Q2 2023 BioXcel Therapeutics Inc Earnings Call
Unknown Executive: for BXL 501 in bipolar disorders, schizophrenia, and Alzheimer's dementia. We firmly believe this drug has the potential to have a positive impact on patients and caregivers and address a significant unmet need. For example, 23 million episodes of bipolar schizophrenia-related agitation occur annually in the U.S., in the at-home setting. In addition, 100 million Alzheimer-related agitation episodes occur every year in the U.S.
Speaker 1: 501 in bipolar disorders, schizophrenia and Alzheimer's dementia. We firmly believe this drug has the potential to have a positive impact on patients and caregivers and address a significant unmet medical name. For example, 23 million episodes of bipolar schizophrenia related agitation occur annually in the US, in the at home setting, in addition, 100 million as the IMA related agitation episodes occur every year in the US. Importantly, more than 80% of these patients are in a residential setting and episode here represent more than half of the total episode volume. We are motivated to develop 501 to address the needs of these patients. We have developed a comprehensive plan for our Tranquility Program in Alzheimer's associated agitation. In June , we announced positive top line data from Tranquility 2. This was a uniquely complex trial requiring mobilization of clinical team whenever an agitation episode occurred.
Unknown Executive: Importantly, more than 80% of these patients are in a residential setting, and episodes here represent more than half of the total episode volume. We are motivated to develop 501 to address the needs of these patients. We have developed a comprehensive plan for our tranquility program for Alzheimer's-related agitation. In June, we announced positive top-line data from Tranquility.
Unknown Executive: This was a uniquely complex trial requiring the mobilization of clinical teams whenever an agitation episode occurred. We were pleased that our top-line data showed that we met our primary endpoint with the 60-mogram dose, with 50-1 demonstrating a statistically significant 39% greater reduction in PEC score from baseline compared to placebo at 2 hours. We also met a key secondary endpoint with a statistically significant reduction in agitation symptoms versus splice, as measured by PEC score change from baseline at one hour with 60 microgram.
Speaker 1: with 501 demonstrating a statistically significant 39% greater reduction in PEC score from baseline compared to placebo at 2 hours. We also met a key secondary endpoint with statistically significant reduction in agitation symptoms versus placebo. As measured by PEC score change from baseline at 1 hour with 60 microgantles.
Unknown Executive: 5.1 was well tolerated with no drug-related serious adverse events over trial duration. However, as we disclose in an 8K filing, there were issues related to a principal investigator at a Tranquility 2 clinical site. The conduct by this PI was unacceptable and extremely unfortunate.
Speaker 1: 501 was well tolerated with no drug-related serious adverse events over-trial duration.
Speaker 1: As we disclose in an 8K filing, there were issues related to a principle investigator at a tranquility to clinical site. The conduct by this PI was unacceptable and extremely unfortunate.
Unknown Executive: We are investigating the issue and, for example, have already initiated an audit by an independent third party of the data from the PI's clinical site. In addition, we have requested a meeting with the FDA to discuss our entire Tranquility program. This will include both Tranquility 2 and Tranquility 3 clinical trials, the data audit, and the data package that may be required to support submission of an S&DA seeking approval of 501 for the acute treatment of agitation in mild to moderate dementia patients with probable Alzheimer's disease. We hope to have an update on the Tranquility program, including the audit and FDM meeting, by the end of the year.
Speaker 1: We are investigating the issue and for example, have already initiated and audit by an independent third party of the data from the PI's clinical site.
Speaker 1: In addition, we have requested a meeting with the FDA to discuss our entire Tranquility Program. This will include both Tranquility II, Tranquility III clinical trials, the data audit, and the data package that may be required to support some mission of an SNDA, seek it.
Speaker 1: seeking approval of 501 for the acute treatment of agitation in mild to moderate dementia patients with probable Alzheimer's disease.
Speaker 1: We hope to have an update on the Tranquility Program, including the audit and FDA meeting by the end of the year.
Unknown Executive: Regarding Tranquility 3, we paused enrollment after early trial data showed a much higher background frequency of agitation episodes than originally expected. It appears that this patient population may be better suited for a chronic treatment of agitation while our focus is on developing 501 as an acute treatment of Alzheimer's education. As a reminder, we have breakthrough therapy designation for the acute treatment of agitation associated with dementia. In parallel, we are advancing our serenity program for the at-home acute treatment of agitation associated with bipolar disorders or schizophrenia. In May, we reported top-line results from CRE&3 Part 1.
Speaker 1: Regarding Tranquility 3, we paused enrollment after early trial data showed a much higher background frequency of agitation episode than originally expected. It appears that this patient population may be better suited for a chronic treatment of agitation.
Speaker 1: while our focus is on developing 501 as acute treatment of Alzheimer's agitation.
Speaker 1: As a reminder, we have breakthrough therapy designation for the acute treatment of agitation associated with dementia.
Speaker 1: In parallel, we are advancing our serenity program for that home acute treatment of agitation, associated with bipolar disorders or schizophrenia.
Unknown Executive: We evaluated patients in Part 1 in a monitored medical setting as surrogates for the at-home setting. The trial assessed the safety and efficacy of a 60-mogram dose of BXL 50501, which is half of the lowest approved dose of Vigalmi, using the same primary and second-end points as in the CINITY 1-2. While we believe the data suggests the potential for 501 to be effective in a monitored medical setting with a 60 microgram dose, we did not meet the primary endpoint or mean change in PEC score at 2 hours.
Speaker 1: In May, we reported top line results from C-93 Part 1. We evaluated patients in Part 1 in a monitored medical setting as Saro gets for the at-home setting.
Speaker 1: The trial assess the safety and efficacy of 60 microgram dose of BX-L501, which is half of the lowest approved dose of Vigalmi using the same primary and secondary endpoint as in the CINETI-1 and 2.
Speaker 1: While we believe the data suggests the potential for 501 to be effective in a monoton medical setting with 60 microgram dose, we did not meet the primary end point of mean change in PECS CO2 hours. However, the 60 microgram dose was well tolerated.
