Q1 2023 Better Therapeutics Inc Earnings Call
Speaker 1: You
Speaker 2: Good morning and thank you for standing by. Welcome to the Better Therapeutics First Quarter 2023 Conference Call.
Speaker 2: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during these sessions, you will need to press star-1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star-1-1 again.
Speaker 2: Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mark Heinen, Chief Financial Officer. Please go ahead.
Speaker 3: Thank you, operator. Good morning, everyone, and welcome to the Better Therapeutics conference call.
Speaker 3: Our press release was issued this morning and can be found in the investor's section of our corporate website, bettertx.com. Joining me on the call today is Frank Carboh, our president and chief executive officer, Dr. Mark Berman, our chief medical officer, and Diane Gomez, and our chief medical officer.
Speaker 3: During today's call, we will provide a business update and a financial overview of the first quarter of 2023. A Q&A session will follow on prepared remarks.
Speaker 3: Before we begin, I'd like to remind everyone that any statements we make or information presented on this call that are not historical facts.
Speaker 3: are forward-looking statements that are based on our current beliefs, plans, and expectations.
Speaker 3: and are made pursuant to the safe hardware provisions of the Private Securities Litigation Reform Act of 1995.
Speaker 3: actual event and results made different materially from those expressed or implied by any forward looking statements.
Speaker 3: With that, I'll pass the call over to Frank Carma. Frank?
Speaker 4: Thank you Mark and good morning everyone. Thanks for joining us on the call today. We successfully navigated several challenges in Q1 and with that we believe laid the foundation for a long term success.
Speaker 4: We also advanced our interactions with the FDA and are now within the final 90 days of our review.
Speaker 4: And with that in mind, we've continued to advance our preparations for the anticipated commercial launch of BT-001 in type 2 diabetes.
Speaker 4: including discussions with potential launch partners. Before I recap our accomplishments in the first quarter, I want to acknowledge the news of path therapeutics filing for bankruptcy.
Speaker 4: This is obviously a devastating outcome for TARE and a setback for prescription digital therapeutics or PDTs.
Speaker 4: As one of the true pioneers in the industry, pair pace away for their investment and innovation and their contributions to creating PDTs as a new category. However, the difficulties likely raised doubts around the commercial viability of PDTs.
Speaker 4: It is therefore more important than ever to perhaps highlight that the dynamics across the different PTT players are, in many cases, quite different.
Speaker 4: And I'll take this opportunity to underscore key points of differentiation for better therapeutics.
Speaker 4: which we believe will drive our ability to gain traction with payers, providers, and patients over the long term.
Speaker 4: The first and perhaps most important point of differentiation is our therapeutic area focus. Our current development candidates are intended to treat cardiometabolic diseases, including type 2 diabetes, hypertension, hypolipidemia, non-alcoholic fatty liver disease or naffledi,
Speaker 4: non-alcoholic data have a tightness or a nash and chronic kidney disease. We deliberately chose cardiometabolic diseases as our initial target because they A, she get the same lifestyle behaviors as a common root cause.
Speaker 4: b. Rank among the most prevalent and costly chronic diseases that are largely reversible and preventable, presenting opportunities for transformative impact.
Speaker 4: and C, represent areas of significant unmet clinical need because currently available drugs are often expensive and predominantly treat symptoms, typically resulting in disease progression and more costly healthcare interventions over time.
Speaker 4: Second is the treatment landscape.
Speaker 4: Our focus on cardiometabolic diseases and in particular diabetes.
Speaker 4: offers access to very large patient populations with high cost of care burdens, driving an urgency to act on the side of health systems and payers.
Speaker 4: And talking with payers for more than a year now, and also validated by numerous third-party research studies.
Speaker 4: Diabetes is a top priority as disease prevalence continues to grow and costs are escalating.
Speaker 4: Meanwhile, we're not seeing significant improvements in patient outcomes.
Speaker 4: Furthermore, current diabetes treatment guidelines already call for behavior change as the foundation of treatment.
Speaker 4: even stating in recent updates that digital health interventions may be useful as an adjunct to standard care to improve diabetes management.
Speaker 4: We believe this will help with provider adoption as we don't need to change ideas about treatment or the way that it is delivered.
Speaker 4: Moreover, most drugs are indicated to be used in conjunction with behavior change.
Speaker 4: And we believe this allows for a more natural and seamless introduction and further adoption of PDTs in the diabetes indication.
