing of fiber, one and how do they volunteer and evaluating safety and Tolerability.
Daily or twice daily dosing basis, or whether it's <unk> here.
Including in combination with an anti depressant.
The trial outcome is expected to inform dose selection.
And as Sharon with selected select David.
Yeah, Hi, Dawn in Ontario.
Norepinephrine reuptake inhibitor.
Mmm needy patients.
Beyond these three embarked on near term data Readouts, we are advancing our research and development pipeline.
We are developing <unk> satisfy overdue and novel.
Jay.
And Doug on us as a potential therapy.
Chronic treatment of agitation in patients with dementia and other related notice I care to count.
Issues.
I'm pleased to announce that prototype formulation has been developed and we are initiating.
Enabling studies.
Our advancement as I've continued to validate our unique AI approach in discovering novel pathways and product candidate for neuro psychiatric disorder and for neuro rare diseases. This is ed.
New A&D, our forecast for the company.
We have identified more than 10 product concepts that are being evaluated.
As we look to expand our neuro pipeline beyond <unk> and <unk>.
We plan to host an R&D day in the near future.
Outline our strategy and progress in more detail.
Lastly, we are thrilled with our progress with you I just had 101.
It is a compelling value proposition and Hard-coated Dumont and is one of the most clinically advanced auto immune activators.
I must say there is positive.
Those two kind of slide five.
And CIBC small cell neuroendocrine prostate cancer <unk> and adenocarcinoma.
Which is supported by the intended subject clinical safety database.
101.
Has been published in the peer group Chairman.
As presented at ESMO do you in February .
<unk> hundred one in combination with Keytruda them I'll say these are complete response rate of 45%.
CNC.
This is a promising.
And heavily pre treated patients with no FDA approved therapy.
We believe the results support moving forward with the potential pivotal study for <unk> hundred one as a monotherapy and in combination with Keytruda in CNC and second half of this year.
The FDA discussions.
Finally, we are excited about the tremendous potential of anchors that compatibility and not actively seeking to unlock its full value of what our shareholders. We expect to provide an update on this shortly.
Looking back I can proudly say that 2022, while the year of significant accomplishment for biodiesel therapeutics all Brian .
The approval and launch of <unk> me validates our use of AI with positive impact on their drug discovery and development paradigm and on patients lives.
We are truly a driver I'm, saying Dusty James and have demonstrated that our AI based approach can improve the probability of success and a view of the development timeline and then R&D economic.
These accomplishments.
The mission of the company.
We sat out the wholesale when we became a public company five years ago.
I would now like to turn the call over to Matt Wiley.
I'm not sure if I'll get Ed <unk>.
Our next Saturday launch makes this is Matt.
Thank you very much and good morning, everyone.
Before I provide an update on our commercial activities I want to reinforce <unk> message of how proud we are of what we accomplished last year with the approval and launch of <unk>.
Not only did we focus on building strong.
Our commercial organization, we took the necessary steps and investment in building an entirely new market for the treatment of agitation episodes and area, which there had been no new developments in more than a decade.
It is important to understand this context as we move from launch to market development to sales acceleration later this year.
Our commercial engine is running efficiently and firing on all cylinders as we move into the heart of the new year.
Looking back at 2022, I can report that the fourth quarter was transformational for the commercial organization.
Most importantly, we improved the volume of potential patient exposures to call me and continuing to pave the way for broader access to this meaningful treatment.
We are working hard to change the lives of patients and each one matter Scott.
Considering that objective we successfully expanded the sales force of 70 representatives with full deployment commencing last December .
This allowed us to expand our reach from 700 target hospitals more than <unk> hundred and positioned us to fully launch of <unk> as we entered 2023.
The new sales team members haven't seen depth of experience necessary to continue our launch momentum as our original team members.
From the original sales team last year debt with an average of 21 years of industry experience and an average of eight or more product launches. This.
This expanded team has already begun making an impact.
They have extended our reach to more than 1100 of our target hospitals to date and are reaching over 7000 unique health care providers.
Kristin Gaumy continues to grow and this increase in share of voice is expected to accelerate PNT reviews and process and formulary adoption this year.
With that in mind I'll provide some updates on our formulary adoption progress.
As you know, we launched <unk> last year with a small team of 26 Representatives. This team has secured formulary access in more than 65 total hospitals to date with 39 of those as tier one accounts and 27% tier two.
We are also we also have more than 600, PNC reviews and process.
That should take place over the next few months of these approximately 280, our tier one hospitals.
