Karuna Therapeutics Inc. Q1 2023 Earnings Call

Speaker 1: I.

Speaker 2: Welcome to the Karuna Therapeutics first quarter 2023 Financial Results Conference call. All participants are in a listen-only mode. Please note this call is being recorded. I will now turn the call over to Alexa Smith, Senior Director of Investor Relations.

Speaker 3: Thank you. Good morning, everyone, and thank you for joining our first quarter of the 2020 financial results conference call. I'm joined on the call today by Bill Murray, President and Chief Executive Officer, and Troy Melzi, Chief Financial Officer, who will begin our call with prepared remarks, as well as Andrew Miller, Founder and Chief Operating Officer, and Will Kane, Chief Commercial Officer, who will join Bill and Troy for the Q&A portion of our call.

Speaker 3: Before we begin, I encourage everyone to visit the investors page of our website at investors.parunatx.com to find our press release and presentation related to today's call. Forward-looking statements related to our product development, regulatory and commercialization plans, our research activities and financial outlook may be presented during this call.

Speaker 3: Please refer to today's press release and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. And now I'll hand it over to Bill.

Speaker 4: Thanks, Alexis, and good morning, everyone. In the beginning of this year, we outlined three strategic and operational priorities. The first is to build the core, which means maximizing the value of Car XT through our continued development efforts, submitting the NDA in the third quarter, securing FDA approval, and successfully launching Car XT in 2024.

Speaker 4: The second is to expand our pipeline organically and inorganically. And the third is to scale the company and build the operational capabilities needed to support our transition to an integrated R&D commercial organization.

Speaker 4: As we sit here today on May 4th, I can say we've made excellent progress in all three areas. Let's start with the important development and regulatory updates for CAR XT.

Speaker 4: In the first quarter, we announced positive data from Emergence 3, our third consecutive positive efficacy and safety trial evaluating CAR XT and schizophrenia. In the trial, CAR XT demonstrated a statistically significant and clinically meaningful 8.4-point reduction in the PANDS total score at week 5.

Speaker 4: With a p-value less than 0.001 and a cone's de-effect, 0.6.

Speaker 4: CAR XT has now demonstrated clear and consistent antipsychotic activity across three registrational studies, whether one looks at the PANS, effect size, or p-values.

Speaker 4: In the trial carcass, he was generally well-calorated with a side effect profile substantially consistent with our prior schizophrenia trials, as expected, mostly colonergic side effects, which were mild moderate in severity and generally transient in nature.

Speaker 4: Just as important as we didn't see, weight gain, EPS, and somnolence, which are common with many atypical antipsychotics. These side effects can be burdensome for patients and reduce compliance, leading to relapse and hospitalization, and negatively impact overall treatment outcomes in schizophrenia. And the lack of these side effects can be meaningful for patients.

Speaker 4: We look forward to presenting additional data medical Congresses this month, including new efficacy and safety results such as CGIS, AERA, TNVD from emergency 3, as well as the exploratory end-point analysis of value and carcassity in cognition from emergency 2 and 3 trials.

Speaker 4: The totality of the data generated date reinforces the potential of CARIX-T to be a completely new and differentiated pharmacological treatment schizophrenia that should be very well received by the psychiatry community of approved.

Speaker 4: In addition to Emerging 3, we made significant progress advancing Emerging 4 and 5, our 52-week open-label trials evaluating the long-term safety of parks, teens, and schizophrenia. Emerging 4 completed enrollment at the end of last year, and we anticipate wrapping up enrollment for Emerging 5 Discord.

Speaker 4: Both trials are designed to provide long-term safety data as well as contribute to overall safety exposures to support our NDA. There's a great deal of valuable information that can be garnered from both studies not only for the NDA but also for medical education.

Speaker 4: We'll plan to share data from these trials in 2024.

Speaker 4: Outside the trials, the Emergent Program, or Phase 1B trial evaluating the effective CARXT on 24-hour ambulatory blood pressure is well underway. We initiated the trial in April and are very pleased by our enrollment numbers to date and we expect top-line data in the fourth quarter of this year.

Speaker 4: On the regulatory front, we had a positive pre-NDA meeting with the FDA this quarter, which reinforced our key assumptions related to our data package and timing, and we continue to target our NDA submission for the third quarter of this year. We expect formal meeting minutes later this month.

Speaker 4: and we will provide more information as appropriate. In the meantime, the organization is well on its way to preparing our submission and getting ready for the potential approval of CAR XT in the second half of 2024.

