Q2 2023 Marinus Pharmaceuticals Inc Earnings Call
Greetings and welcome to the Marriott Marinus Pharmaceuticals second quarter 2023 financial results and business update call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Like to ask a question during this time simply press star one on your telephone keypad. If you would like to withdraw your question again, Chris to Starwood.
And now it is my pleasure to introduce you to your host so any legal senior Vice President Investor Relations Human resources and corporate Affairs, you May now begin Miss Wigle.
Sure.
Yeah.
Thank you and good morning, with me from Meredith or Dr. Scott Braunstein, Chairman and Chief Executive Officer, Mr. Shaffer, Chief Commercial officer.
Thank you, Joe Houlihan, Chief Medical Officer.
Defense deal Chief Financial Officer, and Chief operating Officer before we begin I would like to remind everyone that some of the statements. We're making today are forward looking statements under the securities laws.
These forward looking statements involve substantial risks and uncertainties that could cause our clinical development programs future results performance or achievements to differ significantly from those expressed or implied by such forward looking statements.
These risks and uncertainties and risks associated with our business are described in the Companys reports filed with the Securities and Exchange Commission, including forms 10-K, 10-Q and 8-K.
I will now turn the call over to our CEO Scott Braunstein.
Thank you Sonya and welcome to our call. We have made strong progress this quarter on both the regulatory and commercial front as well as advancing our oral and IV <unk> clinical programs positioning us well for the catalyst rich year ahead. We are pleased to report the call in the second quarter sales of $4 2 million.
The launch momentum has continued and as a result, we are raising full year 2023 is the call me sales guidance to the range of 17 to $18 5 million Christy Schaffer, our chief commercial officer, who will be reviewing some of the key initiatives for 2023 that we believe will support the continued long term growth.
The <unk> franchise.
Currently we see significant potential for the Tommy following its a textbook outcome in seizures associated with tuberous sclerosis complex and indication that would offer important commercial synergies.
This will be one of the topics that we will be discussing in more detail during our investor day on September 19.
We are making meaningful progress expanding access to <unk> alone for patients around the world.
On July 31, we announced that the European Commission approved our marketing authorization application for us They told me and CDK <unk> deficiency disorder.
This approval required a tremendous effort from the Marin team to respond to the many technical and clinical questions raised by the EMA during the review process.
To further support global access we recently submitted the marketing authorization application in the U K, our ex U S partnerships are a central part of our commitment to reach the global patient community.
As previously reported Meredith entered into an exclusive distribution agreement with biologics in selected markets in the Middle East in Africa, and we hope to have the telling me available per patient in the Mena region in early 2024 in China. Our partner in Asia has made significant progress and we expect the submission of our <unk>.
<unk> NDA in the near term moving to our clinical pipeline I want to start with an update on the phase III <unk> trial in refractory status Epilepticus, which I'm sure is top of mind for many of you.
Total enrollment continued to move in the right direction. However, the summer months have been a time of turnover for many clinical site personnel, which we believe has resulted in a slowdown in recruitment.
This phenomenon has had a much bigger impact than previously anticipated, particularly while our team has continued to work hard and completed the majority of remaining site activations in the second quarter.
As a result of this summer slowdown, which Joe will discuss in more detail. We have moved the interim analysis out three months to Q1 of next year.
While we are disappointed in this delay we believe it is critically important to continue to enroll the right patient population for a successful trial outcome. We are confident that the diligence screening efforts by our clinical team and the <unk> study sites will drive a placebo rate well within our expectations, creating the opportunity.
For a meaningful clinical result, and putting us in a position to demonstrate a benefit across multiple health care utilization measures.
The organization is working towards an expected NDA filing and preparing our future commercial execution importantly, the one quarter delay toward interim data review is not expected to impact the timing of our commercial launch and may allow us to submit our NDA filing with the valuable.
Alternative bottle size, which Christie will discuss shortly.
We look forward to providing an overview of upcoming milestones that next steps following the interim analysis as well as an update on enrollment during our investor and analyst event next month.
When the interim analysis is conducted and if it meets the stopping criteria. We plan to begin transitioning the majority of recites to an open label extension and then two shortly transition a subset of these sites to the raise to study.
This will help support a smooth and rapid completion to raise too with the goal of driving improved timelines for the European filing and a potential U S label expansion. The trial is on track to begin enrollment later this year.
Let me move to the oral franchise clinical development program and begin with a quick update on the trust PSC trial.
We are actively enrolling in refractory patients in this global study and continue to expect top line data in mid 2024 blended discontinuation rates and the trust PSC trial had been low which supports our belief that adjustments to dose titration.
Following the phase II results can drive improvements in Tolerability and deliver a clinically meaningful outcome.
One of the elements that is critical to the success of the trust trial is working closely with our advocacy partners that the PSC Alliance next month, we will be attending the international PSU Research conference, where the team and I will be meeting with a number of key opinion leaders patients and advocates.
We believe that the Tommy has the potential to address a significant unmet need for TFC patients suffering from refractory seizures and <unk>.
The only product currently in phase III development for this indication.
At the same time, we have spent considerable energy broadening our patent portfolio for the oral franchise and are pleased that our new method of use patents has been granted by the U S. PTO for <unk> loan for its use in treating seizures associated with PSC. This new method of use patent expires in 2014.