We are right now within that window of a typical review time of six to 12 months. So the original sales team has made significant progress in lining these meetings up with 46% of its original targets either approved or scheduled to vote.
We expect more of these efforts to matriculate into PMT scheduled votes in the coming months.
Our second hiring wave newly deployed 44 representatives have just begun their efforts and we expect to see a meaningful uptick in formulary boats in process in the second and third quarters due to their efforts.
Market research prior to launch indicate that we should expect to see a majority of PMT votes would result in formulary wins for <unk>.
It's been our experience to date and we continue to be pleased with the perceived value of the call me to hospitals patients and health care providers.
We are encouraged that several hospitals and systems have already begun ordering the product developed firsthand experience prior to full approval.
We see this as a significant win as hospitals gain experience with the Gaumy. We've received possible positive anecdotal feedback regarding patient response throughput and staff safety.
On this topic, we expect to launch a free trial program to qualifying hospitals later this quarter.
This program is designed to facilitate early experience with the Gaumy and to provide hospital and system specific metrics, they can analyze to determine their own value.
We expect this program to accelerate into the demand of our Gaumy de novo institutions nationwide.
Turning to market access we.
We have now contracted with three group purchasing organizations, where GPS covering half of the targeted hospital beds.
While we are in negotiations and discussions with the remaining two major GPS we have focused our attention on system specific contracting that will help accelerate the pace of integrated delivery network or IGN reviews.
And adoption to provide system wide access to <unk>.
As noted in previous calls our corporate account director team is targeting 59, ibms, having a total of approximately 280000 deaths in the United States.
So far we have secured formulary approval or just over 7000 of those pads or 2% with more than 70000 or 25% anticipating a vote over the next two quarters or so.
So electric contracting with these entities may further accelerate the review process with some of the remaining systems that have not yet to engage.
At the same time, we are beginning to gain access we are ramping up our marketing efforts significantly to support our field teams.
We are launching a new HCP targeted advertising campaign focused on our gourmet as a collaborative approach to managing agitation in bipolar and schizophrenia patients based on our research. This campaign is motivating to health care providers and helps us position <unk> as a positive solution for both patients and advanced practice providers, such as ER staff and nurses.
We are deploying this campaign through print media digital media and our sales team and expect to generate more than $10 5 million impressions in the second quarter.
We've also deployed a geo targeting media effort to digitally and circle our targeted institutions in the U S. This means anyone in those hospitals with a smartphone or computer maker gaumy advertising on popular web sites and applications.
In addition, the marketing team deployed a large scale pure speaker effort to provide a comprehensive presentation on a go on me to targeted hcp's.
We have also planned promotional attendance at six national conferences with more than 150 regional or local conferences. This year that will further amplify our message and exposure.
I am proud of the commercial organization is tremendous progress with the launch of our gourmet to bring this important new treatment option to patients.
Our early success and interest in the brand is palpable and our field team energy continues to outpace the industry norms.
While there is an expected protraction to hospital launches and uptake market receptivity and excitement continues to grow and the promise of this drug to patients is peerless.
We are disrupting and creating a market in agitation and our confidence in this brand could not be higher.
Now I will turn the call over to Vince who will provide an overview of <unk> recent progress Vince Thanks, Matt and good morning, everyone. So I'd like to spend a few minutes reviewing the many exciting milestones recently achieved by our subsidiary <unk> cell Therapeutics. So let me start with our lead immunotherapy candidate <unk> hundred one which is our.
<unk> oral and each immune activator designed to turn cold tumors to hot via DPP <unk> inhibition. This is a novel mechanism of action identified by our AI platform in combination with Keytruda. We believe 701 can expand the activity of immunotherapy into large underserved patient populations.
This combo potentially addresses a very high unmet medical need by focusing on cold tumors. The major challenge in immunotherapy today.
This is even more relevant given recent setbacks in the immunotherapy development landscape for aggressive forms of prostate cancer.
So as demos mentioned, our phase III results for 701 in combination with Keytruda demonstrated very promising safety and efficacy data.
Aggressive form of prostate cancer importantly, we believe <unk> hundred one's clinical pathway continues to be de risked as we know have demonstrated clinical POC and both adenocarcinoma non small cell cancer and.
In the second half of this year, we intend to initiate a potential registrational phase <unk> study for <unk>.
701, and small cell on your endocrine cancer subject to FDA Lane.
Building on the positive clinical data for 701 and based on our deep knowledge of DPP biology in cancer, we are pursuing new indications, we plan to initiate a phase <unk> trial in small cell lung cancer in the second half of this year, we're particularly excited about 700 one's potential in this indication because it shares many many commonalities with.
