Q3 2023 Karuna Therapeutics Inc Earnings Call
Welcome to the <unk> Therapeutics third quarter 2023 financial results Conference call. All participants are in a listen only mode. Please note. This call is being recorded.
I will now turn the call over to elastic Smith head of corporate Affairs and Investor Relations.
Good morning, everyone and thank you for joining our third quarter 2023.
Results Conference call I'm joined today by Bill Murray, President and Chief Executive Officer, and Jason Brown, Chief Financial Officer, who will begin our call.
Thank you Miller, Chief operating officer, and walking Chief commercial officer.
Jason for the Q&A portion of the call.
Let me begin I encourage everyone to visit the investors page of our website at investors <unk> com.
Yeah.
In our press releases and presentation at the latest today's call.
Forward looking statements related to our product development regulatory and commercialization plan our research activity.
Turning to our outlook may be presented during the call.
You can purchase today's press release.
Yeah.
Risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements and with that I'll hand, it over itself.
Thanks, a lot good morning, everyone I wanted to begin by thanking our R&D team at our external partner as a high quality NDA submission for car T for the treatment of schizophrenia.
Teamwork, many long day and weekend over the past several months to write and submit our NDA.
It was a major achievement for crude and represents the culmination of years of preclinical clinical and CMC regulatory work encore XT details across several hundred thousand pages of information.
Now the submission of course is just the first step in the NDA review process. There are several other important milestones and activities ahead, including top line data from the phase one B <unk> trial this month.
We expect to hear back from the FDA on their filing decision later this month as well and we're already preparing information for our day 120 safety update and site inspections among other things.
As we've talked about we expect the standard review and therefore, a potential approval and launch in the second half of next year.
As you know the treatment of schizophrenia has been served by one class of medication for over 30 years and the potential approval of <unk> T with change that for patients and their physician and I continue to believe this could be one of the most important product launches in biopharma in 2024 25.
In terms of our prelaunch activities. They remain on track, we have the capabilities and the funding needed to optimize this program. We've built out our managed care access and MSL teams were focused primarily on pre approval scientific exchange meetings with payers, we started several weeks ago and responding to them.
Medical information request from psychiatrist and nurse practitioners.
Interest and participation for car T is very high in the community right now and we will continue to build over the next several quarters.
Additionally.
We have and will continue to present and publish new data from our emerging program this year and next year.
Last month, we presented data from emerging three at the European College of Neuropsychopharmacology meeting that highlighted car axes differentiated tolerability profile demonstrated in the trial and the potential to provide clinically meaningful symptom relief.
<unk> to include new analyses on Panther responders, which was the final pre specified secondary endpoint in the trial.
In emerging three nearly 60% of patients receiving <unk> achieved a 20% reduction of pain symptoms by week five the end of the trial.
We also shared data on the Pan's motor symptom domains, including the pans more to positive disorganized thoughts uncontrolled hostility excitement and anxiety depression factors, where <unk> demonstrated that.
Statistically significant improvements from baseline to week five compared to placebo.
On safety, we provided additional data to characterize the adverse events associated with car T and emerging three were consistent with emergent wanting to the most common treatment emergent adverse events were Gi in nature.
Primarily occurred within the first two weeks of treatment mild in severity and transient over time.
Looking ahead, we'll be sharing pooled efficacy and safety analyses from the merger one two and three trials as well as additional analyses on negative symptoms and adverse events.
NII in Colorado Springs, and CNS summit in Boston This month.
On the commercial front preparations for the anticipated launch are on track to including market Research sales force sizing and deployment and our peer to peer and consumer outreach programs.
We have a team of people with a great deal of new product launch experience in neuroscience. They know what works and what doesn't and are carefully evaluating all strategic and operational decisions to support the launch.
Equally important to our regulatory achievements and pre commercialization work for car T is the continued execution of our ongoing phase III program horizon at depth.
Which we believe reinforce the value proposition of <unk> as a potential treatment for psychosis related conditions.
<unk> cited activation and improvement is ongoing with about 50 sites currently active across the United States and Europe.
As we maintain our target of sharing top line data in the second half of 2024, we continue to monitor site activation and enrollment rates very closely and manage factors that may impact enrollment on a day to day basis.
Although there is no approved therapy for the adjunctive treatment of schizophrenia. The use of anti Psychotics is combination treatment is seen and around 30% of patients. Despite the lack of <unk>.
Our pharmacological rationale and clinical evidence to support adjunctive use.
Do arise we hope to reinforce the uniqueness of <unk> differentiated clinical profile and demonstrated that <unk> can be safely and effectively added on top of standard of care.
I'm also pleased to share our debt program evaluating <unk> for the treatment of psychosis and Alzheimers is fully underway. Following the initiation of a debt two and three in the third quarter.
We remain on track to share data from <unk>, one into a relapse prevention and acute efficacy trials in 2025.
As a reminder, the fundamental concepts of cards originates from an all climbers trial, whereas in Omaha demonstrated promising therapeutic benefit in treating psychosis and related behavioral symptoms as well as cognition.
That program is designed based on the insights from that initial study and our phase <unk> trial in healthy volunteers.