Speaker 4: Now, turning to our second indication, a Junctive Treatment at schizophrenia and its respective program arise, which is evaluating CARXTY on top of standard of care in adults who experience an inadequate response to their current atypical treatment.

Speaker 4: The Phase 3 program includes a six-week outpatient trial evaluating the efficacy and safety of CARXT, Comparitable Seabo, and an optional 52-week open-label extension trial that evaluates the long-term safety of CARXT as an adjunct therapy. This morning we announced that we now anticipate top-line data from the Arise trial in the second half of 2024.

Speaker 4: in Bulgaria and Serbia on top of the existing 30 or so active sites in the United States.

Speaker 4: A few of these XUS sites are recruiting as of last week and more will be activated in the coming weeks and months.

Speaker 4: Second, changes have been made to support site operations, recruitment, and physician and patient experience. This includes enhanced site communications, changes in technology, and marketing support. And third, clinical trial site budgets have been reviewed and adjusted where necessary to reflect additional efforts. Timely completion of this study is important, and we're taking all the necessary steps to ensure execution in a timely manner without compromising quality.

Speaker 4: Now, briefly on our ADEP program, which is evaluating CAR XT in psychosis and Alzheimer's disease, for which there is no FDA-approved treatment.

Speaker 4: trials underway and actively enrolling patients and we expect to have a depth to the 12-week acute efficacy and safety trial and a depth three, the optional open label extension up and running in the second half of the year. Data from these trials are expected in 2025.

Speaker 4: Now on to building our pipeline. In February , we announced an exclusive global in license agreement for TRIP-C-45 inhibitors for the treatment of mood and anxiety disorders, including lead clinical stage candidate, CAR-2618.

Speaker 4: This transaction met all of our criteria. Scientifically, Tripsy45 represents a completely novel, pharmacological approach and mood and anxiety with validation in pre-clinical and early clinical models. Strategically, it expands and diversifies our psychiatry portfolio.

Speaker 4: And lastly, it could be an important source of value for the company in the future.

Speaker 4: We look forward to sharing more details on CAR 2618's plan development program later this year. Turning to our operational priorities for this year, we've made excellent progress building our capabilities in teams. Our 2023 staffing plan includes over 100 new hires. We've already successfully filled 45 of those roles.

Speaker 4: including our Chief Commercial Officer, Wilking, who brings a great deal of launch experience in neuroscience, including schizophrenia and Alzheimer's. We've expanded teams such as our medical affairs and market access groups to support our pre-commercialization activities with the medical community and payers among others.

Speaker 4: We plan to engage in scientific exchange at over 30 different national and regional medical meetings and in parallel, develop and publish several key posters, publications, and review articles.

Speaker 4: about our cash runway for the years ahead.

Speaker 5: Thank you, Bill, and good morning, everyone. I'll begin with an overview of our current cash position and financial results for the first quarter of 2023, followed by our financial outlook for the remainder of 2023 and 2024.

Speaker 5: In March, we completed a follow-on public offering that resulted in net proceeds of $436.7 million, increasing our cash position from 1.1 billion at the end of 2022 to 1.5 billion as of March 31st, 2023.

Speaker 5: We expect the current cash to fund our operations through the end of 2026. Importantly, our cash runway extends at least two years after our expected commercial launch of Carrots T and schizophrenia in the second half of 2024, if approved by the FDA.

Speaker 5: Total operating expenses for the first quarter were $109.7 million, compared to $58.6 million the year prior.

Speaker 5: Operating expenses were slightly offset by $11.3 million in interest income and less than $1 million in licensing revenue associated with sales of clinical drug supply to XI labs.

Speaker 5: R&D expense for the first quarter was $85.5 million, and increased a 41.7 million versus the prior year period, which was primarily driven by expenses related to the emergent, a rise and adept clinical programs. NDA supporting activities.

Speaker 5: The $15 million upfront license payment for Goldfinch Bios Tripsie 4-5 channel candidate.

Speaker 5: as well as increased employee headcounts and higher stock base compensation expense. DNA for the first quarter was 24.3 million, an increase of 9.5 million versus the prior year period, which was primarily driven by an increase in commercial prep activities, professional fees,

Speaker 5: employee headcount, and again, higher base stock compensation expense. We expect our R&D expense to remain relatively consistent on a quarterly basis for the remainder of the year and for SG&A expense to increase modestly quarter over quarter as we continue to build commercial capabilities.

Speaker 5: and corporate infrastructure. We are reiterating our previous financial guidance for the full year 2023 with overall operating expenses ranging between $430 and $470 million, which includes up to $70 million in non-cash stock-based compensation expense.