Finally, and equally exciting I'm happy to share that we've enrolled the first patient in the multiple ascending dose study using our second generation, Oregon excellent formulation and are on track for preliminary data by year end.
We believe this formulation has the potential to be the future of the oral franchise and will continue to target its used in patients suffering from lgs and other refractory epilepsies.
We saw meaningful improvement in pharmacokinetics, and our single ascending dose trial and are hopeful that this mad study will reinforce our belief that the second generation oral program will allow twice a day dosing and provides physicians the ability to dose titrate to higher serum concentrations of <unk> that can be.
And then can be achieved today.
Both of these attributes are critical to offering an enhanced solution to the broader refractory population with that I would like to turn the call over to our Chief commercial officer Christy Shafer.
Thank you Scott and good morning two.
I'm pleased to present the progress we've made in the second quarter and the underlying drivers of our strong performance as we continue to grow that the Tommy brand.
Thank you Kevin net product revenues grew to $4 2 million with approximately 120 commercial patients active on therapy.
<unk> had positive payer coverage and access for the Tommy.
83% of U S. Commercial plans have extended labeled coverage does that Tommy with all state Medicaid plans extending coverage at the end of the second quarter with.
With the exceptional early performance of the Tommy we are thrilled to increase our revenue guidance for 2023 to a range of 17 to $18 $5 million.
I want to thank the entire commercial team has worked tirelessly to ensure a successful launch of the Tommy and for the passion They demonstrate day in and day out bringing meaningful change to patients with ARIA.
The International Foundation for CDK, All five research has established two new centers of excellence at Vanderbilt and Monster PRA, bringing a total of 10 <unk> to the U S, which is a direct reflection of the need for more centers that provide multi specialty care for CBD family.
We continue to collaborate closely with the centers of excellence, helping connect them with their community and local hcp's to maximize access to care for patients they treat.
As we look to the next phase of launch our commercial team is focused on executing a comprehensive strategy that addresses each phase of the patient journey, while building on our core capabilities needed to reach our full potential for current and future potential launches, including TSA.
Our strategy is anchored in four key areas.
Identification activation of the caregiver community.
Stablish thing its a tommy as the standard of care for CDB seizure management.
Seamlessly enhancing the patient experience.
To start we're continuing to invest in better and more informative third party data and analytics insights are enabling increased identification in two ways.
First we gained visibility in to nearly two times the number of ICD 10 coding CBD patients and we could see at this time last year and second we're beginning to identify patients and look alike cohorts does not yet been diagnosed with CBD or coated with the appropriate ICD 10 code.
In both cases, we're expanding our call targets to meet patients where they are in the contango nuc therapy and care.
Insights driving us today's call points are enabling continuous improvement in our message delivery to ensure reps are focusing education on the Tommy as a treatment option for providers with known CBD patients and for providers with suspected mi patients on disease state genetic testing and coding.
This includes the spelling cost and access misperceptions of genetic testing, which is widely accessible and reimbursed under merchant tariff plan.
Appreciating the integral role of the caregiver, we're pleased to announce the kickoff of our patient engagement program Shining moments later this month.
We have three dedicated HCP on the Speakers' Bureau, and White caregiver family that what performs five webinars in the back half of 2023.
Strong recruitment efforts are ongoing in conjunction with the IFC are our target Hcp's and a significant media outreach plan.
We're confident that by sharing the experience isn't those who have initiated treatment CBD families will be inspired by the potential for more good days with the Tommy.
To round out our strategy, we plan to continuously refine to Tommy <unk> patient support program to meet the evolving needs of the CDB community and enhance the patient experience.
Finally planning is underway for our second American Epilepsy Society annual meeting as a commercial organization, where we look forward to showcasing these initiatives.
For our acute care franchise, we continue to prepare for a potential commercial launch with the quarter ahead focused on leveraging insights from the real World data project I introduced on our Q1 earnings call.
You May remember this project is a first of its kind approach leveraging data across four distinct claims providers to generate patient progression through distinct status episodes.
Now complete this refined collection of insights has yielded three fundamental areas. That's fighting that will guide our subsequent steps towards launch preparedness.
First the data provided an updated detailed view of the overall refractory status epilepticus population through transitions across settings in the hospital and the treatment provided as patients move through both the Etsy continuum and hospital departments.
Informing our stakeholder mapping and highlighting specific areas of unmet need along the patient journey.
Second utilizing that data, we tackled the heterogeneity of RSV patients by creating art types within the diagnosis and to clear cohorts emerged.
Our C patients, who progressed to IV anesthesia and dose to progress through a cycle of ASM.
Third we were able to overlay as a patient episodes across a broader spectrum of community and academic hospitals to identify accounts that are involved in RSA patient care, including patient referral pathways, and especially high volume receiving center.
In essence, the data reinforced our significant market potential and gave US a clear road map for the acute care franchises commercial debut.
I look forward to providing more details on September 19th during our Investor day.
As Scott mentioned, we're also making important manufacturing investments to ensure I think an excellent it's optimized for physician use and can be seamlessly integrated into the hospital setting.
We are developing a smaller 250 ml bottle compared to the existing 500 ml bottle for increased storage flexibility in the hospital setting.
This will allow <unk> to be stored in a wider variety of locked cabinets onto unit for ready access and with preferred for controlled substance distribution tracking and waste recording that.
The smaller volume is also expected to reduce barriers and initiating treatment with less cost impact if a model is punctured or not used or not used in its entirety.
