Q4 2023 Cara Therapeutics Inc Earnings Call

Operator: Thank you for standing by. And welcome to Cara Therapeutics' fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen only mode.

Thank you for standing by and welcome to Cara Therapeutics fourth quarter and full year 2023 earnings conference call. At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the question queue, you may press star 11 again.

To ask a question during the session you will need to press star one one on your telephone to remove yourself from the question queue. You May Press Star One won a game I would now like to hand, the call over to Matt Murphy manager of Investor Relations. Please go ahead.

Matthew Murphy: I would now like to hand the call over to Matt Murphy, Manager of Investor Relations. Please go ahead. Thank you, operator, and good afternoon. After the market closed today, Cara issued a news release announcing the company's financial operating results for the fourth quarter and full year 2023. Copies of this news release can be found in the investor section of our website at caratherapeutics.com. Before we begin, let me remind you that during the course of this conference call, we will be making certain forward-looking statements about CARA and our program based on management's current plans and expectations. These statements are being made under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainty. Actual results may differ materially due to various factors, and Cara undertakes no obligation to update or revise these statements publicly as a result of new information or future results or developments.

Okay.

Matthew Murphy: Thank you operator and good afternoon.

Matthew Murphy: After market closed today <unk> issued a news release announcing the company's financial operating results for the fourth quarter and full year 2023.

Matthew Murphy: Copies of this news release can be found in the investors section of our website at Cara Therapeutics Dotcom.

Before we begin let me remind you that during the course of this conference call, we will be making certain forward looking statements about Kara and our program based on management's current plans and expectations. These statements are being made under the private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties.

Matthew Murphy: Actual results may differ materially due to various factors and care undertakes no obligation to update or revise these statements publicly as a result of new information or future results or developments invest.

Matthew Murphy: Investors should read the risk factors set forth in CARE's 10-K for the year ended December 31st, 2022 and any subsequent reports filed with the SEC, including its Form 10-Q for the quarter ended September 30th, 2022. With that said, I'd like to turn the call over to Chris Posner, CARA's Chief Executive Officer.

Matthew Murphy: Investors should read the risk factors set forth in Paris 10-K for the year ended December 31, 2022, and any subsequent reports filed with the SEC, including its Form 10-Q for the quarter ended September 32023.

Matthew Murphy: With that said I'd like to turn the call over to Chris Connor Caris, Chief Executive Officer, Chris. Thanks.

Christopher A. Posner: Thanks Matt. Good afternoon, and thank you for joining our call. With me today are Ryan Maynard, our Chief Financial Officer, and Dr. Joana Goncalves, our Chief Medical Officer. Significant developments in 2023 led us to sharpen CARIS' strategy and focus. We announced in January of this year that we have prioritized the program with the highest likelihood of clinical and commercial success, oral diphylocephalin for notalgia parasitica, or NP. Focusing all our resources on NP extends our cash runway into 2026, which allows us to reach all value inflection milestones in this program. MP is a highly underserved neuropathic condition with a sizable patient population and no approved therapy. We are optimistic that oral diphtheria keflin, if approved, could become the first and only oral antipyretic therapy for MP. I want to highlight why MP has such potential and detail how our late-stage oral diphelic Keflin clinical program can address it. Notalgia Parasitica is an unexplored neuropathy, and yet, NP is relatively common. The disease is a chronic neuropathic paroitic condition characterized by paritis of the upper back, often leading to pigment changes as a result of excessive scratching.

Speaker Change: Thanks, Matt Good afternoon, and thank you for joining our call with me today are Ryan Maynard, our Chief Financial Officer and Dr. Joanna can solve as our Chief Medical Officer.

Speaker Change: Significant developments in 2023, let us to sharpen caris strategy and focus we announced in January of this year that we have prioritized the program with the highest likelihood of clinical and commercial success oral diastolic caseloads per hotel, Japan static or M. P.

Ryan D. Maynard: Focusing all our resources on N P extends our cash runway into 2026, which allows us to reach all value inflection milestones in this program.

Ryan D. Maynard: N P is a highly underserved neuropathic condition with a sizable patient population and no approved therapies. We are optimistic that oral diastolic cephalin if approved could become the first and only oral anti predict therapy for M. P.

Ryan D. Maynard: I want to highlight why M. P has such potential in detail how our late stage World Diastolic Cephalin clinical program can address it no.

Ryan D. Maynard: <unk> tells you pair of aesthetic is an unexplored neuropathy and yet N P is relatively common.

Ryan D. Maynard: The disease is a chronic neuropathic perilla condition characterized by pruritus or the upper back often leading to pigment changes as a result of excessive scratching.

Christopher A. Posner: Notalgia Parasitica has been dramatically understudied. But, as I will highlight in a bit, anecdotal evidence suggests, and we believe, that chronic neuropathic paritis is often as onerous as chronic pain in terms of impacting the quality of life of patients. And while chronic pain has been targeted and studied extensively, chronic neuropathic pruritus has not. An estimated 34 million U.S. patients, or 13 percent of the adult population, suffer from chronic paritis. And approximately 2.7 million, or 8 percent of them, have chronic neuropathic paritis. Now out of those chronic neuropathic paritis patients, 650,000, or 24% are notalgia parasitica patients under the care of a healthcare provider, predominantly a dermatologist. This number does not account for the many missed or undiagnosed patients. Notalgia Parasitica has a significant impact on the quality of life of patients, including on their mood, sleep, and self-care activities.

