Q2 2023 Mind Medicine (MindMed) Inc Earnings Call

[music].

Yeah.

And well come to mind medicine second quarter 2023 financial results incorporate update conference call.

Currently all participants are in a listen only mode.

This call is being webcast live on the investors and media session of mind Matt's website at my the Mad Dog C O N.

And a recording will be available after the call.

For opening remarks, I would like to introduce Potbelly Youll mind, Matt. Please go ahead.

Thank you and good afternoon, everyone.

Welcome to our second quarter 2023 financial results and corporate update conference call.

The press release reporting our financial results is available in the investors and media section of our website and our quarterly report on Form 10-Q. The quarter ended June 30th 2023 will be filed today with the Securities and Exchange Commission.

Joining me today is Sean Greenway, our Chief Financial Officer.

Dan Carlin, our Chief Medical Officer.

Dr Mary <unk>, our executive President.

During today's call, we will be making certain forward looking statements, including without limitation statements about the potential safety efficacy and regulatory and clinical progress of our product candidate.

Financial projections, and our future expectations plans partnerships and prospects.

These statements are subject to various risks such as changes in market conditions and difficulties associated with research and development regulatory approval processes.

That are described in our filings made with the FTC.

The most recent annual report on Form 10-K, and quarterly report on Form 10-Q.

Forward looking statements are based on your assumptions opinions and estimates of management of the date. The statements were made including the non occurrence of the risks and uncertainties that are described in our filings made with the SEC or other significant event occurring outside of my Meds normal course of business.

You are cautioned not to place undue reliance on these forward looking statements, which are made as of today August three 2023.

<unk> disclaims any obligation to update such statements, even if management's views change except as required by law.

We're very excited to be providing the financial and business update as we rapidly approach and exciting and critical period for mind that.

Over the past year, we have made significant progress on our R&D pipeline, which has positioned us for a series of important milestones in the coming quarters.

Our most advanced fleet program, and then 120 or generalized anxiety disorder or <unk>.

<unk> seen extraordinary enthusiasm and execution over the past 12 months.

In August 2022, we dosed the first patient in our Phase <unk> study then in 120 for J D and with the significant momentum. We have achieved we are on track to complete enrollment and patient dosing by the end of the third quarter with top line data on the primary endpoint through week four to be reported in the fourth quarter of this year.

It is worth a moment of reflection on the significance of this upcoming milestone given the historical importance of compelling opportunity for life, a giant or L. S D.

L. S. D is the most studied storied, perhaps most stigmatize dragging the psychedelic class.

Our aim that was compelling clinical data from our phase <unk> study, our proprietary formats LST and then 120 will become one of the leading candidate if not the leading candidate and if I could like drug class.

Before we dive further into our R&D and financial update I would like to highlight the current backdrop of brain health disorders.

His experience increased visibility due to worsening epidemiology and recognition of its significance on overall wellbeing.

In particular depreciation for the breadth and magnitude of impact that anxiety plays in driving brain health disorders.

We've been heartened by the recent comments from the president regarding the need to improve access to mental health care and remain supportive of broad and concrete steps to do just that.

Given that the annual health care costs for people with a behavioral health condition or three and a half times higher than those without a behavioral health condition the need for better access to mental health care is clear.

We believe the re emerging potential of L. S. D. As a pharmaceutical candidate is also mirrored by the growing appreciation for the core nature of anxiety and psychiatric disorders, including JD in particular.

J D isn't often debilitating mental health disorder associated with excessive anxiety and persistent worry, which can lead to significant impairment, including less accomplishment at work and reduced labor force participation as well as significantly higher rates of other comorbid conditions.

And unfortunately, the problems has grown significantly over the past several years.

Our recent mental health prevalent study that was prepared for the substance abuse and mental health services administration or Samsung.

10% of U S. Adults report, having generalized anxiety disorder diagnosis.

Making it the second most common mental health disorder, among adults and.

In comparison to historical studies of the prevalence of the condition appears to have tripled in the last two decades long.

This reality is reinforced by the recent emphasis on anxiety screening is last year. The U S. Preventative services task force or U S. P. S. T F issued a recommendation to screen for anxiety, all children and adolescents, aged eight to 18 years and issued a draft recommendation to screen all adults under the age of 65.

Gross and prevalent in focus of anxiety disorders, and unfortunately, not been matched by innovative treatment with the treatment landscape remaining dominated by SSRI SNRI benzodiazepines and then more limited cases anti psychotics.

In fact, the last original approved marketing application that was focused on the treatment of JD was obtained for Cymbalta in 2004.

Despite the broad use which represents approximately $3 billion in annual U S revenues.

Available therapy suffer from a variety of efficacy safety and tolerability challenges with the low rates of compliance and our mission.

The simple reality is that for many years J D has been overlooked indication precisely because the most used treatment options such as ssris appeared to be less well equipped to trading <unk> symptoms of depression symptoms.

This presents both of the relatively lower response to accessorize and J D versus M. D D.

But also in the fact that MBV patients with heightened anxiety typically respond less well to current standards of care.

Quantitatively. This is displayed by the fact, the current therapies for J D have demonstrated a standardized effect side of around 0.4 clinical trials, we've come demonstrating a considerably lower response.

The research, we've conducted with patients and health care practitioners in the U S and Europe tells us that there is a significant demand for a new pharmacological class they could offer faster more profound and more durable efficacy responses as well as favorable safety and tolerability.

This is particularly true in the segment of patients who despite having tried currently available therapies continue to experience intolerable anxiety.

We believe this is a major contributor to the high degree of enthusiasm, we consistently hear from patients providers and payers on the revolutionary potential of am 120 and psychiatric disorders.

As one prominent psychiatrist recently put it the days of vessels horizon alike are limited.

On a related note in June FDA released draft guidance for developing drugs and psychedelic drug class.