We were originally planning on filing the RSC NDA with the 500 ml bottle and then filing a supplemental NDA with the 250 ml bottle, but the additional three months may allow us to file with the new smaller bottle.
With the early successes of the Tommy launch as our foundation I look forward to building on our commitment to deliver innovative new treatment options to patients suffering from rare genetic epilepsies and refractory seizure disorders.
I'll now hand, the call over to our Chief Medical Officer, Joe Houlihan to discuss our ongoing development program.
Thank you Christine and Hello, everyone.
It's my pleasure to provide an overview of the substantial pipeline progress we've made since our first quarter call.
Starting with our development programs in status Epilepticus Scot mentioned, we now expect to conduct an interim analysis of the phase III <unk> trial of IV <unk> in refractory status and the <unk>.
First quarter of 2024.
With the analysis meets its predefined stopping criteria, we plan to announce top line results at that time.
We continue to tackle industry headwinds affecting clinical trial recruitment.
Recognize that the summer is a busy time of year for many institutions with the transition of new residents and fellows and turnover among other research though.
We believe these factors have slowed rave study recruitment, resulting in the delay of our topline results to the first quarter of 2024.
To address these challenges Meredith is supporting new Res trial champions through onsite and virtual education at our study centers in the United States, Australia and Canada.
In June and July alone. We are successfully activated 13, new sites across these three countries and are pleased to share that we've already enrolled our first patient in in Canada.
We are encouraged by the enthusiasm dedication and motivation of the site staff and look forward to continued collaboration to complete the re study.
Okay.
We expect to complete final site Activations for raise this month at which point the team will be fully focused on completing the double blind phase of the trial and initiating the open label extension.
While we are disappointed by the enrollment impact to the study this summer.
<unk> about the volume of patients being screened and we firmly believe that enrollment will return to its usual pace with the integration of new sites and the normalization of clinical personnel transitions.
Now I'd like to provide a few operational updates on the study.
Ray sites are now being re supply with the new citrate buffer formulation of either you can absolutely.
This new formulation does not require refrigeration and is expected to have a 24 month shelf life.
Also the data monitoring committee.
Recently to review safety information and the integrity of the trial conduct.
Following this review they recommended continuation of the study without modification.
As a reminder, we plan to conduct an interim analysis at two thirds enrollment or 82 patients.
There are two co primary endpoints in two key secondary endpoints that will be analyzed and reported at the interim.
The co primary endpoints or proportion of participants with status associated within 30 minutes of study drug initiation.
Proportion of participants with no progression to IV anesthesia for 36 hours.
To meet the stopping criteria, we need to achieve statistical significance on both endpoints.
Two key secondary endpoints are time to see cessation and no progression to IV anesthesia for 24 hours off study drug for 72 hours.
Other secondary endpoints include additional clinical measures functional outcomes and metrics on health care utilization such as number of ICU days length of hospital stay and time on mechanical ventilation.
We plan to present the results from the analysis of these additional secondary endpoints at upcoming medical meetings.
The interim analysis with data on 82 patients is powered at over 90% to show a 40% difference between <unk> and placebo and in fact, the study could achieve statistical significance with treatment differences of less than 30%.
We continue to closely monitor the baseline characteristics of patients entering the study and have seen that the patients are largely similar to those enrolled in phase two.
This gives us optimism that the results from phase III will mirror those from phase III.
We also know from review of characteristics of the patients who have failed screening that we're enrolling an appropriate study population.
Between those.
The similarity of the study populations in phases, two and three we continue to believe that we're enrolling the right patients in the rave study.
Our August corporate Tech now includes an update of the baseline characteristics of patients enrolled the trial.
One difference between the phase II patients and those entering the phase III study is the baseline seizure burden.
Based on feedback from our scientific advisers and to align with published guidelines for diagnosis of status epilepticus, we reduced the required seizure burden from 50% in phase, 2% to 20% in phase III.
So as expected the baseline seizure burden is somewhat lower than the phase III study.
Based on detailed review of the Gs and patient outcomes through phase II.
We expect the difference in seizure burden to have no impact on resolution of status and either placebo or <unk> and.
In addition, we have an independent blinded central EEG reading group that reviews. The data from this study on an ongoing basis to validate patient eligibility.
At our upcoming Investor Day, we will provide you with information on patient demographics and baseline characteristics.
As well as further detail on the interim analysis plan.
Other trials in status epilepticus continue to make meaningful progress with.
<unk> have done a great job navigating a new clinical trial regulations in Europe and.
We expect to begin enrollment in our European registration study for refractory status raised two later this year.
By transitioning a portion of raise sites to raise two following a successful interim analysis, we would expect a quick and seamless site activation process.
In addition, we've initiated screening in our phase III reset trial and establish status epilepticus unexpected complete the first study cohort by the end of the year.
Also as Scott mentioned, where supply is in excellent positions upon request under emergency IND.
With Super refractory status epilepticus or S. RSC.
Our clinical team has developed a new dosing paradigm designed specifically for these extremely difficult to treat cases.
Rather than recommending a 48 hour regimen like the one we're using in the rave study.
So far three patients have been treated with the new Src regimen, including a patient with new onset refractory status epilepticus or ignores the condition thats one of the most poorly responsive to treatment.
I'm pleased to report that all three patients were weaned off IV anesthetics with resolution of their status.