No tells you pair of aesthetic has been dramatically under study, but as I will highlight in a bit anecdotal evidence suggests and we believe that chronic neuropathic pruritus as often as onerous as chronic pain in terms of impacting the quality of life of patients and walk chronic pain.

Ryan D. Maynard: Has been targeted and studied extensively chronic neuropathic pruritus has not.

Ryan D. Maynard: An estimated 34 million U S patients or 13% of the adult population suffer from chronic pruritus and approximately $2 7 million or 8% of them have chronic neuropathic pruritus.

Ryan D. Maynard: Out of those chronic neuropathic pruritus patients 650000, or 24% are no tells you pair of aesthetic of patients under the care of a health care provider predominantly a dermatologist.

Ryan D. Maynard: This number does not account for the many myths or undiagnosed patients.

Ryan D. Maynard: No tells you pair of Seneca has a significant impact on the quality of life of patients, including on their mood sleep and self care activities and.

Christopher A. Posner: And yet, this significant health challenge has no current treatment or wide-ranging efforts to address it. Anecdotal feedback from patients suggests that their paritis is often constant and is as debilitating as pain. There are no approved treatments for notalgia parasitica, and off-label use of other therapies, frequently topical and systemic treatments indicated for neuropathic pain, are mostly ineffective or associated with significant side effects.

Ryan D. Maynard: This significant health challenge has no current treatment or wide ranging efforts to address it.

Ryan D. Maynard: Anecdotal feedback from patients suggest that their pruritus is often caused it and <unk> is a debilitating S. P.

Ryan D. Maynard: There are no approved treatments for <unk> and off label use of other therapies frequently topical and systemic treatments indicated for neuropathic pain are mostly ineffective.

Ryan D. Maynard: Or associated with significant side effects.

Christopher A. Posner: In market research, almost 90% of MP patients responded that the treatments that they had been offered for MP had been minimally or not at all helpful. As a result, almost 75% of responders stated that they were not currently on any therapy for MP. It is clear from the literature and our market research that there is a significant unmet need for an effective, safe, and well-tolerated treatment for MP. Our Oral-DFK program could lead the way to target and address Notalgia Parasitica's hallmark chronic neuropathic paritis. We believe Oral-DFK's neuromodulatory action presents an ideal mechanistic approach to treating chronic neuropathic paritis.

In market research almost 90% of ANP patients responded that the treatments that they had been offered for M. P had been minimally or not at all helpful.

Ryan D. Maynard: As a result, almost 75% of responders said that they were not currently on any therapy for N. P. It is clear from the literature and our market research that there is a significant unmet need for an effective safe and well tolerated treatment for M. P.

Ryan D. Maynard: Our oral D. S. K program could lead the way to target and address new couch a pair of aesthetic is hallmark chronic neuropathic pruritus, we believe oral D. S case neuromodulator reaction presents an ideal mechanistic approach to treating chronic neuropathic pruritus in our phase II.

Christopher A. Posner: In our Phase II proof of concept study in MP, Oral-DFK at a 2-mg BID dose showed a statistically significant separation from placebo on the worst itch NRS scale as early as day one. It also showed sustained efficacy throughout the double-blind, eight-week treatment period. The publication of these data in the February 2023 New England Journal of Medicine attracted a lot of attention from thought leaders, investigators, and patients, highlighting the significant unmet need. This excitement has resulted in rapid enrollment in the ongoing dose-finding portion of our Phase 2-3 COURAGE-1 study. I am pleased to announce that we have completed Enrollment Encouragement One Part A ahead of schedule, putting us on track to report top-line effic As a reminder, Courage One is comprised of two parts.

Ryan D. Maynard: Proof of concept study in M. P. Oral D. S. K L. A to make B I D dose showed a statistically significant separation from placebo on the worst itch and our S scale as early as day one.

Ryan D. Maynard: It also showed sustained efficacy throughout the double blind eight week treatment period.

Ryan D. Maynard: Publication of these data in the February 2023, New England Journal of Medicine has attracted a lot of attention from thought leaders investigators and patients.

Ryan D. Maynard: Highlighting the significant unmet need this excitement has resulted in rapid enrollment in the ongoing dose finding portion of our phase III three courage one study.

Ryan D. Maynard: I am pleased to announce that we have completed enrolment encourage one part a ahead of schedule and putting us on track to report top line efficacy and safety results in Q3 of this year.

Ryan D. Maynard: As a reminder.

Ryan D. Maynard: Courage, one is comprised of two parts part a the dose finding portion of this study is a double blind placebo controlled eight week study comparing three dosage strengths of oral D. S. K to placebo. We currently have 53 active sites in North America, and Europe, and we plan to include.

