Acasti Pharma Inc (ACST) 2022 Q4 法說會逐字稿

Good day, and welcome to the Acasti Pharma Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Robert Blum of Lytham Partners. Please go ahead.

All right. Thank you very much, MJ. And welcome to Acasti Pharma's Fiscal Year and 2022 Conference Call. On the call with us this afternoon is Jan D'Alvise, President and Chief Executive Officer; Brian Ford, Chief Financial Officer; and Monique Champagne, Vice President of Clinical Affairs. Following management's prepared remarks, there will be a Q&A session. (Operator Instructions)

I'd also like to remind everyone that statements on this conference call that are not statements of historical or current facts constitute forward-looking information within the meaning of the Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and the Securities and Exchange Act of 1934.

Such forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results to be materially different from those expressed or implied by such forward-looking statements.

In addition to statements, which explicitly describe such risks and uncertainties, listeners are urged to consider statements labeled with terms, believe, expects, intends, anticipates, potential, should, may, will, plans, continue, targeted or other similar expressions to be uncertain and forward-looking. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call.

Forward-looking statements during this conference call may include, but are not limited to, the success and timing of regulatory submissions of the planned Phase III study for GTX-104 and Acasti's other preclinical and clinical trials, regulatory requirements or developments and the outcome of meetings with the FDA, changes to clinical trial designs and regulatory pathways, legislative, regulatory, political and economic developments and costs associated with Acasti's clinical trials.

The forward-looking statements made during this conference call are expressly qualified in their entirety by this cautionary statement, the cautionary note regarding forward-looking information section and the risk factors contained in the Acasti's annual report on Form 10-K, which is available on EDGAR at www.sec.gov, on SEDAR at www.sedar.com and on the Investors section of the Acasti website at www.acastipharma.com.

In addition, any forward-looking statements represent Acasti's views as of today and should not be relied upon as representing our views of any subsequent date, Acasti undertakes no obligation to update such forward look for -- such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by applicable securities laws.

I'd now like to turn the call over to Jan D'Alvise, President, Chief Executive Officer, Acasti Pharma. Jan, please proceed.

Thank you, Robert. Given that we conducted our last conference call only about a month ago when we announced the positive results of our PK bridging study for GTX-104, we plan to keep today's prepared remarks covering our fiscal year 2022 rather brief, allowing for more time at the end for questions.

Fiscal '22 was a truly transformative year for Acasti. We pivoted as a company and acquired Grace Therapeutics in late August of 2021. This acquisition gave us a new mission of reformulating and repurposing marketed medicines for indications in rare and orphan diseases where significant unmet medical needs exist.

This strategy allows us to pursue the 505(b)(2) regulatory pathway, which is potentially a faster, lower cost and lower risk approach to getting drugs approved by the FDA.

We now have 3 drug candidates advancing in clinical development, and all 3 have already received orphan drug designation by the FDA, which could grant us 7 years of market exclusivity in the United States.

We also expanded an already extensive portfolio of approved and pending patents that cover composition of matter and method of use, which can extend our market exclusivity to 2036 and beyond.

So let me give you a quick update on the status of our lead drug candidate, GTX-104, which is a novel formulation of nimodipine for IV infusion designed specifically for patients with subarachnoid hemorrhage, or SAH, which is a condition caused by bleeding on the brain due to a ruptured aneurysm.

SAH presents a life-threatening emergency for the patient, and our new proprietary IV drug formulation addresses a vital need in the critical care market that has seen little innovation over the years. SAH patients are so critical that 10% to 15% die before they ever reach the hospital, and about 1/3 ultimately do not survive. Another 1/3 of these patients require dependent care for the rest of their lives.

SAH is estimated to affect about 50,000 patients per year in the United States alone. And based on our market research, we believe that GTX-104 represents a total available market in the United States of more than $300 million. The current standard of care is an orally administered drug called nimodipine, which was approved by the FDA back in 1988.