Unknown Executive: However, the 60 microgram dose was well tolerated and demonstrated favorable safety results, including proportionately fewer adverse events compared to those observed during serenity 1 and 2, which evaluated the approved 120 microgram or 180 microgram tools. We believe the safety results support the potential for at-home use. We are now conducting serenity 3, Part 2.
Speaker 1: and demonstrated favorable safety results, including proportionately fewer adverse events compared to those observed during serenity, one and two which evaluated the proof, one 20 microgram or 180 microgram doses.
Speaker 1: We believe the safety results support the potential for at home use.
Unknown Executive: It is a 12-week study to evaluate the safety of a 60 microgram dose of BXL 50501 with an optional 60 microgram. To identify a dose to potentially provide an optimal balance between the safety and efficacy in the at-home population, we performed pharmacokinatic and pharmacodynamic modeling that suggested that use of an 80 microgrant dose of BX or 50501 could provide this balance. We believe the evaluation of an 80 microgram dose is further supported by our previous clinical experience with this dose during our phase 1 trial in schizophrenia patients with agitaphia.
Speaker 1: We are now conducting serenity 3 part 2. It is a 12 week study to evaluate the safety of a 60 microgram dose of BXL 501 with an optional 60 microgram dose.
Speaker 1: To identify a dose to potentially provide an optimal balance between the safety and efficacy in the atom population, we perform pharmacokinatic and pharmacodynamic modeling that suggests that use of an 80 microgram dose of BX-5-01.
Speaker 1: could provide this balance. We believe the evaluation of an 80 microgram dose is further supported by our previous clinical experience with these dose during our phase 1 B trial in the case of in-ear patients with agitation.
Unknown Executive: We plan to meet with the FDA to discuss the 80-mogram dose and a protocol amendment to the ongoing Cinerary 3 Part 2 study. The primary objective of Part 2 is to describe the incidence of treatment emergent adverse events. The primary endpoint is a comparison of serious adverse events and treatment emergent adverse events as compared to placebo, and the secondary endpoints include a number of efficacy assessments. Turning to our major depressive disorder program, we reported positive top-line results from the Phase 1B multiple ascending dose trial in May. As part of our reprioritization effort, we will pause this program.
Speaker 1: We plan to meet with the FDA to discuss the 80 microgram dose and a protocol amendment to the ongoing serenary 3 part 2 study.
Speaker 1: The primary objective of Part 2 is to describe the incidence of treatment emergent adverse event.
Speaker 1: The primary endpoint is a comparison of serious adverse events and treatment emergence adverse events as compared to placebo and the secondary endpoints include a number of efficacy assessment.
Speaker 1: Turning to our major depressive disorder program, we reported positive top line results from the phase 1b multiple ascending dose trial in May.
Unknown Executive: To augment our clinical development team, Dr. Vince O'Neill, who is currently serving as head of R&D for Oncoz XL, will play a broader role in our neuroscience development. Vince has been with the company since the IPO in 2018 and has extensive pharmaceutical clinical development experience. He played an instrumental role in Cineity 1 and 2 trials along with our chief medical officer, Dr.
Speaker 1: As part of our reprioritization effort, we will pause this program.
Speaker 1: to augment our clinical development team, Dr. Vincent Niel, who is currently serving as head of R&D for UNCO's Excel, will play a broader role in our neuroscience development.
Speaker 1: Vince has been with the company since the IPO in 2018 and has been has extensive pharmaceutical clinical development experience.
Speaker 1: Vince played an instrumental role in SINAT-1 and 2 trials along with our chief medical officer, Dr. Rob Riesinger, that resulted in the approval of IgALMI and the successful human proof of concept trials for 7-0-1 in our oncology program.
Unknown Executive: Rob Riesinger, that resulted in the approval of Egalmi and the successful human proof of concept trials for 701 in our oncology program. Tushan Kostick, our head of medical affairs, will play an important role in developing clinical and medical strategies for 501 to support commercialization of any potential indication. He has more than two decades of pharmaceutical industry experience in neuroscience.
Speaker 1: Tushan Kostik, our head of medical affairs, will play an important role in developing clinical and medical strategies of 501 to support commercialization of any potential indications.
Unknown Executive: This includes clinical development and commercialization of leading drugs such as Ablify in Vega, Montana, and result. We have also initiated a search to expand our board of directors to strengthen clinical development expertise. The third part of our business transformation involves prioritizing AI-driven innovation to strengthen our neuroscience clinical development. Our unique integration of data science, clinical expertise, and commercialization gives us a powerful and distinct competitive advantage in building a robust R&D pipeline.
Speaker 1: He has more than two decades of pharmaceutical industry experience. In neuroscience, this includes clinical development and commercialization of leading drugs such as Abelify, Invega, Abelify.
Speaker 1: Maintainer and Rikdhurti.
Speaker 1: We have also initiated a search to expand our board of directors to strengthen clinical development expertise.
Speaker 1: The third part of our business transformation involves privatizing AID1 innovation to strengthen our neuroscience clinical development.
Speaker 1: Our unique integration of data science, clinical expertise and commercialization gives us a powerful and distinct competitive advantage in building a robust R&D pipeline.
Unknown Executive: We are truly excited about our clinical dominoin initiative and pipeline candidates, including BXL 502. We look forward to highlighting these developments at an R&D event we plan to host later this year. We also plan to spotlight our next generation AI platform capabilities for identifying and re-innovating late stage drug candidates and introduce VXL 503 and 504.
Speaker 1: We are truly excited about our clinical Dhamma minutes, initiatives and pipeline candidates, including VXL 502.
Speaker 1: We look forward to highlighting these developments at an R&D event we plan to host later this year. We also plan to spotlight our next generation AI platform capabilities for identify and renovating late stage drug candidates and introduce VXL 503 and 504.
Unknown Executive: In summary, this is a challenging yet transformative period for our company. We are taking swift and decisive steps with the goal of putting the company in the best possible position for future success. We have received interest from potential corporate partners. However, it is far too early to know what, if any, form such a transaction could take. We are passionate about our goals and remain committed to delivering long-term value to shareholders. Now, I will turn the call over to Rich, who will discuss our second quarter financial results.
Speaker 1: In summary, this is challenging yet transformative period for our company. We are taking swift and decisive steps with the goal of putting the company in the best possible position for future success.