And while our primary objective with adapt to evaluate the efficacy and safety of car exceed treating hallucinations and delusions associated with Alzheimers. We will also be collecting data providing additional insight into the potential of <unk> in treating other prominent and clinically relevant symptoms of alzheimers, including agitation.
Aggression and cognition.
The data from a debt may not only reinforced <unk> promise as a potential treatment for all cymer psychosis, but also help inform future developments with <unk>.
Outside of <unk>, We're also making headway in our early stage and discovery program, most notably with car 2006 to 18, our trips in four or five inhibitor that we acquired from goldfinch bought out at the start of this year, we plan to evaluate <unk> 2006, <unk> for the treatment of major depressive disorder and anticipate initiating.
The phase <unk> clinical trial in 2024 with additional details such as trial design and refined timing to be shared early next year.
Now on an earnings call earlier this year I had highlighted three strategic and operational priorities that we set out to achieve in 2023, those priorities were maximize the value of <unk> from a development perspective.
To expand our pipeline and three scale the operational capabilities of our company as we transition to a fully integrated.
R&D and commercial organizations.
We've made excellent progress on these three fronts, which reflects the hard work and scale of our organization.
Just a couple months left in 2023, we look forward to finishing the year strong.
With that I'll hand, it over to Jason.
Thank you Bill I'm pleased to be with you all today to share our third quarter financial results and to discuss our full year 2023 guidance.
Q3 was another strong quarter for the company driven.
Driven by continued progress across our ongoing <unk> phase III programs.
The submission of our NDA for <unk>.
Pre commercialization efforts as well as significant growth across the organization.
Total operating expenses for the third quarter were $136 2 million compared to $81 1 million for the same period in 2022.
Operating expenses were slightly offset by $17 million of interest income.
<unk> had a net loss of $119 1 million.
Research and development expenses for the third quarter were $104 million.
Compared to $62 million for the prior year period.
The increased to $42 million was primarily driven by expenses related to our ongoing RXT clinical programs.
Increased employee head count.
Higher stock based compensation.
General and administrative expenses for the third quarter were $32 3 million compared to $19 1 million for the prior year period.
The increase of $13 1 million was primarily driven by expenses related to our pre commercialization efforts.
Increased employee head count and higher stock based compensation.
Cash cash equivalents and investment Securities totaled $1 3 billion as of September 32023, compared to $1 1 billion at the end of 2020 to.
Providing us with a cash runway comfortably through 2026.
The increase was due to our follow on public offering in March of this year that resulted in the net proceeds of approximately $437 million.
Looking ahead at the rest of the year, we anticipate R&D to decrease in the fourth quarter relative to the third quarter.
To reiterate our guidance for the full year 2023.
Total operating expense is expected to come in towards the top end of that range at around $478 million.
Of that we expect R&D and G&A expenses to be in the range of $355 million and $115 million respectively with.
With the increase in R&D guidance being primarily driven by continued enrollment of our long term safety trials.
Activation costs associated with the adapt program and costs related to our ambulatory blood pressure monitoring trial.
I'll now hand, it back over to Bill.
Thank you Jason with that we can open the call to questions.
At this time, if you would like to ask a question press star one on your telephone keypad.
If you'd like to withdraw your question Press Star one again.
As a reminder to ensure that we have time to answer everyone's questions. Please limit yourself to one question.
Please standby for your first question.
Yeah first question is from the line of your team Sanjay.
Good time.
Okay.
Hey, guys. Thank you for taking my question and congrats on all the progress.
Just two quick ones for me if I may so the Fox one is with regard to <unk> study can you maybe talk about your expectation would you expect the drug to behave similarly to the monotherapy in terms of the onset of the depth of responses.
Should we think about the added call it ability back and then maybe on the pipeline front on <unk> you are prioritizing Didi could you maybe talk about the rationale the rationale going into <unk>.
Anxiety disorder. Thank you.
Thanks again, thank you for both questions I'm going to turn it over to Andrew.
Thanks, Bill. Thanks, So with respect to the arise study from an expectations perspective first maybe just speak to efficacy and a reminder, that the primary endpoint in the arise study. The total answer or is the same as the primary endpoint across version one two and three so those do significantly its form our expectations about what we expect to see in the horizon program.
That's a key difference with the rise program being with you expect the baseline severity of symptoms to be lower given that patients are being actively treated with existing antipsychotic medicine.
Because of that we expect a little less dynamic range, but our expectation from a statistical powering perspective is more conservative you have 4% to five point change on total P&C comparison.
Eight to 11 point change that we observed at Amberjack program, that's still would meaningfully clear of what we would consider a clinically meaningful benefit in patients.
And again, it's all based on that same primary endpoints across the Orion and emerging programs with respect to safety and overall Tolerability. Obviously one of the things. We're most excited about with our ex TSB completely unique pharmacology that focus on the <unk> four of a sporadic receptors and when you look at the Tolerability and safety profile.
It's very distinct in comparison to the adverse effects that are observed up current background standard of care. So we continue to expect to see things consistent with that muscarinic pharmacology of car T and don't expect meaningful overlap or for instance, worsening ups background side effects associated with current events.
