BioXcel Therapeutics Inc (BTAI) 2021 Q1 法說會逐字稿

Good morning, and welcome to the BioXcel Therapeutics First Quarter 2021 Financial Results Conference Call.

(Operator Instructions)

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

Actual results could differ materially from those anticipated in these 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, including its quarterly report on Form 10-Q for the quarterly period ended March 31, 2020, which can be found on its website, www.bioxceltherapeutics.com or on www.sec.gov.

As a reminder, today's conference is being recorded.

Joining us on today's call are Dr. Vimal Mehta, Chief Executive Officer; Richard Steinhart, Chief Financial Officer; William Kane, Chief Commercial Officer; Vince O'Neill, Chief Medical Officer; Frank Yocca, Chief Scientific Officer; and Reina Benabou, Chief Development Officer.

It is now my pleasure to turn the call over to Dr. Mehta, the CEO of BioXcel.

Thank you, sir.

Please go ahead.

Thank you, operator.

Good morning, everyone, and thank you for joining our conference call to discuss BioXcel Therapeutics' financial results and business highlights for the first quarter of 2021.

We appreciate everyone's time and attention.

This quarter, we have remained committed to accomplishing our long term goals for our neuroscience candidate BXCL501, with an emphasis on advancing our dementia development program as well as building the commercial readiness infrastructure needed to support the potential launch of our first 2 indications.

Starting off with dementia, we are very pleased with the tremendous advancement we have made with this indication from successful data readout to the receipt of Breakthrough Therapy designation from the FDA.

In first quarter, we announced positive data from the TRANQUILITY study, our Phase Ib/II trial for the acute treatment of agitation associated with dementia, which included patients with Alzheimer's disease.

To summarize, 501 was well tolerated, with statistically significant reductions in agitation achieved at 2 hours post dose with both 30 and 60 microgram cohort as measured by primary and secondary endpoint.

Also, the supplemental 40 microgram dose cohort study was initiated and is progressing well.

These results aim to provide development path to a pivotal program and provides a strong foundation for our broad dementia development strategy.

We are highly encouraged by 501 potential in dementia.

We believe it has broad applicability in treating not just acute agitation, but the full spectrum of agitation across care setting.

Supported by the TRANQUILITY results, we received FDA Breakthrough Therapy designation for BXCL501 for the acute treatment of agitation associated with dementia, another win for this indication.

This designation highlights the need for alternative treatment options for this underserved patient population and potentially offers an expedited development and regulatory review for 501.

With our end of Phase II meeting with the FDA in the near future, we look forward to discussing our registrational development strategy for dementia, solidifying the trial design as well as initiating the late-stage program in the second half of this year.

Approximately 6 million individuals in the U.S. are living with dementia and of that, 70% experienced agitation episodes.

This market is a huge opportunity that is largely untapped.

Following decades of research, there are still no safe and effective treatments that directly target agitation commonly seen with the dementia patients, including Alzheimer's patients.

We are thrilled by the potential to be the first company to develop a therapy designed to address this significant patient and caregiver need.

In parallel, we are making great strides with commercial readiness initiatives in hopes of bringing the first treatment to specifically address schizophrenia and bipolar disorder related agitation to the U.S. market.

Back in March, we announced that we have completed the submission of our NDA application to the FDA, supported by positive data from the pivotal SERENITY studies reported last July.

This is our first NDA for our Neuroscience Program, and we expect a response from the FDA this month regarding this submission.

On the commercialization front, we are continuing to advance our preparation for commercial readiness.

These initiatives have included making key hires for both commercial and medical teams.

In March, we deployed our Medical Science Liaison and Medical Manage Care teams.

Additionally, we are completing the design of our sales force size and structure.

If approved, we are confident we would be ready for a commercial launch of BXCL501.

Importantly, the infrastructure we are building to support the potential commercialization of BXCL501 for acute treatment of agitation associated with schizophrenia and bipolar disorder, I and II will be crucial foundation to launching additional potential follow-on indication, paving the way for our neuroscience business.