Speaker 4: Third is the significance of the clinical endpoint used in our pivotal trial.
Speaker 4: Not only is the reduction of hemoglobin A1c a universally accepted clinical endpoint for type 2 diabetes by providers and payers alike,
Speaker 4: It is also widely accepted as a proxy for future events in diabetic patients.
Speaker 4: As you know, the same endpoint is also used in drug trials. At our exploratory endpoints, collected data across a broad range of additional health outcome measures, providing further clinical evidence for the health impact of our PDT.
Speaker 4: The initial health economic data shows promising potential cost offsets derived from the utilization of our therapy.
Speaker 4: And finally, our PDT platform, as currently developed, is designed to have broad utility and enable rapid expansion across multiple related disease states.
Speaker 4: This potential for rapid expansion stems from the fact that the underlying root cause behaviors are largely the same for most cardiovascular conditions.
Speaker 4: And hence, the behavioral health interventions delivered by our platform to treat these conditions are also largely the same. This is fundamentally different from a traditional pharmaceutical drug approach where the products to treat different diseases are usually distinct.
Speaker 4: with unique mechanisms of action. I will now recap our accomplishments in the first quarter of this year.
Speaker 4: We took a number of actions in Q1 to enhance our financial position and ensure the long-term success of the company.
Speaker 4: This included, among others, a reduction in force, coupled with other cost-saving measures
Speaker 4: as well as a 6.5 million private placement in April .
Speaker 4: Combined, these measures were targeted to extend our cash runway towards the end of September , allowing us to potentially reach several important milestones that we expect will further substantially enhance our financial position.
Speaker 4: These include potential FDA authorization for BT-ZZR1.
Speaker 4: as well as the potential BD partnership and or a royalty monetization transaction.
Speaker 4: Throughout the first quarter of this year, we had multiple rounds of interactions with the FDA regarding our denover submission.
Speaker 4: We highlighted on our last earnings call the request for additional information received as a typical part of the de novo process.
Speaker 4: and guide it that we expect it to respond to the FDA by mid-April.
Speaker 4: We have a report that we submitted our response on April 17th and the agency confirmed the review is progressing.
Speaker 4: We believe we are on track to receive the FDA's decision by the middle of this year.
Speaker 4: We also made substantial progress in our preparations for the potential commercialization of BT001.
Speaker 4: Specifically, in the last quarter, we have filled key leadership positions, including the hiring of a Head of Marketing and Head of Medical Affairs, both bringing considerable cardiometabolic expertise to the team.
Speaker 4: We signed a contract for hub and distribution services and building on the growing body of evidence, we had our abstract from the Cardio-Metabolic Health Congress published in Postgraduate Medicine highlighting our primary endpoint results.
Speaker 4: And during the Academy of Managed Care Pharmacy or AMCP meeting at the end of March, with good interactions with payers and have commenced formal pre-authorization information exchange meetings. Despite the reduction in force and resulting slowdown of enrollment in our real-world evidence study,
Speaker 4: you have the first data set in Q4 of this year.
Speaker 4: Lastly, we expect the submission to the FDA for a breakthrough device designation for the treatment of liver disease to be completed in Q3 of this year. Related, we recently submitted an abstract describing our LYFT-VITA study results for a presentation at the European Association for the Study of the Liver.
Speaker 4: what ESIL's annual Congress. ESIL is a leading professional society and their clinical practice guidelines inform the standard of care for Nathalie and Nash around the world.
Speaker 4: Our abstract was accepted for poster presentation at the event in June and Vienna in Dr. Alkoury, the PI for the study will be presenting the poster.
Speaker 4: Over the past few months we made in part difficult.
Speaker 4: but necessary changes to our business. As a result, I believe we are extremely capital efficient, while maintaining the ability to advance with laser focus the potential commercialization of BT001, which we anticipate commencing within a few months of receiving a decision from the FDA.
Speaker 4: Diane will now share more detail on our progress. Diane.
Speaker 5: Our market access work continues and we're pleased to have consolidated our payer messaging, payer research and health economic modeling, and value-based agreement workstreams to complete our pre-authorization information exchange, or PI, value story that we have now begun to use in our first payer meetings, as Frank mentioned. From panel discussions and conversations with payers at the recent AMCP meeting, I would like to share the following key takeaways. One, payers are beginning to differentiate PDPs from other digital therapeutics.
Speaker 5: In other words, those that are FDA authorized versus those that are not.