Small cell neuroendocrine cancer.
In addition, we're partnering with two premier academic cancer Institutes' to explore <unk> hundred one's potential beyond our company sponsored trials first with Georgetown Lombardi cancer Center.
The phase II trial in pancreatic cancer, and secondly, with Dana Farber Cancer Institute and a phase <unk> two trial in AML. We're also continuing to validate GBP nine overexpression as our lead biomarker Kennedy and are developing a next generation DPP <unk> inhibitor.
So taken together, we're very pleased with the recent programs for our lead immunotherapy programs 701 and all.
We're excited about the future for <unk> cel I would now like to hand over to our CFO rich. Thank you Vince I will now review, our fourth quarter and full year 2022 financial results.
Net revenue was approximately $238000 for the quarter and $375000 for the full year 2022.
Which resulted from early product trials and reflects limited market access.
Due to the Companys direct shipping model to hospitals wholesaler stocking was neither expected nor occurred.
Research and development expenses were $32 5 million for the fourth quarter of 2022 compared to $12 5 million for the same period in 2021.
R&D expenses were $91 2 million for the full year 2022, compared to $52 7 million the same period in 2021.
The increased expense increased expenses for both the fourth quarter and the full year were primarily attributable to an increase in clinical trial costs related to our multiple pivotal <unk> 501 clinical programs.
SG&A expenses were $20 7 million for the quarter.
2022, as compared to $13 6 million for the same period in 2021.
SG&A expenses were $68 8 million for the full year 2022, as compared to $54 2 million in 2021.
Increased costs for both the fourth quarter and the full year were primarily due to personnel and costs related to the launch of <unk> in the United States.
<unk> cell therapeutics had a $54 8 million.
Had a loss a net loss of $54 8 million for the fourth quarter of 2022 compared to a net loss of $26 1 million for the same period in 2021.
For the full year the company reported a net loss of $165 8 million compared to a net loss of $106 9 million for the same period in 2021.
The loss for the year includes approximately $17 3 million in noncash stock based compensation.
It'll cash expenditures for 2022 totaled approximately $135 $3 million.
Cash and cash equivalents totaled $193 7 million at December 31, 2022, compared to $233 million at December 31, 2021.
The company believes that full execution of our strategic financing with Oaktree and the Qatar investment Authority would result in a cash runway into 2025.
Now I'd like to turn the call back to nimble.
Thank you operator, we would now like to open the call for questions operator.
Thank you.
This time, we will be conducting a question and answer session.
If you would like to ask a question.
Please press star one on your telephone keypad.
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One moment, please pull for questions.
Our first question comes from the line of Colin Bristow with UBS.
Please proceed with your question.
Hey, good morning, and congrats on all the continued progress.
The first on the <unk> launch you have 65, formerly win could you just help us what is the denominator here.
How many formularies because actually voted.
And then maybe just walk us through the typical timeline coma, a formulary win to the drug being on hand and available for use in the hospital.
Secondly, just looking a bit further into the future given the progress you are making.
The potential to provide some sort of revenue guidance 2020, full I know I keep pushing you guys on that.
And then lastly, just on trying to 83 could you just give us an update on how enrollment is progressing thanks a lot.
Well good morning, Collin. This is Matt on your first question about the denominator. So one of the things I said in the prepared remarks is that we're winning a majority of our wins.
And Thats Thats round two.
I am sorry.
Winning about two thirds of our.
Formularies in process and so.
What that means is we.
We have 65 out of roughly 100, and that's what we expect and we saw that in market research and we would expect that to continue the.
The primary driver for exclusion rate now is cost and what were finding Collin is that no doesn't necessarily mean no.
In many cases, they just want more experience so they want to trial the drug in their hospital or in a site or two in our system to assess their own value.
So we're not getting the hard no come back in a year, where we're getting the we want to we want a little bit more information to understand how the offset of cost impacts our hospital or system.
So the timeline between a formulary win and uptake I think that's the second question. There was actually a couple of slides in the commercial bank deck that I would point you to so the formulary process takes about six months to 12 months on average.
And then thereafter in market research, we anticipated that.
Of that roughly a third of health care providers would trial the drug in the first six months and that goes up to somewhere between 67% to 70%.
Between six months and a year. So there is a lag between PNT approval, that's really when we have freedom to operate and generate demand as a sales organization and thats. When we begin to pull it through so there is a as I said theres a protraction in the hospital process. That's why the ramp to peak is somewhere between eight to 10 years for these types of products.
Yeah.
So let me call them take the third question good morning.