Christopher A. Posner: Part A, the dose-finding portion of the study, is a double-blind, placebo-controlled, eight-week study comparing three dosage strengths of oral DFK to placebo. We currently have 53 active sites in North America and Europe, and we plan to include additional sites for the pivotal portion of the program. The primary endpoint is the proportion of patients with a greater than four-point improvement at week eight from baseline on the worst itch NRS scale. The readout from this portion of the trial will provide key information, specifically the dose and sample size, to initiate the phase 3 pivotal portion of the program, Part B of Courage 1 and the second study, Courage 2. Ahead of these top-line data, we will be hosting a panel of renowned dermatology KOLs to discuss the unmet need in MP and the potential role of oral DFK in this underserved disease and wide-open therapeutic indication.

Ryan D. Maynard: Additional sites for the pivotal portion of the program.

Ryan D. Maynard: The primary endpoint is the proportion of patients with a greater than four point improvement at week eight from baseline in the worst itch and are at scale.

Ryan D. Maynard: The read out from this portion of the trial will provide key information specifically the dosing sample size to initiate the phase III pivotal portion of the program part B encourage one and the second study courage to.

Ryan D. Maynard: Ahead of these top line data, we will be hosting a panel of renown dermatology kols to discuss the unmet need in MP and the potential role of oral D. S. K in this underserved disease and wide open therapeutic indication, we will issue an announcement with details of this event in the car.

Christopher A. Posner: We will issue an announcement with details of this event in the coming days, and we hope you will join us. Moving on, to Kursuva Injection. In the fourth quarter of 2023, we saw strong quarter-to-quarter demand growth of 22% as reflected by the vials shipped to individual clinics. This continued growth and demand is a clear testament to the value and clinical benefit CORSUVA offers to patients and their providers. However, with unfavorable reimbursement changes following the end of the TDAPA period on March 31st this year, we anticipate that DOs, dialysis organizations, will modify current treatment protocols and significantly restrict access to Coursuva. As a result, we do not expect meaningful revenue contributions from Corsuva going forward.

Ryan D. Maynard: <unk> days, and we hope you will join us.

Ryan D. Maynard: Moving on to <unk> injection.

Ryan D. Maynard: In the fourth quarter of 2023, we saw a strong quarter to quarter demand growth of 22% as reflected by the vials shipped to individual clinics. This continued growth in demand is a clear testament to the value and clinical benefit of course suba offers to patients and their providers.

Over with unfavorable reimbursement changes following the end of the dapper period on March 31. This year, we anticipate that D. O US dialysis organizations will modify current treatment protocols and significantly restrict access to of course Suva.

Ryan D. Maynard: As a result, we do not expect meaningful revenue contributions from core suba going forward.

Christopher A. Posner: Let me conclude by reiterating the following: over the three months, we have taken decisive and swift action. We have evolved our strategy and meaningfully extended our cash runway by sharpening our focus on the program with the highest potential. Notalgia Parasitica has the ingredients for a breakout program with a high probability of clinical and commercial success.

Speaker Change: Let me conclude by reiterating the following over the three months, we have taken decisive and Swift action.

Speaker Change: We have evolved our strategy and meaningfully extended our cash runway by sharpening our focus on the program with the highest potential.

Speaker Change: <unk> has the ingredients for a breakout program with a high probability of clinical and commercial success I am confident and optimistic that we're on the right path to unlock terrorists growth potential and create sustainable value for all our stakeholders.

Ryan D. Maynard: I am confident and optimistic that we are on the right path to unlock CARA's growth potential and create sustainable value for all our stakeholders. I would now like to turn the call over to Ryan for additional details on our fourth quarter results.

Speaker Change: I would now like to turn the call over to Ryan for additional details on our fourth quarter results over to you Ryan. Thank you Chris.

Ryan D. Maynard: Thank you, Chris. I would first reiterate the importance of the financing transaction with Healthcare Royalty which we completed in Q4. We were able to bring forward the value of our ex-USA and Japan royalties and add to our balance sheet in a meaningful, non-dilutive manner. This, combined with our prioritization announcement in January of this year, allowed us to extend our cash runway into 2026, thereby enabling us to reach all value inflection milestones in our NP program. Now, I'd also like to highlight how the HCR agreement is reflected in our financial statements. In Q4, we recorded the total net proceeds as a long-term liability on our balance sheet. Royalties received from CSL and Mariyushi under this agreement are recorded as non-cash other revenue on our P&L.

Ryan D. Maynard: I would like to first reiterate the importance of the financing transaction with healthcare royalty, which we completed in Q4.

Ryan D. Maynard: We were able to bring forward the value of our <unk> USA.

Ryan D. Maynard: USA, and Japan, royalties and add to our balance sheet and a meaningful non dilutive manner.

Ryan D. Maynard: This combined with our prioritization announcement in January of this year allowed us to extend our cash runway into 2026, thereby enabling us to reach all value inflection milestones in our <unk> program.

Ryan D. Maynard: Now I'd also like to highlight how the HCR agreement is reflected in our financial statements. In Q4, we recorded a total net proceeds as a long term liability on our balance sheet.