And then you want to comment on 2006 <unk> at the preclinical evidence supporting <unk>.
Utilization.
I mean, I think with 26 18 in general trips you four five as a therapeutic target or site.
Patrick LLS and mental illness, I think there are a lot of interesting possibilities I think that that's really the basis of your question is that there.
As evidenced broadly to support both antidepressant anxiolytic properties spin.
Specifically in 2018, a volatile all about more broadly tricky for a <unk> target I think our focus on MTBE initially represents or his representative of both our scientific confidence in that preclinical data our ability to execute a study that we think will provide meaningful information.
Mmm.
Your next question is from the line <unk> Wedbush Securities.
Hi, This is <unk>. Thank you for taking my question wondering.
Wondering if you could talk a little bit about your expectations around were real world duration of treatment for <unk> cycling amongst therapies and he'd been completely discontinuing therapies represents a hallmark of this schizophrenia space.
How would you describe your base case expectations now that you've had longer term experience with car accident clinical trials. Thank you.
I'll make a few comments.
Turn it over to a retainer cheap commercial officer, what I can tell you right now.
When you look at real World experience with the second generation atypical.
Adherence rates are in the range of about.
Only 50% to 60%.
And the number of missed days of therapy. Each year is probably between 100 and 150, depending on which real world observational study that you you look at it and so.
Noncompliance is a real problem.
Given the efficacy and safety experienced some patients have that results in relapse that results in.
ER visits and then of course, hospitalizations and increase health care costs.
Of course don't have real world experience yet.
But we would expect that adherence with cards G railroads city could be higher persist in seeing could be longer and miss days of therapy, lower and I'll, just turn it over to will to add a little bit.
Thanks, So I'll just echo some of the comments Bill made which is you know in the marketplace. When we talked to clinicians and also the players the.
They see the potential or increase adherence is real <unk>.
Value add for <unk> Info mentioned, there was the incremental increase from the typical speed typical and given the needed mechanism on the clinical worldwide. All we've seen so far in the emerging programs.
There is strong interest in seeing longterm data to realize the full potential of <unk> and so when we don't have real world data.
The data is indicating and signaling that there could be an opportunity here for increased adherence and as we've talked about on many occasions or they really high rate of non adherence pace.
Patients typically how 'bout three <unk> three quarters of them or 75% will discontinue the first 18 months and that's driven by a lack of either out of an embassy or in Tolerability encouraged he may have the opportunity to really address both of those those needs in the market.
Thanks for the question.
Your next question is from the line of miles Manti with William Blair.
Hey, Congrats on Dakota. Thanks for the questions first of all I'm, just clarifying you Gotta announced C. N D. I filing acceptance if you do get that and would you also use that as a for them to give us the ambulatory blood pressure monitoring tighter at that time and then the second one is I imagined phosphate fully and relatives the second call it off.
That's patients that are treatment naive to carve tie in an outpatient setting can you just give us an outside on the drop out right and how that compares to emerge a full that's ongoing in patients that have been experienced thanks very much.
Grandma they'll take the first part of the question then turn it over to Andrew answered. Your your second question as it relates to the acceptance, we will announced that we expect that at the at the end of the month and then as it relates to the AVP M results, we expect to have those announced in the middle of the fourth quarter.
Which is only a couple of weeks away.
Andrew.
Okay, and loud with respect to emerging for an emergency five obviously the studies continue to be ongoing as as you mentioned, it's sort of premature to comment you specifically in any conclusions from the study.
I think we do look for those as being overall consistent with.
What we spoke to earlier the pharmacology Carr C seeing it E M one and it for receptors.
Our expectation is we'll see in those long term study or something it looks quite consistent with a we've been over released from the short term studies a merger one two or three where we see predominantly.
Predominantly unethical.
Inefficacy profiled characterized by a robust effect abroad effect and as safety and Tolerability profile is generally characterized by mild to moderate transient G I side effects.
Well of course look forward to releasing all of that data at the right time here in 2024 is that the study is complete.
But again it does studies are a great opportunity for us to further demonstrate.
Potentially differentiated profiles carpeting.
Thanks for the question of miles.
The next question is from the line of Tom Mathis with iPhone.
Hey, Thanks for taking my questions Uhm ahead, it'd be AVP M data I was just curious what's your level of confidence right now that.
Data with the F D. A will not serve as a major amendment any any more color you can provide or any analogues and then just more broadly how are you thinking about business development and the possibility of doing another trip C. Four five like deal in the next year or so before the lunch. Thanks.
Thanks, Paul for the questions I'll, let Andrew tackle the the first question that I can answer the second question for Ya and I think with respect to D. A V. P. N study that was specifically a topic of discussion with USDA at our pre NDA me being in second quarter earlier, this year and specifically the idea that that study, which.
Eight one E safety study would be submitted at the day, 120th <unk>, which obviously based on our submission in late September all happened in the late January timeframe.
And again I think were highly confident but that would not result in a sort of major event net Q Enda NDA review process again because of specific leave that conversation with the agent <unk> eating but also I think the general precedent set a study <unk> safety study.
Submitted prior to mid point of view or certainly prior to pay 120th Uhm, We would not expect to you resolve an extension today great. Thanks, Andrew and then full as it relates to visit development. It's a good question it's C.