Now frankly do enrollment has been completed that was our primary focus and we wanted to learn as much as we can with wrangler. They do as you know that trial is in residential.
Residential same thing now we are moving for the nursing home setting. So all these things that have been directed to tranquility. We don't expect trial enrollment to be any different than the bank really do but we have not conducted any trial and we are collecting that data. Once we have all the data will provide a guidance.
The data I think Adobe is expected.
Great and on the guidance.
I think Thats a fair question.
I keep asking Matt once we have high level of confidence in our launch metrics that he has been providing.
And we have multiple quarters something that hour battery will be no launch may take these robust and then launch may takes it is exiting in a day mariner once we have that.
Our confidence in the demand we will start projecting that avenues. So 2024, we will provide to how the 2020, because what guidance. We can provide Matt would you like to add anything just that revenue is a lagging indicator. So a lot of the metrics that we're providing now should give you some idea of how we're progressing.
The revenue as it comes behind that you should be able to to be able to add those things up and get a decent idea, but demonstrate will provide as we get.
More of a steady ramp up.
Thanks, a lot guys.
Thanks Colin.
Yes.
Our next question comes from the line of Robyn <unk>.
This would choose securities. Please proceed with your question.
Hey, guys. Thank you for taking my question, so not to drill down deeper into the niche this lines.
It looks like your sales implies over 2000.
To date <unk>.
You said that there are some orders coming in I guess I guess several questions here.
Once you get a hospital or hospital is now on formulary how are they.
Shocking the drug like when you look at that number how much of it stocking I think he said.
1000 beds available so.
I'm just trying to understand that amount and then of the 65 total formulary wins today, how many are actually high purchases.
So that gives us a good amount of color on how we can apply that 2000 number and then lastly, you mentioned cost what sort of factor for now.
For for certain situations are you adjusting the cost have you thought about adjusting the cost to improve market access. Thanks.
Alright, there is quite a bit to unpack there. So let me let me take a shot at it.
So I think that it's a fair assessment.
You could draw the the number of total units.
Those hospitals that shipped in Q4, how many of those.
Films went into patients we wouldn't necessarily know that yet typically we look at reordering pattern side, we're not disclosing those metrics.
But that would indicate just how many patient exposures, we might have so they're gonna be hospitals that bring in units and it could be several units. It could be just one of the strengths to give it a shot to see how it works in their patients where they may be waiting for some type of protocol development in order to help guide them and utilize the <unk>.
So not every every carton thats been ordered necessarily has triggered a reorder yet, but we're still early in the process.
So the 7000 number is actually the number of unique health care providers that we saw.
Or actually launched to date.
Through both our original and expanded sales organization.
So we continue to see an inflection on the number of physicians that we see and the number of contacts were making in hospitals again, we were at over 100 hospitals within our target universe that we've seen we actually are around 2000 hospitals total that we've seen so we've seen nontarget hospitals as well when necessary.
Those might be in systems, where there are downstream institutions that want to hear from us.
But that represents about 64% reach which is really good considering we just expanded our team back in December .
So that's.
That's where the 7000 number comes from.
Right now.
We look at the PMT.
Reviews and process there are over 600 or so in process.
<unk> half of those 280 of those are within our targeted institutions for the original sales team for the original 26.
Which means that it implies that they have almost half of the original targets that are either they either have formulary access or they have those hospitals in process to vote.
So of the formulary wins, how many of those are purchased we havent given any guidance on that historically I think it's a little too early to kind of bifurcate.
The ordering patterns we've had.
Those that have approved the drug order now we've had those that have non formulary access for order and so we would expect that pattern to continue as we bring more of these hospitals online what I can tell you is that once the product is on formulary. It makes it easier for them to reorder.
Because they're not just trialing the product at the time.
Adjusting the cost now we're not considering adjusting the WAC price of the drug we wouldn't anticipate doing that at all we will have contracts in place with the GPS and we may do selective contracting with the idms.
And so the the gross net implication of that is quite small. However, it is something that we may do to get access to a broader swath of hospitals, especially those that are not within our target universe.
So that has always been part of the plan.
And we expect that that will help accelerate the pace of those system wide approvals throughout the course of the year.
Great. That's really helpful and just one on southern Airlines given that you can earn cold tumors hot youre going to be hockey hockey combining with the checkpoint inhibitor I know you're doing a lot of these academic studies sort of introduce the car.
How are you thinking about going forward as you expand obviously keytruda is expensive.
Would you consider a partnership to help with supply or even in licensing in your own checkpoint inhibitor.
Yes, Hi, Robin this is Ben so most definitely would be open to discussing some kind of supply agreement and a partnership but as you know to date we have.