Speaker 1: We have received interest from potential corporate partners. However, it is far too early to know what if any form such a transaction could take.
Speaker 1: We are passionate about our goals and remain committed to delivering long-term value to shareholders.
Speaker 1: Now, I will turn the call over to Rich who will discuss our second quarter financial results.
Unknown Executive: Thank you, Vimel. Our second quarter 2023 financial results are as follows. Net revenue of Ligalmi was approximately $457,000 for the quarter. Research and development expenses were $27 million for the second quarter of 2023, compared to $17.9 million for the same period in 2022. The increased expenses were primarily attributable to increased clinical trial expenses for Serenity 3 and Tranquility 2. Selling general and administrative expenses were $25.9 million for the second quarter of 2023, compared to $18.4 million for the same period in 2022.
Speaker 2: Thank you, Vimal. Thank you, Vimal. Our second quarter 2023 financial results are as follows.
Speaker 2: Net revenue of the GOMI was approximately $457,000 for the quarter.
Speaker 2: Research and development expenses were $27 million for the second quarter of 2023, compared to $17.9 million for the same period in 2022.
Speaker 2: The increased expenses were primarily attributable to increased clinical trial expenses for Serenity III and Tranquility II.
Speaker 2: Selling General and Administrative Expenses were $25.9 million for the second quarter of 2023, compared to $18.4 million for the same period in 2022.
Speaker 2: The increased expenses were primarily tributable to an increase in personnel and related costs to support the commercialization of El Gami.
Unknown Executive: The increased expenses were primarily attributable to an increase in personnel and related costs to support the commercialization of Elgamon. Bilexel Therapeutics had a $53.5 million loss for the second quarter of 2023, compared to a net loss of $37.7 million for the same period in 2022. The loss for the quarter included approximately $6.1 million in non-cash, stock-based compensation.
Speaker 2: BioXL Thetter-Pudix had a $53.5 million loss for the second quarter of 2023, compared to a net loss of $37.7 million for the same period in 2022.
Speaker 2: The loss to the quarter included approximately $6.1 million in non-cash stock base compensation.
Speaker 2: Caching cash equivalent totaled 127.5 million as of June 30, 2023.
Speaker 2: As noted, the company is undertaking a strategic reprioritization that includes a reduction in the workforce of more than 50%, which is expected to reduce expenses significantly.
Unknown Executive: Cash and cash equivalents totaled $127.5 million as of June 30, 2023. As noted, the company is undertaking a strategic reprioritization that includes a reduction in the workforce of more than 50%, which is expected to significantly reduce expenses. In the absence of additional capital becoming available, the company under the strategic financing agreements is otherwise. The company estimates that its current cash and cash equivalence will last through mid-2020. The company's previously disclosed cash runway projection assumed a full utilization of its strategic financing agreements of $155 million with Oak Tree Fund Administration and Qatar Abbasment Authority.
Speaker 2: In the absence of additional capital becoming available, the company under the strategic financial agreements are otherwise. The company estimates that its current cash and cash equivalents will last through mid 2024.
Speaker 2: The company's previously disclosed cash runway projection assumed a full utilization of its strategic financing agreement of $155 million with Oak Tree Fund Administration and 200 thousand percent of electric costs would soon be racked on to expires in favor of any privatization and any superpower in the business that had been
Speaker 2: Based on recent events, the company is not likely to be in a position to meet the milestones required to access the additional capital under the financing agreements.
Speaker 2: The company is exploring multiple ways to extend its cash runway and is already in discussions with its strategic financing partners to amend the agreements.
Speaker 2: Successful modification of these agreements could extend the company's cash runway.
Speaker 2: Finally, with regards to Oncose Excel, we are currently examining strategic alternative including strategic partnerships or financing.
Unknown Executive: Based on recent events, the company is not likely to be in a position to meet the milestones required to access the additional capital under the financing agreement. It is exploring multiple ways to extend its cash runway and is already in discussions with its strategic financing partners to amend the agreement. Finally, with regard to Oncos Excel, we are currently examining strategic alternatives, including strategic partnerships or financial. Now I'd like to turn the call back to Vimal.
Speaker 2: Now I'd like to turn the call back to them all.
Speaker 1: Thank you Rich. We would now like to open the call for questions. Operator.
Speaker 3: At this time, we'll be conducting a question and answer session.
Speaker 3: If you would like to ask a question, please press star 1 on your telephone keypad.
Speaker 3: A confirmation tone indicate your line is in the question queue.
Speaker 3: You may press star 2 if you would like to remove your question from the queue.
Speaker 3: For participants using speech or equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker 3: Our first question today comes from Greg Harrison, a Bank of America. Please proceed with your question.
Speaker 4: Take good morning. Thanks for taking the question.
Unknown Executive: Thank you, Rich. We would now like to open the call for questions, Operator.
Speaker 4: How are you thinking about the outlook for the company with this restructuring and how do you think investors should think about the story at this point?
Operator: At this time, we'll be conducting a question and answer session.
Operator: and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question Q. You may press star 2 if you would like to remove your question from the Q. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.
Speaker 1: Good morning Greg, this is Wemmel. I'm very excited about the outlook for our business.
Speaker 1: As I shared earlier, we are laser focused on the at-home opportunities for BXL 501. Specifically, the two-value drivers for 501 are serenity program for schizophrenia and bipolar associated education.
Speaker 1: and our tranquility program for Alzheimer's as it is.
Speaker 1: We landed with Egalmi in the institutional setting. We are now shifting resources to expand into a potentially more promising retail pharmacy and outpatient setting.
Speaker 1: We also look forward to highlighting our pipeline with BX-L502 update at R&D day by the end of this year.
Operator: Our first question today comes from Greg Harrison of Bank of America. Please proceed with your question.
Speaker 4: Got it, that's helpful. And one more if I can. Could you give us some more color on...
Gregory Allen Harrison: Hey, good morning. Thanks for taking the question. How are you thinking about the outlook for the company with this restructuring? And what do you think investors should think about the story at this point?
Speaker 4: Why you made the decision to shift focus to the at-home setting and away from institutional medical settings.