Speaker 5: Two, payers see the potential for Medicare coverage through the Access to Prescription Digital Therapeutics Act of 2023 bill as they signal to get ready to cover PDT.
Speaker 5: reviewing prescription, digital, therapeutic.
Speaker 5: And since the AMCP, we have had several meetings confirmed with payers on our targeted list and are encouraged by the early discussions as we progress towards potential FDA authorization.
Speaker 5: Veterans Affairs or the VA are an important part of our targeted launch strategy. As a matter of fact, one VA site is currently enrolling patients into our real-world evidence program. We've recently completed a research study to understand more about the patient population and the engagement model.
Speaker 5: The VA is organized into 18 Veterans Integrated Services Networks or VIVINs, and insights from interviews suggest we take a dual strategy approach, navigating with champions at the national level while also driving local VIVIN level advocacy. He summary points from the study are its follows.
Speaker 5: The concept of a cognitive behavioral therapy or CBT-based treatment app for diabetes was well received.
Speaker 5: Pharmacy decision makers responded positively to BT001's strong safety profile when considering adverse events of a behavioral digital therapy in comparison to those associated with pharmacotherapy. They also perceived no negative impact on the pharmacy budget.
Speaker 5: Pharmacy leaders agreed, CT001 could be used at any stage of diabetes progression throughout a patient's journey, but felt it would be used as early as possible.
Speaker 5: They agree that BC-001 would fit in the current VA clinical practice guideline as an individualized by BD's self-management education treatment tailored to a patient's preferences, learning needs and abilities.
Speaker 5: And finally, a decrease in HbA1c and outpatient visits were cited most in terms of measures for a successful diabetes treatment.
Speaker 5: We look forward to taking these valuable insights as we move into meetings with key supporters at the national level while developing our vision-level coverage approach.
Speaker 5: As we refine our plans for market entry, the first phase in our launch will be focused on continuing efforts to stand coverage amongst payers.
Covered lines will be a key metric and determinant of success for us. We anticipate follow-up meetings with payers upon FDA authorization and we will prioritize the hiring of our field payer teams in this effort.
We know it is critical to also have provider demand and clinical champions in the marketplace.
Health system characterization continues as we further refine our list of 50 health systems mapped from patient claims analyses we conducted in the fourth quarter of last year.
Our goal is to identify those health systems that are innovative and more likely to adopt BT001. Indicators include the ability to influence provider networks, engaging in value-based contracts, and focusing on population health studies or initiatives in diabetes or other large population diseases.
As we create awareness and to accelerate our target payers' willingness to review for coverage via PIE meetings, we will prioritize help systems mapped to these payers.
Our plan is to initiate the build-out of field teams in specific geographies where we see positive momentum with payers and providers for a focused regional market entry.
And this represents a thoughtful approach to our ramp up, responsibly and efficiently managing our resources.
With regards to provider engagement, in the first quarter, we also onboarded key opinion leader advisors who are serving to guide our marketing efforts.
Early insights gathered will inform our broader research. I'm delighted to hear from practicing clinical experts who have not had prior exposure to or experience with VTE-001 about their enthusiasm for this novel therapeutic and the clinical data that supports it. This is one of the best books that I have Things!
Advisors value a clinical endpoint that matches what they expect in drug trials, the reduction in HbA1c.
Their occurs by the health economic data will be T001 may offset costs of expensive pharmaceutical therapy.
They recognize the exciting innovation here as a shift to behavioral therapy which may increase the chance for patient change beyond what monitoring alone can do to increase awareness of blood glucose impact from food choice.
And, like medication, it's critical to have BT001 prescribable in their e-prescribing workflow.
Finally, we're pleased to report that we have engaged our distribution partner Phil, leveraging its Phil-Rx patient access platform to improve access to prescriptions, simplify the patient experience with their prescriptions, and manage both pharmacy and medical benefits processes. Phil's technology solution offers the capabilities companies like ours.
Thank you, Diane. I'll begin by discussing our operating expenses for the first quarter of 2023. Research and development expenses were $3.4 million for the quarter ended March 31, 2023, compared to $3.7 million for the same period in 2022. The decrease was primarily due to an increase in capitalized software development costs.
offset by a decrease in clinical study costs. Sales and marketing expenses for the quarter ended March 31, 2023, were $2.1 million compared to $2 million for the same period last year. The increase was primarily related to higher personnel-related costs associated with our commercial readiness activities, partially offset by lower real-world evidence-related expenses.