Speaker 5: Of this, we anticipate R&D expenses to range between 310 million and 340 million, which includes up to 35 million in non-cash stock-based compensation, and we expect S-GNA expenses to range between 120 and 130 million.

Speaker 5: which also includes up to $35 million in non-cash stock base compensation.

Speaker 5: We expect total op-EX for 2024 to be similar to 2023 with a decrease in R&D and a corresponding increase in S-GNA.

Speaker 5: With that I'll hand it back to Bill.

Speaker 5: with that I'll hand it back to Bill. Thanks, Troy.

Speaker 4: As I mentioned earlier, I'm encouraged by the progress we've made, a really strong start to the year from development, regulatory, and operational perspectives.

Speaker 4: We're well positioned and well capitalized with the management team and in-house expertise needed to execute against our three strategic priorities. And I look forward to providing future updates across our programs and business. And with that, I'll turn it over to the operator to begin Q&A.

Speaker 2: At this time, I would like to remind everyone in order to ask a question, press star and the number one on your telephone keypad. Please limit your question to one initial question. We'll pause for just a moment to compile the Q&A roster. The Q&A roster.

Speaker 2: And your first question will come from Salveen Richard, your line is open.

Speaker 3: I think for taking your question and congrats on the progress, this is Tommy on for Selvene. Just one on the pre-NDA meeting here. What came out of this meeting and what are the remaining gaining items here? And also could you help frame expectations into the cognition data? Thank you.

Speaker 4: Yeah, thanks for the question. I'll answer it and ask Andrew Miller to expand on it. As it relates to the pre-NDA meeting, and we've communicated this in the past, it was largely procedural. We wanted to confirm, reinforce key assumptions related to

Speaker 4: Our data submission and timing, our statistical analysis plan, among several other things, it was very positive and productive meeting as we said in the opening remarks, we're on practice, mid, our NDA in the third quarter of 2023. So they were really...

Speaker 4: Those surprises at all in the meeting. That being said, we expect to have a formal meeting minute at the end of the month. As it relates to the cognition data,

Speaker 4: We'll share that information at the AACP meeting in May. It was a pooled analysis of Mergent 2 and 3. Look, the unmet need here is high. Cognition is essential feature of schizophrenia. It's...

Speaker 4: There's no FDA approved treatment right now, and it's one of the major predictors of long-term functional outcomes. We're encouraged by what we see. When I look at the data, I think it leads me to want to do additional clinical development work, and that'll be something that comes into focus over the next several months in quarters. But that I believe it was a positive.

Speaker 6: And maybe just quickly add to that. I mean, I think from the cognition perspective, obviously, this is an exploratory endpoint as part of our study. But I think we are encouraged when you look across the arc of all information that's available to us to date around the no-bling and carcass teeth from the biological rationale to the preclinical data to the data from historical studies.

Speaker 2: with an only an Alzheimer's schizophrenia. The studies with CARXT is part of the immersion program, so we look forward to presenting more details about here at Canada Months. Great. Our next question comes from Tal Mattel. Your line is open. Thank you.

Speaker 5: Thanks. That was Paul Matisse here. That was an interesting pronunciation. Hey, thanks again for taking the questions and congrats on all the progress. I had one question on your FDA meeting. Did it come up at all as to whether your approach to submitting the ABPM data in some sort of safety update during the review?

Speaker 5: Did you get any confirmation that that's an acceptable strategy with the FDA? And then I guess just how do you guys plan on articulating those data and sharing that result? Thank you. Thank you.

Speaker 6: Thanks, folks. Bill Oh and Andrew answer the question regarding ABPM. For thanks Bill. Now of course, obviously, as part of the pre-India meeting, we really discussed the overall development program and all of our studies across a margin of variety of phase one studies, QDC, hematic arena, and parametri as well as specifically the APBM study. You know, we do think based on that discussion, it's a reasonable strategy to present the ABPM data at the day 120 safety update, which would be our current plan.

Speaker 6: really I think that's consistent with precedent and consistent with the idea that presenting additional data from a phase one safety trial such as the APM study would be a reasonable plan. We have clinical vital sign assessment as part of our all of our clinical studies. So this is really just an enhancement of that data set, a complement to that data set.

Speaker 6: And we do think that's a reasonable strategy to provide alongside of all the other safety data that will come at that day, 1, 20 safety update.

Speaker 5: Thank you. Any comment on the I'm just how you guys will articulate those data to street.

Speaker 6: I think we haven't gotten into specifics at that at this point. Obviously typically with the top line data release would be some sort of communication of the primary endpoint or potentially key secondary endpoint. So we'll keep thinking about that, but obviously we want to get the information out in a timely manner once we receive it.