Speaker 1: We are shifting our focus from the institution setting to the retail slash at home market. Due to the market and business factors, we shared in our call.
Vimal D. Mehta: Good morning, Greg. This is Wimel.
Speaker 1: The hospital setting was more difficult to penetrate than originally anticipated, particularly in a challenging post-COVID environment.
Vimal D. Mehta: I'm very excited about the outlook for our business. As I shared earlier, we are laser focused on the at-home opportunities for BXL 501. Specifically, the two value drivers for 501 are the Serenity Program for schizophrenia and Bipolar-associated Education and our tranquility program for Alzheimer's education. We landed with Egalmi in the institutional setting. We are now shifting resources to expand into a potentially more promising retail pharmacy and outpatient setting. We also look forward to highlighting our pipeline with BXL 502, an update on R&D Day, by the end of this year.
Speaker 1: It is important to note that we will continue to make a Galmi available to our hospital customers through a more targeted contracting effort and small code team.
Speaker 1: We are committed to bringing Egalmi to current and future patients and their families for current indication and for new indication.
Speaker 4: All right, thank you for taking the questions.
Speaker 3: The next question is from Colin Bristow of UBS. Please proceed with your question.
Speaker 3: Thank you, Booling. And I just want to pass on my well done on this repo implementation unit out tough decisions, but they had to be done. And maybe first question and just kind of picking back off the prior ones, could you outline how you see the mark of opportunity to get out for a girl? We now you're shifting the focus to the at home.
Unknown Executive: Got it, that's helpful. And one more, if I can. Could you give us some more color on why you made the decision to shift focus to the at-home setting and away from institutional and medical settings?
Unknown Executive: We are shifting our focus from the institutional setting to the retail slash at-home market due to the market and business factors we shared in our call. The hospital setting was more difficult to penetrate than originally anticipated, particularly in a challenging post-COVID environment. It is important to note that we will continue to make Egalmi available to our hospital customers through a more targeted contracting effort and a small co-tee. We are committed to bringing Egalmi to current and future patients and their families for current indications and for new indications.
Speaker 3: And secondly, I think this is the most common question we're getting from investors is.
Speaker 3: Just updates on the timing of, or first the external audit. I think I heard you say by the end of the year, but any more color you can give with where you are in this first, it would be great. And then, you know, on the second part of that, it's just timing regarding feedback from FDA. I know you've requested an rating, but when do you expect this to occur?
Speaker 1: Have you had any sort of interactions or feedback around this data issue? Thank you. Good morning, Colin. Regarding your question about the Tranquility Program update, as I stated in my earlier remarks, we expect to have updates.
Unknown Executive: Thank you for taking the question.
Colin Nigel Bristow: The next question is from Colin Bristow of UBS. Please proceed with your question. Hey, good morning, and I just wanted to pass on but well done on this reprioritization. You know, pretty tough decisions, but I think they had to be done.
Speaker 1: or hope to have the update by the end of the year. Independent audit is in progress. We have requested a meeting. Once we have the meeting, we will have a clarity what is the data package required to file an SNDA, and that will be a good time to provide an update on the time quality program.
Speaker 1: I just would appreciate if you can come back to your first question that you had asked so that we get addressed that.
Speaker 3: I'massing fluids.
Unknown Executive: And maybe the first question, and just kind of digging back off the power ones, could you outline how you see the market opportunities for a galami now that you're shifting the focus to the at-home setting, and how should we think about that, you know, specifically from a market opportunity point of view? And then secondly, I think this is the most common question we're getting from investors: Just updates on the timing of, or first, the external audit. I think I heard you say by the end of the year, but any more color you can give on where you are in this process would be great.
Speaker 3: Yeah, so I think it was- My first question was-
Speaker 5: Good morning Colin, it's Matt, how are you?
Speaker 5: So the question you heard. I did. Yeah. So the question about the market opportunity switching from the the hospital settings, the at home setting. Keep in mind that there are 23 million episodes.
Speaker 5: in the at home setting. One of the things that we accounted for in our models as well is that we would capture many of the patients that wind up in the emergency department in the at home setting as well. And given the market research that we've conducted, we recognize the unmet need in the home setting is quite significant. It's...
Speaker 5: it's under recognized and under diagnosed, but the patients certainly see value here. And they indicated that both they and their caregivers would use this product profile for BXDL-501 in 80% of their episodes.
Unknown Executive: And then, you know, the second part of that is just timing regarding feedback from FDA. I know you've requested anything, but when do you expect this to occur? And have you had any sort of interactions or feedback around this data issue? Thanks.
Speaker 5: So we feel that the market conditions for the at home setting is quite favorable and we look forward to bringing the product to those patients.
Unknown Executive: Good morning, Colin. Regarding your question about the Tranquility Program update, as I stated in my earlier remarks, we expect to have the update or hope to have the update by the end of the year. An independent audit is in progress, and we have requested a meeting. Once we have the meeting, we will have clarity on what the data package required to file as SNDA, and that will be a good time to provide an update on the tranquility problem. I just, Would I appreciate it if you could come back to your first question that you had asked so that we can address that.
Unknown Executive: So I think that's about it. Good morning, Colin. It's Matt. How are you?
Unknown Executive: Yeah, so the question. I was just checking. You heard it, right? I did, yeah.
Unknown Executive: So the question about the market opportunity switching from the hospital setting to the at-home setting, you know, keep in mind that there are 23 million episodes in the at-home setting. One of the things that we accounted for in our models as well is that we would capture many of the patients that wind up in the emergency department in the at-home setting as well. And given the market research that we've conducted, we recognize the unmet need in the home setting is quite significant.
Unknown Executive: It's under-recognized and underdiagnosed, but the patients certainly see value here, and they indicated that both they and their caregivers would use this product profile for BXDL for 50% of their episodes. So we feel that the market conditions for the at-home setting are quite favorable, and we look forward to bringing the drug to those patients.
Sumant Satchidanand Kulkarni: The next question is from Sumont Koukarni of Kanakord. Please proceed with your question. Good morning. Thanks for taking my questions.