Royalties received from CSL and Mary Yoshi under this agreement are recorded as noncash other revenue on our P&L. We also required noncash imputed interest.

Ryan D. Maynard: We also record non-cash imputed... As a reminder, if the royalty payments received by HCR under this agreement exceed two times HCR's initial contribution before 2029, then the royalties thereafter would then revert back to us. Now on to the Q4 results. In the fourth quarter of 2023, Korsuva Injection generated net sales of $5 million. We reported revenue of $3 million for the three months ended December 31st.

Ryan D. Maynard: As a reminder, if the royalty payments received by HCR under this agreement exceed.

Two times Hcr's initial contribution before 2029.

And the royalties thereafter would then revert back to us.

Ryan D. Maynard: Now onto the Q4 results in.

Ryan D. Maynard: In the fourth quarter of 2023 courses of injection generated net sales of $5 million.

Ryan D. Maynard: We reported revenue of $3 million for the three months ended December 31.

Ryan D. Maynard: 2023 compared to $3.3 million for the same period in 2022. Revenue for this quarter consisted of $2.3 million of collaborative revenue relating to our profit from CSLV4's sales of Corsuba Injection and $0.7 million of other revenue related to royalties and milestone payments related to the HCR agreement. Demand for Corsuva continued to grow in Q4, with wholesaler shipments to deals reaching 110,000 vials, which was a 22% increase from the prior quarter. However, the majority of these vials were inventory that was reallocated within the Fresenius network of clinics and therefore did not translate into incremental revenue for CARA. Cost of goods sold was $0.6 million for the three months ended December 31st, 2023, compared to $2.1 million for the same period in 2022.

Ryan D. Maynard: 2023, compared to $3 3 million for the same period in 2022.

Ryan D. Maynard: Revenue this quarter consisted of $2 3 million of collaborative revenue.

Ryan D. Maynard: Two our profit from CSL before us sales of course to the injection and.

Ryan D. Maynard: <unk> 7 million of other revenue related to royalties and milestone payments related to the HCR agreement.

Ryan D. Maynard: Demand for <unk> continued to grow in Q4 with wholesaler shipments to dealers, reaching 110000, vials, which was a 22% increase from the prior quarter.

Ryan D. Maynard: The majority of these vials, where inventory that was reallocated within the <unk> network of clinics, and therefore did not translate into incremental revenue for Cara.

Ryan D. Maynard: Cost of goods sold was <unk> 6 million for the three months ended December 31, 2023, compared to $2 1 million for the same period in 2022.

Ryan D. Maynard: The cost of goods sold this quarter included mainly inventory adjustment charges rather than actual vials shipped to CSLV4. Research and development expenses were $28.4 million for the three months and December 31, 2023, compared to $26 million in the same period of 2022. The high R&D expenses in 2023 were primarily due to increases in clinical trial costs related to our three late-stage development programs, partially offset by a decrease in stock-based compensation expected. R&D expenses in the three months ended December 31, 2023 included a $1.7 million expense related to an agreement for manufacturing commitments that are no longer needed due to the reduced demand expectations of Corsuva in the United States. G&A expenses were essentially flat at $6.6 million for the three months ended.

Cost of goods sold this quarter included mainly inventory adjustment charges, rather than actual vials shipped to CSL before.

Ryan D. Maynard: Research and development expenses were $28 4 million for the three months ended December 31, 2023 compared to $26 million in the same period of 2022.

Ryan D. Maynard: The higher R&D expenses, and 23 were primarily due to increases in clinical trial costs related to our three late stage development programs, partially offset by a decrease in stock based compensation expense.

Ryan D. Maynard: R&D expense in the three months ended December 31, 2023 included a $1 7 million expense related to an agreement for manufacturing commitments that are no longer needed due to the reduced demand expectations of course Suva in the United States.

Ryan D. Maynard: G&A expenses were essentially flat at $6 6 million for the three months ended.

Ryan D. Maynard: December 31st, 2023 compared to 6.4 last year. Cash, cash equivalents, and marketable securities at December 31, 2023 totaled $100.8 million compared to $156.7 million for the same period in 2022. The decrease in the balance primarily resulted from $92.1 million of cash used in operating activities offset by the $36.5 million of net proceeds received from HCR.

Ryan D. Maynard: At December 31, 2023 compared to $6 four.

Ryan D. Maynard: Last year.

Ryan D. Maynard: Cash cash equivalents in marketable securities at December 31, 2023 totaled $100 8 million compared to $156 7 million for the same period in 2022.

Ryan D. Maynard: The decrease in the balance primarily resulted from $92 1 million of cash used in operating activities offset by the $36 5 million of net proceeds received from ACR.

Ryan D. Maynard: Now, finally, we expect that our current unrestricted cash, cash equivalents, and available for sale marketable securities will be sufficient to fund our currently anticipated operating plan into 2026. Our current operating plan reflects the impact of our prioritization announcement in January of 2024, which includes costs related to our planned pivotal program for MPs. Now, I'll turn it back to Chris.