Notably this guidance highlights the reality that dose response is not well understood because the drug class and emphasizes the need for elucidation of dose response relationship exactly as we are doing.

The draft guidance also knows the importance of establishing a standalone drug effect that is in the absence of psychotherapy really exactly as we designed our clinical trial over two years ago.

In our view our approach is clearly in line with the FDA guidance and importantly allows for consistent study design and treatment delivery paradigm, and we potentially advance into pivotal clinical trials.

To our knowledge our phase <unk> study and then 120 and JD is the largest controlled study a L. S D ever conducted.

Guide the dose selection and development strategy for and then 120 <unk> as well as deepen our scientific understanding of its clinical effects, that's underlying functional mechanisms of action.

It's important to point out that we dosed our first patient just under one year ago in August of 2022.

The activation of all of our clinical sites only occurring at the beginning of 2023.

The ability of our team to execute a study of this size, so seamlessly and efficiently stands out within the field and also speaks to the quality of the organization, we adopt a mindset.

It also reinforces our high degree of confidence in our team's ability to launch and raw future studies and a very efficient manner.

Patient dosing in enrollment for our phase III trial in <unk> is progressing well across our 20 active sites and we expect to complete study enrollment in the third quarter of this year with top line results to be reported in the fourth quarter of this year.

Patients in the trial are randomly assigned to receive a single administration of either 25, 5100, or 200 micrograms, and then 120 or a placebo and then followed for up to 12 weeks.

The primary objective of this study is to determine the dose response relationship with and then 120 across the four active dose arms as measured by the change in Hamilton anxiety rating scale or him a at four weeks post dosing.

The statistical analysis being employed in this study is a multiple comparison procedure modeling or M. C. P. Mod approach sophisticated statistical approach developed by Novartis, which is especially well equipped to demonstrate dose response and optimized dose selection.

This statistical approach, which has received qualification opinions from both FDA and EMA and superior power and lower estimation errors compared to more traditional design, which we believe bolsters the probability of success of our approach.

As we finalized this week.

Cool analysis plan for our Phase <unk> study, we have also made the determination that due to the high powering of our approach a reduction in the minimum sample size as warranted and as a result, we are reducing the enrollment target by 10% from 200 patients to 180 patients.

We believe this change and maintain critical power of approximately 90% to achieve the study's objective and based on our internal modeling there's a high degree of confidence in obtaining statistically positive results.

We observed an effect size they represent even a marginal improvement over the standard of care.

As we rapidly approach conclusion of our phase <unk> study.

I'm excited to share our plans for the ultimate formulation, we intend to advance <unk> and then 120 product candidate <unk>.

Specifically utilizing catlin Zaidis ODT technology, as we announced earlier today.

Over the past years, we explored numerous advanced dosage forms with the aim of enhancing pharmaceutical performance and intellectual property protection, creating a product that is difficult to replicate and has the opportunity to demonstrate more attractive pharmacokinetic performance characteristics, such as faster absorption better bioavailability reduce variability.

<unk> as a result, the potential for reduced duration of perceptual activity.

Towards this end we entered into an exclusive license agreement with Cadillac that covers all forms of velocity across all major pharmaceutical market.

Cadillac is the global leader in enabling Biopharma Celgene in consumer health partners to optimize development launch and supplier better patients treated across multiple modalities with our agreement <unk> has gained access to catalog patented diverse orally disintegrating tablet or ODT technology for use with <unk>.

Then 120.

Catalysts proprietary data technology is a unique freeze-dry oral solid dosage form the disbursements almost instantly in the mouth without the need for water.

We believe that the <unk> OTT delivery technology when incorporated into our and then 120 product candidate.

Represents an optimized pharmaceutical product that has the potential to enhance our competitive advantage in the marketplace and continue to expand our intellectual property or states, where the first relevant patent application not expiring until 2042, assuming our patent application claims are issued and granted to further support. This transition. We are also planning to initiate a phase one pharmacokinetic.

Medics bridging study to support the advancement of <unk>, and then 120 Odt's independent clinical trials.

We believe this will allow for precise dose selection for phase III, providing valuable data to bolster our intellectual property position.

Additionally, we have either completed or in advance planning to complete all prerequisite study that we believe will enable an efficient transition from inclusion of our phase III clinical program into pivotal phase III studies.

In addition to this session based delivery of IMMU 120, Mg a D. We are investigating the direct neuro pharmacological activity and then 120 serotonin agonists and innovative treatment regimen.

One such exploratory approach is our phase II proof of concept study in 120 for ADHD.

This study is being conducted in collaboration with University Hospital Basel, Switzerland in Maastricht University in the Netherlands.

And is designed to evaluate the therapeutic utility of repeated low doses and then 120 in adult patients with ADHD.

Notably this is the first study in which and then 120, it's been administered outside of a clinical setting.

To date, no Esa use have been reported to guessing the real world potential of this treatment regimen as well as demonstrating our ability to deliver and then 120th innovative dosing frequency combination.

We expect to enroll a total of 52 participants who will receive a 20 microgram dose and then 120 or placebo twice weekly for six weeks with a primary endpoint for this study being the mean change from baseline and 80 HD symptoms as assessed by the AI Srs after six weeks of treatment.

Enrollment in this study is to continue to progress with over 80% of enrollment complete.

However, due to controlled substance importation challenges that our Netherlands site.

We now anticipate reporting top line results in either the fourth quarter of 2023.

First quarter of 2024.

Our second lien program and then part two which is the RNA tumor of M. DMA.

We believe <unk> holds promise for its potential pro social effects and favorable tolerability profile versus racemic M. D N a.

The focus of <unk> development is to develop a regularly administered product treat the core symptoms of autism spectrum disorder, where ASD and particular social communication difficulties.

Remarkably despite significantly increasing prevalence of ASD. There are currently no approved therapies, specifically targeted at its core simple.

MDMA, often referred to as an and pathogen.

Thetic molecule known to enhance feelings and connectedness compassion.