Unknown Executive: Good morning, thanks for taking my questions. So, per your breakthrough therapy designation status, how exactly does the FDA define acute treatment of agitation in terms of the number of episodes or instances of film usage per month? Along those lines, do you think the current price of $105 per film is appropriate or a strategic misstep for the convenience of at-home use? I'm asking because of two factors. First, even one were to hit the annual specialty tier of roughly $10,000 per year for pricing on a gross basis, that would translate to a patient using 100 films a year. And makers of chronic treatments of agitation enjoy significantly higher market caps or biovalues, but on pricing assumptions, they have a much higher as
Unknown Executive: So let me address the price question and the number of episodes. You know, first and foremost, we did conduct research when we established our launch price for both bipolar and schizophrenia in the at home setting and also in ADA. And what we found is that for episodic treatment, there was an appetite in the market for that price point. Certainly, what we see is the volume of episodes in mild Alzheimer's dementia patients is roughly three a month, and that can escalate further as they become more moderate.
Unknown Executive: But we also recognize that 81% of the ADA are either in an at-home setting or an ALF setting, which is akin to an at-home setting and represents over 50% of the total volume of agitation episodes. And that doesn't preclude 501 from being used in episodic breakthrough episodes.
Unknown Executive: Got it. And then does your new cash runway include the potential to redo Tranquility 2 in case the FTA says you will not be able to file on just what you have?
Unknown Executive: Simon, we are not speculating on that. We are doing an audit, and we want to meet with the FDA and get the feedback, then we will be able to comment on it.
Unknown Executive: The next question comes from Ram Savarayu of H.C. Wainwright.
The next question is from Yachting Sliver of Guggenheim Partners. Please proceed with your question.
Unknown Executive: H. C. Wainwright, please proceed with your question. Hi, thanks very much for taking my question. I just wanted to revert back to the formulary wins that you had previously announced that you were previously engaged in pursuing in the institutional setting, and wanted to ask how that is affected, if at all, by your reprioritization here into the at-home setting.
Yeah.
Hey, guys. Thank you for taking my question first question is on the Alzheimer's disease agitation I understand you would need with D. F D. A I'm trying to get their feedback on quality to Edmonton.
Let's talk about what generally is the ICA guidelines for an indication like this what sort of.
Unknown Executive: To what extent could we potentially expect you to be able to capitalize on the formulary wins that have already happened in the institutional setting? And along what trajectory?
Boy, a duration of exposure that is needed.
From a regulatory perspective for a disease that affects millions of people.
It seems like you are sort of stopping quality too.
Unknown Executive: Sure. So, you know, first of all, we reported out that we had over 185 formulary wins, P&T wins to date. We're still accumulating those wins at a win rate of over 65%. In fact, we had three wins on Friday.
It's still not clear to me from call. It the one and two combined is enough for you to get in the pool.
So that's one basically just help me understand the path forward for all the time like disease Education Angie languishing.
And is it seems like on the R&D day, but I'll talk a little bit about the cyber too just curious.
Unknown Executive: And so we would expect that the 650 or so hospitals that are still scheduled to vote will continue with that process, and assuming that we continue to accrue these hospitals, we will reach out to them through medical affairs activities, through market access activities, contracting, and certainly support them with trade and distribution to ensure that they can access the drug and utilize it. The medical affairs support will obviously be really important in helping them determine how to develop protocols and pathways so that planning is in place as well.
You can highlight a little bit yeah.
And then.
In terms of the cash runway.
Maybe help us understand.
How should we model that going forward, where exactly are you cutting cost.
How many of the sales rep.
Are you still going to have to.
And that's what these three questions.
Thank you Catherine.
First question regarding the <unk> program.
Ralph will answer like what our plans are.
Yeah, So let me declare that.
We pause the trial because of the early data and tranquility three indicated that the patient population may be better suited for chronic as opposed to episodic therapy and as you know our focus is on the episodic treatment in line with our breakthrough therapy designation by FDA.
Unknown Executive: The promotional activities for the at-home market are a little bit different because you are educating physicians and patients at the same time. As you know, patients can be motivated to ask for prescription drugs. So that would be part of the plan as well. And then through sampling and contracting with PBMs, and these are activities that the contracting with PBMs and state Medicaid. Those are activities that may be accomplished prior to even FDA approval, considering we have a drug on the market today. So those are activities that we're planning out to get ahead of that potential approval, and more to come on the actual market.
For episodic treatment.
We have decided to pause the trial in order to discuss this issue with the FDA at an upcoming meeting and we will be able to provide more guidance on that once that meeting occurs.
Yeah.
Oh.
Okay.
We do expect at that meeting to discuss both the auditing and the tranquility to resolve and at that point, we'll be able to provide more guidance at the end of the year with regard to what will be necessary for.
We're filing an S NDA package.
Unknown Executive: The next question is from Yotnseye of Guggenheim Partners.
Yes.
Your second question I will pass it on to Rob pass it onto Frank's on fiber too.
Unknown Executive: and partners. Please proceed with your question.
Hi, Yes. This is Frank Alka.
Unknown Executive: Hey guys, thank you for taking my question. The first question is on Alzheimer's disease agitation. I understand you will meet with the FDA and try to get their feedback on tranquility 2 and 1. Can you just talk about what generally are the ICA guidelines for an indication like this? What sort of things?
I am excited about our emerging pipeline development candidates, especially <unk> CL.
502.
We really are looking forward to an upcoming R&D day, we will present, our progress with this molecule particular its development, but also discuss some some unique indications of interest.
Secondly.
Unknown Executive: Exposure, and duration of exposure is needed from a regulatory perspective for a disease that affects millions of people. It seems like you are sort of stopping Transquality too. It's still not clear to me if Tranquility 1 and 2 combined is enough for you to get approval. So that's one, basically just help me understand the path forward for Alzheimer's education, as you understand. The second is, it seems like on R&D day you're going to talk a little bit about the 5 or 2, just curious, you know, maybe you can highlight a little bit there. And then, you know, in terms of the cash runway, maybe you can help us understand how we should model it going forward, where exactly are you putting the cost, you know, how many sales.
We will discuss our next generation AI platform. This has evolved considerably from the first time, we did our R&D day two years ago. The capabilities are have been enhanced for identifying and re innovating late stage opportunities and we will also discuss some candidates for additional pipeline entry.