Nimodipine is a powerful calcium channel blocker, and it works primarily on the brain to lower the patient's blood pressure by relaxing cerebral blood vessels, thereby increasing blood flow and oxygenation. Nimodipine is mandated by the joint commission that certifies U.S. drug centers to be administered to all patients with SAH, as it's been shown to reduce the incidence of delayed cerebral ischemia and to improve neurological outcomes.

Nimodipine is available in the U.S. only as an orally administered capsule, which is problematic as many of these SAH patients are not conscious, or if they are awake, they have a hard time swallowing oral drugs. The nursing staff must pull apart the capsule, siphon off the drug to be delivered orally to the patient via a nasogastric tube that goes directly into the stomach.

As nimodipine can stick to the side of the tube, it's very difficult to control how much drug is actually being delivered and ultimately absorbed. This leads to a lot of variability in dosing and the resulting blood pressure of the patient.

We believe that GTX-104 delivered intravenously could be a major improvement in the standard of care as a more convenient, efficient and precise way to deliver nimodipine directly into the patient's bloodstream.

On May 18, we held a conference call where we announced that our GTX-104 PK bridging study successfully met all its endpoints. The primary objective of the PK study was to evaluate the relative bioavailability of GTX-104 delivered intravenously compared to oral nimodipine in healthy adult male and female subjects, while the secondary objective was to assess its safety and tolerability.

The results showed statistically no difference in maximum and total exposure between IV GTX-104 and the oral formulation of nimodipine, and no serious adverse events were observed. This means that GTX-104 can be considered essentially bioequivalent to oral nimodipine.

Additionally, the bioavailability of oral nimodipine capsule was observed to be only 8% compared to GTX-104, which, when given intravenously, is naturally 100% bioavailable. Consequently, less than 1/10 the amount of nimodipine is administered with GTX-104 to achieve the same blood levels as the oral capsules.

One of the most important findings from this PK study is that plasma concentrations obtained following IV administration of nimodipine showed significantly less variability between subjects as compared to oral administration. Both inter- and intra-subject variability was significantly lower for GTX-104 as compared with oral nimodipine.

This is important as we believe that because of its better absorption profile and more consistent blood levels, GTX-104 may provide physicians with a more reliable and effective treatment for patients with SAH. This is a key advantage as we believe GTX-104 could help to reduce the incidence of hypotensive events and vasospasm, which require immediate and costly intervention and can lead to worse outcomes for the patient.

Moreover, it could provide dosing flexibility and a more consistent and convenient route of administration for the significant percentage of patients, who present and remain unconscious during their ICU stay following SAH.

Finally, despite the positive impact the nimodipine has on recovery and in improving neurological outcomes, physicians must often discontinue nimodipine treatment, primarily as a result of hypotensive episodes that are difficult to be -- are difficult to control with the oral administration of the drug.

Such discontinuation of nimodipine could potentially be avoided by giving the patient GTX-104, which, because of its IV administration, the rate of infusion can be controlled, and it may also alleviate the need for careful attention to the timing of oral nimodipine administration at least 1 hour before or 2 hours after a meal.

For all these reasons, we believe IV administration of GTX-104 could be a much better option for SAH patients than oral nimodipine. It represents a significant commercial opportunity, and we believe GTX-104 could be well positioned to rapidly capture market share if the FDA grants approval.

We plan to submit our recent PK bridging study results to the FDA very soon, along with our proposed design for the Phase III safety study, which we believe can start as planned in the second half of this year. The safety study is expected to be the final step required to seek regulatory approval under the 505(b)(2) regulatory pathway before submitting our new drug application to the FDA.

We believe the safety study should be relatively low risk based on the favorable safety profile observed now in more than 130 patients combined from our Phase I PK studies.

In addition to GTX-104, we remain enthusiastic about the depth of our clinical pipeline, which includes GTX-101 and GTX-102. And we continue to make steady progress advancing these 2 drug candidates toward their next major milestones.