It's a really a very important priority for us to build a pipeline I would say, it's second only to the approval and launch of car X T, which is obviously our most important priority you mentioned the goldfinch transaction trips you forfeit Heather.
But we look at new opportunities on a weekly monthly basis, we think about them strategically scientifically.
Financially and I think that the the trip C. Four five.
Inhibitor check to all of those boxes.
We think about neuroscience fairly broadly with a focus on schizophrenia, all Simers depression anxiety.
Several other conditions, if we see something that we like fits our balance sheet makes sense, given our capabilities and our neuroscience focus yeah.
Yeah, we would we would do something obviously, our number one priority right now is correct state.
A number two is building the pipeline and new product flow.
For any company.
Blood and so we'll continue to look at things and if we see something what we like.
Of course.
I'll do it.
Thanks for the question.
Your next question is from the line of Ash Burma the P. B S.
I. Good morning. Thank you for taking my question. So on the AVP M study I wanted to also I normally haven't seen any <unk> study and sediments and for me too.
<unk> on the a B T M.
Mechanistically or <unk>, they could could be additional and one agonism nev impact on efficient.
Thanks.
Thanks for the question will turn it over to Andrew.
Thinks that show specifically from a pharmacology perspective.
It's often challenging a separate individual contributions we have a molecule hitting multiple targets that being said I think when you look at the data that exist for.
Some of the animal steric modulator programs et cetera tend to see any potential pressure affect few times <unk> receptor. So.
Our expectation is not that you won't see any meaningful presser effect with <unk> certainly on the basis of an M. One at that for a pharmacology and I think as you referenced.
We don't seem to see a sustained chronic increase across the merchant program Alrighty 80, 80 PM study.
Offers us the ability to further confirm that and we certainly remain confident here with the final data coming quite soon.
That will be able to reject that statistical hypothesis of any sort of sustained three millimeter increase in systolic blood pressure.
Thank you.
The next question is from 911 on heat Michelle with Wells Fargo.
Great. Thank you for taking my question and congrats on your progress.
Just wanted to ask regarding your company test data on drip C. Four and five and then was this small and could easily.
Suicidal ideation again the numbers are small so just wanted to understand is it just the last small number of salt is there any particular reason why you would see high suicidal ideation with this mechanism. Thank you.
Did you read my week, we have trouble hearing what you said would you mind repeating the question.
Sure. So this is regarding the script C four and five and the data we saw in early October from <unk>. So the trial was tell me the date of slow recruitment, but there was is 15 per cent rate of suicidal ideation in the treatment down with it.
Four per cent and placebo I'm just trying to understand is this everything is it has this anything to do with the mechanism.
Or are they just a small small numbers does that really small numbers here. Thank you.
Thank you Andrew go ahead.
Thanks, Thanks, So you're referring to a study where the results were recently posted on clinical trials Dot Gov that was.
Actually a remote mobile base study that was done by the I R. S.
Really as a result of the pandemic that.
That study was terminated early I think that final enrollment with like low single digit number of subjects I think given that in some of the considerations around.
And more generally studies.
Depression, or or things like schizophrenia, and it's really premature to read too much into that study.
Study results, particularly when you speak to.
Adverse effects or things like suicidal Asian, which tends to be rare, it's often more challenging to make any conclusions about that until you get larger numbers.
There's also I think more details with respect to things like suicidal Asian their specific rating scales for that we implement that across the immersion program as well.
Just simply looking at Th E. As it does not I would say a thorough assessment.
A potential effects and I would further say that from our perspective, we certainly don't see in the preclinical evidence or specific scientific rationale for why that that could be an adverse effect associated with trixie four five will certainly obviously be carefully assessing that.
Anyone with it being diligent study.
Studies depression, when we push forward into our style last year.
With the 2618 program.
Very much. Thank you for the question.
Next question is from the line, David I'm <unk> with Piper Sandler.
[noise] hi, thanks, So on arise can you talk to pace of enrollment and are you still onboarding sites just wanted to get a flavor for you know where things are on on that trial and then secondly, an adept in.
A D psychosis more specifically how are you thinking about it. These are the a D. Agitation you know some companies that are looking agitation you guys are looking at psychosis do you think they'd agitation and psychosis, a sort of a distinction without much of a difference.
Just wanted to pick your brain on that thank you.
Thanks for the questions. David go ahead, yeah, specifically for the first question around the arise program.
Have continued to activate sites over the course of this year really in the second at third quarter, we initiate it.
Two new countries as part of that program for area Serviette process theaters about 20 sites that are active at this point in time.
You know I think is still maybe mentioned a little earlier.
See what I'm more managing studies, it's always a day to day basis.
Do you think you are likely to see some additional side activations across the arise program again, that's that's pretty typical studies like this route you'll also see sites that will drop off over time.
Who aren't actively enrolling but I think we feel good about where we are with you rise program continued T momentum as part of that program officer will provide any additional updates you have to look forward to.
To the extent there already.
And then with respect to the a depth program and our focus on psychosis.
Yeah, I think if you rewind the clock 10 to 15 years, there perhaps wasn't as much distinction among psychosis snatched station, we really look at that as.