They aren't interfered with MDMA and particular, I believe could boost serotonin and other neurotransmitter levels in the brain, leading to increased our stability and enter personal emotional warm.

Preclinical studies of RMB and they have shown acute pro social pathogenic attack all produce dopaminergic activity suggests that might exist, but fewer stimulus neurotoxic hypothermic and abuse related effects compared to preceding like MDMA or the estimate of humor.

With robust preclinical evidence supporting our approach we're excited to launch the phase one clinical trials and then forward to later this year.

The trial aims to assess <unk> tolerability pharmacokinetics and pharmacodynamics.

Actively exploring all possibilities to generate early indications of efficacy during development.

We expect together such data both from Neurotypical healthy volunteers and otherwise healthy individuals diagnosed with ASD.

Currently we have collaborated with the University Hospital Basel to conduct a comparative phase one pharmacokinetic and Pharmacodynamic study of our S and racemic MD&A.

The study involves enrolling healthy volunteers and is designed to evaluate the tolerability pharmacokinetics and acute subjective physiological and endocrine effects of three molecules.

Successful completion of this study is expected to expedite our understanding of <unk> pharmacological profile as we progress into later stage clinical development.

We've been informed by UHD that they anticipate completing enrollment by the fourth quarter of this year and anticipate the data will be presented in the first half 2024.

Next I would like to turn to our digital medicine updates.

Alongside our drug development strategy, we have a suite of digital medicine programs that hold the potential to enhance the adoption utilization and accessibility of our drug product candidate.

As we look at the potential commercial challenges drew especially.

Especially important with our product candidate being developed recession based delivery.

We believe our integrated digital applications can significantly contribute to overcoming potential barriers to position our product candidates as ones with the most efficient delivery throughout the patient journey.

Similar strategies have been successfully utilized a great success for other groundbreaking therapy effectively overcoming similar barriers to deliver an enhanced efficiency and ease of delivery.

This differentiating factor could also afford us even further market protection, making our alternate products extremely difficult to replicate while maintaining the same degree of safety effectiveness and ease of delivery should they ultimately be approved or marketed together.

Over the course of 2023, we have seen significant progress in the depth of digital medicine programs and successfully integrated these digital applications into certain ongoing and planned clinical studies.

Our specific approach targets two primary critical period.

Activity during the treatment session or interest session.

And activities between treatment sessions or intersection.

Each approach is built on a platform comprising distinct components with some falling under the purview of the Fda's definition of medical devices.

Others may not be regulated itself.

So those are the qualified medical devices, we intend to collaborate with the FDA and other international regulatory authorities.

The guidance throughout the development process with the goal of ultimately obtaining regulatory clearance or approval.

To date, we have significantly advanced the technical clinical and regulatory execution of our interests session monitoring application.

Mind med session monitoring system or M S or not.

Through multiple meetings with FDA, including Representatives of both the FDA center for devices and Radiological health CVR age.

And with the division of psychiatry within Cedar.

We believe we have charted a course with the intent to further the integration into our clinical development program and then 120 with an aim to ultimately obtaining approval for the integrated solution.

The path to achieving this objective is as well established device regulatory pathways and efficient and unique manner.

Specifically, we are leveraging a development pathway in which a version of M. S. M. S. Designed specifically for use by providers and patients. During this provider nasal spray treatment session is being advanced in pursuit of a class III regulated software as a medical device or Sam D clearance do you have it.

De Novo pathway.

In pursuing the <unk> clearance.

The builder product, we believe will be a useful asset supporting the safe administration from Nevada.

At least from the clinic of patients undergoing robotic treatment.

We're also seeking to establish with FDA that the components of our products meet their requirements for labeling.

We believe this initial approach to obtain early FDA clearance for M SMS, which provide O paved the way for a potential rapid regulatory application of a subsequent msmx version designed for use with <unk> 120 subjects with potential future approval to leverage the efficiency of this approach as we pursue the de novo clearance for MFS in that.

Used in conjunction with <unk>, we are in parallel collecting data on M. S. M S. Using conjunction with LSD from both clinical studies being conducted through our UHD collaboration as well as studies that are part of our and then one 'twenty development program.

This strategy opens the door to potential early clinical integration and SMS as a companion device and then 120 and the potential subsequent pursuit of a combination product label.

Given the anticipated episodic nature of treatment and then 120 in particular.

We're also continuing to conduct clinical research with our digital medicine applications.

Well for ongoing patient monitoring engagement outside of the treatment session.

We aspire to have the integrated data from insertion monitoring with MSNBC and out of session monitoring allow for a deeper understanding and prediction of patterns of response, and then 120 and potential optimization of dosing paradigms on a more individualized basis.

Turning to our commercial initiatives over the course of 2023, and we've continued to attract strong commercial leaders, who have successfully launched numerous products, including in complex and highly stigmatized settings.

We're continuing to see great progress in these initiatives as we seek to develop a groundbreaking market access strategy thoroughly document the clinical and socioeconomic impact of our targeted indications.

Generate health economic and outcome research data to bolster the value proposition of our product candidates.

We recognize and embrace the challenges associated with essentially launching a new therapeutic class in a major market indications.

We are also encouraged by the recent growth in uptake of Johnson's provider nasal spray.

Similarly utilizes assertion based delivery paradigm.

The lack of a durable treatment response first bravado requires patients to spend over 12 hours in the clinical setting across six or more visits in the first month of treatment alone.

Even still in the most recent quarters provider sales grew by 99% year over year with a greater than $675 million annual run rate in light of this increasing uptake and the demonstrated willingness of patients providers and payers to embracing innovative intermittent treatment model should.

Should we be successful in demonstrating the safety and effectiveness of MMO in 'twenty, We believe and then one 'twenty could represent an even more attractive treatment option with more durable unless administratively cumbersome delivery characteristics.