Moving to our oral franchise I can report that we are actively enrolling patients in the global Phase III Trust PSC trial in tuberous sclerosis complex.
We remain on track for data by the Middle of next year.
As we've previously discussed to address the higher than expected rates of some loans. We saw in our phase <unk> study, we developed a new titration schedule for phase III.
By using a slower initial titration, we believe that we can improve tolerability and potential efficacy as well.
Even though the study remains blinded we've had few reports of some noise and have seen low discontinuation rates to date bolstering our confidence in the new titration schedule.
We are pleased to report we've also begun enrolling <unk> patients in China.
Which is an important research region for us.
I recently visited some of the clinical sites in China.
Encouraged by the high level of engagement from Tunisia, our collaboration partner as well as the expertise and enthusiasm of the study investigators.
Finally, turning to our second generation product development efforts, we're pleased to have initiated enrollment in our multiple ascending dose study.
We expect that this study will confirm the feasibility of the IV dosing with preliminary data anticipated by year end.
In parallel we plan to finalize the clinical program designed for Lennox <unk> syndrome in the first quarter of 2024 pending results.
Study.
Development of a can excellent prodrug also continues to advance with submission of an IND application targeted for the fourth quarter of 2024 were.
We're pleased that so far the profile of the pro drug appears to support dosing once a day.
We're also glad to share that we've submitted seven abstracts for presentation at the American Epilepsy Society annual meeting in December .
<unk> two year data from the Marigold open label extension.
To conclude we will continue to focus our efforts on successfully executing our phase III programs throughout the remainder of the year.
The next 12 months hold great promise with numerous data catalysts on the horizon and I look forward to seeing the positive impact our work can have on patients and families suffering from refractory seizure disorders.
I would now like to turn the call over to our CFO and COO, Steve <unk>, who will provide you with a financial update.
Thanks, Joe and good morning to everyone I am pleased to be able to share our financial results for the second quarter of 2023.
Prior to diving into the details of our financial performance I'd like to provide a few key updates for the business.
For the fiscal year 2023, I am pleased to provide an update to our revenue and operating expense guidance.
<unk> net revenue, we are increasing our guidance with net revenues now projected to be in the range of 17 to $18 5 million, which represents an increase of $2 million on the lower end and $1 5 million on the higher end of the prior guidance range.
As Christie mentioned the increased guidance reflects the strong continued execution of our launch.
For BARDA revenue. We are also increasing our guidance with revenue is now projected to be in the range of $11 million to $12 million, which represents an increase from the prior guidance range of $8 million to $11 million.
The increase is a result of continued progress of the API onshoring activities and ongoing IV can ask phone development.
We now project, our GAAP operating expenses inclusive of SG&A and R&D expenses to be in the range of $160 million to $165 million of which we expect approximately $15 million to be noncash stock based compensation.
This is a reduction from our prior guidance of $165 million to $175 million and is driven by ongoing efforts to drive prudent cost management and focused investments answer Tommy commercialization and our ongoing phase III trials, we expect that our current cash cash equivalents and short term investments of $175 3 million.
Sufficient to fund our operations into the second half of 2024 inclusive of maintaining the required minimum cash balance of $15 million under our credit agreement.
The approval of the telling me by the EU in July of this year marks a significant milestone for CBD patients throughout Europe .
Our commercial partner Orion recently announced it has begun preparations for the launch of the Tommy there, including engaging and required processes for obtaining pricing and reimbursement approval in the various European countries.
While the reimbursement environment can be challenging in Europe , we believe thats a Tom he brings a number of differentiated attributes for CDT patients, including the safety profile and meaningful durability of effect as evidenced by the two year open label data.
As a result of the EU approval <unk> is also eligible to receive royalties and commercial and sales milestones under our collaboration agreement with Orion.
As a reminder, royalty rates under the Ryan agreement range from the low double digits to the upper teens for us the Tommy.
I will now move into our financial results.
For the second quarter of 2023, we recognize product revenues of $4 2 million and $7 6 million for the three and six months ended June 32023.
These revenues consistent with the tomo product sales, which was launched in the third quarter of 2022.
We recognize barter revenues of $1 8 million and $8 9 million for the three and six months ended June 32023, as compared to $1 8 million and $3 3 million for the same periods in the prior year the.
The increase was driven primarily by activity associated with startup of our API Onshoring initiative.
Research and development expenses were 21, 4 million and $49 3 million for the three and six months ended June 32023, as compared to $21 5 million and $39 5 million for the same periods in the prior year.
Year to date change was due to increased costs associated with our API onshoring effort increase TFC in RSV clinical trial activity and increased head count.
As a reminder, the API onshoring effort is approximately 70% funded by BARDA. So that the increase in R&D expenses is partially offset by the increased BARDA revenues reflected in the first half of 2023.
Selling general and administrative expenses were $15 7 million and $30 9 million for the three and six months ended June 32023, as compared to $17 1 million and $28 8 million for the same periods in the prior year.
The primary drivers of the change on a year to date basis were increased head count related to the U S launches of Tommy.
Interest income was $2 1 million and $4 5 million for the three and six months ended June 32023, as compared to less than <unk> 1 million for the same periods in the prior year.
The increase in interest income was driven by the overall increase in cash cash equivalents and short term investments and increase the yield on those balances.