Recently, in tandem with mental health care awareness month, we launched an education campaign on agitation in neuropsychiatric diseases, such as schizophrenia and bipolar disorders called "Boiling Point." This campaign intends to shed light on the importance of prompt and cooperative de-escalation in the acute treatment of agitation, our interactive website at PartnersInCalm.com aims to educate health care providers.

Importantly, our strategy for commercializing 501 for the treatment of schizophrenia, bipolar disorder includes agitation associated with dementia as well as other possible indications.

We have already benefited broadly from the market research, payer and advisory board meeting, we have had with a deeper understanding of the agitation treatment landscape.

We will continue identifying key learning and insights as we roll our commercial plan for schizophrenia and bipolar disorder that will help lay the foundation for the much larger dementia opportunity.

With the preparations for U.S. commercialization on track, we are excited to announce that our strategic plans for geographic market expansion in Europe are also underway.

Utilizing our NDA package, we expect to file a Marketing Authorization Application with the European Medicines Agency for the treatment of acute agitation associated with schizophrenia and bipolar disorders I and II in the second half of this year.

We are committed to delivering transformative neuroscience medicines to the global population through regulatory expansion opportunities and potential strategic partnerships to help commercialize 501 in Europe.

Adding to our geographic expansion strategy, we recently strengthened our BXCL501 IP portfolio with the issuance of 2 Japanese patents.

The first covered method of treating agitation, which will expire no earlier than 2037, and the second is directed to film design, which will expire no earlier than 2041.

All these achievements serve as foundational building blocks for expanding our global footprint.

While we continue to prioritize our dementia and schizophrenia bipolar programs, we believe that 501's differentiated mechanism of action has the potential to treat a wide spectrum of agitation across neuropsychiatric and neurological disorders.

We are confident this candidate has a potential to be used across an array of treatment settings where there are large unmet needs.

Recently, we reported data from the RELEASE study, our Phase Ib/II trial of BXCL501 for the treatment of opioid withdrawal symptoms.

This trial mark our first time testing 501 as a sub-chronic treatment, twice-daily dosing over 1 week.

We were encouraged that we met the primary safety endpoint and were able to identify a dose range that was generally well tolerated and resulted in numerical improvements in retention in this difficult-to-treat fentanyl enriched patient population.

According to the latest estimate from the CDC synthetic opioid fatalities rose by an unprecedented 55% during the 12 months ending in September 2020.

The growing use of fentanyl is becoming a significant national health crisis.

Based on these statistics, we believe there is an important need for new treatment options to help address this mounting crisis.

We will continue to analyze these results in collaboration with our highly distinguished advisers regarding potential next steps for this important condition.

The RELEASE data also supports further investigation of different dosing regimens across additional indications and treatment settings.

As you can see, we have laid a robust clinical foundation for our BXCL501 program, conducting a total of 7 clinical trials in over 800 subjects across a range of diseases in just over 2.5 years.

We have now demonstrated the potential for robust treatment effect for elevating acute agitation in 3 distinct indications, schizophrenia, bipolar disorder and dementia.

We have made significant progress on our strategic initiatives in building an integrated organization encompassing artificial intelligence, research and development, medical and commercial capabilities to deliver innovative medicines to patients.

At BioXcel, we are passionate about the potential to bring novel treatment in neuroscience and immuno-oncology to the millions of patients who lack effective and tolerable options while also creating value for our shareholders.

Now, I would like to turn the conversation to our immuno-oncology clinical candidate, BXCL701.

It is an oral immunomodulator designed to stimulate both innate and adaptive immune systems, potentially turning cold tumors to hot.

701 is designed to be a potent inhibitor of DPP 8/9 that may activate inflammasomes, resulting in the release of pro-inflammatory cytokines in the tumor microenvironment.

As you know, despite checkpoint inhibitor therapy undoubted success, many patients do not respond to them, particularly cold tumors, such as aggressive form of prostate cancer.

We are excited about BXCL501's novel mechanism of action to combine with a checkpoint inhibitor and are encouraged by our I-O program to date.

We believe 701 is the most advanced orally available innate immunity activator in development that has been optimized for dosing in combination with KEYTRUDA.

701 is currently being evaluated in 2 combination trials with KEYTRUDA for the treatment of several advanced cancer types, both cold and hot tumors.