Purchased keytruda on the open market and that certainly has given us flexibility.
Since we Couldnt then need to deal with negotiating with the partner.
We're certainly open to that is the short answer.
Okay.
Thanks Robyn.
Our next question comes from Greg Harrison with Bank of America. Please proceed.
With your question.
Hey, good morning, guys. Thanks for taking the questions.
Just two from me.
First what responses have you heard from providers, who have used <unk> in the clinic so far.
And what interest of the express in that home setting and then.
How will you disclose the serenity to tranquility III data and what are your expectations there.
So Greg I'll handle the first one with Rob So what we're hearing from the field is everything that we would expect promise of a gourmet as a landing exactly the way that we'd want it to they are seeing better throughput.
They're using it to potentially.
Avoid staff injuries.
The onset of action has been everything we thought it would be a they consider rapid and so it does fulfill that cooperative care.
<unk>, we want them to have and so we've gotten great feedback from the field I'll turn it to Rob for a specific example, sure so I get frequent contacts email and text messages and.
And of course provide reserves are seemingly trying this on the worst of the worst so I'll give you the anecdote.
Physician saw patient in four point restraints, both risk both ankles are shackled to the Gurney and they released one arm to provide the film and within 15 minutes. The patient was out four point restraints, they were clearly improving and they were.
Discharge some hours later from the hospital.
This was such an impressive result in fact, they reached out to us and wanted to let US know so I think the reception of physicians is very positive at this point.
And its clearly having an effect in clinical practice.
And we hope that this fits nicely with.
The new sort of standards of care.
Certainly a more humane way to treat people.
And I just like to add on top of that if you think of our label. It says mild moderate and severe and in real life. We are seeing patients are being created so that market is an artist loaded we will have market from <unk> Suisse.
Yeah.
Regarding your second question.
Yes.
Greg This is <unk>.
Regarding your second question on how we plan to disclose the data really followed the company, but also as we have done in the past we will have a press release of the topline data have a call with the street.
Doug.
Alright, then we are all out and we plan to follow that for a release of those to date does that then we are all getting afforded its happening in next several weeks.
Great. That's helpful. Thanks again guys.
Thank you Greg.
Our next question comes from the line of Greg.
<unk> with <unk> Securities.
And that was good.
Hey, good morning, Thanks for taking my questions.
I just had two in particular.
One just wanted to.
Get a better sense of how you think the uptake is going.
And whether the first quarter and second quarter sales number that you've reported.
Is <unk>.
Pretty much in line with how you were thinking I think you have done a good job resetting expectations at the uptake would be.
Slow and gradual given the process on getting into hospital formularies.
Is still lower than I think many of US expected so just <unk>.
Comments around that and then secondly, I just wanted to also ask about your.
Efforts to kind of maybe raise the awareness of the products I think previously we had an impression that perhaps.
Perhaps comments you had made that product is basically selling itself, but yet I think what.
We're hearing on this call is that there's now a free drug program, there's clinician targeting campaigns and just wanted to know if these are newer initiatives in response to the uptake or are these in line with how you've been planning the whole time.
So Greg as a commercial guy will be the first to say that no drug sells itself.
We put a lot of sales and marketing effort behind it.
Can we talk first about the uptake so the uptake curve I would think about this way is it takes again six to 12 months for the formulary process to really take place. So for our first 26 reps recall that great launches in July of last year. So we're right in that six to 12 month window.
With the original 26 Representatives thereafter, once you're a PNT formulary approval, that's when your uptake curve begins and I just.
Sure some of those those data from commercial day earlier.
And so that will take place over another six to 12 months and so that's the timeline that we should expect now keep in mind that our next 44 Representatives started this cycle.
Beginning in December so there are six to 12 month window for PMT review on formulary approval is going to be in the May June timeframe, and Thats, what I was going to start.
So that's how I would think about the uptake curve theoretically.
You Shouldnt really see a lot of revenue for the first six months of a drug launch in the hospital.
They simply have to go through their process and Theres a lot of mechanics to do that.
Regarding your question about marketing effort and the free trial program.
So one of the things that I have said before is that when physicians try it and they experience a gourmet and patients themselves.
Exactly what we're talking about so we're not a big had no cattle.
Drug launch this drug delivers as promised and it certainly is making a huge impact when its stride and so doing a free trial program, where there is some pushback on cost or some evaluation that needs to be had to see value in their own hospital, that's exactly why we're doing it.
We want them to cross that CASM, a little bit quicker.