General and administrative expenses for the quarter ended March 31, 2023, or $3.4 million, compared to $3.6 million for the same period in 2022. The decrease was primarily related to lower business insurance costs.
I'll set somewhat by an increase in personnel and related costs. Interest expense for the quarter ended March 31, 2023 was $400,000 compared to $300,000 for the same period last year.
The increase was primarily the result of an additional $5 million borrowed under the company's secured term loan agreement with Hercules Capital in the second quarter of 2022.
Net loss for the quarter ended March 31, 2023 was 9.4 million compared to 9.7 million for the same period last year.
On a per share basis, net loss was $0.39 compared to $0.41 last year. The decline in loss per share is related to an increase in weighted average shares outstanding and a decline in net loss.
Moving to our balance sheet, cash and cash equivalents were $6.1 million on March 31, 2023, compared to $15.7 million on December 31, 2022.
In April 2023, we completed a private placement for gross proceeds of 6.5 million.
On a pro form of basis, taking into account the private placement, cash and cash for the rents was $12.59 at the end of the first quarter.
Our cash burn in the first quarter included a number of one-time expenses totaling approximately $1.6 million.
including fees related to our recent financing, a principal payment under our Hercules debt facility and others.
However, as a result of the restructuring and other cost savings initiatives,
These initiatives include a mini-deterrable and agreement with Herkley's, which among other things provides for July and principal payments for up to six months. The cost savings initiatives to lay in principal payments and proceeds from private placement are expected to extend our cash rate runway toward the end of Q3, allowing us to potentially meet several key milestones including FDA authorization, a business development transaction, and or a royalty monetization transaction. With that, I'll turn the call back over to Frank for some closing comments. Frank?
These initiatives include a mini-determined agreement with Heartlease, which among other things provides for July and principal payments for up to six months. The cost savings initiatives to lay in principal payments and proceeds from private placement are expected to extend our cash rate runway toward the end of Q3, allowing us to potentially meet several key milestones including FDA authorization, a business development transaction, and or a royalty monetization transaction. With that, I'll turn the call back over to Frank for some closing comments. Frank? Thank you, Mark.
Before we wrap up, I would like to come back to our financing strategy. As I shared previously, we are pursuing a three-tiered strategy which consists of capital market-based financings, business development, and structured non-shared eluded financings such as a royalty monetization transaction. While we have executed on one element of the strategy with our private placement,
We recognize our cash resources need to be further enhanced.
As Mark mentioned, with the actions taken to extend our cash runway, we believe we have sufficient time to meet one or several of the milestones critical to our success.
Each of these milestones are either catalysts for further financing opportunities or directly result in meaningful cash injections, or both.
It is worth noting that when we completed our recent private placement,
we could have done a larger deal, but deliberately decided to do a smaller deal on better terms because we felt it was the right thing to do for the company and for shareholders.
We also believe it better sets us up for long-term success and it reflects our confidence in other elements of our financing strategy coming to fruition.
Since the private placement, we have made significant progress in our various business development discussions.
And optimistic about a ability to continue to deliver on several elements of all financing strategy.
And until we know where we come out on these elements, we're operating on a highly cost efficient basis.
While the continuously increasing interest of payers in TDTs
The industry is evolving in ways that are beneficial to us. We believe we are in a very good position to succeed. Largely because of our focus on cardiometabolic diseases with type 2 diabetes as our lead indication, we expect the dynamic of our launch to be different.
from what has been observed in prior PDT launches. And we look forward to bringing our groundbreaking therapeutic to the providers and patients who urgently need them.
And finally,
I want to again thank the entire Beta Therapeutic team for the unwavering passion and commitment to patients that they demonstrate every day. With that, we're now ready to take your questions. Thank you.
Thank you. At this time we will conduct the question and answer session. As a reminder to ask a question you will need to press star 11 on your telephone and wait for your name to be announced.
To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. I.
Our first question comes from the line of Thomas Flatten at Lake Street Capital Markets. Thomas, your line is open.
Good morning, everyone. Thanks for taking the questions. Frank, I was wondering if you could comment on the dialogue with FDA. Did they provide any hint of the sufficiency of the responses that you put in?
Hey Thomas, good morning. Thanks for your questions. We cannot comment on what exactly the FDA responded back to us, but what they did tell us is that they accepted our submission and that the review continues to progress. They further gave us an indication that led us to believe that we are now on the final naridage.
what types of endpoints we might see when we roll into the fourth quarter and you're ready to announce some of that data.