As we continue to progress our pipeline, we remain committed to offering greater clarity on our planned commercial model and the path forward for each program aiming to maximize the impact of uptake of our innovative product candidate.

With respect to our intellectual property and market protection strategy. Our current patent portfolio includes 57 pending U S application and 19 pending patent cooperation treaty applications.

These include applications covering compositions dosing dosage formulation and methods of treatment among others projected exploration dates beginning in 2041.

Our market protection strategy has been further strengthened by our recent exclusive license agreements covering the use of the Cadillac <unk> ODT technology for LST in all its forms and all major pharmaceutical markets.

We continue to retain all rights to our product candidates and we're aggressively protecting and expanding our intellectual property portfolio as part of our comprehensive market protection strategy.

Over the course of the next several quarters, we anticipate several important intellectual property milestones that we believe will reinforce our optimism about our ability to durably protect our market position for many years.

Overall, we are highly encouraged by the progress we have made it mind, Matt and were enthusiastic about the many exciting milestones in the months ahead.

We are deeply committed to advancing our organization and providing new life changing treatment options for individuals suffering from brain health disorders.

As we continue our strategy to bring our lead product candidates to market. We firmly believe we are laying a strong foundation for creating enduring value for our shareholders.

With that I'll turn the call over to our CFO , Sean Greenway to discuss our financial results John .

Thanks, Rob and thank you all for joining us today.

We will now turn to our financial results for the quarter ended June 32023 as of June 32023 mine <unk> had cash and cash equivalents totaling $116 9 million compared to $142 1 million as of December 31, 2022.

We believe that our cash position allows us to accelerate our preparation for moving quickly into a pivotal program our leap <unk>.

Development candidate.

<unk> hundred 20, and will be sufficient to meet our operating requirements beyond our key development milestones in 2023, and then to the first half of 2025.

The net cash used in operating activities was $27 $2 million for the six months ended June 32023.

Compared to $28 million in the first six months ended June 32022.

Yeah.

R&D expenses were $14 8 million for the quarter ended June 30 of 2023 compared to $9 3 million for the same period in 2022, an increase of $5 4 million.

The increase was primarily due to increases of $4 4 million in expenses related to clinical research for our <unk> 120 <unk> study.

Your point $8 million and preclinical activities.

To your point $6 million and internal personnel cost as a result of increasing R&D capacities.

Zero point $2 million in connection with various external R&D collaborations.

Partially offset by a decrease of $2 $5 million in expenses related to our <unk> program and a decrease of zero point $1 million related to our <unk> hundred two program.

General and administrative expenses were $14 $4 million for the quarter ended June 32023, compared to $7 6 million for the same period in 2022 and.

An increase of $6 $8 million.

The increase was attributed to professional services fees and expenses related to our proxy contest in connection with our 2023 annual general meeting of shareholders and additional cost to support the growth of our business.

Our net loss for the quarter ended June 32023.

It was $29 1 million compared to $2 $17 million for the same period in 2022.

I will now turn the call back to Rob who will provide some closing comments.

Thank you Sean.

As we come to a close I want to extend my sincere appreciation and gratitude the critical work and unmatched execution brought mind that ever closer to realizing our mission.

I'd like to thank our highly talented and deeply committed team our research collaborators and clinical investigator teams, our investors and the many other individuals who have been supportive, including especially our patients and their families.

We are working tirelessly to deliver on the therapeutic potential of our pipeline and transform the treatment landscape for many individuals within with brain health disorders.

With that I'd like to thank you all again for joining us today and I'm happy to take any questions.

Thank you.

I will now be conduction a question and the first question. If you would like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue.

Perhaps the size if you would like to remove your question from the queue.

Perfect.

Because I mean, it may be necessary, which beats up your handset before pressing based IC.

And our first question comes from China.

With Cantor Fitzgerald. Please go ahead.

Yeah.

Yeah, Rob and thanks for taking our questions and.

Congratulations on the J D enrollment progress and desire to feel that that looks to be pretty interesting I know other companies have been satisfied with working at technology.

Again.

Just a couple of questions on the <unk> going.

Steady and so we will start with four different dose levels and placebo.

So I'm wondering what do you anticipate for that base respond and then secondarily for moving forward. What is more important to you is it a certain P value or is there a responder rate.

For efficacy.

I guess given that this is not a pivotal study.

We anticipate that the totality of data is most important but what are you looking for out of this study.

The win Yep. Thanks, so much thanks, so much Charles Thanks for the question.

So first in terms of what were what were expecting across the dose levels.

Certainly what we've seen from historical studies in healthy volunteers gives us some insight in terms of the acute pharmacodynamic of.

120 or LST.

Yeah, no very little and I think it was highlighted in the Fda's recent guidance was actually known about the relative responsive different doses or really across a broad range of any of those drugs and so we're going in our part of the statistical methodology allows for the nomination of.

Candidate response curves now I think based on historical data where for particularly the data that came out of your H B last year, where we saw there was a degree of correlation between the magnitude of the acute perceptual effects. The ultimate clinical response in that study and I think we have an expectation that.

At higher dose levels in the range, where we're studying we would see a more robust response, but of course.

The entire study is designed to to hopefully elucidate what that response curve.

And that translates nicely over into the second part of your question in terms of whats most meaningful what's most important moving forward.

Certainly as a as a dose optimization study one of the key features is to identify it.

Dose that we can transition into subsequent kind of a research and getting pivotal studies and in connection with that and we're looking.

To also quantify the magnitude of the effect size at the different doses, but also at the dose we would ultimately then selected to take forward.

Okay that in terms of an outcome is really key and understanding the magnitude of the effect is going to of course drive the patient numbers.

The powering of subsequent clinical studies.

And so in that context, certainly from a clinically relevant perspective, we would certainly want to see a response that is in line with or better than.

The current standards of care as I mentioned earlier on the call.

You don't get an effect size of <unk>, four or below so something there or above would be certainly supportive of moving forward in our view.