In our ongoing open-label Phase Ib/II trial in aggressive forms of prostate cancer, we are pleased that the adenocarcinoma cohort has met its efficacy bar to move to stage 2. The trial will now continue to full enrollment and updated efficacy data are expected to be reported this year.

This is a giant step for 701, as this candidate is showing early promise in cold tumors by potentially making the cancer more recognizable to checkpoint inhibitors.

If successful, this innate immune inhibitor could be transformative to the immuno-oncology field.

Finally, company has a strong cash position of $194 million to achieve our key milestones.

With that, I would like to turn the call over to our CFO, Richard Steinhart.

Richard?

Thank you, Vimal.

We reported the net loss of $26.4 million for the first quarter of 2021 compared to a net loss of $14.9 million for the same period in 2020.

The research and development expenses were $14.7 million during the first quarter of 2021 as compared to $12.4 million for the same period in 2020.

The higher expenses were primarily attributable to an increase in personnel and related costs necessary to enlarge our development and medical teams.

In addition, we experienced increased professional fees in conjunction with higher consulting fees and CMC costs related to BXCL501, as well as increased costs related to our RELEASE clinical trial.

These increases were offset in part by a decrease in SERENITY I and II clinical trial costs.

General and administrative expenses were $11.6 million for the first quarter of 2021 as compared to $2.6 million for the same period in 2020.

The increase was primarily due to higher personnel-related costs as well as costs related to our expansion in preparation of the potential launch of BXCL501 in the U.S. and increased legal, professional fees and insurance costs.

The first quarter of 2021 results include approximately $5.6 million in noncash stock-based compensation costs compared to noncash stock-based compensation costs of $776,000 for the same period in 2020.

And as of March 31, again, our cash and cash equivalents totaled approximately $194 million.

Now, I'd like to turn the call back to Vimal for any further comments.

Thanks, Richard.

We would now like to open the call for questions.

Operator?

(Operator Instructions) Our first question today is coming from Geoff Meacham of Bank of America.

This is Greg Harrison on for Geoff.

So as you look forward to a pivotal trial in dementia, what are your preferred characteristics you'd target in your end of Phase II meeting with the FDA?

Just wondering if you'd be able to potentially run a smaller trial given the existing safety track record of 501 and get the indication added to the label sooner?

Greg, thanks for the question.

This is Vimal.

We are having a -- planning a meeting with the FDA to get alignment on the things you exactly mentioned, the clinical trial design and what is the size of the trial needed and what is the size of the safety database needed.

So we will get the clarity on all of that soon once we have a meeting with the FDA.

And as you know in TRANQUILITY, we use ALF setting and we are trying to see that what we want to do in Phase III is close to what we have done in TRANQUILITY.

Our next question is coming from Graig Suvannavejh of Goldman Sachs.

This is [Anna] on for Graig Suvannavejh.

Just one quick question from us.

Could you provide a little bit more color on the PLACIDITY enrollment and the burden of COVID-19?

Just a little color would be helpful.

We initiated the sites in Q1 and after opening couple of sites we realized that there were operational difficulties in enrolling the patients and opening additional sites.

So we decided to voluntarily pause enrollment until we assess what is the optimal step to take to get -- initiate trial.

And do you expect that the time lines would be slightly delayed in terms of getting first signs or first signals of data?

Once we have assessed what the operational challenges are and how we're going to overcome, then we will be able to provide a guidance on the time line.

Our next question is coming from Brian Mills of Jefferies.

So I was wondering if you could talk a little bit about 501 commercial launch preparations.

And have you encountered any logistical challenges due to COVID?

And when do you expect to hold meetings with P&T committees?

Sure.

Thanks, Brian.

This is Will Kane, and I'll address your question.

So our preparation for the launch is ongoing, and we're making steady progress.

Everything is coming together.

We've completed a good chunk of market research to help inform us, and the product does receive positive reviews by hospital-based clinicians as well as pharmacy directors.

So we consider that a positive signal relative to the receptivity to 501.

They've also clearly recognized the unmet need, particularly in the patients who are treating in the hospital setting.