Speaker 6: I think we haven't gotten into specifics at that at this point. Obviously, typically with the top line data, release would be some sort of communication of the primary endpoint or potentially key secondary endpoint. So we'll keep thinking about that, but obviously we want to get the information out in a timely manner once we receive it. Thanks, Matt. Thanks so much.

Speaker 2: And your next question comes from Jessica Faye. Your line is open. This is Nick on suggest. Thanks for taking our questions.

Speaker 7: kind of mentioned this, but on the NDA filing, can you just kind of recast some of the activities that remain ahead of the potential filing time? And in particular, I know you mentioned this associated with E3D4, but in terms of the exposure data, like, or you want to track to recruit adequate amount of that data ahead of it? Thanks. Yeah, absolutely with respect to you, the long-term safety studies.

Speaker 6: That shifts really from anything about recruitment and retention to, you know, cleaning that data, analyzing that data, writing it all up for submission. Havas is a tremendous amount of information that goes into that submission. And our projections certainly do include our current status, where we are from a recruitment perspective.

Speaker 2: Yeah, I think we're in a position where that's not the limiting factor as we go forward. And our next question will come from Jason Jaravi. Your line is open.

Speaker 5: Hey guys, it's Jason. Thanks for taking the the question. One for Bill.

Speaker 5: Just curious how you're thinking about CAR XT indication stacking beyond where the products currently in the clinic. This is common playbook for CNS drugs and I'm curious for the interplay with the IRA drug pricing legislation and does that in any way make you think differently about future development programs and perhaps maybe advancing them through your...

Speaker 4: I do think you have to think about life cycle management and the portfolio holistically, and of course the IRA is a component of it. I will just say up front, I think it's difficult to hide from the IRA if you're running a biopharma company of any size. As it relates to Car XT, look, we have potentially three indications on the drug, which will be.

Speaker 4: Clearly the primary drivers of value, that includes of course schizophrenia and a chunk of treatment indication which I think could be.

Speaker 4: could serve as a fundamental change in the approach of schizophrenia and an important value driver. I mean, we have Alzheimer's psychosis. There are other indications in psychosis, broadly speaking, that we're examining and we continue to analyze. Of course, you have Parkinson's.

Speaker 4: There's autism, there's aspects of bipolar Mania that also could be interesting and will will continue to annual and Analyze those opportunities and they should come into focus as we get closer to the end of the year early 2024. I think we certainly have an indication set right now that could result in broad adoption in the psychiatry community

Speaker 4: As it relates to how we think about it in the context of IRA, Kroona does not have a great deal of concentration risk as it relates to the IRA. The big reason is that roughly 75% of the utilization of CARX T will be outside of Medicare, Part D. And if you can consider the fact that...

Speaker 4: Even in the Medicare Part D channel, there's an LIS component, which also would.

Speaker 4: be an advantage for car extinct. And while an indication for Alzheimer's psychosis could shift us more into it, I just don't think you can shy away from it. As we develop the portfolio...

Speaker 4: We do think about diversification not just by therapeutic area or sources of growth and revenue, but also just in terms of our payermix. And I think you know with a compound like our trip C45 while it's still early.

Speaker 4: We'll have more information about that at the end of the year, early 2024. That would actually move you into depression and anxiety where there isn't as much impact from the IRI. So we just take all these factors into consideration, think carefully, strategically about the opportunities, obviously scientifically, and then of course financially where is the best return on our investment.

Speaker 4: that at the end of the year, early 2024, that would actually move you into depression and anxiety where there isn't as much impact from the I.R.I. So we just take all these factors into consideration, think carefully, strategically about the opportunities, obviously scientifically, and then of course financially where is the best return on our investment. Thanks Jason.

Speaker 2: Yep, thanks. And our next question comes from Nina Britton. Your line is open.

Speaker 8: Thanks for taking my question. Just curious on the going back to the cognitive data that you're going to present in the next couple of weeks here, can you just walk us through what you would consider to be encouraging and how it's going to impact the data that you're going to present?

Speaker 8: your plan for indication expansion. I know you did just talk a little bit about additional indications, but any additional details on formal plans to conduct the NCIAF would be great. Thanks. Andrew, can we take that question? Sure, maybe to just take the last part first.

Speaker 6: I think it'd be premature at this moment to sort of comment on exactly what the plan is going to be. I think as Bill mentioned, there's obviously a lot of different potential indications for CARIS-C. In some of them we have existing initial data, in some of them we have mechanistic rationale, or other things. So we're putting all of that together in the mix. Certainly the cognitive data as we see that from emergent two and three will play a part in that.