Ah separating out of an agitation related indication over the last five to 10 years Gibbons.
Gibbons frankly lack of approval for anything more broadly for psychosis, specifically agitation aggression I think are potentially more.
I think it affected by drugs that have asama linzer sedative based effects fundamentally that sort of behavioral paradigm, whereas when you look at hallucinations and delusions and that sort of core psychosis, that's really where we look at taking advantage of a known antipsychotic effects of.
I am willing and N as part of <unk>.
Bill referred.
To this in the original or the opening of the call that that is the population alzheimers patients worthy antipsychotic effect up and nobody was first discovered in when you look at that data which is.
All published you see benefits specific Leon hallucinations.
<unk> agitation and aggression across that program. So we really look at the opportunity with the car X T as something to capture that broad effects.
But specifically starting with hallucinations and delusions as the basis for the primary endpoint any of depth program.
The only other thing I'd add is David we know that the product is a coke pro cognitive effects, which was observed in the very same trial that.
I introduced talked about and so when we think about that all farmers population of course, the first step would be us an.
An official indication or an F D. A approved vindication for psychosis, but we know that there's data on other aspects of all members of the spode agitation aggression and.
And cognition, which I think.
Creates a compelling opportunity for us as we go into this.
In this area. Thanks for the question.
Your next question is from the line of J Awesome Oppenheimer.
Oh, Hey, congrats on all the progress and thank you for taking the question.
There seems to be a lot of interest in the AVP M. Study can you just remind us what blood pressure signals have you seen in the past what's the rationale behind running this study and ultimately is fairly legitimate blood pressure concern for car axes and investors should be concerned about or is that just a false mayor.
Contrived by competitors. Thank you.
Thanks for the question do I go ahead, Andrew Yeah, sure happy to happy to speak to sort of what we've seen how that projects and Navy cabinet and I think maybe I'll just start with I think with respect AVP EM.
It's not something that we have a lot of concern about internally atmosphere running this study to provide a more definitive data point about what any blood pressure back of course, he could be but when we look at the immersion program, which has the same dosing also impatient living with schizophrenia assign a minute at the Saint paradigm.
Study.
Even in that setting where we're measuring vital signs at T. Max of the drug two hours post us we don't see a three millimeter increase even and that's it.
What you would describe forest kind of a fundamentally worst case scenario, we translate that data.
PM paradigm.
That's why we have such a high level of confidence and having a successful outcome from that study.
Consistently across the program with <unk>.
I have not observed any meaningful presser effect and now something that was.
A historical consideration with this mechanism really until you've seen some of the M. Four selective calm now to come into early stage clinical development over the last couple of years.
So from our perspective, we're obviously greatly.
Greatly looking forward to being able to see the final eight pm data and get that out to.
The public domain, which I think will provide you know in our minds to those definitive data point around any potential pressure effects, but we expect that to be consistent with what we have already changed in our clinical assessment Sydney merchant program.
Thanks for the question.
Thank you.
Your next question is from the line of <unk> Morgan Stanley.
Thanks for taking my question what is the latest feedback you you're hearing from payers on court T and and how does the benefit on cognition resonating with payers and clinicians. Thanks.
Yeah, Great question and I'll, just make a couple of comments and then I'll turn it over to Okay. We've already started scientific exchange meetings with with Medicaid.
Programs all across the United States. So we are now more than 12 months away from from launch we're gonna have plenty of opportunity to sort of lay the proper groundwork so that we achieve <unk>.
Electively high level of formulary coverage during the the first first year on the market I think we've already been to about 14 Medicaid programs, maybe more over the past several months and.
I think the opportunity here for us to carve out a position on formularies kirksey.
Is is pretty significant they haven't had a novel form a logical class.
Three decades, I think if I was if we were getting ready to introduce another D. Two antagonists conversations with payers may be a little bit different but this isn't that with that I'll turn it over to will sure. Thanks, though so.
Particularly pleased with the interact cause we've had to date with the bear community.
Since we initiated scientific exchange in September we've had over two dozen interactions across <unk>.
Annals, Medicaid Medicare and <unk> and also commercial and we have more than a dozen just one meeting scheduled lucci now and the end of the year and that number continues to go up I think it reflects a couple of things. One is there is interest and we've I've heard this directly in new treatment options for patients with serious mental illness in this case, particularly schizophrenia.
There is.
One of the things the the pre approval information exchange allows us the opportunity to learn.
Almost in real time data is presented and into medical meetings et cetera, and so they look forward to to that interaction, which is something we can really capitalise on over the next 12 months the data as well received I think they they certainly appreciate the unique mechanism of <unk> relative to the products that they are currently offering on there for.
<unk> they they really.
Really dive into some of the the data we present and particularly in the total pounds, but questions about this upscale.
Which which we we find to be encouraging and of course, the fundamentally different CD intolerably profiled as reflected in the data to beat they do to your question have a real appreciation for the three symptoms remains of schizophrenia, the positive and negative down the cognitive and they know just as the clinical community knows where the deficits are.
They are relatively good drugs on the positive symptoms, but where the needs are negative and cognitive so they are very interested to learn more about about car excuse evolving clinical program aware that the drug may actually be able to offer potential benefits. There. So so so far.