Obviously, given the historical evidence in some of the preliminary study developed D. We think there's a really compelling opportunity and if we see a higher effect size of even more exciting about the opportunity for it and of course would also imply.

Higher power of lower required patient numbers as we progressing.

Okay. That's helpful. Rob if I could ask one additional final follow up question regarding the phenotype of the sample of the patient sample that you are enrolling do you have a pretty broad range age range 18 to 74, I guess I'm wondering what you think about that in.

Terms of heterogeneity I mean, some of those patients may need it in a general anxiety disorder for quite some time would you anticipate there to be an age interaction of fast and have you incorporated.

Analyses in two Years' Statistical analysis plan. Thank you.

Okay.

So I'll take a make a brief answer and then turn it over to Dr. Carlson.

10 o'clock to respond further.

I think high level when we.

When we look at the study and we're certainly with the rich data set will have coming out of the study I think it will have a lot of insight you're able to do many many layers of analysis to understand both the activity of the molecule and the clinical response.

It is not planned as a primary or secondary analysis to look at specific age effects or specific.

In terms of the duration of prior diagnosis with J D.

That said of course, we will be exploring.

Exploratory analyses.

Extensively any of the characteristics that could be impactful.

Forming a design in subsequent studies, but Dan do you want to take it any further.

Yes, I could just add and things for that question.

<unk> is interesting in that it is obviously a heterogeneous diagnosis regardless of age but also that there is an accumulation of disease burden.

Right.

<unk>, which makes it.

Some of the different than other.

Yeah.

Speaking neurotic illnesses and so.

Both age as accurate for analysis and duration of Illinois, because it's certainly possible that older songs have only recently developed sort of as well.

I'll be interested in that I'm interested in how both the acute effects vary with those factors and of course, how longer term efficacy data with both duration of disease.

My last question is for Sean.

As Dan was finished.

The off a little bit so Sean quick question regarding the cash and I think you mentioned it was sufficient to fund fully funded into the first handful.

When he signed I think is what you said I guess my question is do you anticipate being able to operationalize.

Phase III study perhaps.

At the end of 'twenty four and does is that cost included in your projections or would that would that change depending on the design and size of that phase III.

I appreciate that Charles.

I will kick it over to Rob to talk a little bit about aspects or the other phase III, but as it relates to guidance.

Pretty much just said that in.

Our.

It's pretty set for having a runway into the first half of 2025, and obviously assuming success.

A success.

As Rob has mentioned before that the goal is to quickly pivot and move quickly into phase III, we haven't given any guidance as to as to.

The timeline one of the phase III I don't know, Rob do you want to add any additional color there.

Yes, Thanks, Sean.

As John said, we haven't given guidance on the specific timeline.

<unk> and the phase II or for initiation of a phase III study, but certainly.

We are very much of the mind that we need to be fast and efficient with our development program and move seamlessly through to subsequent stages of development. So we are undertaking all of the preparations in as much engagement in preparation to seamlessly and very quickly transitioned into those later stage.

Our regulatory discussions at all through the launch at the later stage studies, so as as we come to data and as we start to get further guidance on this precise timelines will certainly oh.

Update as well does impact them.

The financial guidance associated with any any further scoping at the later stage trials and programs.

Okay that makes sense. Thanks, Rob Thanks, John for taking my questions.

Thank you Charles.

Our next question comes from Brian Abrahams with RBC capital markets. Please go ahead.

Hi, everyone. This is <unk>.

<unk> on for Brian .

That's on all the progress that you were able to make.

This quarter.

I was wondering if you could give me a little bit more color on the catalyst formulation deal. So you had mentioned that.

With the oral dissolving.

As such that you have that.

You might be able to extend out.

Production, a little bit more if you could tell me.

Whether you think that the dissolving dosage would be something that would appear on a potential label and.

If the PK.

Can't be replicated by like a typical <unk>.

The sublingual dose solid dosing.

And then.

As a follow up to that as well do you think that this formulation will be something that you end up bringing in to phase III or would be the go forward.

Formulation or does that kind of depend on how the phase one.

Trials that you would tend to run with that Pan out.

Yes, thanks very much for the question.

So in terms of our dose selection is certainly our intent to take for the ODT formulation.

And the subsequent clinical trials without them on 'twenty in particular.

Assuming a successful phase two study to take it forward into individual clinical trials to commercialization.

Should we look like in a market application approved.

In terms of the performance characteristics and that protect ability.

One of the key features of <unk> technology is also a bit there.

Rapid rate, but its integration.

With drugs that have obviously a.

Q perceptual activity that we anticipate in development and certainly later downstream would result in a period of time.

Correct.

Every interval of time is important and the ability to have a dosage form but it's been a great almost immediately in the mouth and then it gives an opportunity for pre gastric absorption to drive faster uptake absorption in the body could be quite important in terms of differentiating the product from <unk>.

Local products and certainly from an oral capsule or a solid oral dosage form that is subject to gas.

Gastric dissolution of disintegration and subsequent absorptions. So our view is that it offers a really compelling opportunity to differentiate potentially on the on the pharmacokinetics and certainly in terms of the dosage form and based on all that we know in the.

Proprietary information, we have about the performance of a LSD by modern pharmaceutical standards. This technology manufacturing process. All of this is something that we've been able to.

Take additional steps to protect from electro property perspective, and also that we think would be very difficult.

Not impossible to replicate.

The ability to differentiate that product profile and the ability to differentiate particularly when it comes to things that would potentially have an impact on the safety or the performance of the molecule are often what can substantially differentiate our product.

And really you know you can look at some other other products get to the first part of your question.

Biohazard Nortek ODT successfully been take it forward into the clinic and ultimately.

To launch now owned it and marketed by Pfizer.

Yeah.

Thank you I appreciate that and if I can ask a follow up as well so as you're thinking about.