Speaker 6: with respect to cognition and schizophrenia. In terms of the data itself, I think what you should expect to see from us is the same type of analyses that we completed around the emergent one study. Again, the study design from a dose and randomization, treatment duration is all the same in emergent one, two, and three.

Speaker 6: The studies were not recruited specifically from a basis of cognitive impairment. They were recruited on the basis of a total of pants, various assessments focused on positive symptoms. So, one of the things that we do with the merger 1, and you'll see this again with the merger 2 and 3, it's what specifically at the subset of patients.

Speaker 6: who are one center of vision below the mean of age, mass control controls with respect to cognitive performance on the battery that we use in the study. So the idea being you would want to look specifically at patients that would be target group to enroll if you were looking specifically at cognition. So.

Speaker 6: We're encouraged by the results across those groups and again we look forward to being able to share more details here in the near future. The one thing I would add if you think about the near term when we introduce Car XT

Speaker 4: The psychiatry community is what we know is that carcass teeth does not appear to impair cognition.

Speaker 4: the psychiatry community is what we know is that CARXT does not appear to impair cognition and in any survey of psychiatrists.

Speaker 4: or patients, one thing that you hear even more commonly or frequently, then impact on weight gain or EPS, which are problematic side effects of the current D2 and TagonS is cognitive impairment, which can really impact functional outcomes. So...

Speaker 4: At minimum, we have something that's not impacting condition. I think the pro-cognitive effects, whether you look at things pre-clinically or clinically, there's certainly a signal there. But for the launch, the real-world experience of this is also very important. I think it should be positive. Got it. That's super helpful. Thanks.

Speaker 2: and you made some comments about changes you're making. And I imagine the disruption in each and Europe is still challenging, but are there other structural dynamics that are posing headwind on study recruitment? And then one quick follow up, what's your appetite for securing a PRV for youth on the correct P-File? Thank you. Yeah, I'll start with the second question and probably turn the first question over to.

Speaker 4: actually shortens the review period. We'll learn about that 60 days after the submission and we'll continue to evaluate a PRV and make a decision at the appropriate time. But clearly speed to market here is important. I think that's obvious and we'll exhaust every possibility to do that.

Speaker 6: Yeah, with respect to recruitment, specifically around studies in patients living with schizophrenia, I don't think there's a lot of specific factors to that at this moment. Obviously, the more studies that are ongoing from a competitive perspective.

Speaker 6: you're competing in large part with the same size for the same patient, so that can't be a factor that Evan flows over time. But I don't think we would point out anything specific to patients with the schizophrenia at this point. There's obviously a myriad of factors that go into the execution of any clinical study.

Speaker 6: from sites to specific protocols, all sorts of different dynamics that we manage frankly across every clinical study that we run. We've been able to, I think, very successfully execute the emergent program, which includes both inpatient and outpatient studies in emergent four and five that have recruited well, as noted by the support they'll provide for NDA submission here next quarter.

Speaker 6: So I think we would point out anything at this point specific to get from it.

Speaker 9: Thanks, Liz. Your next question comes from Jay Olsen. Your line is open.

Speaker 4: Congrats on all the progress, and thank you for the update. Could you talk about the adjunctive therapy setting for schizophrenia and how the novel mechanism of CAR XT could be synergistic with dopamine-based atypicals and also the unmet need and size of the commercial opportunity for adjunctive therapy as compared to monotherapy as specific?

Speaker 4: or example of the unmet need here.

Speaker 4: for example, of the unmet deed here. In terms of psychiatry,

Speaker 4: It's completely intuitive to a psychiatrist to use two compounds that mechanistically are different and probably complementary, which is why we're doing the adjunctive study. If you look at adjunctive treatment options in other areas, for example, in depression and Alzheimer's.

Speaker 4: they can garner up to a third or more of a market. And so if you really were to put sort of numbers behind this the adjunctive treatment approach in schizophrenia could be a substantial opportunity. Physicians, patients, and then of course, commercially, and then filming in two quarters

Speaker 4: I do believe early on psychiatrists who are accustomed to polypharmacy approaches are going to use CarX-T on top of a D2 antagonist.

Speaker 4: if they're using two D2 antagonists that are pharmacologically more similar than different, I think it's pretty clear here that the opportunity for the muscarinic class, we're going to lead the class, is pretty significant. Andrew, do you want to add? Yeah, just add quickly just from a scientific perspective, obviously the pharmacology, the primary pharmacology is...