I think really engaging in positive and and eat every one of them has welcomed the opportunity to come back in the future as we present work clinical data to confuse me learn more of the next the.
Next 10 to 12 months and the only thing I would add is just in general in the area of mental health I would say every corner of the healthcare system right now is moving.
In the right direction.
Words, we just talked about payers, even state governments are rethinking policies as it relates to formularies and.
Reducing the use of certain drug utilization management sort of techniques to control prescribing and we see fewer and fewer states using prior authorization. In fact, I think it's 14 states there's no PA allowed.
You also see the elimination or the reduction in the use of steps and I think these are very very good trends.
If you take a look at patient advocacy groups that are doing more work than ever before to reduce stigma and isolation and if you look at the providers. There are more community mental health centers being set up in communities all across the United States and I think all of these trends.
More tailwinds than they are headwinds and <unk>.
Abel coverage you have access to cards, J and frankly any other new compounds. That's introduced in the United States for a serious medical illness, and I think it's a very different dynamic and mental health as compared to other therapeutic areas is across those.
Aspects of the marketed and there's more momentum than there has been in years and so that puts us in a very good position when we start to introduce correct corporate fee in the United States next year. Thanks for the question.
Next question is from the line.
Solving Richard with Goldman Sachs.
Good morning. This is <unk>. Thank you for taking a question just on their kayaks P. Launch next year could you provide some color on what the early days of launch could look like are there specific physicians are chock of fees that you're most interested in.
<unk> 2618, I guess.
Population with an M T D that would be more suitable for this asset. Thank you.
Yeah. Thank you for the question I'll turn it over to will I would just say as we think about the.
Introduction of Clark's T in the United States. This is gonna be a broad based program.
There is great anticipation and the psychiatry community and the nurse practitioner community.
<unk>.
We're going to cover as many physicians as many as nurse practitioners as many community mental health centers as can be covered and of course, we have a lot of data that will instruct exactly where we deploy our sales organization are managed access teams, but there'll be.
There'll be a full comprehensive well funded program here and I don't think that there was a psychiatrist or a nurse practitioner in the United States. That's not interested in at least evaluating <unk> the data from the emerging one two and three program.
Of course still under review at the FDA, but is very very compelling it's.
It's a completely novel approach it may be complementary to the <unk> and so our job is to make sure everyone is aware of those data.
But they get a complete accurate balanced presentation of all the information that we have which would be consistent with our label and then they'll try it in patients that are either new patients switched patients or patients perhaps that.
Utility and add or although he wouldn't have that indication at launch and so.
B no aspect of this market that we leave out and preparing it for lunch. Thanks.
But I would just add onto that debt to build on those early comments about when we refer to it as mental health moments, where we see opportunity, particularly in states since the Medicaid population is so so important to car exceed particularly out of the gate, where we see states that don't require prior authorizations, where have what zero or one step.
Those are the high priority states and they tend to be a mix, but some large states are in that mix. So will be fully prepared to capitalize on that opportunity will be fully loaded will have a.
Very robust sampling program aren't Salesforce analysis and structure is nearly complete so we will go to market there'll be there'll be a launch that will support the the potential of car exceed across across clinicians and payers and and.
To this point and again back with something Bill said.
And any engagement, we have with the psychiatry community, whether it's psychiatrist or nurse practitioners et cetera, there's a high level of interest and excitement.
Currency and that they were looking just to see.
Our progress industry potentially random drug will be available to them or did you want to take the second question, Yeah, specifically with respect to the trips the trips for five program 2618, you know at this point.
We speak to our focus in an empty ear major depressive disorder, we think about that broadly b or being broadly applicable to that patient population or not at this point focused on a particular subset of M. D D patients uhm.
We believe that there is potential benefits.
The depression perspective, but also from anxiety perspective, there's a substantial comorbidity between them eating an anxiety disorder. So that would be a natural place for us to look at the right time for specific benefits given the preclinical and scientific rationale for antiemetic anti depressant effects or anything at this point our focus remains had a problem.
Like a ball sort of potential treatment Friday.
Thanks.
Your next question is your line of chasing bear.
Bury the bank of America.
Hi, Good morning. This is dina on four G N. Congrats on the progress with Andy submission is corner and thank you for taking our questions.
Just a quick one on car 26, 18 am curious to tell your leveraging all the prior data with this molecule.
Pacifically, referring to the molecules failure and that's F. S. G. S trial with this because it was the wrong target and you know started just went underpins your confidence.
That it has the right profile for M D D and other CNS disorders. Thank you.
Sure happy to happy to speak to that and you know with respect to 26 18, you're referring to the previous development program that was run it in renal disease, obviously indications are unrelated to depression or anxiety, but trixie four five being a target that we have been following.
Given the biological rationale preclinical data, which suggests those anti depressant as well.
We've replicated that data specific thing with 2618, the molecules and not relying on other target compounds or tool compounds, but specifically with 26 18 looking at those preclinical models. So that's really the basis of our confidence with respect to this molecule.
It does offer us a great opportunity to leverage the previous human experience with 2618, specifically the program with administered to over 101.