As youre thinking about designing some of the pivotal study is moving forward based upon the fda's guidance on how to run trials for psychedelic.

They've recommended placebo controlled trials as well as low and high dose studies.

Are using blinded raters that dual monitors how are you kind of or how is that newly released guidance kind of impacted your thinking about designing these trials moving forward.

It's a great question.

As a <unk>.

Conversation and Oh intellectual discussion, we've been having with with FDA.

I've been a part of both your momentum in other organizations over the past several years and.

There's obviously, a dynamic with psychedelic drug class, where the acute perceptual effects, particularly at high doses.

Is it.

At risk for functional unwinding.

The phenomenology of an administration section of a psychedelic is quite unique and quite profound but it's also really important we don't lose sight of the fact that almost every.

Potent CNS drug ever developed but particularly some of the recent ones such as <unk>.

Provided with itself has.

I have dealt with a similar challenge the functional and blinding was not.

Genetic or psychedelic in nature, which provide ho.

It is associated and you can see that.

Very very plainly displayed why wouldn't you look at the adverse event.

<unk> four <unk> versus a placebo placebo controlled research is the gold standard in demonstrating effect and I think as we've approached them.

Of course exploit all of the available.

Options, we could use for control condition, it really the room most robust.

Control Commission that can be taken forward into any study I think one of the significant challenges and I would I would note that the FDA guidance certainly discusses this but.

There's plenty of room for I think.

[noise] appropriately so for subsequent discussions and an agreement with the division in terms of the path forward and appropriate controls.

When you zoom out and think about the intent of a control condition is both going to aid in the interpretation of safety data as is noted in the guidance it would be nearly impossible without a placebo condition to determine the attribute ability of adverse effects or any sort of safety findings and therefore for safety interpretation of placebo is absolutely Paramount.

And also really important.

If we're actually trying to mitigate a functional unwinding.

That Ah control condition that would be use other than a placebo to mitigate that potential.

<unk> would have to be a dose that is perceivable.

Giving someone a dose of LST for instance that doesn't rise to the level of having any sort of perceptual effect doesn't really aid doesn't really mitigate the risk of functional and binding while it does hamper the ability to adequately interpret safety conclusion, so in our view using a sub perceptual dose of a cycle.

I like.

It's really one of the most challenging to argue for because it really.

Doesn't aid in the thing we're trying to to overcome and does create challenges in terms of interpretation of the study results. So our view is that the appropriate control and.

In studies with Psychedelics in 'twenty program is to use a placebo controlled research, which again is the gold standard for all clinical research and it's something that we certainly will be putting forward in field.

You'll feel quite strongly about it as it goes before it in development.

Okay. Thank you so much for taking my questions.

Thank you.

Our next question comes from Alan <unk> with.

Please go ahead.

Yes. Good afternoon, Bob can you hear me please.

Hi, Ken Thanks, Tyler.

Yes, hi.

Coming back to the designers technology.

Obviously, there are a number of precedent you refer it to at least one.

And the improvement in onset of action and bioavailability.

Can we extrapolate.

To specifically to an end one in 'twenty.

What magnitude of improvement could be.

Estimate based on historical and based on the number.

Actual product candidates that have been tested with the technology itself.

Okay.

Yeah. Thanks Ali Yeah. It it's a great question in terms of.

Extrapolation from other molecules, there's a number of physiochemical and other performance.

The performance properties that dictate the rate of pre gastric absorption for any molecule.

And certainly one of the strong reasons for proceeding with a phase one study to characterize exactly that to characterize the rapid nature of onset time to onset.

Any absorption and the time to answer the need for social activities will give us the specific insight. So as we progressed through that study very quickly and have the data.

Come available I think we'll be able to get much more precise and it probably is a little bit premature for me to extrapolate from other molecules, but certainly some of the the initial and silicon modeling. We've done has given us confidence that we would see an opportunity for enhanced performance and enhanced.

Okay profile that will potentially be differentiated and it could be more attractive. So that was the one of the motivating factors for taking that product forward and as we come to it to the PK data with that formulation.

Compared to our.

Two formulation and what will have direct insights can provide a much more extensive answer on the exact difference.

Yes.

Hearing your commitment to move forward once you better characterized in phase one.

It certainly appears that it cannot make things worse.

I want.

This improve.

And by availability.

Is that correct or safe to say.

Well, it's certainly Ah.

One of the features of a molecule that.

Is it highly potent.

Penetrable and that we know when we get a solid.

Oral dosage forms such as the capsule that then requires a first time and dissolution time.

A product that is administered in the mouth and then swallowed for instance with water.

Presumably would have a similar degree.

Similar profile upon.

Entering the stomach and so.

While we certainly need to demonstrate this and want to characterize the response, we feel like there is.

A limited.

Down side risk in terms of.

Worsening outcomes for these guys, but again.

This is subject to confirmation that we're moving forward with a PK bridging study.

Sure.

And my second question is about the draft guidance and.

The nature of inclusion of placebo and a.

The low dose.

The active drug.

Do you think that you will have done enough work in this space to be.

Two at least partially satisfy that or do you think that you would have to continue an exploration of identifying what are the two safety profile 120.

And what is the.

Differential between the low dose and be presumably most effective dose.

In terms of clinical.

Perfect.

Okay.

So in terms of.

Selection of of a designee enforcing that'd be informed by the results from our phase two dose optimization study Richard I think it's worth reiterating that the reality is this is the most extensive and rigorous exploration of dose response in a patient population.

Certainly with LSD, but to our knowledge with any drug and the entire class.

We will have a very rich data set and a lot of information that we can then use to support.

Decision, making and proposals for subsequent clinical trials.

In terms of characterization of safety is really a function of.

The dose doses that.

Our sponsored would be intending to move forward and ultimately bring.

Bring to a marketing application so as we identify those doses to the response it certainly will inform subsequent development, but I think there's yeah. There's multiple questions that the program can act can ask them at times are one of the questions put forward is to characterize a of course the lowest effective dose.