Speaker 6: subtherapeutic dose of zanomelanine and use that in combination with the subtherapeutic dose of sort of representative atypical antipsychotics, namely raspiridone and aripiprazole, and see true synergistic benefits of preclinical models of psychosis. So obviously we want to generate the human clinical trial data in ARISE to support that.

Speaker 6: But I think at first blush, you know, scientifically, it's intuitive. And I think we have some nice data, albeit preclinical at this stage, to support that idea. Super helpful. Thank you.

Speaker 7: Your next question comes from David Anselm. Your line is open. Thanks. So, just a couple. Can you talk about when we might see clinical work commence in mania, how you're thinking about that, how big of a priority that is?

Speaker 10: And then secondly, as you think about life cycle management, what's a bigger priority along acting injectable or getting to a once daily oral formulation? Thank you.

Speaker 4: Yeah, David, thanks. This is Bill. I'll answer the question. As it relates to mania, it's part of a larger analysis of additional indications beyond the three that we're already developing. I know that mood and anxiety market fairly well.

Speaker 4: There's certainly a psychosis component to mania and it's something that we're looking at, you know, very seriously. And I think it'll come into focus, as I mentioned earlier, at the end of the year, early 2024. We have a lot on our plate right now. We can do more than one thing at a time, but...

Speaker 4: Our single focus right now is ensuring that the NDA is submitted on time and it's of the highest quality. And additional indications will be sort of the next step in that. We're certainly intellectually well down the path, but as it relates to making an operational decision, we have a little bit more work to do in thinking about those types of investments. You know, as it relates to the NDA, we have a lot of work to do.

Speaker 4: QD dosing or the LAI, I don't know if it's an either or. I think if there's an opportunity to improve the dosing of any product, you take advantage of it. Physicians want flexibility as it relates to dosing regimens and formulations. I don't think I will say, and I'll just turn this over to Andrew in a minute, I don't see BID as an impediment.

Speaker 4: I also don't see dose type titration as anything else but commonplace to psychiatrists.

Speaker 4: And, you know, what psychiatrists want right now is not necessarily a new dosing regimen. They want a better product with efficacy at the upper end of the range and a product with less weight gain, EPS, and sedation. And we, of course, do the emergent program of those who are car XT and 1500 patients and have free, very...

Speaker 4: convincing, you know, efficacy and safety trials. And if we have an opportunity to get to a different dosing regimen, we're a different formulation, we'll do it. But, you know, added a gate, as I think about creating value with CAR XT, I think the data set that we have here is pretty impressive. And I think we've also set a fairly high bar. Andrew, do you want to talk a little bit more about LAI? Yes, sure. Can speak to that a little bit.

Speaker 6: Obviously, that continues to be a small portion, but a growing portion of the overall prescription market in the US as well as outside of the US in schizophrenia. So it is something that is of interest to us. Obviously, from a timing perspective.

Speaker 6: The LAI is really something that you would envision being used as a switch from the oral medicine. And so, you know, from our perspective, obviously the focus out of the gate is really established. The oral product for CAR XT is something that can hopefully be very helpful to patients from both an efficacy and overall safety and tolerability perspective.

Speaker 6: we intend to appreciate it to critical about it.

Speaker 11: Thank you.

Speaker 11: Thank you.

Speaker 6: Your next question comes from Yatton Senjai. Here's line is open. There's one question for me. Could you just talk about the size and scope of the ambulatory study? I don't see it on knifalcries.gov and maybe articulate for us. What are the key risks to that study? Thanks. Here can speak to that a little bit as you noted.

Speaker 6: The ABPM study is a phase one study. It doesn't require clinical trial stuff up listing. We have spoken previously about some high-level details. I can recap some of that here. The study has a targeting enrollment of 103 patients. It's an eight-week study. It is one dose arm of CARSTE. There's no placebo group.

Speaker 6: the dosing of CARSTE is identical to what we use in emerging one, two, and three. So if flexible, those, there's a two-day titration and then 100 slash 20 and 125 slash 30 being that dose levels that patients would continue on after the first week, respectively. The primary endpoint is the statistical hypothesis that CARSTE is less than a three-millimeter.

Speaker 6: systolic blood pressure change from baseline to endpoint. That's consistent with how ambulatory studies are conducted across really all indications per FDA guidance. Again, if you look at the data we've put out already for emergent one and two, we'll be able to put out additional blood pressure vital site data for more information.

Speaker 6: if we got the same thing in the ambulatory study, we would be successful on that primary endpoint. So that's kind of what gives us confidence that given the similarities between emergent one, two, and three in the ambulatory study and the data we have so far, that's what we really look at this as just a confirmation of what we've already seen, but doing that in a more definitive way, the same way that you would say, do a dedicated thorough Q&A.

