BioXcel Therapeutics Inc (BTAI) 2018 Q3 法說會逐字稿

Good day, and welcome to the BioXcel Therapeutics Third Quarter 2018 Results Conference Call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Lee Roth.

Please go ahead.

Thanks, Leanne, and good morning, and once again, welcome to the BioXcel Therapeutics Third Quarter 2018 Financial Results Conference Call.

Just to remind everyone, certain matters discussed on today's call or answers that may be given to questions asked include forward-looking statements that are subject to risks and uncertainties relating to future events and/or the future financial performance of the company.

Our actual results could differ materially from those anticipated in such forward-looking statements.

The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, which can be found on our website bioxceltherapeutics.com or on www.sec.gov.

Please note, the company is under no obligation to update any forward-looking statements discussed today, and investors are cautioned not to place undue reliance on such statements.

Joining me today from management are Vimal Mehta, Chief Executive Officer of BioXcel Therapeutics; Richard Steinhart, Chief Financial Officer; Vince O'Neill, Chief Medical Officer; and Frank Yocca, Chief Scientific Officer.

With that said, it's my pleasure to turn the call over to the company's Chief Executive Officer, Dr. Vimal Mehta.

Vimal?

Thanks, Lee.

Good morning, everyone, and thank you for joining our conference call to discuss BioXcel Therapeutics' financial results for the third quarter of 2018.

Over the past several months we have made significant progress in developing both our clinical assays, BXCL501 and BXCL701, our emerging pipeline candidate, establishing clinical partnership and strengthening our operational capability.

I would like to start by highlighting the progress we have made in our neuroscience program with BXCL501.

BXCL501 is a potential first-in-class drug that directly targets the causal mechanism of agitation and is under development for acute treatment of mild to moderate acute agitation resulting from schizophrenia, bipolar and Alzheimer's disease.

The sublingual thin-film formulation of BXCL501 is believed to have a rapid onset of action and provides ease of administration in agitated patients.

Along with its robust safety and pharmacokinetic profile established through use in millions of patients and in over 130 clinical trials, Dex is the most selective alpha2A adrenergic agonist available.

It produces an arousable sedation and has a calming effect on agitated patients.

In the U.S., we believe as many as 5 million patients with Alzheimer's disease, schizophrenia and bipolar disorder experience agitation.

Approximately 1.2 million of these patients experience mild to moderate agitation and represent a potential patient population for treatment with BXCL501.

With ADASUVE, the first-approved inhaled antipsychotic treatment for acute agitation as a reference drug, we believe we have a well-characterized regulatory pathway for BXCL501 via FDA's 505(b)(2) pathway, along with potential favorable reimbursement.

We recently held our 3 Investigational New Drug, IND, meeting with the FDA and received valuable guidance on the development of BXCL501.

Following the approval of our IND, we plan to initiate a first-in-human pharmacokinetic bioavailability and safety study of the sublingual thin-film formulation of Dex prior to year-end.

The aim of this trial is to define the optimal dose of the sublingual film and collect relevant data to move it into Phase II/III registration trial.

The data from this trial is expected to be available in the first half of 2019.

We are pleased to report that we have completed manufacturing of our propriety sublingual thin-film formulation of dexmedetomidine, and it is available for clinical studies.

Additionally, we appointed a clinical research organization to support the company in conducting and managing the pharmacokinetic and safety clinical study.

Previously, we announced positive result from our Phase Ib trial, evaluating intravenously administered Dex in June.

Findings from the study demonstrated that the selected dose and exposure levels of IV Dex had a calming effect in healthy subjects without clinically meaningful changes in blood pressure or heart rate and the drug was well tolerated.

Through this trial, we were able to develop a dosing strategy for the sublingual thin-film formulation of BXCL501.

As an extension of the Phase Ib study, we are evaluating the dose and exposure level in schizophrenia and senile dementia of the Alzheimer's type SDAT patient will support the further development of BXCL501 in relevant disease pathology.

We expect to report data from these studies of IV Dex before the end of this year.

Additionally, in order to support the global clinical development of our new neuroscience program, especially BXCL501, we formed a world-class neuroscience Clinical Advisory Board.

The founding members of the CAB include Professor Sheldon Preskorn, Professor Stephen Marder, Dr. George Grossberg and Professor Alan Breier.

We are looking forward to working with the CAB and receiving their valuable guidance on clinical development, regulatory and medical affairs as well as the commercialization strategy for BXCL501 and of our emerging neuroscience program.

Let's turn to our second clinical program, BXCL701.

BXCL701 is a -- is an orally available systemic innate immune activator.