Such as <unk> <unk>, three and 504, so it will be a very interesting day.
So regarding your third question related to the cash runway.
Sure Yeah. So the re prioritization that we're working on now will extend the cash runway by reducing our burn significantly and we're also working on various other options to extend the cash runway, which includes working with our strategic partner as we said the goal is to get is to get the company to about an $80 million.
Go forward annualized burn rate.
And that's what we're working towards.
Of the.
Unknown Executive: of the sales wrap, you're still going.
Market will reduce that the market access team will be a core group of market access teams to work through the commercial sector.
Unknown Executive: You're still going to have these three questions.
Uh huh.
Unknown Executive: Thank you, Yatin. First question regarding the Tranquility Program: Rob will answer, like, what our plans are. Yeah, so let me be clear that we paused
Yeah.
Yes.
The next question is from Greg.
Greg <unk> of Mizuho Securities. Please proceed with your question.
Good morning.
Oh great.
So just two questions.
Unknown Executive: Yeah, so let me be clear that we paused the trial because the early data in Tranquility 3 indicated that the patient population may be better suited for chronic as opposed to episodic therapy, and as you know, our focus is on episodic treatment in line with our breakthrough therapy designation by FDA for episodic treatment. We have decided to pause the trial in order to discuss this issue with the FDA at an upcoming meeting, and we'll be able to provide more guidance on that once that meeting occurs.
One just following up on.
Perhaps one last question how do you expect the split between R&D and SG&A.
One four and then to.
Borden County opportunity.
How should we be modeling gulfport.
Our primary focus.
Okay.
Yeah.
So in terms of the commercialization, it's going to be a small core team of about a dozen people so that will reduce our SG&A expenses pretty dramatically.
Unknown Executive: We do expect at that meeting to discuss both the audit and the Tranquility II results. And at that point, we'll be able to provide more guidance at the end of the year with regard to what will be necessary for filing an SNDA package.
Now moving forward.
Our R&D.
Expenses should go down remember in the first half of the year, we had serenity three and tranquility to fully implemented and that's what caused the increase in expenses in the first half of 2023.
And Richard regarding your second question on modeling, we've never provided guidance on a go on these sales.
Unknown Executive: Yatiati, regarding your second question, I will pass it on to Rob, uh, pass it on to Frank for 502.
And so.
I think the way to think about this is by reducing our head count in commercial to 12.
Unknown Executive: Hi, this is Frank Yaka. I'm excited about our emerging pipeline development candidates, especially BXL 502. We are really looking forward to an upcoming R&D day where we'll present our progress with this molecule, in particular its development, but also discuss some unique indications of interest.
It limits, our ability to go out and prospect the way that we had.
In targeting the 1700 hospitals. However, we will continue to support through contracting efforts and through trade and distribution on both of our existing customers and those that choose to come online and approve a gummy through formulary.
We will support them in the same way so that.
Unknown Executive: We will discuss our next-generation AI platform, which has evolved considerably from the first time we did our R&D day two years ago. The capabilities have been enhanced for identifying and re-innovating late-stage opportunities.
That may help you.
But I can't give guidance beyond that.
The next question is from Robin Karnofsky up Truest Securities. Please proceed with your question.
Unknown Executive: And we'll also discuss some candidates for additional pipeline entries, such as BXL 503 and 505. So it'll be a very interesting day.
Hi, This is Alex on for Robyn.
Can you remind us what the approximate market opportunity is the breakdown for dementia setting.
Unknown Executive: So regarding your third question, Yati, related to the cash runway, Richard Willett. Sure, Yadi. So the reprioritization that we're working on now will extend the cash runway.
Assisted living facility versus nursing home.
And what are the gating factors to uptake on the assisted living facility.
So.
As I think we've communicated previously with their 100 million episodes total better than 80% of the patients with Alzheimer's dementia I mentioned this earlier in the call.
Unknown Executive: Sure, Yadi. So the reprioritization that we're working on now will extend the cash runway by reducing our burn significantly. And we're also working on various other options to extend the cash runway, which includes working with our strategic partner. As we said, the goal is to get the company to about an $80 million annualized burn rate, and that's what we're working towards. In terms of the market, we'll reduce that. The market access team will be. be a poor group of market access teams to work through the commercial sector
Our in either of the at home setting or the.
Al upsetting and I don't have a specific breakdown for you here, but certainly something I can communicate later as we get closer to a market entry disclosure.
Better than 50% of the episodes are in those settings, and we feel that that allows us to price. The drug is an episodic frog as opposed to pricing as a chronic drug.
And certainly can be used episodically in any setting. So we think that the Tam still holds at 100 million episodes.
Yeah.
Unknown Executive: The next question is from Greg Suvigende of Mizuho Securities. Please proceed with your question.
The next question is from Corinne Jenkins of Goldman Sachs. Please proceed with your question.
Unknown Executive: Good morning. This is Richard on behalf of Greg Cavanagh.
Hi, this is morey on zinc.
Unknown Executive: Let me see how. So just two questions from me: one, just one.
Wilkins.
First what do you view best options to further extend runway beyond mid 2024.
Unknown Executive: Following up from the crash one-night question, how do you expect the split between R&D and SGMA going forward? And then two, for the GOMME opportunity in sales, how are we moving now on a go-forward basis now that that's your primary focus?
And the second question is if the FDA requires an additional study.
Unknown Executive: now that your primary focus is on the at-home setting. Thank you.
Where they have to start it.
Unknown Executive: So in terms of commercialization, it's going to be a small core team of about a dozen people. So that will reduce our SG&A expenses pretty dramatically, you know, moving forward. Our R&D expenses should go down. Remember, in the first half of the year, we had Serenity 3 and Tranquility 2 fully implemented. And that's what caused the increase in expenses in the first half of 2023. Richard, regarding your second question on modeling. We've never provided guidance on GOMME sales.
Cleaning the trial with the same population.
Two.
Hi, this is with.
Regarding our cash runway extends and as Richard has already outlined our cash runway.
The southern joining for <unk>.