As a reminder, GTX-102 is a novel concentrated oral mucosal spray, a betamethasone, intended to improve the neurological symptoms of ataxia-telangiectasia, or A-T, for short. A-T is a progressive neurodegenerative genetic disease that primarily affects children, causing severe disability and for which no treatment currently exists.

GTX-102 is comprised of the active glucocorticoid betamethasone and can be sprayed conveniently over the tongue of the A-T patient. We believe there's a significant market opportunity for GTX-102, as it could be the first FDA-approved therapy for the more than 4,000 A-T patients diagnosed in the U.S.

Based on third-party market research, we estimate the A-T market for GTX-102 to be about 150 million in the United States alone. We plan to initiate the PK bridging study of GTX-102 in calendar Q3 of 2022, and we continue to expect to report out the results before the end of this year.

The objective of this important PK study is to compare the bioavailability of 3 different doses of GTX-102 to an oral solution of betamethasone, which is only available in Europe, and to the injectable form of betamethasone, which is available in the U.S.

Based on the FDA's guidance following the PK bridging study and assuming the PK bridging study meets its primary endpoint, we plan to conduct a Phase III safety and efficacy trial in A-T patients, which is expected to be initiated in the first half of 2023. If both the PK and Phase III studies meet their primary endpoints, an NDA filing under Section 505(b)(2) would follow.

The final program that we have currently in the clinic is GTX-101, which, again, is a non-narcotic topical bio-adhesive bupivacaine spray that forms a thin film on contact with the skin in the targeted area of pain. We designed it to help relieve the painful symptoms of postherpetic neuralgia or PHN.

PHN is the excruciating nerve pain that many older people experience after the visible manifestations of the shingles infection have subsided. We commissioned primary market research with more than 250 physicians that routinely treat PHN patients, and they indicated that a significant unmet need exists.

Approximately 40% of patients that are prescribed as standard of care, which includes oral gabapentin and lidocaine patches, experienced insufficient pain relief. Gabapentin does not work well. It can cause unpleasant side effects and was recently added to the controlled substance list due to a tendency for abuse.

The patches are difficult to use. They fall off and can cause skin sensitivity and irritation, especially in older individuals. And depending on their placement, they're very inconvenient, uncomfortable and unattractive. Additionally, it can take up to 2 weeks for the patch to work, and it can only be worn for a continuous 12 hours, and then it must be removed for another 12 hours. So breakthrough pain is common.

Given these issues with the oral and patch alternatives, too many of these patients end up being prescribed opioids, which, given the abuse potential, physicians want to avoid at all costs. The potential benefits of GTX-101 could include faster onset of action, which is inherent in our active ingredient bupivacaine versus lidocaine as well as a longer duration of pain relief.

GTX-101 can be conveniently sprayed on the skin wherever the pain is located. And based on the PK profile of bupivacaine, we believe that GTX-101 may be applied twice a day to the affected area for a 24/7 pain relief, although this dosing schedule will need to be confirmed in our clinical trials.

We believe GTX-101 has the potential to be a game changer as a non-opioid analgesic for PHN patients, who suffer from this debilitating pain. We expect to report results of a minipig skin sensitivity study in early calendar Q3. We're also planning to initiate a single dose study and a multiple ascending dose study in healthy human volunteers both in calendar Q3 2022.

These 2 important clinical studies are expected to report out before the end of this calendar year. Results from the multiple ascending dose study is required before we can initiate our Phase II program in PHN patients, which is expected to start early in 2023.

So you can see that we currently have significant ongoing clinical and CMC activities underway for all 3 of our pipeline programs. You'll also note that we had a total of almost $44 million in cash, cash equivalents and short-term investments on our year-end March 31 balance sheet.

We continue to believe this cash position will allow us to complete Phase III for GTX-104 and submit our NDA for the FDA to review, while also advancing GTX-102 into Phase III and GTX-101 into Phase II, all important milestones and key value inflection points.

We're very excited about the prospects ahead for the company and look forward to keeping you apprised of our progress towards our many milestones in this new fiscal year.

I'd like to now turn the call over to Brian Ford, our CFO, to review our fiscal '22 financial results. At the conclusion of Brian's remarks, we'll open the call for questions. Brian?