Interest expense was $4 2 million and $8 4 million for the three and six months ended June 32023, as compared to $2 7 million and $4 3 million for the same periods in the prior year.
The increase was driven by a drawdown of an additional $30 million of credit under the Oaktree agreement in March 2022. Upon FDA approval first with Tommy and noncash interest expense related to a revenue interest financing with regard.
The company reported a net loss before income taxes of $33 5 million and $68 2 million for the three and six months ended June 30 of 2023 as compared to a net loss of $39 4 million and $58 8 million for the same periods in the prior year.
As a note. The 2022 net loss includes the onetime gain of $12 $7 million related to recognition of a portion of the upfront payment associated with our Orion partnership.
So those also include noncash stock based compensation expense of $3 9 million and $7 6 million for the three and six months ended June 32023, as compared to $3 8 million and $7 2 million for the same periods in the prior year.
Cash used in operating activities was $65 8 million for the six months ended June 32023, as compared to cash used in operating activities of $61 3 million for the same period in the prior year.
Now I'll turn the call back to Scott, who will provide concluding remarks.
Thanks, Steve with a solid foundation for continued success and expansion we are confident in our ability to execute against our near term milestones to drive Mariners into the next stage of growth as a leader in the development of innovative treatment options for patients with rare genetic epilepsies and refractory seizure disorders.
As we mentioned, we'll be hosting a hybrid investor and analyst day on September 19th in New York City for a deep dive into our pipeline and commercial launch preparations in RSV and PSC.
We hope you will be able to join and I look forward to seeing many of you. There in person operator can you now open the call for questions.
Yes. Thank you do you have a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue simply press star one again, we ask the participants limit their time to one question, we'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Brian Abrahams of RBC capital markets. Your line is open.
Hey, guys. Good morning, Thanks for taking my question and congrats on all the continued progress in the next quarter with the curtailments.
I wanted to ask if you could expand a little bit more on the.
On the baseline characteristics that youre seeing in the <unk> study it looked like the.
You mentioned the seizure burden.
Being lower versus the phase two and it looks like actually the seizure burden.
Has gone down quite a bit since the last cut of the baseline characteristics. So I guess I'm wondering if there's any differences in the pocket and the types of patients that you're.
Enrolls more recently into the study.
Maybe how that dovetails with the stringency.
No.
And the screening criteria.
What the potential impact could be to the placebo rate on the.
On the progression to IV anesthesia endpoint and then maybe along those lines also noticed.
The proportion of patients with prominent motor features has actually come up quite a bit so I'm wondering how that fits in as well.
Hi, Brian Thanks for the question this is Joe.
I think.
Yes.
While we changed the inclusion criteria as I mentioned in the remarks.
For the baseline seizure burden to be 20% and that's actually the American clinical Louis' geology Society.
Has published that as a guideline for diagnosis of status.
And the baseline seizure burden.
And believe it is going to influence either placebo or drug response.
The placebo response on either endpoint.
It's driven.
Mainly by status severity, which is identical.
In both.
From the phase II.
So that was something that we saw.
<unk> make a difference in outcome, but.
All the patients in the high dose group, regardless of the severity of their status or the.
The baseline seizure burden in the phase II study.
Had virtually complete resolution of status.
Persisted.
Persisted after the drug was stopped so.
The baseline seizure burden I don't think there is going to have any effect.
Nor the motor features the prominent motor features.
That could be anything that could be any type of motor activity.
It either.
So called motor status or Nonconvulsive status with motor features.
That shouldn't have any bearing on outcome either.
So I think that regardless of those differences from the baseline characteristics.
No I don't think it's going to make any difference and we have looked at whether there's been a change in the characteristics of the patients over time and haven't really been able to see anything there.
Got it another assessment.
Got it yeah, Brian the only thing I'd add too is I think we were surprised that the first kind of the data how high the seizure burden was right because the enroll it looked as though very similar to the phase two where the seizure burden was 50%. So we've expected that number to come down and overall, we're really not surprised by it at that.
Our expectation going into the study that we would be somewhere between 30 and 40%.
Thank you. Your next question comes from the line of Joseph Thome of TD Cowen Your line is open.
Hi, there good morning, and thank you for taking my question.
Maybe just on the Q1 'twenty four interim timing, maybe what gives you confidence that this is going to be.
No.
What youre seeing over there.
Yes.
Updated goal and then.
The updated metric.
Under 50% of the patients are getting does so I guess, what's the main reason why a patient is maybe a screen failure that youre seeing in the phase III.
Yes.
Yes.
Let me take the first question on timelines and then I'll pass it over to Joe for a little bit more color.
As we met with investors Joe in the first half of the year, we were seeing very steady enrollment.
On a monthly basis for several months that gave us a lot of confidence on the timeline and the completion of the study.
And since the beginning of the year, we've almost doubled the number of sites that are now open and activated actually more than doubled if we go back and look at our our January numbers. So we feel very confident now that the study has all the right sites throughout the U S, Canada and Australia.
And we were surprised that we saw a slowdown over the summer, we really expected to be in a different place.
But as we've talked to our medical science liaison teams, our clinical ops teams.
As Joe mentioned in his prepared remarks, we've had.
Such a high degree of turnover in the hospital I think we really underestimated that short term impact. So we're quite confident in terms of the sites that are now participating their level of activity that will see back to normal levels of enrollment and.