And that's predicated on what clinical trials, we will be exiting one in terms of our option to extend that cash runway. We have multiple opportunities. One is working with our strategic partner with charter is already our clients who are our financings of archstone.
Interest developing in these programs.
Our corporate partners, we are looking into that and in addition, we have some core assets that we can monetize and capitalize to extend our cash runway. So good news is that we have multiple opportunities to extend our cash run rate and achieve meaningful clinical milestones.
Unknown Executive: And so, I think the way to think about this is by reducing our head count in commercial to 12. It limits our ability to go out and prospect the way that we had, in targeting the 1,700 hospitals. However, we will continue to support through contracting efforts and through trade and distribution with both our existing customers and those that choose to come online and approve Agamie through formulary. We will support them in the same way. So that's... that may help you. But I can't give guidance beyond that.
Yeah.
So let me handle it.
The FDA has too.
Another study at this point it is premature to discuss whether another study is required.
But in terms of whether that study would be a laugh or just at home again.
Certainly make that decision upon consultation with the FDA and we will be providing that.
Okay.
This year.
I'd just like to add on top of what Robert said.
The other point.
Unknown Executive: The next question is from Robin Kronoskis.
Lapping.
Episodic medications to treat agitation.
Unknown Executive: of the truest securities. Please proceed with your question.
Learning from the data from the sign from that.
Nickel outcome that we had observed we never or FDA never expected that we will have so many episodes observed in the mid singles.
Unknown Executive: Please proceed with your question.
Unknown Executive: Hi, this is Alex Lenn for Robin. Can you remind us what the approximate market opportunity is, the breakdown for dementia settings between assisted living facility versus nursing home, and what are the gaining factors to accelerate uptake of assisted living facilities? So, you know, as I think we've communicated previously, there are 100 million episodes total; better than 80% of the patients with Alzheimer's dementia, I mentioned this earlier in the call, are in either the at-home setting or the ALF setting.
So we are taking that information back to the FDA and designing a program what makes most sense does it make sense to have a 11 home setting as episodic and whatever is needed to put together.
And would it make sense to go back later on and evaluate the nursing home is a more chronic option because I'd like to remind everyone. Our breakthrough therapy designation is in for acute treatment of agitation and we believe mild to moderate.
But as I must've disease population is that relevant one so far what we have uploaded.
Unknown Executive: And I don't have a specific breakdown for you here, but certainly something I can communicate later as we get closer to market entry disclosure. Better than 50% of the episodes are in those settings, and we feel that that allows us to price the drug as an episodic drug as opposed to pricing it as a chronic drug, which certainly can be used episodically in any setting. So we think that the TAM still holds at 100 million episodes.
Okay.
Okay. Thank you.
The next question is from Samir Giovanni of Rx Securities. Please proceed with your question.
Yeah, Hi, guys. Thanks for taking my questions.
Doesn't mean it after what have you, but I got a couple.
I guess the Big question for me is it is it realistic C guys T and market directly to the generalist physicians for the Atmel I'm setting isn't that really moved the domain of big pharma.
Unknown Executive: The next question is from Corinne Jenkins of Goldman Sachs. Please proceed with your question.
Have you thought about just doing.
Unknown Executive: Hi, this is Omari on behalf of Corinne Jenkins. So first, what do you view as your best options to further extend the runway beyond mid-2024? And then, second, if the FDA requires an additional study where they have to start, we have to try it, which is kind of completely neutral with the same population and turnpility to it.
The Poland deal around decal me to address that and reduce the cashman.
And I guess the second question is just really out of interest how many how many agitation episodes we seen.
In tranquility three in a nursing home setting thanks very much.
So I'll take the first question.
<unk>.
So when we think about the at home setting for bipolar and schizophrenia. There are roughly seven to 8000 psychiatrist that either diagnose or actively manage that therapeutic treatments for those patients.
Unknown Executive: Hi, this is Vimal. Regarding our cash runway extension, as Richard has already outlined, our cash runway is the mid-2020s, and that's obviously predicated on what clinical trials we will be executing on. In terms of our options to extend that Kanshan Way, we have multiple opportunities. One is working with our strategic partners, which Richard has already outlined, who are our financing partners. There is an interest developing in these programs by other corporate partners.
So we feel that we.
We would be very well positioned to access that market.
As it relates to all timers dementia.
Agitation these patients are managed.
From a topline perspective by about 65000 physicians in the United States about 30000 of those would be of interest to us. Those 30000 are additionally, making the diagnosis diagnosis and treatment evaluation for these patients now of those there are somewhere between three to 4000 that are.
Specialist of interest.
Unknown Executive: We are looking into that. And, in addition, we have some core assets that we can monetize and capitalize to extend our cash runway. So the good news is that we have multiple opportunities to extend our cash runway and achieve meaningful clinical outcomes.
But the primary care opportunity with the generalist opportunity as you described we would either have to partner with the CSO.
A potential partnership with a larger pharmaceutical company.
Permutations of all three of those and so that market entry strategy is not yet that clearly defined but we're working through those those problems for those those.
Unknown Executive: So let me handle if the FDA has to do another study; at this point, it's premature to discuss whether another study is required. But in terms of whether that study would be ALF or just at home, again, we certainly make that decision upon consultation with the FDA, and we'll be providing that update. Later, I think I'd just like to add on top of what Rob said.
Potential opportunities I guess at this time.
So send me regarding how many episodes we observed.
I will let Rob answer that.
So.
There are patients continuing in the trial at this point and they continue to have episodes. So the number is accruing it's hard to say Ed on a given day. So I think the best way to describe it would be to say it's a regular.
Unknown Executive: I think I'd just like to add on top of what Rob said. We are a pioneer in developing an episodic medication to treat adjective. We are learning from the data, from the science, from the clinical outcomes that we are observing. We never, or FDA never expected that we would have so many episodes observed in the nursing home setting. So we are taking that information back to the FDA and designing a program that makes the most sense.
And it is greater on an individual basis than what we reported in our tranquility to results and this is exactly why we are.
We're discussing it with the FDA.
So that we have a clear path forward for episodic treatment of acute episodes.
Uh huh.
And we'll we'll have that guidance at the end of the year.