Thank you, Jan, and welcome, everybody, to the call. Please note that unless otherwise indicated, all financial numbers that we discuss are denominated in U.S. dollars, and the financials are reported conforming to U.S. GAAP guidelines. We should also note that we are a clinical stage company. Thus, we do not yet generate revenues or have any cost of goods expenses.

Research and development expenses, net of government assistance for the year ended March 31, 2022, totaled $5.6 million compared to $4.2 million for the year ended March 31, 2021. Our research and development during the year March -- ended March 31, 2022, was focused primarily on advancing our 3 clinical development programs for our GTX-104, 102 and 101 drug candidates. All 3 were acquired in the Grace merger, which was completed in August of 2021.

Research and development expenses during the year ended March 31, 2021, related to the Phase III clinical program for CaPre, which was discontinued after September 2020. However, it did include some due diligence work and activities on various strategic options under review prior to the Grace merger announcement.

General and administrative expenses before depreciation and stock-based compensation expenses for the year ended March 31, 2022, were $9.3 million compared to $5.5 million for the year ended March 31, 2021. The increase was a result of increased legal, tax, accounting and other professional fees related to the Grace merger and expenses related to the renewal of our at-the-market program.

Loss from operating activities for the year ended March 31, 2022, was $15.6 million compared to a loss of $16.4 million for the year ended March 31, 2021. The company incurred net financial gains for the year ended March 31, 2021 -- '22 of $5.1 million compared to a $3.3 million loss for the year ended March 31, 2021. The change is primarily due to a change in the fair value of warrant liabilities on the balance sheet.

Next year -- or sorry, net loss for the year ended March 31, 2022, was $9.8 million or $0.27 per share compared to a net loss of $19.7 million or $1.33 per share for the year ended March 31, 2021.

As Jan already noted, our cash, cash equivalents and short-term investments totaled $43.7 million as at March 31, 2022, compared to $60.7 million as of March 31, 2021. Based on management's current projections, current cash is expected to fund our lead asset GTX-104 through to NDA submission, and GTX-102 and 101 to additional key milestones.

With that, I'll now turn the call back over to Jan.

Thanks, Brian. Appreciate that. I'll now turn the call over to the operator. MJ, can you open it up for questions? .

(Operator Instructions) Our first question today comes from Leland Gershell of Oppenheimer.

Questions. First, with respect to 104, I'm sorry if I missed it in the prepared remarks, but if you could remind us on the design and number of patients or subjects you'll need in that safety study and when we might be able to see the results? And then I also have a question with respect to the IP. Do you -- I know you have the notice of allowances. Do you know when those patents are expected to issue?

Yes. Thanks, Leland, and thanks so much for being on the call today. I'll briefly describe what we're thinking of here for the design of the safety trial and also turn it over to Monique Champagne, our VP of Clinical Affairs, and she can add any additional comments.

So we're in the final stages of designing the study right now, and we'll be submitting the protocol -- the draft protocol along with the results of our PK study very soon, probably within the next month or 2. So we'll submit that to the FDA, and then we look for any comments from them on the design. So we are currently on track to initiate the safety study before the end of this year, and we still expect that it'll be in roughly 100 to 125 patients. It'll be 2 arms.

So we'll be comparing the safety profile of GTX-104 with the safety profile of the oral capsule. And so this is important. Obviously, nimodipine can't be withheld from those patients.

We don't think that we'll need more than a couple of dozen sites. We're working with some of the biggest centers in the country -- biggest drug centers. And we would expect pretty decent recruitment. So we're anticipating the study, will take probably in the ballpark of 12 to 18 months to complete.

So we're thinking towards the end of 2023, early '24, the study should wrap up. And then it'll take a quarter or so to compile all the results and submit our NDA, but we're still on track, we believe, to submit the NDA in early 2024.

Monique, is there anything you'd like to add that I didn't cover there?

No. I think the information was complete. However, I believe you also asked some questions on the study design of the (inaudible) study, am I right?