Yeah, we can add a little bit of color of what to expect here and I would like to invite Mark Berman into the conversation. Mark, do you want to comment on this? Happy to. Thanks, Frank, and good morning, Thomas. So the Real World Evidence Program, as you know, is going to enroll approximately 1,000 patients.
across the multi-site study and as we mentioned we're about three-quarters of the way enrolled that study and expect to be fully enrolled by the end of Q3. In Q4 we will release interim results. These will be results of six months.
duration, so change from baseline, we'll focus on A1c change at that time. And we're going to release contingent on having sufficient power. So obviously this won't be the full set of patients as of the interim results. And we'll make sure that we release results when we have.
sample size that gives us sufficient power and therefore sufficient confidence and the results that we'll share. And just a follow-up on that. Will those data then be rolled into your dossier that you use in discussions with payers? Or will you wait for the study to be complete? Yeah, it's a great question. I'll start and then we can turn it over.
So we are not planning to wait on this data.
Good morning, Thomas. I'll just add to say that, of course, in a real-world, evidence studies are always important to payers, but even from some of the early conversations we had on value-based agreements, there's a real understanding that behavior change is very likely to...
change clinical outcomes for patients. And so a lot of our conversations with payers have focused a lot on engagement metrics, but of course, any data that becomes available we'll look to to utilize.
Excellent, appreciate you guys taking the questions. Thank you. Thank you. You're welcome. Please stand by for our next question. Our next question comes from Charles Rhee of TD Cohen. Charles, your line is open. Hi, this is Lucas Alford Charles. Thanks for taking the questions. Curious to see or to hear how your conversations with health systems and providers have gone up to this point. Given that physicians may prove to be a harder sell than payers when it comes to using PDTs, I'd like to hear how your interactions with.
physicians and health systems, particularly in the regions that you're targeting, have gone up to this point and will just make some detail around what you guys are specifically to maybe overcome, you know, or maybe as stigma among patients around prescribed and additional parapetics.
Good morning. Thanks for your question. I will hand it on to Diane here in a moment, but let me just start. You mentioned at the end. Stick my phone.
that may be around patients here. This is actually, I think, one of the things we were different from perhaps other PDT launches that you saw in the past. We don't think we actually have this issue that we're dealing with highly stigmatized patients. We are dealing with type 2 diabetes with a patient population that is A, highly prevalent.
that has high cost of care burdens associated with it and it has high degrees of unmet medical needs. You may recall we shared earlier that...
You know, only about 50% of patients that are on the center of care medications do in fact have that blood sugar on the control. And these patients are being treated, you know, in the mainstream off our healthcare system by an ec analogist and primary care physician. So we actually don't think that there's stigma, you know, digital health interventions as I said in my pro-pad remarks.
The treatment guidelines to type two diabetes, not only do they call already for behavior change as the foundation of treatment in the most recent update, it actually also now references digital health interventions. So we think we're very well positioned here. Diane, maybe you can share a little bit more color of what we're hearing from.
providers and payers alike in the various interactions that we've had over the last few weeks. Yes, absolutely. Thanks, Frank. And good morning, Charles. I do think it's important to separate out the payers and the providers. In the payers, clearly there's more understanding for prescription digital therapeutics.
as a category. And I think an additional add to what Frank has already stated that we've already been speaking with payers for the last 12 to 18 months. And since the beginning, the team has been asking what they would need to consider for reviewing
BT001 and considering coverage. And we looked down the list of everything we've heard over this time period, and we're ready to deliver on those expectations that payers have, and that includes FDA authorization, having an adequately sized and controlled trial design, diverse populations, which I know have been.
very much appreciated by PAYERS, the clinical endpoints A1C, which are accustomed to be understood in that clinical setting in drug trials, different than symptom alleviation types of endpoints, safety and efficacy data, and also engagement during treatment.
You know, one of the important things to note as well is that there is more recognition among payers around the differences in prescription digital therapeutics. So while it's important to look at this as a category, it's also important to look a little bit deeply. So Frank noted some of those differences maybe with our products and the space in which we play versus other prescriptions.
that the level of evidence from one PDT to another is important as part of their review. On the provider side, I'm actually quite pleased. It was really important to start engaging providers who, you know, I think it's important to know are less aware about PDTs as a category. And so when we speak to providers, we're speaking specifically to
our therapy in type 2 diabetes and they don't have necessarily the knowledge of of PDTs in other disease areas. And as we've onboarded some key opinion leader advisors who also serve as advisors for for big pharma companies and other device companies.