Yes.

Ryan D. Maynard: Now finally, we expect that our current unrestricted cash cash equivalents and available for sale marketable securities will be sufficient to fund our currently anticipated operating plan into 2026.

Ryan D. Maynard: Our current operating plan reflects the impact of our prioritization announcement in January of 2024, which includes costs related to our planned pivotal program for M. P.

Ryan D. Maynard: Now I'll turn it back to Chris Thanks.

Christopher A. Posner: Thanks, Ryan. Cara is fundamentally a development company. By sharpening our strategic focus on notalgia parasitica, we have set Cara on a path to becoming a pioneer in the field of medical dermatology.

Chris Connor: Thanks Ryan.

Chris Connor: Tara is fundamentally a development company by sharpening our strategic focus on <unk>, we have set care on the path to becoming a pioneer in the field of medical dermatology.

Operator: Based on preclinical and clinical data, oral DFK is uniquely suited to address the unmet medical need in this highly underserved disease, and we look forward to sharing the data from the dose-finding portion of the Phase 2-3 trial with you in Q3. Now, with that, Ryan, Joe, and I will be happy to take your questions. So operator, could you please open the line for Q&A? Thank you. As a reminder to ask, you will need to press star 11 on your telephone. To remove yourself from the question queue, you may press star 11.

Chris Connor: Based on preclinical and clinical data oral D. S. K is uniquely suited to address the unmet medical need in this highly underserved disease and we look forward to sharing the data from the dose finding portion of the phase two three trial with you in Q3.

Now with that Ryan, Joe and I will be happy to take your questions. So operator, if you could please open the line for Q&A.

Chris Connor: Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the question queue. You May Press Star one again, please standby, while we compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Annabel Samimy of Staple. Your question, please, Annabel. Hi, thanks for taking my call. Um, so obviously, um.., like a pretty attractive category for the Diphtheria Teflon Mechanism. How large a clinical program do you think this could be in phase three? And when do you think you will?

Speaker Change: Our first question.

Speaker Change: Comes from the line of Annabel Sammy of Stifel. Your question. Please annabel.

Annabel Eva Samimy: Hi, Thanks for taking my question.

Annabel Eva Samimy: So obviously.

Annabel Eva Samimy: It looks like a pretty attractive category for us.

Annabel Eva Samimy: Okay.

Annabel Eva Samimy: Nicholas.

Annabel Eva Samimy: How large a clinical program do you think this could be in phase III.

Christopher A. Posner: Think about the dose to take forward. Would you want... only one dose a tick for which you look for a couple of doses just for that optionality for the patient? And then, separately, given the rapid enrollment and clearly the high interest from the community that you got after the journal publication, do you think that, Uh, you could partner, you would want to partner this opportunity, even in the late stages of development, um, rather just for commercialization? I know that you're a development company, but you know given that interest, I'm just wondering if you're getting expressions of interest from those publications. Thanks, Let me turn the first part to Joe, and then I'll tackle the second part of your question. Thanks, Annabel.

Annabel Eva Samimy: Think about the dose to take forward what she wants.

Annabel Eva Samimy: Only one dose to check for what she looks for a couple of.

Annabel Eva Samimy: Just for that Optionality.

Annabel Eva Samimy: Thanks.

Annabel Eva Samimy: And then separately given the rapid enrollment.

Annabel Eva Samimy: Clearly the high interest from the comedian David you've gone after.

Annabel Eva Samimy: Karen also have location do you think that.

Annabel Eva Samimy: He had partner you would want to partner this opportunity even in the late stages development Rodriguez.

Annabel Eva Samimy: For commercialization.

Annabel Eva Samimy: So just I realize that you are a development company.

Annabel Eva Samimy: Given that interest and just wondering if you are getting expressions of interest from those complications.

Speaker Change: Thanks, Annabel, let me, let me turn the first part to Joe and then I'll tackle the second part of your question, yes. Thanks, Annabel So just to address how large the proxy in the pivotal program will be this will be based upon our results from part a will take the results together without comfort data into account when assessing the size.

Joana Goncalves: So just to address how large Part B in the Pivotal Program will be, this will be based upon our results from Part A. We'll take the results, together with our comfort data, into account when assessing the size of the studies, so more to come once we get that data. As far as how many doses, ideally, it's always best to take one dose forward.

Speaker Change: <unk> of the study so more to come once we get that data.

Joe: As far as how many doses IBD or is it basically take one dose forward and it just makes it simpler pivotal program so that that will be all.

Christopher A. Posner: It just makes a simpler Pivotal Program, so that will be our aim. Yeah, and Annabel, on the second part of your question on partnering, you know, as you know, this asset is totally unencumbered, which is great. And given the strategic prioritization we did in the beginning of this year, we have the cash available until early 26 to complete all the key, you know, the key clinical programs. So right now, our intent is to continue the development of MP. Like you said, I mean, we're super excited. What we saw in the rapid enrollment is certainly indicative, we believe, of the large unmet need spurred by the New England Journal but also by physician interest now.

Joe: Yes, Annabel on the second part of your question on partnering.