Sorry. You broke up there, Monique. Study design of what?

(technical difficulty)

You're still breaking up. Can you repeat that?

(technical difficulty) were there other questions you wanted to clarify of this design of the recently published [PK]?

Okay. Got it. Yes. Leland, any questions you have on the PK? .

No, no. The PK looked terrific. So no questions. .

Yes. I think the other question was on the IP, right, the status of the IP and when it would be issued.

Post the NOAs, we'll see those patents and issue later this year.

Monique, can you comment on that?

I'm so sorry. The communication is really bad. Can you please repeat the question?

I'm sorry. Just asking about the patents following the NOAs, when those patents might issue presumably in the coming months?

I was informed that everything was on track for patents. So I don't foresee any issue with that.

Yes. I think that's right, Leland. I think we would expect issuance very, very soon. Thanks. Did you have any other questions, Leland?

No. That's is all for me.

Okay. Thank you. And operator, I don't know, for some reason, the line seems to be breaking up. I don't know if it's just my line.

You're coming in loud and clear.

Okay. I had difficulty hearing Leland as well.

I apologize for that.

Did we have any other questions?

MJ, do you want to -- MJ, maybe while we wait to see if there are additional questions, I'll jump in here with just a couple, Jan, if that's okay here with you. Leland touched a little bit on GTX-104, maybe transitioning to GTX-102, has the 102 PK bridging study protocol been developed or approved?

Yes. That's a great question. So yes, the study has been designed. It's going to be a fully randomized open label, 5-arm crossover study. And of course, it's going to evaluate the comparative bioavailability and pharmacokinetics of GTX-102, which, again, is a concentrated oral mucosal spray, and we'll be comparing it to betamethasone administered as an oral solution, which is only available in Europe.

So we'll be doing that comparison, that arm for future filing purposes in Europe as well as an IM arm. So it'd be an injectable form of betamethasone for filing purposes in the U.S. and in Canada.

So that study, that protocol has been finished. We are -- this will be conducted in healthy male and female volunteers and is set to start within the next month or so. So we're fully on track with that program.

Okay. Perfect. And then just, I guess, on the cash burn, I don't know if Jan or Brian wants to talk through this, but from a monthly sort of burn perspective now versus when some of these trials begin, is there any updates that you can provide to us there?

Sure. Brian, do you want to take that one?

Sure. As we've been ramping up the research and development activities for these 3 products, our monthly burn has been roughly $800,000 to $1 million over the last 9 months. Going forward, we expect that to increase to upwards of $2 million a month, as we get heavier into the clinical trials, which are administered by contract research organizations and that sort of thing. So that was a fully planned scale-up, and that's where we expect things to land over the next several months.

MJ, if you want to provide instructions on how to queue up if there are any questions -- any further questions?

(Operator Instructions) If there are no further questions, I would like to turn the conference back over to the management team for any closing remarks. Please go ahead.

Okay. Thank you, MJ. I want to thank everyone for taking the time to be with us today on this call. I also want to reiterate our enthusiasm for our 3 clinical development programs and our excitement about the prospects for the new fiscal year.

We believe fiscal '23 can be a truly transformative year for the company, as there are numerous important potential value inflection points in the coming 12 months, with important trial results expected to be reported for GTX-102 and 101 before the end of this calendar year.

By the end of this fiscal year, which, again, as a reminder, is on March 31, 2023, we intend to have 2 Phase III programs underway for GTX-104 and 102 and a Phase II program underway for GTX-101. As a reminder, each of these drug candidates are being developed to address important unmet medical needs and the respective rare and/or disease indications.

And we hope that our efforts will result in better treatment options for these patients, their families and the physicians who treat them. In the drug development world, this is what makes it so exciting for us to come to work each and every day.

As always, we thank you all for your continued support of Acasti, and I wish you a great rest of your day.

MJ, I'll turn it back over to you.

Thank you, Jan. This concludes our conference today. Thank you for attending. You may now disconnect.