100, humans hundred patients and up to a duration of 48 weeks. So that provides us a substantial amount of safety and tolerability data that we think is informative.
We have quite positive with respect to you the profile of 2618, so given that the molecules substantial previous human experience given the biological preclinical rationale for potential efficacy and treating M. D D as well as anxiety disorders, that's kind of the basis of our confidence going forward and and how we think about designing the right.
Clinical trial to highlight this potential benefits.
Thanks for the question.
Thank you I just one quick follow up sorry. So then would you anticipate.
Being able to go straight into C. Three trials from please won't be giving you do have all this prior safety data or is it still you know to be determined. Thank you.
Yeah, I mean, I think we don't want to speculate too far in the future about our development with 2006 to 18, but I think what you're hearing SA.
We do think we're ready to go into a <unk> study in patients with major depressive disorder I would say if you look at the program that we brought with car S. T. In schizophrenia, there's not a substantial this distinction between phase two and phase III our merger one study and our phase two immersion two or three being the phase III study.
Or identical for a critical perspective so.
Again, I think World War wait future results from that Phase one study prior to compensate you specifically in our plans going forward from there, but we do think given the substantial safety and Tolerability data that already exists. It does offer us the opportunity to run an accelerated development program for 2006 eight.
[laughter].
Your next question is from your line, Jessica Bang, what J P. Morgan.
Hey, this is Nick on suggests thanks for taking our questions. You previously talked about your commercial prepare this in the U S and can you thoughts on an initial ramp there but can you also recap you commercial strategy outside the U S and which countries could be logical first choice.
Yeah, It's a good question <unk>.
The United States, we of course have a partnership and China.
<unk> and then the other two important geography's would be the E U and and Japan.
And as we said before will clearly need a partner with regulatory development and commercial capabilities.
<unk> has value outside the United States and both of those geographies and we hope that that is a strategy that will come into focus in the.
In the 20th 2004 period.
24 late 2024.
More to come.
Thank you.
Your next question is from the line might Goldman.
Partners.
Hi, Thanks for taking my question. This is Rudy on the line from work Oh.
So can you talk about your current strategy for cognitive impairment schizophrenia.
Starting to give you the trials to pursue these as a separate indications.
Second or you can also program <unk> Precommercialization worked what should we think about spending more into 2024.
Thanks.
Great. Thanks for the question of annual will take the first part and then we'll take the second word.
Yeah, specifically with respect to hide a air man associated with schizophrenia, obviously, we were able to collect cognitive performance data as an exploratory endpoint as part of the emergency program that will also be included as if you think about future data with respect emergency <unk> five as well as the arise program or all opportunities.
It's just further collect cognitive data there of course with cognitive data collection.
Demonstrated benefit in the original studies with <unk> as well as a patient with alzheimers patients with schizophrenia.
Going forward I said do you think we're contemplating additional work specifically dedicated towards cognition and really what that means is studies that are specifically designed recruited and have primary endpoint a primary endpoint that reflects cognition rather than other symptoms of schizophrenia.
So that's something that certainly under consideration for US. We believe there is a broadly applicable potential benefit of car S T across.
Hostess and cognition and a number of potential different medications and I think you'll expect to hear more from us of 2024, specifically about uhm dedicated development towards cognitions gets pregnant great. Thanks, Andrew will you want to take the second question. Sure then I'll know Precommercialization word. So first you've indicated our leadership is in place of a commercial for.
Is better than the.
The team is really focused on on developing the ranking go to market strategies. As we mentioned before you know we expect us to be fully loaded campaign out of the gate secret opportunity <unk> in a marketplace that is eagerly awaiting new treatment options. Our scientific exchange as we've mentioned has has begun.
I think with guns and green form and that's a collaboration between our account director team in our medical science leaves on teeth. So they are able to continue that dialogue with with clinicians.
Particularly with an payers and clinicians on the mental side to the Sunday have questions. So we can react to provide information to our sales force planning and design work is nearing completion as I said that will give us the opportunity to go to market and really address healthcare prescribers photo psychiatry nurse practitioners.
In psychiatry in a group of primary care.
But obviously very active in this area, but it also allow us to cover a broader landscape. If you will to ensure we cover those would provide community you gave your whole centers that we provide adequate reimbursement support to help to help the offices get through any prior authorization or step processes that needs to be in play one of those sampling program, it's all designed and ready to roll.
We are in a very good position and we still have more work to do obviously, we're a ways away from from a potential approval and will want obviously final wavelengths human form or messaging et cetera, but I think the.
At this point I'm very pleased and we're in good shape.
I would just second what what will said we are on track I would say we're ahead of schedule as it relates to getting.
Getting ready in the beauty here is that the psychiatrist community is anticipated <unk>. There's a great deal of interest here of course, we can promote it until we get approval.
All systems go.
Thanks for the question.
Your next question is from the line of Jason Butler with JMP Securities.
Hi, Thanks for taking the question I'm in all my congrats on the progress just another poll when commercial <unk> can you maybe speak to what you're hearing from physicians about how they're thinking about you know using withdrawal early in the launch and specifically with regards to dose flexibility.