With dual mechanism of action, it has demonstrated single activity in melanoma with an established safety profile from 700 healthy subjects and cancer patients.

Designed to directly stimulate innate immune system, BXCL701 works by inhibiting dipeptidyl peptidase, DPP 8 and 9. Additionally, BXCL701 targets fibroblast activating protein, FAP, and acts as an immunization inhibitor.

Preclinical combination data evaluating BXCL701, a checkpoint and other immuno-oncology agents has demonstrated encouraging antitumor activity in multiple tumor types and formation of functional immunological memory.

BXCL701's primary mechanism of action has been highlighted in multiple peer review journals, including Nature Medicine, providing an important validation of the scientific rationale behind BXCL701.

We have specifically chosen a treatment-emergent neuroendocrine prostate cancer, tNEPC, and pancreatic cancer as our lead target indication based on BioXcel's BXCL701 dual mechanism of action and a strong underlying biologic rationale.

Additionally, based on results from preclinical studies, the combination of BXCL701 with I-O agent produces a synergistic anticancer effect by elevating the infiltration of tumor-killing cells, NK cells and neutrophil, while blocking immune-suppressive cells.

Thus, we believe BXCL701's potential to turn cold tumors into hot in combination with I-O agent can make tNEPC and pancreatic tumors more responsive, offering us a potentially viable therapeutic strategy.

We recently received FDA acceptance of the IND application we submitted for BXCL701 in combination with pembrolizumab, Keytruda, for the treatment of tNEPC.

The Phase Ib/II study is expected to enroll up to 40 patients at multiple trial sites.

The goal of this single-arm, Simon 2-stage, open-label study is to examine the safety, pharmacokinetic antitumor activity of the combination of BXCL701 and pembrolizumab in tNEPC patients with efficacy endpoint of objective response rate.

We also have completed the GMP development of -- for BXCL701 with adequate drug supply to conduct the upcoming clinical trials as well as other studies with potential partners.

We have also selected a leading clinical research organization to support the company in conducting and managing clinical studies.

We anticipate initiation of this trial by year-end and expect to report data throughout 2019.

In addition, we expanded our existing immuno-oncology research collaboration with Nektar Therapeutics into a clinical collaboration to further explore the potential of our BXCL701 in combination with Nektar's NKTR-214, a CD122-biased agonist, and a checkpoint inhibitor.

The focus of this new clinical collaboration is on developing the triple combination of BXCL701, Nektar Therapeutics NKTR-214, and a checkpoint inhibitor for the treatment of pancreatic cancer.

Both companies will share the cost of clinical trial.

The trial assessing the triple combination in pancreatic cancer is expected to be initiated in early 2019.

Today, we are presenting promising preclinical data, along with Nektar, on the triple combination of BXCL701, NKTR-214 and a checkpoint inhibitor across multiple tumor types at the 2018 Society for Immunotherapy of Cancer Annual Meeting.

Findings from this preclinical study has demonstrated robust antitumor activity, resulting in complete tumor regression in multiple tumor model and generation of functional immunological memory, highlighting the utility of the triple combination as a potential therapy for pancreatic cancer and other indications.

In the third quarter, we also established an industry-leading immuno-oncology clinical advisory board to support the global development of BXCL701 and our emerging immuno-oncology program.

The inaugural members of the immuno-oncology CAB were Dr. Louis Weiner, Dr. Daniel Von Hoff, Dr. Eric Small and Dr. Emmanuelle Antonarakis.

These esteemed experts in the field of oncology will guide our team in advancing our I-O program through clinical development to improve patient outcomes.

I would also like to point out that we are employing approaches to derisk clinical development of our lead candidates through patient selection optimization, translational results and predictive biomarker discovery, utilizing our artificial intelligence approaches and platform.

Our exclusive AI partnership with BioXcel Corporation gives us the ability to continue to identify additional indication expansion opportunities for both BXCL501 and 701 in terms of new indications and additional geographies for development.

Our goal is to establish a global footprint by filing IND and clinical trial applications for additional indications in multiple treatments.

Additionally, we are also utilizing our AI platform to prioritize and expand our emerging pipeline through the addition of novel candidates in neuroscience and immuno-oncology.

We are excited about the potential of our lead program, and our emerging pipeline holds just as much promise.

On the operational side, we strengthened our management team with the appointment of Dr. Chetan Lathia as Senior Vice President and Head of Translational Medicine Clinical Pharmacology and Regulatory Affairs; and David Hanley as Vice President and Head of Global Pharmaceutical Development and Operations.