As it relates to the marketing efforts, we want to raise awareness to put additional pressure on the <unk> on these.
Formulary decision makers in a hospital. So we have Geo fenced every target hospital in the United States and they're going to see me a lot.
And that's all part of the process to drive not just awareness, but pressure on the P&C process in that demand.
And what I will let Greg is why youre seeing more of a marketing effort because we have 70 member team deployed.
And a lot faster.
Fostering VSAT fixing that theme and then.
Yes.
Ligand on designing the strategy for 2023, so I would say the commercial.
All efforts under way in 2023.
Commercial and tried to stretch it.
And our next question comes from the line somewhat.
Kearney with Canaccord. Please proceed with your question.
Good morning, Thanks for taking my questions I have three quick ones. The first is very specific and on behalf of investors that might be when he sales focused.
<unk> been out two thirds of the way into the first quarter. What can you specifically say about actual film sales into hospitals that are native to the <unk> performance.
Okay.
Yes, we're not so that's it's a great question, but we're not going to provide guidance on this quarter on this call.
Got it.
Are there any quarters in 2023 that might be especially heavy in terms of.
600, pending PMT Committee meetings and my last question is on tranquility to what is it typically the timeline for data verification and cleaning for a relatively quick trial like this.
So to answer the question about the 600.
Hospital Pnp decisions in process I would expect that to happen over the next several months it depends on their.
<unk> schedule.
And I think we saw this in commercial day.
At <unk>.
Pnp committees may not get through full agenda.
Push out there their meetings they may cancel meetings, if they don't have quorum.
So we're really at the the wins of the PMT.
Meetings themselves and operationally getting those done but.
But we feel pretty good about what we've been able to put on the books so far.
We expect to not just see those matriculate, but to see a lot more come online and pick up the phone over the next couple quarters.
So your next question about the data cleanup and verification as you can imagine we have key data readouts and ongoing in parallel.
Rob can provide you what normally it takes for a pivotal trial because you have lot more how I understand.
Then when you are running a phase II et cetera.
So I realize this is although it's a quick trial, it's a three month duration for any particular patient.
And so there is a range of dosing for patients some doses or some patients may have only had a couple of doses. Other has had many and we have to do what's called source data verification. So we literally check the numbers that are entered into our database against what's in the clinical medical records.
That's actually a lot of work so it's anywhere from eight to 10 weeks.
Literally daily work by many people to make sure our data is accurate correct and precise.
That's very helpful. Thank you.
Yeah.
Okay.
Our next question comes from the line of.
Yes.
Asia with Guggenheim Chief receive with your question.
Hi, Good morning, this is Eddie on for <unk>.
Do you from us on the Alzheimers disease agitation side.
Given the older population for <unk> are there other safety data required for that filing that go beyond what you've already shown are spoken about and then if you are able to get that approval and label expansion can you just give us a little bit more details on how the prescribing and patient monitoring re dosing in reimbursement would work in an outpatient setting.
Versus what you've been showing with the hospital formularies.
So I'll just address it very straightforward there is no additional safety requirements, we're doing and in fact going above and beyond what's necessary to demonstrate the safety.
And so the label, we expect will be very similar to the current labeling in terms of adverse events and safety requirements.
We know that.
Lower doses have a greater safety margin and that is in fact, why we're taking the lower dose in the outpatient setting.
We fully expect to demonstrate the safety and the outpatient setting and that will be one of the label expansions as a result of these trials.
I'll leave the reimbursement.
Because it is very different.
In an outpatient or at home setting than within the hospital or within a clinic setting.
This is <unk>, let me add a little bit more to what Rob said.
In terms of the safety.
Lee we are doing three month follow up monitoring tool.
If they have more episodes were trying to show what the safety and efficacy of the drug is after the primary endpoint is through our pack and the primary endpoint in terms of the efficacy of what we need to tune and also we have already outlined that a 12 month safety.
Open label study.
We will be initiating Paul.
Dementia patients so in terms of.
One of our current understanding on what we know as of today is.
Two hour endpoint primary endpoint in terms of efficacy when three months follow up we show that drug works over a period of time, both in terms of efficacy and safety and then there is a 12 month open label safety study.
Did it answer your question.
Yes, that's helpful. And then and then and then on the second part about just sort of how how would it work. If you did get the label on like who would who will decide if the patient needs to be re dose if they need to be monitored how would the reimbursement work for those.
Studying.
Yes, so at home when a patient feels.
Seals agitation.
They're well aware of it it's very versus stay. This is in fact, what brings them to go to the hospital for treatment in the worst cases.