I'm super pleased about their reaction and as they're exposed to BT001 and all the clinical data that supports it, you continue to engage to inform our broader research. And again here I would say what's really pointed out by our early research is this value around the
of pharmacotherapy and the management of systems and this feeling of advancing from one medication to the other. So they're encouraged by the health economic data and are really encouraging to make sure we're publishing, which of course we've advanced that work. And they do see this as exciting. Right now it's been thought of, monitoring really has been
real change and really improve what normally has been just a progressive disease from one medication to another. So at this point, we're really encouraged by the conversations that we're having with advisors who have not had experience and exposure to our therapy.
Okay, yeah, that's encouraging. And then can you guys update us on the progress made around using the data collected on outcomes and engagement and building out personalization features into your platform? Understand that you guys are intending to see these capabilities embedded into the platform at the time of BT001's launch.
Well, the first thing to recognize is that the product as it was used in our randomized control trial.
does already include a high degree of personalization. The treatment algorithms that are AI powered.
dynamically adjust the treatment pace and intensity to each individual patient. One of the features of digital therapeutics in general is that they are subject to continuous improvement based on the varied data with the use of these therapies.
that's being collected. I think the engagement data, I think, is the data we've shared previously from our randomized control trial and I think the numbers were exceptionally strong. We saw 81% of patients that engaged with our PDT.
after six months. We're on average spending six minutes in app per day. So those were really exceptionally high engagement metrics.
I think we of course we continue to collect data around this currently in our Real-World Evidence program and once we release the next batch of data we will of course also include engagement data again. And as the last point I'll say you may recall
the engagement data that we released on our pilot study in liver disease, it's the liver study where we evaluate the utility of our platform in national nephew, even better engagement metrics than what we saw in the random trial. Although I will say it was also a small sample size.
Mark, do you want to comment a bit more on sort of the...
level of personalization that's embedded in our product? Happy to Frank. I mean, I think you did a wonderful job of summarizing that, that, you know, in the end, Lucas, the, you know, the, the product that was tested within the BT 001 pivot has a high degree of personalization. And of course, with every opportunity to study the product with every opportunity to expose it to
working well. You know, as Frank mentioned, those personalization elements include really the ability for any patient to engage with the platform independent of their current state of, you know, behavioral achievement or activation, if you will. The algorithm that guides the patient's behavioral change.
really does respond to the current state of the patient. And as they advance at their own unique pace, tries to advance that patient forward at a pace that's going to be right for them to make behavioral changes that, you know, not only will be effective, but also will be sustainable. And we see that very much reflected in our data when we look deeper.
At the data, we see a gradual shift in behaviors, starting from wherever patients are. We see those progressing over the six months, and we don't see yet a peak degree of change, suggesting that we've created a pattern that is more consistent with sustained behavioral changes.
the other elements of the cognitive behavioral therapy, including the lessons include personalization elements. There's a large bank of skills recognizing that the behaviors that we are trying to change really do represent a very broad set of.
eating another living lifestyle and self-care behaviors. And patients will need to acquire a diverse set of skills in order to be effective. And the platform allows that patient to personalize their experience to the different skills that are gonna be beneficial to them. In addition, the...
you know, computer generated feedback, if you will, is omnipresent throughout the solution so that from the beginning of treatment, the patient is getting a sense of whether their combination of engagement, their behavioral change, their biometrics is, you know, suggesting that they are going to be.
that are intended to help overcome barriers to change. So there's a rich, you know, summarized as saying there's a rich set of personalization features. We've essentially tested all of those and what we're going to be releasing in the commercial product are refinements based on the usability data that we have.
And I think I'll echo what Frank said. I mean, we're incredibly excited about the opportunity to launch this product hopefully in the commercial world because it's very clear that as we gain larger cohort to patients, that data is really invaluable at allowing us to further refine.
both the feature set and the algorithms that drive the patient experience.
Great, thanks for taking questions. Thank you very much. Please stand by for our next question.
Our next question comes from the line of Kay Nikay at Chardin. Kay, your line is open.
Yeah, thanks. My question is on the BD sign, the potential commercial partner. I guess from your perspective.
again, given the kind of the early history of PDTs partnering for commercialization, what are you really looking for in an ideal partner? And I guess maybe specific to diabetes, as we've seen at least on the device side, there's a lot of post-sale hand-holding required for patients with this disease. So...