Dr. Lathia will be responsible with us, supporting the advancement of company's pipeline programs from a clinical pharmacology and regulatory perspective, while Dr. Hanley will oversee the pharmaceutical development and global operational initiatives associated with our drug path.

We have thoroughly utilized -- we have thoughtfully utilized a portion of the capital from our IPO to advance the clinical development of our lead program, BXCL501 and 701, as well as solidify our leadership team.

We expect cash burn to increase through the remainder of the year and in 2019 based on the increase in the number of clinical studies in both our programs.

As an organization, we believe we have made substantial progress over the last several months, and we are now well positioned to achieve our clinical and operational objective in the coming quarters.

BioXcel Therapeutics is committed to bringing transformative therapies to the market and helping patients who have few, if any, options.

We strive everyday to create significant value for our shareholders.

With that, I would like to turn the call over to Richard to discuss our financial results.

Thank you, Vimal.

And once again, thank you for all joining us this morning, and welcome to our shareholders.

The proceeds from our initial public offering from March of 2018 gave us the necessary capital to advance the clinical development of BXCL501 and 701, including initiation of multiple studies in each program in the coming weeks.

For the third quarter 2018, we reported a net loss of approximately $4.9 million compared to a net loss of $900,000 for the third quarter of 2017.

Research and development expenses totaled $3.8 million for the third quarter of 2018 compared to approximately $600,000 for the same period in 2017.

The increase in research and development expenses reflects increased development activities in both BXCL501 and BXCL701 programs, including increased personnel cost, professional fees, clinical trial costs and manufacturing costs.

General and administrative expenses in the third quarter of 2018 were approximately $1.3 million compared with approximately $300,000 for the third quarter of 2017.

The increase was primarily due to additional payroll and payroll-related expenses, professional fees and costs associated with operating as a public company.

We had cash and cash equivalents of $47.1 million as of September 30, 2018, again reflecting the proceeds from our IPO.

We believe that our current cash position is sufficient to meet our needs for at least the next 18 months.

That concludes the financial review.

And I'd like to turn it back over to Vimal for any closing comments.

Thanks, Richard.

I'd like to thank everyone for joining the call, and would like to open it up for any questions.

(Operator Instructions) And we'll take our first question from Geoff Meacham with Barclays.

Congrats on all the pipeline progress.

Vimal, I know you don't want to get into the specifics, but for 501, were there any surprises in your FDA meeting in terms of the feedback or the development path in -- for the PK study of 501.

What would give you as an ideal profile?

And I have one follow-up.

So our goal with the pre-IND meeting was very simple, to get a FDA buy-in on our like overall development plan, and be focused on 2 areas, which is schizophrenia and bipolar and Alzheimer's.

And what we understood, and I can't be very specific, but in general, we understood that FDA was very encouraging for both indications because there is no systemic therapy currently available for the effective treatment of agitation.

Overall, also, we saw the acceptance of the strategy that we have outlined that we will do with the film like give multiple doses, we will do the pharmacokinetic bioavailability study and the safety study in using different dose strengths of the film.

And then using that data, we can proceed forward with Phase II/Phase III registration trial in 2019.

Okay.

And then on the PK profile, what would you say for 501 would be an ideal profile?

I know you obviously have to run a bridging study at some point with the PK from the IV, but looking forward to the data coming up, what are your expectations?

So I will -- I have Frank Yocca.

I will pass this question to Frank.

Frank?

Yes, Geoff.

So we think we understand what concentration -- plasma concentrations we need to get our effect.

So what we are looking for in terms of the PK profile is something that we can achieve like a Cmax around somewhere between 20 to 30 minutes, so that we can get a rapid onset of effect.

And see those dose ranges where in these smaller IV studies, we're seeing the activity of the drug producing these RASS scores that would fit in terms of reducing agitation.

And we'll take our next question from Carter Gould with UBS Financial.

This is [Andrea] for Carter.

I've got a couple here on 501.

So from the point when you have this 501 PK data in hand, can you talk a little bit more about projected time lines in case you get to the registrational study's approval?

And then how should we be thinking about the duration of the 501 studies relative to IV dexmed?

Sure.

So let me address first the BXCL501 like film trial plan, we are expecting to initiate our pharmacokinetic safety study this year upon approval of the IND.

We already have the pre-IND meeting with the FDA.

We have a CMC for the film, multiple doses already prepared our label for clinical studies.

We have a CRO, who is -- like now will be helping us conduct the studies.

So all [PPs] are in place, it's a matter of just obtaining the IND approval from FDA, and the studies will start this year.

These studies tend to be short studies, like I would say, not that long because you can finish these studies in a short time.