Thanks very much.
The next question is from <unk> <unk> of Jefferies. Please proceed with your question.
Unknown Executive: Does it make sense to have ALF and the home setting as an episodic service and whatever is needed to put together that package? And would it make sense to go back later on and evaluate the nursing home as a more chronic option? Because I'd like to remind everyone, our breakthrough therapy designation is in for the acute treatment of agitation, and we believe the mild to moderate probable Alzheimer's disease population is a relevant one so far to what we have applied.
Good morning team.
Features that are going to be in the protocol amendment for 73 part too.
What are the kind of as a key secondary efficacy assessments that would be valuable.
And then maybe on your issues.
Nick financing partnerships, what modifications to our credit agreement.
But.
Enable you to access capital earlier and be attractive to your partners. Thank you.
So where we are finalizing.
Unknown Executive: The next question is from Samir Devani of RX Securities. Please proceed with your questions.
That amended protocol.
Secondary measures has to do with a.
Unknown Executive: Hi guys, thanks for taking my questions. Most of them have been asked already, but I've got a couple.
A variety of different we'll call the perspectives on efficacy.
And once we have the meeting with the FDA I think it will be much easier to describe the entire.
Unknown Executive: I guess the big question for me is, is it realistic for you guys to market directly to the generalist positions for the at-home setting? Isn't that really more the domain of Big Pharma? And have you thought about just doing a partnership deal around Egalmi to address that and reduce the cash burn?
Ah study and the details.
Okay.
The company did it answer your question because what we are saying is now we have selected a dose 80 microgram.
Based on our pharmacokinetic Pharmacodynamic modeling as we would expect.
Unknown Executive: And then I guess the second question is just really out of interest. How many agitation episodes were you seeing in Tranquility 3 in the nursing home setting? Thanks very much.
And now it's a matter of modifying protocol submitting to the FDA and then we will be in a position to any shared sturdy as Robert said.
The primary is safety and then efficacy trends as we measure it.
Unknown Executive: So I'll take the first question. Good morning.
Unknown Executive: So when we think about the at-home setting for bipolar and schizophrenia, there are roughly 7 to 8,000 psychiatrists that either diagnose or actively manage the therapeutic treatments for those patients. So we feel that we would be very well positioned to access that market. As it relates to Alzheimer's dementia agitation, these patients are managed from a top-line perspective by about 65,000 physicians in the United States. About 30,000 of those would be of interest to us.
So that's what will be the outcome, we will be looking from that time.
Yes. Thank you so much.
Regarding your next question Marty.
Marty vacation on the credit agreement.
Richard has mentioned that we are in.
Active discussions and as we make progress we will provide an update.
Thank you very much I appreciate it.
Okay.
There are no additional questions at this time I'd like to turn the call back over to Dr. Romano for closing remarks.
Thank you everyone for joining us today.
Unknown Executive: Those 30,000 are additionally making the diagnosis and treatment evaluation for these patients. Now, of those, there are somewhere between 3,000 to 4,000 that are specialists of interest. But the primary care opportunity or the generalist opportunity, as you describe, we would either have to partner with a CSO, a potential partnership with a larger pharmaceutical company, or permutations of all three of those. And so that market entry strategy is not yet that clearly defined, but we're working through those problems for those potential opportunities, I guess, at this time.
Sorry data about our path forward through this strategy could be prioritization and look forward to sharing updates on our progress. Thank you for your continued interest in <unk> therapeutics and have a great day.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Hmm.
[music].
Unknown Executive: So regarding how many episodes we observed, I will let Rob answer that. So there are patients continuing in the
Unknown Executive: So there are patients continuing in the trial at this point, and they continue to have episodes, so the number is accruing. But it's hard to say on a given day. So I think the best way to describe it would be to say it's regular, and it is greater on an individual basis than what we reported in our Tranquility II results. And this is exactly why we're discussing it with the FDA. so that we have a clear path forward for episodic treatment of acute episodes, and we'll have that guidance at the end of the year.
Mhm.
Hum.
Hum.
Hum.
Hum.
Hum.
Uh-huh.
[music].
Hum.
Hum.
Hum.
Yes.
[music].
Unknown Executive: The next question is from Kaviz of Jeffries. Please proceed with your question.
Uh huh.
Unknown Executive: Good morning, team. What are the proposed features that are going to be in the protocol amendment for Serenity 3, Part 2? What is the kind of this key secondary efficacy assessment? That would be valuable. And then maybe, on your strategic financing partnerships, what modifications to your credit agreement and RIFA would enable you to access capital earlier and be attractive to your partners? So we are finalizing.
Oh.
[music].
Hum.
Hum.
Yeah.
Unknown Executive: So we are finalizing that amended protocol. The secondary measures have to do with a variety of different, we'll call them perspectives on efficacy. And once we have the meeting with the FDA, I think it will be much easier to describe the entire study and the details.
Yeah.
Uh-huh.
Hum.
[music].
Hmm.
Hum.
[music].
Uh-huh.
Yes.
Oh.
Unknown Executive: So Kambay, did it answer your question? Because what we are saying is now we have selected a dose of 80 micrograms, based on our pharmacokinetic and pharmacodynamic modeling, as we were expecting. And now it's a matter of modifying protocols and submitting them to the FDA, and then we will be in a position to initiate the study. As Rob has said, the primary is safety, and then efficacy trends as we measure over a 12-week period.
Hum.
Hum.
[music].
Yeah.
[music].
Hum.
Hum.
Uh-huh.
Unknown Executive: So that's what the outcome we will be looking for from that trial. Regarding your next question, the modification to the credit agreement, as Richard has mentioned, we are in active discussions, and as we make progress, we'll provide an update.
[music].
Okay.
[music].
Unknown Executive: Thank you very much. I appreciate it.
Unknown Executive: There are no additional questions at this time. I'd like to turn the call back over to Dr. Ametta for closing remarks.
Unknown Executive: Thank you everyone for joining us today. We are excited about our path forward through this strategic prioritization and look forward to sharing updates on our progress. Thank you for your continued interest in bio-xel therapeutics and have a great day.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Unknown Executive: and so on. Thank you. [inaudible]