How willing there'll be to push the dose to optimize advocacy early in their experience versus you know taking a flowering gaming experience with vulnerability mm. Thank you.
Great. Thanks for the question I'll, just make an opening comment and then turn it over to will I've been involved with probably.
Seven or eight.
Neuropsychiatry launches over the course of 25 years and in my experience.
Psychiatrist or the most adept at.
At at dosing and generally follow a principle start low and go slow.
I think that's true whether you're dealing with anti depressants are atypical for schizophrenia or a novel compound line <unk> for schizophrenia, and I would expect that bill followed the same practice with <unk> using the label of course as as guidance as they do it with other a typical turn it over to will live with him.
And his comments, you're all just add onto that we will go to market to enable that flexibility for the prescribing community to tell her they use of the drug for the label that also further clinical experience.
So that they can maximize the patient experience with the product right right out of the the gates in terms of the the.
Approach the patient segments et cetera is a broad basic one right on there are many patients with schizophrenia looking for new treatment options, we reiterated that many times in terms of the hiring of non adherence discontinuation, whether it's patient instead of lapsed and therefore not in any therapy for which currency can be a new patient started if you will or those better experience.
Seeing you know I've been efficacy or Tolerability effects are looking for a switch or in the case of this market with the increases with polypharmacy of two D. Twos, there will be some physicians, who even though we will not promote to that so we have an indication they will see the opportunity to essentially add <unk> to be held on patients were not adequately addressed from inefficacy perspective.
And so it is a broad based population again it has been very little novelty in this area mystically for a long time for decades, Uhm and so you know that there really is I think capture their interest.
They are already thinking about the breath of patients that may benefit from Park Street, I think Will's right. If you know if you had another D. Two antagonists you.
You might be thinking about.
The market more narrowly.
And or a third line.
Type of treatment, but that's not what we're talking about a year and I think whether you go on the far left of the continuum first episodes psychosis, all the way to patients who.
Who are not on therapy, and who have relapsed I think the opportunity for car <unk> is that broad and it should be that broad given given what we've seen in the emerging program. Thanks for the question.
Your next question, it's been in line of Charles <unk> Gerald.
[noise] Hi, this is at peace the propolis on from Cantor I'm, great to hear all the progress made it three Q2 Q2 questions for us.
Can you talk about the progress of a <unk> study and cycles as an Alzheimer's and now what are you know if any of the rate limiting factors for patient enrollment and the second question is.
<unk> T for schizophrenia, what are your expectations for an AD com and now what are possible keep topics for for that discussion. Thank you for taking our questions.
Great. Thank you good questions Andrew.
<unk> depth program, obviously the depth. One study has been ongoing since the second half of 2020 to adapt to just started more recently here in the third quarter. So those studies.
Slightly different points from an operational perspective, certainly in adapt one but also and adapt to focus on finding recruiting that the right patients into that study I think in any study in psychiatry finding patients you Sir.
Really fit the key inclusion criteria with respect to diagnosis symptom severity as well as general health tend to be the sort of limiting factors. That's all built into our assumptions around number of sites and duration of time needed to successfully and studies. So.
Nothing specifically that would point to forget that program outside of the sort of more general considerations.
With respect to an AD com.
We're certainly have already begun our preparation process for potential outcome.
I think our view is were less likely than 50 per cent to receive an outcome. That's really on the basis of having a clinical program for an indication of treatment of schizophrenia. Adults, that's well precedented from a clinical trial design an endpoint in general methodology perspective are development program follows.
Precedence over the last several decades uhm, but of course, that's up to the SDA discretion, whether they'd like to add that uhm and what the topic with apathy, but it's certainly something that we're already getting ready for it but I'll certainly be ready for if that does happen.
I'll sign up question comes from the line of Greg Slavonia list Huh.
E L. Four drinks evanovich. So just two questions from us in terms of the day 120 updates and elaborate more specifically regarding will be part of the update besides the a b PM data and additionally, with a potential clients to launch next year.
Preparation slash manufacturing inspections, knowing thank you.
Yeah, so with respect to the yet they want 20th shaky update really the bulk of that information is simply 120 day roll forward and all the patients that are currently ongoing in the immersion program.
So typically for the N B, a and then the day 120 safety update there's simply a date on the calendar by which all data that's been collected prior to that date is included in the survey.
So we'll have a four month for I'll forward, if that safety data set.
As as part of the programs, there's less about completing studies or specific data, but more of a general rule of that database with respect to manufacturing inspection readiness, etc. Uhm I think in general from a TMT perspective.
We feel I think in a very good place from a submission perspective from a potential inspection as well as supporting the launch we've been manufacturing.
S T at at multi hundred kilogram scale commercial scale for quite some period of time, we already have millions of capsules that are.
Currently disposition and ready for a potential sale, assuming that we get approval.
We use manufacturing sites that are known to the agency are inspected previously by the agency.
And so we feel quite confident going forward that we have a CMC manufacturing strategy to support the potential approval as well as the lunch break.
Thanks, Andrew Thank you for the question.
Thank you. This does conclude today's call. Thank you for joining you may now disconnect your lines.
Thank you. This does conclude today's call. Thank you for <unk>.