That's quite different.

<unk>, then using a sub per sector.

Perceptible dose that presumably does not have the robust.

Clinical response, and using that perceptual dose that they control condition in lieu of a placebo that that's where we really have.

Focus and with respect to the guidance feel that got.

It's really appropriate to bring four placebo controlled research into all subsequent clinical trials.

Understood. Thank you very much Rob.

Thank you Omar.

Our next question comes from.

Frank Please go ahead.

<unk> with Oppenheimer <unk> Co Inc.

Please go ahead.

Hi, Thanks for taking the question just a couple here in terms of the PK.

If it is that its formulation ODT formulation.

Do you share when you would expect that data to come out and is that data that youll share or just use internally to figure out how to.

Use it in a phase I trial.

Yes, we haven't given guidance to.

The exact date when that will be available.

And the extent of it.

Dissemination of of those results it may be used primarily for internal decision, making and support.

Dose selection and transition of moving into an end of phase two meeting and hopefully.

Assuming a successful phase II study moving into pivotal studies, but at that point in time once we have sufficient data in.

So just a clarity on the results of that study and the implications for dose selection will certainly be in a position to share more about about the outcome of that study.

Understood and in terms of the digital effort.

Is this something that.

Youll share is it.

That you intend to use in phase III or anything that we should expect to see in a phase II b or is this.

Any color there on when we can expect to see data on on the digital effort here.

Yes, it does.

Medicine programs and I'll ask Dan Carlin.

Speak a little bit further to it but.

It is not being used currently in our phase <unk> study, but certainly as we continue to explore and aligned with the agency, both Sierra and theater on the path forward and the inclusion of our digital medicine applications and in such a kind of clinical research.

I really want to make sure we have alignment there before we make any commitments to exactly when it would be used in our development program, but certainly our intent as we progress is to integrate it into clinical research with 120 at some point and.

In parallel have a number of opportunities through our collaboration.

Two to conduct clinical research with our image in that system.

Conjunction with LSD and also even more sensitive lease, which provided administrations, which gives us that ability to be really effective really efficient in our development approach for the <unk> product that we can ultimately didn't leverage over into a product that we deemed it to be labeled for use within the 120.

Yeah.

And then.

And here's why.

We are currently in the process of collecting data and higher to inclusion in Serbia.

Little program, we'd want to be sure that we were confident that we could interpret and understand any data coming from the south for medical device product.

And that seed.

<unk> and <unk> were also comfortable with the interoperability of those data so that would be an ongoing conversation as we as we approach the pivotal program as we continue to develop.

So nice product.

Okay, Great and then just lastly can you just remind us of.

Understood is the potency difference maybe.

When you compare psilocybin two LSD.

And if it's the amount for that its different how understood is that just as we're trying to gauge.

The dose response and the different doses of your face to be thank you.

Okay. Yeah. Thanks, that's great. So.

There's obviously there are some studies, including with our collaborators at University Hospital Basel that have looked at the comparative effects.

Okay perceptual effects at least of various doses.

And so aside then.

When we look at that kind of collectively generally the approximation and it is just that an approximation but.

Hundred microgram dose would correspond more closely to about a 20 milligram doses of psilocybin.

And by extrapolation.

Microgram dose would be something more along the lines of 40 milligrams of <unk> in terms of again those acute.

Participant rated.

Magnus <unk>.

Perceptual effects.

The extent to which that correlates with with other.

Target engagement and other clinical outcome assessments. It certainly is a very different question, but when you think of the potency of the molecule. It seems it appears to be about 200 times more potent.

And suicide.

Which of course, the dose range were testing of this.

Pretty extraordinary range of doses comparison will be explored including when we look at the historical data.

Both the 50.

All of the 502 hundred microgram doses, which which very well may help us achieve that.

Our level of acute perceptual activity that we would think correlates to some degree of clinical response, but that's of course, what we're asking in this study and what the data holds great form us around in terms of which of those doses.

We believe its most appropriate take forward based on the response in the image. These population.

Great. Thank you very much.

Thanks, Greg.

Okay.

Our next question comes from Jonathan Aschoff weights.

Please go ahead.

Thank you hi, guys. So I was curious if you could just a little housekeeping question. This G&A how much of this <unk> was related to the annual meeting.

And so kind of what might we not expect to see recurring.

I appreciate that I appreciate that question, we haven't actually broken that out.

But if youre looking for a kind of a forward cadence on.

Operating expenses in general.

The way to probably look at that is.

Where we're getting into kind of a.

The tail end of our.

Phase III enrollment.

Or double the 120 and also.

We're on the backend as Rob mentioned earlier with our ADHD program as well as.

Securing more and more about our <unk> two program.

So I think that if you look at the general cadence in the first half of the year.

I'm sorry in the back half of the year the expenses would be.

You will probably see an uptick on a higher side on the back half of year relative to the first half of the year.

So I mean G&A should progress at this level it shouldnt come down.

Down you are saying.

We haven't given any specific guidance on the G&A line item.

It was more prudent to look at it yourself as an overall on the operating expense line for the overall company.

So again.

I think the way to look at it we haven't given any guidance.

Guidance on that on a number of these different components.

I just wanted to give you something directionally talk to generally think about it.

Okay, two H over higher than one inch.

Got it for Opex. Thanks.

The onset for 120 as it is now what is it and what are you looking for out of ODT $1 20 for onset.

Sure.

So it's great great question, Jonathan that so.

Yeah, when we look at again at historical historical studies of LST in various forms.

Fears that the.

T. Max has been reported somewhere between 60 and 90 minutes.

So something that would be quite differentiated would be anything and again its really important that this is a unique drug classes unique product candidate with.

Which of course brings along.

Any considerations around things that could impact the ultimate safety and effectiveness of a product such as the time to onset of those perceptual activities. The ultimate duration of those perceptual activities and of course, the standard PK metrics.