Annabel Eva Samimy: As you know this assets totally unencumbered.

Annabel Eva Samimy: Which is great and given the strategic prioritization, we did in the beginning of this year.

Speaker Change: We have the cash available into early 'twenty six to complete all the key.

Annabel Eva Samimy: The key clinical programs. So right now our intent is to continue the development of MP like you said I mean, we're super excited what we saw in the rapid enrollment is certainly indicative we believe of the large unmet need spurred by the new England Journal, but also by the physician interest now.

Joana Goncalves: And we intend to continue down this path. Okay, um, and if I could just follow up with one question for Joe. I know right now it's the ID. Was there ever any thought to exploring the ones daily schedule for this, or was it never an option?

And we intend to continue down this path.

Speaker Change: Okay, and if I could just follow up with one question for Joe.

Speaker Change: I know right now.

Speaker Change: Yes.

Speaker Change: Yes.

Joe: Was there ever any thought to exploring.

Joe: Once daily.

Joe: Schedule for this or it was never an option and then the other piece of it.

Joana Goncalves: And any other PKs that you've interviewed? Yeah, good question, Annabel. As you know, the drug is predominantly excreted via the kidneys.

Speaker Change: Yeah, good good Christian and above as you know that the drug is predominantly excretion via the kidney and based on the PK profile with healthy patient population.

Joana Goncalves: And based on the PK profile with this healthy patient population, twice daily is what is needed for this patient population. So it will remain as a BD dose. Okay, got it. Thank you. The Bulletproof Executive 2013, Thank you.

Speaker Change: Twice daily is what is needed for this patient population. So it will remain at the BD guys.

Speaker Change: Okay got it thank you.

Speaker Change: Thanks Annabel.

Speaker Change: Thank you.

Operator: Our next question comes from the line of Joseph Stringer of Needham: Please go ahead. Hi, thanks for taking our questions. Just a few on the expectations for the Part A readout. In the Phase 2a NP trial at the 2MIG dose, on that key efficacy endpoint, the four-point responder analysis at week eight, you had around, I think it was 41%. But at the moment, it's around a 29% response for Korsuva and around 18% for placebo. So I guess, is this what you'd consider a reasonable bar for success and what you'd consider a win when the Part A data comes out, and what gives you confidence that you can replicate this data in Part A?

Speaker Change: Our next question.

Speaker Change: Comes from the line of Joseph Stringer of Needham <unk> Company. Please go ahead Joseph.

Joseph Robert Stringer: Hi, Thanks for taking our questions just a few on the expectations on the part a readout.

Joseph Robert Stringer: In the phase Iia trial at the two make dose on that key efficacy endpoint. The four point responder analysis at week eight.

Joseph Robert Stringer: Around I think it was 41%.

Joseph Robert Stringer: Bonds for our courses.

Joseph Robert Stringer: Around 18% for placebo. So I guess is this what you would consider a reasonable bar for success.

Joseph Robert Stringer: And what you would consider a win when the part a data come out and what gives you confidence that you can replicate this.

Joseph Robert Stringer: Data and part of it.

Joana Goncalves: Yeah, thanks, Joey. So, yeah, we were incredibly pleased with the data we got from COMFORT. We do have to keep in mind that the study now has a slightly different design in that we have three active arms versus one placebo with the 3-to-1 randomization, more study sites as well, greater awareness, you know, through the New England Journal, as well as our late breakers. So, we anticipate that the placebo response may be slightly higher. We still expect within the same range but probably a little bit higher than what we've seen.

Speaker Change: Yes, Joe, but yes, thanks Joey.

Speaker Change: Yes.

Speaker Change: I'm pleased with the data we got some comfort and we do have to keep in mind that the study now has slightly different design.

Speaker Change: Three active arms versus placebo.

Speaker Change: So the 321 randomization more and more steady sites as well greater awareness.

So the new England journal as well as our late breaker.

Speaker Change: We anticipate that the placebo response, maybe slightly higher we still expect within the same range.

Speaker Change: Lacking a little bit higher than what we've seen.

Joana Goncalves: So, we have to take all of that into account when setting our expectations for this Part A. So, with that, what we hope to see is that we do have separation between one of the doses from placebo. But remember that this has not been powered to show statistical significance versus placebo.

Speaker Change: So we have to take all of that into account.

Speaker Change: When setting our expectations for the state.

Speaker Change: Part eight.

Speaker Change: With that.

Speaker Change: What we hope to see is that we do have separation with one of the doses fantasy, but remember that this has not been powered to show statistical significance.

Joana Goncalves: Really, we're aiming to see separation and to be able to select the dose that demonstrates the most favorable benefit-risk profile. That is really our aim to be able to move forward into our pivotal program. So, that's what we hope to see. Great, thank you for taking our questions. Next question comes from the line of Dennis Ding, and I hope Jeff...

Speaker Change: Versus placebo really aiming to see separation and to be able to select the dose that demonstrates the most favorable benefit risk profile that is really our aim to be able to move forward into a pivotal program. So thats, what we hope to see.