Speaker 9: TCE study, which is a typical drug development program, even though you already have ECG assessment across your entire clinical program, so we put it really in that same type of bucket. In your next question comes from Miles Mentor, your line is open.

Speaker 12: Hey, thanks for taking the question. Just got a few inbound this morning on what the definition of an encouraging pre-NDA meeting is. Does it pretty much just mean the path you've laid out to NDA is valid? You're just waiting on safety data? Or are there other things that the regulators recommended that you complete before the filing?

Speaker 12: And also in the pre-NDA meeting, did you discuss the FDA's wants for outpatient data as well as inpatient, just knowing the bulk of your clinical package has been generated in the inpatient setting? Great, thanks for the question. I'll just define positive as...

Speaker 4: The meeting simply reinforced the key assumptions that we had for preparing the NDA and then for submitting it in the third quarter of 2023. And there's no reading between the lines. We of course need to...

Speaker 6: get the meeting minutes at roughly the end of this month, but the meeting is what we expected it would be and that was reassuring to me as we have an entire team of people preparing the submission. Andrew? Yeah, I think it really spoke to, you know, the preparation plan that we had already put forward and I think it was really a confirmation of that.

Speaker 6: So I think we showed good about that from a regulatory perspective.

Speaker 12: Could you repeat the second question? Yeah, just if you asked the question of the regulators specifically, whether they wanted to see outpatient data as well as inpatient data, just knowing the majority of your clinical package is in the inpatient setting.

Speaker 6: Yeah, happy to speak to that. So obviously, the Immersion Program is a mix of both inpatient and outpatient studies. Importantly, 52-week safety studies in Immersion 4 and 5, which are completely outpatient. Immersion 1, 2, and 3, the five-week placebo-controlled acute psychosis studies are inpatient. That's not reflective of anything.

unique to CARXT. It's reflected the fact that patients with acute psychosis and a portion of them are randomized received placebo. So that is the standard practice for acute psychosis studies. If you look back over the previous 20 to 30 years, that inpatient placebo control paradigm is the only type of study that's been used to support registration of the current atypical medicine.

approved for the last 20 years.

Great, thanks for the clarification. Your next question comes from Jason Butler. Your line is open. führt trujiuiu. Ð?ÈÈÈÈÈÈÈ?ÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈÈ?

Hi, thanks for taking the questions. Just a real quick follow-up on the blood pressure study. Is there any limit on or what is the limit on patient ages being enrolled into the study? And then can you just talk a little bit about your payer engagement and how payers are thinking about a novel mechanism being introduced into schizophrenia.

in terms of, for example, prior authorizations and in the context of monotherapy versus agent therapy. Thanks.

in terms of, for example, prior authorizations and in the context of monotherapy versus adjunct therapy. Thanks. The first question.

Go ahead. I thought I could hear one first. Okay. Well, we'll start with a pair of ones.

So obviously we are building our market access account team and they have started some interactions.

with payers in collaboration with our medical affairs team. I would say that the initial reaction is a positive one. They appreciate the novelty of the mechanism because it's been so long since there has been a novelty in this class and they also put it in the context of the overall clinical data which would be currently on the increased risk90% of the incidence of the network in which we have had Recentlyanks either

We'll be able to share with them in more detail later this year as per the PIE law. That allows us to have a more detailed discussion pre-launch to enable them to make earlier decisions about access and coverage. And so I think the initial signs are encouraging, but it will be put in the context of the total clinical profile, et cetera. PIE authorization steps are pretty standard in this market for new psychiatric drugs, but there is some encouraging news, particularly at the state level.

where state legislators are moving to potentially reduce some of those hurdles through mandating quicker review times or by reducing utilization management techniques such as PAs and step edits. And so we'll monitor that, but there seems to be a recognition that we as a society need to do more for patients with serious mental illness and that I think will play out in terms of our launch planning and how we engage.

both government and commercial partners. And I would add that there's still a balanced conversation or dialogue between the companies and the payers in the area of mental health, which I think is a real positive. And the other point I would make is that if you look at the formulary coverage rates for the currently available branded.

atypical antipsychotics, they're quite high. You're looking at 70 to 80 percent of formularies covering these products and the difference between what they're dealing with and what we'll deal with is we have something that is actually pharmacologically different. And so if coverage for a D2 antagonist...

can be secured, which is a one of 12 market, I think there's a strong likelihood that we're going to be able to achieve access for physicians and patients at a price that does not create budget problems for the payers and at the same time rewards corona for its innovation. I think that balance we can achieve and that's our aim. Yeah, just quickly with respect to the EPM study, that study enrolled.

that it is also representative of the age group that we enrolled across the emergent program that of course allowed patients age 18 to up to 65. When you look at the emergent one, two and three studies, they all have an average age of between 42 to 47 with a standard deviation of about 10. And so the vast majority of patients fit into that 30 to 60 age range.