And we're using that normal baseline for our Q1 projections and certainly if we see accelerated relative to the first half of the year some are excluded.
<unk>.
We would hope that we can move the timelines up so we have a lot of reasons to be enthusiastic we've really doubled our resources in Alaska.
Six to nine months on this study disappointing to us about the summer, but from an overall study perspective confident it's a it's a short term hit Joe I'll turn it over to you to talk a little bit more on the <unk>.
My second question.
Yeah Yeah.
Hi, Joe So, yes, I think the one of the major reasons is the patients end up responding to another AED and then don't come into the study, which actually when we say looking at the <unk>.
Screen failures gives us confidence we're enrolling the right patients that could have been a potential placebo responder.
Not necessarily the first endpoint that perhaps on the second endpoint.
Integration within 36 hours or IV infusion within 36 hours.
And so.
The the.
The stringency of the criteria is greater than in phase two and.
I think.
By far that that's the main reason take patients are being screened out.
Okay, great. Thank you very much.
Yeah.
Your next question comes from the line of Andrew Tsai of Jefferies. Please go ahead.
Hey, good morning, Thanks for taking my questions I appreciate the update so just really quickly on the baseline right analysis what percentage of patients.
Is this re analysis based on and then secondly, as we think about the interim topline release, what is your latest thinking on whether you will.
I'll announce when the 82nd patient has been enrolled could it be an individual press release or should the street have to wait for the topline.
Topline data itself in Q1, thank you.
Yes, Thanks, Andrew we've gotten the question a lot and I would generally say my bias today is that we would topline the second patient.
We owe it to the Investor community given that our timelines have shifted and that was a disappointment to us.
This baseline characteristic is.
Really a recent cut we've updated the data really to the last few weeks.
We're not going to give you that absolute number, but we are going to talk a little bit more about the numbers in September so stay tuned.
I Miss anything there Andrew.
No all set thank you very clear.
And I think importantly, we've gotten the question from a lot of investors now with the protocol Amendment that we made last summer and really.
I would say really took effect at year end as we talked about it took a while for all of those sites to get through their IRB.
Thought it was important to really show you. This updated data set with a.
A large number of patients that have been enrolled since the protocol amendment.
So I think thats a critical piece there as well Andrew that this is really I would call. It a mixed population. Although we would argue it's really the population that we initially intended to study in the phase III.
Right great. Thank you again.
Yeah.
Your next question comes from the line of Charles Duncan of Cantor Fitzgerald. Your line is open.
Yes, good morning, Scott and team congrats.
Good quarter commercial theater.
Great.
The recent EU approval.
And to your question wanted to ask you regarding.
First of all on the raise one you mentioned that the DMC recently.
Yeah.
And then you continue to mainland could you provide some color.
Yes, sure patients be SaaS within that do you see.
This afternoon.
The second part of this question is regarding the <unk> trial.
You mentioned.
In mid <unk>.
And you see.
Sure.
Winded basis, lower discontinuation rates could you give us some color.
Yes.
<unk>.
Thanks.
Joe you want to start on the deep on the D&C.
Sure.
The DMC was looking at safety.
They look at Unblinded safety data to see if there is an imbalance in adverse effects.
That indicate something.
Going on with the drug and so that's really all they look at.
When when they convened to look at the interim analysis interim analysis data.
As you'll see efficacy right now they are just looking at safety.
And in terms of the trust POC study could you repeat that one more time I'm sorry.
Yes in terms of the discontinuation rate and that's what really are you seeing I mean, it sounds great that you're.
<unk> reduced the reduced penetration rate is healthy.
Is the discontinuation rate.
Right.
Well, it's extremely low I mean, it's in the single digits.
Terms of patients discontinuing so.
Pat.
Basic answer the question in terms of the reasons for discontinuation.
Thanks again.
Yeah.
Very low discontinuation rate and the other thing too and I think we mentioned this is very few calls from physicians about <unk>.
Adjusting titration with what's doing titration.
On each side effects. So we're very optimistic about that titration schedule.
And <unk>.
Charles the only thing I would add this is Scott if you recall marigold as our kind of benchmark, 80% of patients achieved standard dosing.
And we had less than a 10% discontinuation rate there was only one patient who discontinued because the tolerability and the double blind phase III.
In the phase II <unk> study, we saw about a 25% discontinuation rate again really surprised us was about 70% of patients who required aggressive dose adjustments.
And that really persisted throughout the trial, so that dichotomy in two datasets was really the owners for us amending the dose titration and I think we feel very confident now where we are.
<unk>.
With a meaningful number of patients who enrolled in trust.
We're seeing effectively baseline characteristics discontinuation rates and what appears to be in a blinded discontinuation rates and blended dose titration adjustments much more similar to marigold datasets in the phase <unk> and I think that that's giving us a lot of confidence both the efficacy and the safety signal.
Very good thanks for the added color.
Your next question comes from the line of Jean Li of True Securities. Your line is open.
Hey, Thanks for taking our question.
And given how challenging this bank to enroll in phase III ways. What gives you confidence the commercial opportunity have been absolutely and party.
We expect difficult to find patients enrolling.
Why would that differ in commercial situations. Thank you.
Yes, let me, let me kick it off and then Christi, if you want to add any color I'll be happy to.
Pass it over to you a few different things June I think.
Like any clinical study and particularly in the hospital setting we really narrowed this population to a very small slice of the RFP population.