So we expect the results to come out in first half of 2019.

And using the data, we go back to the FDA with the fuller plan and a defined indication, whether it's schizophrenia and bipolar or Alzheimer's or both, and get their approval to initiate Phase II, Phase III studies.

Those studies, from our experience, the previous experience, we know at least for schizophrenia and bipolar, they require about 9 to 12 month.

So if we have the approval from the FDA in first half of 2019, then those studies will go up to early or first half of 2020 and then we'll be ready to file a NDA.

Our goal and hope is that we should be able to file a NDA, if possible, by 2020, and that's what we are targeting.

And we'll take our next question from Do Kim with BMO Capital Markets.

This is Keith Tapper on for Do Kim.

I had a few question though, 701.

So the IND is -- for 701 is to treat NEPC.

Could you talk a little bit about the study design and what that might look like, being that it's a treatment-emergent disease in terms of exclusion criteria for background treatment or anything like that and how that might affect measuring the outcome?

So thanks for your question.

I will pass it on to Vince, who is our Chief Medical Officer.

Sure.

Thanks, Vimal.

So the study, as we previously said, was a combination approach with Keytruda.

And we chose Keytruda, based really on the fact that we already have some data from the KEYNOTE-199 study and how Keytruda works or its efficacy or the lack thereof in this patient population.

So that's the combination approach.

It's a 2-stage Simon design, so 15 patients, plus approximately 15.

And it will be preceded by a safety run in or escalation prior to that.

So fundamentally, the primary endpoint is based on response rate, and we can do that because NEPC, unlike Class C adenocarcinoma of prostate, typically results in measurable disease, typically results in vestibular MetS for example.

So that's the general approach to this study.

Does that answer your question?

It does.

In terms of, I guess, an exclusion criteria, is there like a certain line of treatment that -- because it generally results from previous chemotherapies, so is there a certain standardization of lines of treatment prior to being involved in this study?

Sure.

So clearly, by definition, as you've just said, this a treatment-emergent disease.

So by definition, patients had to have received androgen deprivation therapy and an additional one line of chemotherapy.

So those are the inclusions.

And we'll take our next question from Sumant Kulkarni with Canaccord.

I have one, it's actually a big picture question, but has a very specific focus to it.

So we had the recent ESMO conference, where we saw a lot of products coming out or combo products in immuno-oncology not doing as well as people might have hoped.

So given yours is an organization that relies on artificial intelligence, how quickly can you adapt if your product, which also involves a combo, you might find some new intelligence based off of your approach?

Is that a valid way of looking at things?

How nimble can you be?

Sumant, that's a great question.

We always use our like AI and machine-learning platform whenever we are even going to any conference.

We have done this for a conference that's happening in Washington D.C., Society of Immunotherapy.

So we used that to understand what the overall landscape looks like, and I call that as a machine-created report.

And our scientists, our team that is at the SITC this week, they utilized that report to understand the overall landscape, to understand particularly the combination landscape and then understanding and drilling it down to what other combinations are going on.

At a very high level, if you look at the immuno-oncology, primarily it is combination of adaptive -- the agents which can change the microenvironment using adaptive immune approaches.

I think where BioXcel Therapeutic separate itself is in the innate immunity.

I think, and I'm not aware of, that we are the only company which has a orally available systemic innate-immunity activator, and we have for this agent 700-patient data.

So our belief right from the beginning has been that to be able to get responses, the kind of response you are looking, and particularly in hard to treat tumors, like neuroendocrine prostate cancer and pancreatic tumors, you need to combine an innate-immunity agents, which is BXCL701, with other agents.

And we have chosen right now NKTR-214.

We continue to explore more any checkpoint inhibitor.

Combination of these 3, basically innate-immunity activator does the early surveillance of the immune system, it kind of warns the adaptive immunity agent and the professional killer cells, which are the T cells, they are already pre-warned by the time like you -- using and activating the innate immunity, plus PD-1 can take off the brake.

So I think, overall, we strongly believe that, going forward, you will see more and more innate-immunity activation as a strategy employed by other companies as well.

And I think we are ahead, particularly in terms of the systemic agents for innate immunity.

And it appears that there are no further questions in the queue at this time.

I'd like to turn things back over to Vimal Mehta for any additional or closing remarks.

I'd like to thank everyone for joining us today and also excellent questions.

I think they are very relevant.

We continue to feel very excited about what we have been able to accomplish and what is ahead of the company in Q4 2018 and throughout 2019.

Thank you very much.

And that does conclude today's conference.

Thank you for your participation.

You may now disconnect.