So the patient may take the medication and of course after a period of time. If there is no improvement they may be able to take a second dose.
In terms of who would be prescribing this their outpatient mental health provider typically a psychiatrist or a nurse practitioner et cetera might be prescribing this for them.
Reimbursement would be done.
Yes, I can take that I mean, so one of the things that we've done where we're working on our market entry strategy for that so we're breaking down the market. When we look at those prescribers, who are either initiating therapy are switching therapy for Alzheimer's dementia patients roughly half of the prescribers are neurologists.
Summer site and then summer.
I'd put in the primary care bucket, although if theyre double boarded I don't know what they are they could be in memory centers as well.
So that being said the reimbursement is traditional retail reimbursement it could be through PVM med D benefit where Medicaid is there they are in that bucket.
So it's more of a traditional reimbursement model than it is in the hospital.
Great. Thank you so much.
Our next question comes from the line of Corinne Jenkins with Goldman Sachs. Please proceed with your question.
Yes, good morning, So maybe just on the.
The.
Free drug program, how do you think about designing and constraining that sampling program to optimize getting.
Physician interested in the drug maybe not overdoing it in terms of providing free product over too long of a period.
So it's a great question and the long acting injectables in the hospitals kind of paved the way for this so there is <unk> guidance on it.
We have.
Very specific belts and suspenders on quantities. So the hospital is not going be able to order.
More than a very what I'll call a very limited.
US trial program. So right now that the limits are two cartons per six months.
And so thats in our business roles, we want these hospitals to get experience.
And we want to make sure that they get experience with the right patients, but we certainly don't want to.
Flood the market with free goods.
Okay helpful. And then maybe on the Tranquility program, just assuming drink later, who meet statistical significance on the primary endpoint, how should we think about kind of best case scenarios.
So it could happen or if it's a three month observation period, and what are you watching and what what's most important about investigators and regulators for that portion of the study.
So the primarily hi, Collin this is Brian .
In the three month period.
If they have another episode they get another dose so that we can demonstrate that if they have episodic agitation, which is three episodes of the month or they start getting into more of it to the episodes. The week drug is effective and that's what we're trying to show in the three months follow up Rob.
Okay.
The FDA is interested in.
Not just efficacy, but also safety and that is what the study is designed to do when we met with them extensively to come up with this.
Our trial design and statistical powering have agreement.
As a pivotal trial for both safety and efficacy.
Thank you.
Our next question comes from the line of.
Graham.
<unk> with H C. Wainwright. Please proceed with your question.
Thanks, So much just a few quick ones.
Firstly I was wondering if you could comment on the degree to which formularies that have said no, but not a hard no.
Looking for trends and demand.
What kinds of trends they are looking to see before they reconsider their decision with respect to <unk>. Secondly, I was wondering if you could comment a little bit about the timing and prioritization of the development of the rest of the neuroscience pipeline beyond 501, and lastly, if you could just clarify whether.
At this juncture the potential spin out of Hong Kong SXL.
Is no longer being considered and you are simply focusing on partnering opportunities for 701. Thank you.
Alright, Thanks, Rob.
So on the formulary instead of given the what I'll call the soft now.
Certainly they are looking for more evidence specifically in their own institutions institutions to evaluate the value so whether the value to them is improved throughput.
A reduction of staff injuries. They just want to see the patient response or response time those are the sorts of things that they might be looking for certainly the more noise in the hospital from their stakeholders that want this drug that's going to help.
And so we're doing everything that all the marketing efforts are intended to do that is to really push that.
Those decisions forward and maybe turn the soft now into a yes overtime.
And then as we think about the the larger systems like the Idms Theyre looking for more of their hospitals to raise their hand, and say I want this in my institution.
So we're working on all those fronts to make sure that anywhere where there is a concern or question mark about the value of the <unk> that we're able to solve it for them.
And certainly we want to create the noise in the ground groundswell.
To push them to a decision.
A positive decision.
I will just add to the cost question it depends who we're talking to <unk>.
<unk> heard from so many salespeople that hospital things if they can avoid one in JD to a staff member.
And we will pay for <unk>.
So that's a very big fan.
Every well market driver and obviously like.
Economy gets used we don't see that we are doing Barton once people know what value. It is bringing and the case study that they are all presented to you.
Even before we launched all of it that really that would be used in the severely agitated patients now we are seeing that drug is being used in a patient who came completely chain.
And then Doug allowed them to get out of that situation within joining five minutes. So I think market feedback could not have been any better than what we have observed that as part of the reason, we decided to make continue to make the investment in our common stock.