Such as the T magazine, Max AUC and such.

Anything that they're bringing in.

The speed of absorption would impact the time to onset potentially of sort of perceptual activity that again her the PV effector molecules and so we're looking at observing.

Faster absorption than what we've seen with oral.

Oral capsule.

And ultimately.

Taking to characterize the differentiation between again at.

Time to first absorption, but also the time to maximum concentration and Theres other standard PK characteristics anything that brings in that timeline.

Even even by a small period of time could be impactful in terms of the duration of the overall response it could be.

Quite impactful because I think it would be difficult.

To justify a downstream products such as a generic entrant that had different.

Perceptual.

Time quarters of different perceptual profile and assume that it could could be relying on the same sort of activity. So when you see these unique characteristics and unique considerations around drug price such that it's really important that.

The precision in terms of.

The performance.

Of our product okay.

Alright, and you were mentioning pre gastric I guess youre trying to get around is there much of a food effect or not really.

Well the food effect what certainly.

Could you potentially be impacted by the extended free gastric absorptions something.

Formulation for instance that absorbs.

Primarily pre gastric we would be at lower risk Brexit effect of course so.

It drives both the impact of things such as gastric retention, but also the time the speed.

To which you see absorption of the API.

Ultimately that drives.

The timeline to first answer that or any sort of PD effects.

Okay and can we assume that you know the dropping of enrollment was overwhelmingly due to you know youre going to go forward with an OTT and you still have close in up to 90% power. So why bother with 20 more.

It was that decision certainly was informed as we looked at.

Analyze the statistical analysis plan looked at.

The likelihood of obtaining our primary study objectives and.

You know and and undertook too.

I understand the likelihood of seeing any statistical positive result in the event that we see a clinically meaningful result.

And as I mentioned that even if we see a marginal.

Improvement over the standard of care, where we see the effect sizes are a point for less.

There's a high degree of confidence in the ability to detect.

A statistically and clinically meaningful.

<unk> with 180 patients. So when we look at and of course, any sort of savings and efficiencies. We can built into the program. We're always searching for those and this was an opportunity.

To do exactly that without having.

To sacrifice.

Sacrifice on the power of the likelihood of success of the study.

Yeah sounds totally rational thank you guys.

Thanks, Jonathan.

Our next question comes from Patrick <unk> with H C. Wainwright. Please go ahead.

Hi, Good afternoon. This is luis spending for Patrick.

Let me give you a little breather and ask for a kind of a different question I'm trying to model the.

Population the patient population for J D and there has been a recent study.

Anything that's pointing to the increased prevalence rates of J D and other mood disorders.

It might be familiar with the study and that's one of substance use disorders.

So this suggests 20 million adults suffering from JD in the past year can you provide some context into state of specifically.

If we're looking at a new normal with a 10% prevalence in this.

Post pandemic era or do you think this is going to plateau.

<unk>.

And then come down thank you.

Yeah. Thanks, Doug.

It's of course, it's very difficult to predict that'd be epidemiological changes in terms of prevalence of a button.

Individual diagnosis, but we certainly are.

Anecdotally as we're out in the world and engaging with payers with providers with patients, we hear over and over and over again.

Both the magnitude of that.

Problem.

Several conversations where we talk about we saw for a viral infectious disease pandemic, but we have an ongoing.

Pandemic or epidemic.

And mental health disorders, and really anxiety.

As a symptom cost here, but in general I think that in itself has been something that's been.

Course, we ever looked and again.

New data that shows just how much like how significant.

It's going to have an issue it is and so.

Certainly the relative lack of focus for innovative new treatments to target J D over the past couple of decades.

The fact that there hasn't been a like new and over that same period, we've seen based on.

Comparison of the historical data.

The latest data we see.

A substantial it was a tripling of the prevalence of J D.

Does that signify is the reality that has been overlooked it is still a significant unmet need to target to 80 patients in.

With our study coming it seems to be an argue coming right at the appropriate time, where the need has never been greater and our opportunity has never been greater by extension.

Thank you that is helpful. If I am allowed I'll just ask a quick question on your 402 program when is the phase one trial expected to start.

And if youre looking at.

Annie <unk>.

Specific biomarkers of imaging data to determine target engagement.

And what would be your target population here.

Thank you.

Yes. Thanks, so much for our phase one study is intended to.

Be initiated.

At the end of 2023.

We also have the parallel study ongoing investigator.

Betsy and initiated studies through our collaboration with the University Hospital, Basel, which we've been informed we anticipate.

Being able to.

Report our study results coming from that study in the first half of 2024.

As we progress as we get.

Get further along in terms of the design what will be speaking more to the specific population and automated specific endpoint that clinical program, but certainly our intent is to characterize the safety and PK pharmacodynamics.

And then part two in healthy volunteers, but also as early as possible and development to bring them closer to our otherwise healthy diagnosed with autism spectrum disorder.

As a team.

Acute response to.

And then look forward to administration, both for understanding the pharmacokinetics safety Tolerability, the PD effects and ultimately trying to get some indication of this is a molecule MDMA an RMT made particular, particularly where we want to observe some.

Characterization of the acute effects of the molecule and in many instances, we anticipate that would be something that would cause it potentially even impact self reporting oh.

Over the course of a day of exposure so.

We are seeking to bring in patients as early as we possibly can to the development program to get some indication that we are seeing activity and of course, then expanding continue on to later stages of development.

Yeah.

Great. Thank you.

No further questions at this time I would like to turn the floor back over to Ralph for closing comments. Please go ahead.

Thank you. Thank you operator, and thanks, everyone. Thanks, everyone for the questions today.

We appreciate you joining us and look forward to providing further updates.

Okay.

Yeah.

This concludes today's conference call you may disconnect. Your line is at this time. Thank you for your participation and have a good day.

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Okay.

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