How important is that? Thanks. Yeah, thank you. Thanks, Kate, for your very question. Good morning. So on the partnering side, as I mentioned on, I think, a flyer earnings call, we have multiple discussions that we're currently entertaining with different types of.
companies that span the gamut from you know pharma
support the commercial launch in the US and help us successfully commercialize our PDT in the US market. You could separately see a partnership that maybe supports expanding our geographic footprint and help us commercializing our PDT in markets outside of the United States, where we're currently really not set up to do this ourselves. Thirdly, you can imagine a partnership to support the expansion of our pipeline, meaning expansion beyond tied to the PDS into other cognitive and metabolic conditions, particularly those where we already have proof of concept and then with a partner, we would be able to progress faster. You could also see, as a fourth example, opportunities to...
combine our PDT with certain other medical devices. So it's a very broad gamut, and the value proposition to us, I think, is different depending on who we're talking to.
Anything that is diabetes disease related that's important from your perspective? Say that again so I could not hear you. Anything that is diabetes disease related that's important from your perspective?
diabetes disease related that it's important that the partner understand that you're looking for from your end.
Yes, I mean, you know, we don't. I think the fundamental point here is that we don't view our PDT as an adjunct.
to a drug, to help them soak a drug. We view our PDT as a self-standing product that delivers value on its own and generates revenue on its own. So that's maybe one.
And, of course, experience in type 2 diabetes or other cardiometabolic conditions, depending on whether the partnership is focused on supporting our launch in type 2 diabetes or whether it's focused on expanding our pipeline, therapeutic area expertise and...
capabilities that can help with market access, medical affairs, and ultimately sales and marketing, of course, would be beneficial.
And I don't know, Diane, is there anything that you would want to add from your standpoint? Yes, thanks, Frank. So we do see this as a revenue generating treatment and not necessarily specific to any one drug. And we feel you're capturing even features of adherence of drugs is important in our technology. I think what's really important to understand is that this isn't a companion app of any sort.
And I think what's important to understand as well, because I heard the comment, Kay, with regards to hand-holding with patients is, you know, we're extremely excited about the data we've already seen in our pivotal trials with level of engagement where patients were not
And with providers, the importance of ensuring the education of diabetes nurse educators who are already part of the treatment support for patients with diabetes and also diabetes disease management that exists. So what's encouraging is that payers and providers...
together are signaling this therapy being part already of this treatment pathway. And so we are encouraged about those specifics related to type 2 diabetes.
And I would just clarify maybe one last point. As Diane said, we don't view our PDT as a companion app, but as a self-standing product. But that is not to say that using our PDT alongside a pharmacotherapy that a partner may have on the market.
it could generate additional benefits clearly. I mean, we've shown that in our randomized control trials where the combination, where we demonstrated that the combination of our PDT with a standard of care yields better outcomes, both in terms of safety and efficacy than standard of care alone. You could further think about avenues where.
the pairing of a PDG with a pharmacodrug.
might result in better medication adherence, because you know, you have a platform that allows you to engage with a patient on a daily basis and so forth. So I just wouldn't say, while we view our PDT, as having independent value, there is an incremental value proposition that could be realized in cases where a partner might have existing pharmaceutical therapies on the market.
is now open.
Hey good morning guys. Look I know I've asked this before but you know given that you guys you know further honing in on commercial strategy ahead of the launch I was just thinking how you're thinking about positioning you know BTO and the physicians and obviously current treatment guidelines.
call for behavioral therapy as a first line therapy, but we saw within the pivotal study that you guys treated patients with pretty advanced disease and saw compelling changes being made to their medication usage. So just as you guys start to build out the sales force and prepare them for those introductory conversations with endos and PCPs, I guess which side, if you are picking one, the spectrum do you intend to focus on?
Thank you for your question, Raul. Good morning. I will say.
It may be a little bit too early to comment in great detail on this, and we may reserve some of this maybe for the next call when we are closer to actual launch. But Diane, maybe you want to provide already some eye-level thinking around the question that we will just ask. Sure. Rahul, good morning. Hello everyone.