I'm very pleased that we are at a point, where we have a call with commercial apparatus in place and I think it got me a reception.
The exception is great from the healthcare provider and I'll be working some thoughts looking at this.
Coming back to your timing and prioritization on neuro pipeline.
$16 million already covered we think on me $203 million at home setting and 100 million, we got a diamond agitation all investments and plans that have been put in place. So that we can get additional sandy is what our dorms acting in Alabama and that will expand our market all of you.
The $15 billion target.
The market, it's a huge opportunity and we have a leadership position in this space. So we're continuing that but.
Our AI platform is very productive and it has been generating more of that and we had already announced fiber too. So we are pursuing five or do we have created a new formulation.
Initiating IND, enabling studies and we believe it can go to the clinic.
First half of 2024, so thats kind of timelines we are targeting quantifiable.
Pardon me there was no bandwidth in the company.
Clinical and regulatory to execute on more things. When you are conducting four pivotal trials like the tranquility to tranquility.
Part one to part two so timing is really good for fiber due to execute in the clinic. In addition, we have almost now and product concepts.
Normally we will have about dozen brought a concerted before we select our next aging theyre going through their prioritization process. One that does happen that will generate sustained him about R&D pipeline outside firewall in plywood. So that's the game plan for next three to five year forecast in neuropsychiatry.
Symptoms as well as the newer here now we are focusing on both of them.
In terms of the Encore, Greg Phil I think this is the timing couldnt be any better time is now.
We have presented the data at Ash could you you just chose to take care of today all of the information is there and we are very actively started pursuing both options partnering as well as seeking independent investment.
So that <unk> can execute on their business plan and the upcoming plan that Vince has already outlined a potential phase III pivotal trial at <unk>.
See human proof of concept and exploding cyber.
One potential outside prostate cancer and pancreatic dig in AML.
Thank you very much.
Thanks, Ron.
Our next question comes from the line of Samir designing or executing please proceed with your question.
Hi, guys. Thanks for taking my questions.
And just I guess.
But more interested in terms of the operating costs.
For this year.
I think in the release.
Can you talk about a $14 million incremental sales and marketing spend I don't see now we've got the full 70 reps onboard.
Just wondering how we should be thinking about incremental sales and marketing costs. This year.
R&D, obviously you saw the ramp.
Can the ongoing pivotal studies, just wondering on a quarterly basis, how we should be thinking about that.
It sort of key one similar levels to <unk>.
Q4 last year, maybe Q1, and Q2, and then dropping away in Q3 and Q4. Thanks so much.
Thanks Hamid.
Our if you look at our quarterly costs was around $32 million or so in the previous three quarters in 2022, because in Q4 was a little bit extra ordinary because viva conducting multiple pivotal programs.
Now some of them have completed and some of it is still continuing I would say that we're thinking of the cause if we're thinking not Q4 should be outlier and what it was in 2022 somewhere in between I would say completely.
Completely agree with that Sameer so.
As we go through this year several of these significant and pivotal trials will start to drop off as you suggest we should be.
Not burning quite as much money in terms of the sales force that's fully deployed and so we will spend money pass throughout the year.
And then just a follow up.
The sales force fully deployed in Q4, we think going to be still some incremental.
In Q1 for that thanks.
No we have fallen so much our product is in place 70 sales team. We have cat team. We have marketing we have commercial operation. We are full MSL team I think it's execution time now.
Okay. Thanks very much.
Thank you Tommy.
Yeah.
Okay.
And our next question comes from the line of quick.
<unk> <unk> with Mizuho Securities. Please proceed with your question.
Yes, thanks for taking my follow up I forgot to ask this before.
Just.
On the comments you made about your discussions with the two other major GP OS.
I was curious as to whether the fact that they are those haven't been secured yet is related more to the timelines with which they run their process or was wondering if you could give color whether they.
Are providing some sort of pushback, whether it's related to price or any other discussions that are separate from that.
Timeline perspective thanks.
Thanks, Greg.
So one of them is progressing quite nicely.
Yes, I can.
Report that we're close to the finish line and so we'll report out on that when we do and then there is another one that is notoriously slow.
They wait to see a whole host of their hospitals downstream raise their hands. So we're working through those hospitals to bill.
We feel good about one out of the two and.
The other one will come along.
Okay. Thank you very much.
Yep.
Yeah.
And we have reached.
A question and answer session and I'll now turn the call back over to CEO , Dr. <unk> for closing remarks.
Thank you.
Everyone for joining us today.
And for your interest in <unk> therapeutics.
Have a great day.
And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Yeah.
[music].
Yes.
Yeah.