Great. Thank you for taking our questions.

Speaker Change: Thanks, Joe.

Speaker Change: Thank you.

Speaker Change: Our next question.

Comes from the line of Dennis thing of Jefferies. Your question. Please Dennis.

Operator: Your question, please, Denny. Hi, thanks for taking our questions. If we can ask two questions on the MP data in Q3. You made comments earlier about expecting placebos.

Dennis: Alright, thanks for taking our questions. If we can ask two questions on the MP data in Q3.

You made comments earlier around expecting placebo.

Joana Goncalves: And I'd like to ask you to share your thoughts on your comments. First, do you see the effect to be a little bit higher than we have seen previously? Were there any changes to the inclusion and exclusion criteria? Or what exactly drove that comment?

Dennis: Effectively a little bit higher than we have seen previously were there any changes to the inclusion exclusion criteria or.

Dennis: What exactly drove that comment and then number two.

Dennis: Around quality of life.

Dennis: Previous phase two.

Joana Goncalves: And then, number two, around quality of life in your previous phase two, what are your thoughts now on the upcoming data? Yes, so my comment, Dennis, thank you Dennis. My comment regarding placebo was not due to any design elements in this Part A program. The design is pretty much the same as what we had before, but as I mentioned, and I'll just reiterate the key factors that may contribute to a higher placebo, there's a three-to-one randomization, so patients may feel that they are on active treatment when they're on a placebo arm. That's different from what we had before. It was one-to-one.

Dennis: It seems like you're just getting better but it doesn't really have any impact on quality of life can you help frame that for us and will you be measuring that as well on the upcoming.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Yes, So my comment I'm Dana Thank you Dennis my comments regarding Toshiba.

Speaker Change: It was not due to any design elements in this.

Speaker Change: Part a program the design is pretty much the same as what we had.

Speaker Change: For <unk>, but as I mentioned and I'll just reiterate the key factors that may contribute to a higher placebo. This.

Speaker Change: This is three to one randomization.

Speaker Change: So the patients may feel that they are active.

Speaker Change: On the placebo arm.

Speaker Change: That's different to what we had the forward was one to one.

Joana Goncalves: This is a larger study with more study sites, so there naturally is variability when you have more sites included. And then, of course, greater awareness, so if you take all those factors into account, we are anticipating that the placebo response will be slightly higher. So that's where that comment came from.

Speaker Change: This is the largest study with more study sites.

Speaker Change: So they naturally.

Speaker Change: And the next one is visibility when you have more facts included and then of course, the greater Wayne. So if you take all those factors into account.

Speaker Change: We are anticipating that the placebo response would be slightly higher so that's where that came in that comment came from.

Joana Goncalves: And then, regarding your second question, regarding quality of life and impact on quality of life, you know, this is—at Comfort was the first time we—anyone had conducted a robust randomized study, and we're still trying to understand what quality of life endpoints are most appropriate for this NP patient population. And so, you know, we're still navigating through that and understanding what that is. The tools that are used for other dermatological conditions are not necessarily relevant to NP, and that's what we understood from our Phase 2 data, and that's what we continue to work through as we move forward to our pivotal program.

Speaker Change: And then regarding your second question regarding quality of lack of impact on quality of life.

Speaker Change: Yeah.

Speaker Change: Is it comparable to the first time anyone has conducted a robust randomized study and with still trying to understand what quality of life endpoints are most appropriate for this patient population.

Speaker Change: And so that's we still navigate that we're still navigating through that and understanding what that is a tool that are used for other dermatological conditions not necessarily.

Speaker Change: Listen necessarily relevant to E&P and Thats, what we understood from our phase two data and that's what we continue to work through.

Speaker Change: Any forward pivotal program.

Speaker Change: Thank you.

Operator: Thank you. Standby for our next question. Our next question comes from the line of Kyle Kwan of Canaccord Genuity. Please go ahead, Kyle. Oh, this is Kyle, online.

Thank you.

Speaker Change: Okay bar for our next question.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Carl Clark.

Carl Clark: With Canaccord Genuity. Please go ahead Kyle.

Carl Clark: So this is kind of increased demand.

Operator: Two questions related. The first is regarding the readout. Are you guys playing this close? for more information, and, The second question is regarding the highest, water, and safety.

Carl Clark: Two questions related to first regarding regarding the readout happening during Q are you guys plan on disclosing.

Carl Clark: Granular details on the safety of the different doses and then <unk>.

Carl Clark: Question is on the highest dose.

Carl Clark: What are the safety expectations.

Christopher A. Posner: Thanks, Scott. Well, the first one, yeah, we're going to disclose top-line efficacy and safety results in Q3. That'll be with the Part A readout. So the first answer to your question is, yes, we will be disclosing top-line efficacy and safety. And the second part of that, I'll turn it to you. Yeah, and just to add on top-line safety, it's what we typically present, so your adverse events, most common discontinuations, so just typical safety data. And then your second question regarding the highest dose and expectations, well, the highest dose is 2 milligrams twice daily, which was used in our comfort study.

Carl Clark: Youre expecting and what are potential limitations as well.