If a relatively small number at the upper end and lower end is at that rate. So the ADPM study, we would expect to have a very similar age distribution to 1, 2, and 3. Thanks for the question.

Thank you your next question comes from Brian Abrams. Your line is open. Hi, this is Joe and for Brian , thanks for taking our question. So we talked to several positions and they were all excited about the potential of car. To have differentiation of the cognition versus atypicals. So just wondering if there are ways to highlight

CarX-D's potential cognitive advantages over atypicals beyond the conference presentations. Can you potentially do additional analyses or phase 3 work or are there smaller studies that you can do and timelines for that relative to initial launch? Thank you.

Yeah, listen, I think it's a really important question. I think the answer to your question in short is yes. There are additional analyses that we will do. There's also additional clinical work that we can do. And that could be, as you said, for publication purposes. It could be investigator initiated trial. And then, of course, you have registration work.

This is important and the medical community is interested in exploring this and so are we. I think Andrew can make a few more comments about it. Yeah, I mean, I think, you know, obviously probably did across immersion. One, two, and three, we have the opportunity to do similar data collection analysis across ongoing and future studies as well. So I think they're.

can use to be additional sources of information or a cognition that could be available across the next year or two. And it builds that, I think the idea of pulling together the entire story, looking at all of the data, trying to sitting down and saying, well, we'll be the best way to continue to pursue.

the pro-cognitive effects of CARX-T and demonstrate that in schizophrenia or other populations. Again, I think this most recent piece of data will be able to talk more about the details here at the end of the month with respect to emergence two and three, but fits very nicely into that story. It really reinforces the idea that

You know again, zonulin was originally developed as an M1 agonist for cognition. That was the original hypothesis. Obviously, we've come to understand a lot about the antipsychotic effects of a dual M1 and M4 agonist and want to continue to pursue the potential broad spectrum of benefits that we think it could have.

developed as an M1 agonist or cognition. That was the original hypothesis. Obviously, we've come to understand a lot about the anti-psychotic effects of a DUOM-1 and four agonists. We want to continue to pursue the central broad spectrum of benefits that we think it has. Thanks for the question.

And your final question will come from Mark Goodman. Your line is open. This is Rudy on the line for Mark. Thanks for taking our question. Regarding the Alzheimer's set cost-ass indication for a DEB1 study, can you maybe remind us the rationale for the randomized withdrawal time design? Like, how do we select the 12-week and 26-week duration for the two parts, and why do we select MPCI as the primary applying instead of CMAI? Yeah, I can speak to that quickly. And maybe the last part first.

psychosis as opposed to agitation, aggression, which are somewhat related, but can...

be, I'd say, treated or potentially treated with different types of medicines taking advantage of their sedative effects. So that's sort of the rationale for that. With respect to the randomized withdrawal design in emergent one, or sorry, ADEPT one, and then ADEPT two being a parallel group double-blind placebo control setting more similar to emergent one, two, and three.

We think the two of those provide a really nice complement to each other. The randomized withdrawal design is a very common design. It is typically used actually in schizophrenia as a post-market commitment or something that can enable maintenance therapy labeling. It's commonly used in depression. It's been used as a pivotal study to support substantial evidence effectiveness for approval of antidepressant medicines.

It tends to be a study design that is a little more resistant to potential placebo effects. Obviously, it does require a longer protocol. 12 weeks of open-label treatment, we think that's more than sufficient amount of time to have a clinical response on CAR XT given the results of emergent 1, 2, and 3, as well as the original Lilliol hammer study where you saw substantial benefits to work such as disappearing as early as the first couple weeks of treatment.

And then 26-week randomized withdrawal period, that's really about allowing a long enough period of time to have substantial number of relapse events on the CPU.

And when you look out there at the literature, we believe 26 weeks is more than sufficient to see that. And so it's really those relapse events that is the basis of the primary endpoint analysis. So that's just a little bit of additional background on kind of the fundamental construct of those studies and the timeframes that we chose. So appreciate that question.

Cut it.

And we will now turn it back over to Bill Murray, President and CEO , for final remarks.

I just want to thank everyone for joining the call and we look forward to giving you updates in the future on our progress. Thank you very much. And this concludes today's conference call. You may now disconnect.