Because we really wanted to show the value proposition versus IV anesthesia.
And I think different than our phase two where we had several patients who failed multiple therapies, but a physician wasn't necessarily ready to give IBM seizure that allow the patient to enroll in the phase two where we're really using the strict criteria of a of.
As a physician and the physician's mind IV anesthesia needs to be the next therapy I think as a result of that we've kept this is a very very narrow inclusion criteria.
Now the flip side of that.
[laughter].
We think that's the critical piece to driving low placebo rate. So I think in retrospect, we really.
<unk> are looking at a smaller subset of the status population that will ultimately look at.
It's very interesting to me in the Phase III study. The average time to enrollment is 24 hours as of today, which means physicians are really observing these patients treating them with multiple aedes, sometimes more than two aes in the phase III study.
I think what we really believe is the ultimate paradigm shift here, one that shouldnt be difficult is that.
Would you want a family member in status Epilepticus for 24 hours no.
It's quite ill and so we'll start with the dataset and raise which is all about the appointment of general anesthesia and those very severe complications, but we will move very quickly to this drug being used faster showing faster response rates and other aedes.
And and the importance of time is brain, which I do think makes series two trial more and more important I think it's critical people ask me all the time why do we choose to do the interim analysis.
On the <unk> trial on one hand, I think we are more than sufficiently powered to get the answer and on the other to your question June as we look at the market I think raised two becomes a very critical part of the marketing story.
Chris Let me pass it over to you.
Sure Scott, Thanks, and Jim. Thanks for the question, we've been thinking about that the same sort of thing over here, but what I'd love to say that Scott.
Touched on initially.
This selection is really amazing for us on the commercial side given the data that we expect to get out of that.
Clinical trial effort certainly differ from commercial promotional efforts and what we have been very encouraged by and I spoke to it a little bit in our prepared remarks was the data that has come back about how these patients admitted to the hospital system. The cost of these patients as they progress.
Three of the hospital system and the value that we think that <unk> can bring to them. So again from a promotional perspective. It is wildly different but we felt confident that the selection that they're that clinical team is working on will directly affect on how we pay up a present value in the hospital.
Thank you. Your next question comes from the line of Marc Goodman of Leerink Partners. Your line is open.
Yes. Good morning, there was a comment earlier about the number of patients numbers CDB pace looks I guess it was from the coatings that you've been evaluated can you talk about what the number is that you believe that.
There are patients in the U S. What was the old number whats the new number and maybe just give us a sense of.
How about the revenues in the quarter, how we got there gross to that you know just.
You know where the pricing is these days thank you.
Okay.
Sure.
Mark I'm going to flip it over to Kristy to talk more on the ICD numbers and just a reminder, for you and everyone.
Both of our patient advocacy groups. The Lulu Foundation ICR were really instrumental in creating that ICD 10 code. So we've only had that ICD code.
Payable to us or in physicians for about three years.
And in niche and we've actually changed our data sources to to really try to be more sensitive, but christy feel free to share the numbers with mark.
Sure. So all of our modeling has really dictated in that dress about patient population of about 2000 pediatric patients and we stay firm on that number and that's the number that.
It's continuing to inform our forecast however, when I spoke earlier about doubling our ICD 10 patients we invested in a dataset early on that tracks. The ICD 10 code in the Houston job that we had really strong confidence that that would grow with our promoters.
Channel effort and it certainly did and we saw very nice increase in numbers. However, we decided as a team to invest in further amounts of data that is capturing even more patients and so on.
And that number has actually doubled.
The initial data set that we purchased and so with that we're getting a unique patients unique physicians treating these patients switches that led us to increasing our target size of physicians across the United States. So we sell stay firm on that 2000 and approachable patients that are pediatric and that has now.
Enabled us to find them a little bit easier.
Thank you.
Your next question comes from the line of Douglas <unk>.
Okay.
Operator, I'm sorry, we didn't answer the second part of Mark's question Steve.
My apologies.
Yeah, No problem Mark Yeah happy to provide additional commentary on the launch so revenues in the quarter were $4 2 million.
As you saw in the detail we had about 120 patients on commercial therapy actively on commercial therapy at the end of Q2.
No big changes in assumptions or gross to net discounts have been around that 20%, maybe a slight upside to that number.
It could be projected for the year.
From an average WAC basis, though that's where we have seen some upside.
We had indicated we thought our average age would be around four to five years old initially we're actually seeing that an average median age of around nine years old that takes our average WAC closer to 150000 annually or a little more.
I think what the quarter really gave us confidence in is what we've been saying all along is we have this steady continued build of patients and that that build is driving us and giving us confidence that again, we view this as a breakeven kind of investment in the <unk> commercial launch within about a two year window, we're investing about $25 million.
Annually between our reps our market access in this kind of small team going after these 2000 patients at.
At an annualized sales run rate of $30 million, we get to breakeven. We still think that's very much on track to happen by the middle of 2024.
And Mark I just wanted to answer your question a little a little.
I know you asked a direct question so year one when we looked at the ICD data, we were seeing somewhere between two and 300 patients and now we're seeing well north of 700 patients coded for CDK Alpha and that number is growing every year.
Apologies that we didn't get that to you earlier.
Alright, operator.
Perfect.
Douglas Tsao your line is open.