Love this topic and it's important to recognize that as we bomb boarded advisors. This is really a lot of the first and foremost set of work that They are helping to guide us with So their early insights how they see potential for positioning having us
make sure we carve out a different place in the market because this therapy is so differentiated. Then again, the many companion apps that are out there, solutions in the wellness phase, other types of therapies. And so it is a little bit early to say, but I'm encouraged just as recent as this week being able to engage with providers on.
launch but you know given that you have some of these other you have plants you know within the pipeline to develop out these assets down the road I guess given the size of typical studies and match you know hypertension or hyperlipidemia I mean I guess
What are the estimates around what a pivotal trial and one of these indications might cost and you know What resources are needed to to execute a trial like that? I'll say two things. Well, the first one is while we have as you know pilot data for National National D hypertension hyponat We believe we have the data in hand
to then go and design the next set of pivotal trials. We are currently not pursuing this at much on hold just because we need to focus our precious financial resources on getting through FDA authorization, advancing our preparation for commercial launch, and really making sure that we have the eyes on the prize here first and get type 2 diabetes over the line and are ready to launch.
The moment that we have additional financial resources, and this could come through a number of different avenues, as I alluded to, we're pursuing this. The moment less financial resources, then we continue those additional explorations to expand into other indications and initiate other trials. I just want to be clear that we're very focused right now.
maybe you wanted to give a high level estimate of how we think about the cost and time around a pivotal trial, let's say for nationality, but it equally applies actually to other indications as well.
Yeah, I think that's right. Good morning, Rahul. You know, to build on Frank's comments, recall that our initial pivotal study...
And about 668 patients is considered one of the most robust pivotal trials for a medical device or a prescription digital therapeutic. And it really was submitted to the FDA as a pivotal trial as a part of the de novo pathway. Our anticipation and our strategy is that
assuming we will get authorization for BT001, subsequent indications are going to be filed under the 510k pathway because the underlying platform is substantially similar. We will already have had a robust safety data set that has been gathered. That safety data set was very strong.
And so there will be a need to establish a new data set to advance specific claims, for example, as a treatment for a national anaphylaxis. But because of that earlier predicate work, the future studies are expected to be smaller than the pivotal study. Obviously, they'll be individually powered, so they'll have individual sample sizes depending on the...
the effect sizes that we're looking to see in each indication. But similarly, we also we think that most of these trials on average are going to be about a six-month treatment period, enough to demonstrate safety when the patient is using the device as it's intended.
and enough to generate an effectiveness or efficacy signal to establish the claim. So Ned, as Frank mentioned, these are, while they would be randomized controlled trials and still robust trials, they're kind of a fraction of the duration and a fraction of the cost of a traditional.
between 10 and 15 million dollars.
And for national natural disease, it might be slightly higher, but not much. I would say it's roughly in the same ballpark, more on the upper end of that range. So if you think about, these are, at the end of the day, sort of phase three studies that the data which has been being used to seek additional authorizations from the FDA, again, it's a fraction of what it would be for sort of a normal pharmacological agent.
Got it. That's helpful. I appreciate that. And then just one more clarification question for me. I apologize if I missed it earlier. But, you know, just obviously, assuming clearance and a subsequent launch later this year, how should we think about, you know, incremental changes to OpEx over the next couple quarters? Thanks.
Yeah, so generally you can expect our up-ex to continue to actually decline right now, you know, and that's really because the impact from the restructuring is still working its way or hasn't worked its way through our P&L in the early parts of the second quarter, because that's when we sort of implemented it. And then going forward, you will see that operating expense continues to go down.
And we're going to continue to operate on a highly cost efficient basis until additional funding is secured. And as we said multiple times here, we feel pretty optimistic that with the actions we've taken, both in terms of the private placement that we completed a few weeks ago and the actions we've taken, we're going to continue to operate on a highly cost efficient basis until additional funding is secured.
with the cost containment measures that we have extended our runways sufficiently to get to people who actually thicken their hand's-Edneck and a strong upward attitude,
to the multiple milestones such as potential FGA authorization, potential BD transaction, possibly a royalty monetization transaction. So we have the time we believe to now get one or several of these to the finish line and each of them either
result directly or could unlock opportunities to potentially substantial additional funding. But until then, you know, we're going to operate very, very efficiently and that means that you will see our operating expense continue to
Thank you very much. At this time I would like to turn the call back to Frank Karb for closing remarks. Well thank you very much for your interest.
this morning and joining us for this call. We feel very good with where we are. I hope we were able to convey that. And we look forward to keeping you updated on the progress. And if in the meantime you have questions, please feel free to contact us. Thank you. Bye bye. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.