Speaker Change: Thanks, Thanks, Scott will the first one yes, we're going to we're going to disclose top line efficacy and safety results in Q3 that will be with the part a readout. So the first the first answer to your question is yes, we will be disclosing topline efficacy and safety and the second part, yes, yes, and just to add.

Speaker Change: The top line safety, what we typically present.

Speaker Change: So you're at Deutsche Bank must comment discontinuation. So just typical safety data and then it was your second question regarding the highest dosing expectations was the highest dose at the two milligram twice daily which was used in our concept study and so we would anticipate a similar.

Joana Goncalves: And so we would anticipate a similar readout of safety as we saw there. And, in fact, that remains very consistent with what we've seen throughout all our programs with AD and with NP. So we feel very comfortable with that profile, and it's a very acceptable one. Of course, we have two lower doses. And so the expectation is that tolerability may be better with the lower doses, but I want to reiterate that the highest dose was a very good profile.

Speaker Change: Readout of the safety as we saw there.

Speaker Change: And in fact that remains very consistent with what we've seen throughout all our programs with AP and with A&P. So we feel very comfortable with that profile.

Speaker Change: And it's a very acceptable one of course, you've got to know what doses.

Speaker Change: So the expectation is that Q.

Speaker Change: Tolerability may be.

Speaker Change: Based on the lower doses, but I want to reiterate that the highest dose was a very good profile and so if we see the same will be very pleased with that.

Joana Goncalves: And so if we see the same, we'll be very pleased with that. Thank you. Our next question comes from the line of David Amsellem, Piper Sandler.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of David and sell them a Piper Sandler Your question. Please David.

Operator: Question, please, Dave. Hey, thanks. So I kind of wanted to switch gears and dig into your comments about being at a core development company. I guess with that in mind, just looking away from NP, do you have any thoughts on other potential settings for oral DFK? I guess if we were in a perfect world where resources weren't an issue.

David: Hey, thanks so.

David: Kind of wanted to switch gears and.

David: Dig into your comments about being at core development company I guess with that in mind, just looking away from N. P. Do you have any thoughts on other potential settings for oral GSK I guess, so in a perfect world where resources were into an issue and then secondly.

Christopher A. Posner: And then secondly, you know, with the cash runway being what it is to 26, is there anything early stage out there that you might be looking at? That you might be mining the world for, so to speak, in terms of bringing anything in just to think of the business beyond oral DFK? And just how are you thinking about business just in general?

David: With the cash runway being what it is to 'twenty six is there anything early stage out there that you might be looking at.

David: You might be mining the world for so to speak.

In terms of bringing anything and just to think of the business beyond oral GSK and just how are you thinking about biz Dev just in general Thank you.

Christopher A. Posner: Thank you. Yeah, thanks, David. Great hearing from you. So the first part of your question, are we looking at other things? I mean, our goal with our prioritization in January was to focus our cash and our resources on neuropathic paritis, i.e., notalgia parasitica.

Speaker Change: Yes, Thanks, David <unk> here for me. So the first part of your question around are we looking at other things I mean.

Speaker Change: Our goal with their prioritization in January was to focus our cash and our resources on <unk>.

Speaker Change: <unk> Pruritus E <unk>.

Christopher A. Posner: We want to be really disciplined there. And what we're able to do now is fund that program through a succession of key milestones, which is great. So that's our sole focus right now. You asked the question about business development. I mean, certainly, we do look at assets.

Speaker Change: We want to be really disciplined there and what we're able to do now is fund that program through a succession of key milestones.

Speaker Change: Which is which is great. So we're that's our that's our sole focus right now.

Speaker Change: Asked the question of Biz Dev I mean, certainly we do look at.

Speaker Change: We do look at assets.

Christopher A. Posner: And our focus strategy gives us options to potentially leverage the value inflection points in the NP program to add more value to the company in due course, right? So right now, again, we have our streamlined organization aligned to this strategy of preserving our cash to make sure we can execute the NP program with the cash we have. That's our focus.

Speaker Change: And our focus strategy gives us options to potentially leverage the value inflection points in the EMP program to add more value to the company in due course right. So right now again, we have.

Speaker Change: Our streamlined organization aligned to the strategy of preserving our cash to make sure. We can execute the LP program with the cash we have.

Speaker Change: That's our focus.

Christopher A. Posner: Okay, helpful. Thanks, David. Thank you. I would now like to turn the conference back to Chris Posner for closing remarks. Yeah, thank you very much. And thanks again, everyone, for joining us today. And I wish everyone a great afternoon. And with that, I'll close the call. This concludes today's conference call. Thank you for participating. You may now hang up. Thanks for watching!

Speaker Change: That's helpful. Thanks.

Speaker Change: Thanks, David.

Speaker Change: Thank you.

Speaker Change: I would now like to turn the conference back to Chris Posner for closing remarks, Sir.

Christopher A. Posner: Yes. Thank you very much and thanks again, everyone for joining us today and I wish everyone, a great afternoon, and with that I'll close the call.

Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.

Speaker Change: Okay.

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