Hi, Good morning, Thanks for taking my question just one question for me I'm curious Scott now that we see a lot of progress on the pro drug and it's not that far behind.
The second generation.
Or are you thinking about the development of that.
That asset.
You know in terms of the overall oil franchise.
It's a great question, Doug I was keeping me in our back pockets to really look at the depression space.
And we all know what happened this week Unfortunately in the depression space, but.
And to be very Frank given the fact that our second Gen formulation has really shown at least early on.
Better characteristics than we initially expected I think it was a little bit more of the reverse where we always saw the project being the once a day solution in the marketplace.
I think very honestly, the one with the strongest intellectual property.
But given that the the.
<unk>, new formulation really looks to be twice a day, where it looks like we should be able to get the vast majority of patients up to blood levels of 150 to 175 nanograms very quickly.
It was.
It was almost a no brainer in our mind to make that investment and think about moving very aggressively into lgs.
So I think based on what we see in this healthy volunteer multiple ascending dose data.
As long as we continue to see good progress.
For us it take that compound into phase III.
Potentially into phase III.
In the second half of 2000 and for it to me is incredibly exciting.
And I think our team feels quite strongly that.
We only would require a single phase III efficacy study, which is also pretty unique in the seizure and the seizure world from an FDA perspective, and we can really leverage the <unk> loan.
Clinical package to accelerate that approval. So I look at it a little bit the other way that <unk> I'm sorry, our second generation program is kind of staring us in the face as a new alternative.
The project is equally exciting to us.
The the once a day potential of that drug looks great. This thus far what we believe the preclinical safety profile looks very strong and I think we're gonna have to take a long look in a year or two from now where we are across the board and how exactly we slot prodrug in I'm not sure at this point in time and they've been a lot of it is going to be.
Be dependent on the success of our second generation formulation.
And there'll be a great problem to have an end.
I think as we move forward and really expand into broader refractory epilepsy. There may really be a role here for us to work with a strategic partner. So we can accelerate development programs.
And I'm pretty open minded to thinking about how this how the pro drug will fit in but right now I would say we feel really good about the second Gen program and when are we going to take it from there.
We've had a better answer but.
No that's very helpful. Bob.
That provides the clarity thank you.
Yes.
Yeah.
Our last question comes from the line of Jay Olson of Oppenheimer. Your line is open.
Oh, Hey, guys. Thanks for taking the question.
That rate does meet the prespecified stopping criteria and the first quarter next year can you just walk us through the next steps and timing of commercialization in that scenario and also how important are the secondary endpoints.
Actualization.
Well, let's.
Let's start with the timing Jay and then we can talk a little bit about the secondaries.
With the completion of the study in Q1, we certainly would expect to file the NDA in 'twenty four we would expect.
Thank God team can put the NDA together in a rapid fashion and we'll talk about those timelines are little bit more in September and certainly we think that we would expect a priority review not guaranteed.
And in general our soft launch times are really looking at the middle of 'twenty, five and as Kristie mentioned with those type of timelines. We can incorporate this 250 ml bottle into the launch planning into the NDA.
And to be ready for that at launch we had thought historically that we would file with the 500 get approval and then look for the.
Supplemental approval with the $2 50, but we're now going to incorporate all of that.
And I think when we talk in September .
Kristen Rudisill, our lead on the IV program, we'll talk a lot about the end cap program and we think that launch that roughly that launch timing in the middle of 'twenty five.
<unk> will really set us up for strong.
And tap reimbursement for for three full years.
And again, we'll lay out all those timelines in September for you.
The secondary endpoints, we think are critical I mean, we've gotten questions on how big is the market earlier.
The are we is this a much smaller market than we originally thought I think we truly believe the answer is no and again by us really narrowing the field here. The key secondaries are the key primary and key secondaries are critical for us getting this drug approved but if we want proper reimbursement in the hospital.
We really have to show the economic value of the drug and I think we've designed the study to do that we're enrolling the right patients to do that and so I think that many of the the exploratory secondaries are going to be the basis of our health economic argument.
And as a reminder to folks were very enthusiastic that we can use the larger data set to make those arguments as we put those those second those exploratory secondaries into the public domain into our publication strategies.
No.
It's going to be a combination of the two we know that anesthesia in and of itself has high morbidity high mortality lots of costs from longer hospital stays typically 10% to 17 days in our neuro ICU for these patients.
The high rate of of cardiac support high rates of ventilatory complications Gi complications.
So the bar is pretty low for us to really show some meaningful outcome benefits Christianity isn't that you wanted to add.
On that that I didnt hit on.
No you really.
And I think what's important to note is that that work right now is being informed by the larger pieces of work that we just finished and so cost of care and value is where we're spending the majority of our time right now and to Pat's point. The secondaries are driving most of what is coming out of that park.
Great. Thanks, operator, we're at time and we're going to.
And the conference call I want to thank everyone for dialing in for your support and we look forward to seeing many of you live in September and.
We also look forward to really giving you a deep dive a little bit more on on the raise.
The raise trial, we will do a deep dive on baseline characteristics as we've talked about will go through the enrollment numbers.
Really good to hear a deep dive on our commercial plans and we're going to spend quite a bit of time on the oral franchise as well.
Team has been doing a great job to prepare for that so we look forward to seeing you then thank you.
This concludes today's conference call you may now disconnect.
Okay.
Yeah.
Yeah.
Yeah.
Okay.