And as I said, the profile does motivate them.

We don't anticipate at the current time impacts of COVID, simply because we're a ways away from the launch, and that's going to require tracking over the next several months.

As you know, our base case plan is a launch in Q1 of 2022, and so we will plan for that, continue to assess the opportunity to access hospitals to achieve our goal when we build our sales force.

The goal is to, obviously, engage and to partner with local advocates in hospitals that are high priority for us, so that they can be spokespeople, if you will, in front of the P&T committees to initiate the process and ultimately achieve formulary access for the product.

Our next question is coming from Robyn Karnauskas of Truist Securities.

I guess one for Will.

You said you talked about the structure for the sales force and for marketing of the drug.

Do you have any updated thoughts on either feedback from -- you've mentioned payers.

Like what kind of feedback are you getting from the payers?

And any updated thoughts on the structure of your sales force?

And then just as a follow-up, can you just give an update on enrollment of the PTSD and delirium trial?

Sure.

Hi, Robyn, thanks for the questions.

I'll, obviously, start.

So as it relates to feedback, if you will, from payers, we have, as I said, done some market research with both payers, but more importantly with hospital-based P&T committee members such as pharmacy directors.

As I said, the profile of the drug is very well received.

They've recognized the unmet need, as I stated previously.

Hospitals are a more price-sensitive segment of the market, and so we're looking to understand what level of discounting, if you will, off a WAC price may be necessary to achieve the formulary access that we are shooting for, which is broad-based, right, because the product has applicability across a variety of a spectrum of patients with agitation associated with schizophrenia, bipolar disorder.

So what I would say is, feedback so far has been positive.

We have more work to do, certainly, on the pricing front as we get closer, which we will continue to do.

And as we engage more and more P&T committee members directly through both the medical managed care team and then ultimately, when we feel with an account management team in the second half of this year, which is on schedule.

In terms of the structure of the field force, I guess, I'm pleased to say that as we continue the analysis to finalize the size and structure, it is pretty much on par with what the initial thinking was 75 to 100 representatives, probably closer to 75 as we think through the process.

We have already identified high potential hospitals that would constitute the core.

That's about -- as we indicated previously, that's about 1,500 or so.

And so the next step is to continue to profile them to understand things like P&T, scheduling processes, who the local advocates are, et cetera, to help us prepare for engagement with them.

Robyn, this is Vimal.

Regarding the update on the PTSD, as you know, that is a trial we are conducting with Yale and VA.

It's an IST.

So they are working towards the goal of initiating the trial.

As we get update that they have initiated, we will be able -- in a position to communicate.

For the delirium, which I mentioned, the PLACIDITY, we had some operational challenges in the ICUs in the current environment to enroll patients as well as to be able to open additional sites.

So we have voluntarily paused delirium, and we continue to be focused on our 3 priority indications, schizophrenia, bipolar and dementia.

Our next question is coming from Ram Selvaraju of H.C. Wainwright.

Can you hear me?

Yes, we can hear you.

Firstly, with respect to the European perspective on 501.

Can you perhaps elaborate on what you consider to be the most optimal and effective way to commercialize the drug, if you anticipate establishing your own commercial infrastructure in Europe or if you're going to seek a partner?

And if you are going to seek a partner, can you give us a sense of what you think is likely to be the optimal timing for that, either ahead of or post approval?

So Ram, thanks for the question.

We are very pleased that our recent interactions with the agency in Europe were positive, and they gave us good feedback, and we were encouraged that we can use the NDA package to file in Europe.

Having said that, which we are planning to file in second half of this year, our strategy as a company is to launch this product in U.S. ourselves and seek a partner in Europe.

And with this filing -- like once we get this filing, it definitely creates more interest because now there is a definitive path to the regulatory approval.

And we'll continue to explore the opportunity to find the relevant partners.

We, obviously, get approached by some partners and see who has the relevant capabilities, not only for schizophrenia and bipolar, for our other upcoming indications, including dementia.

And then just a quick follow-up on the delirium side of things.

Are you envisioning the possibility of conducting a new study somewhat along the lines of PLACIDITY, but that doesn't involve focusing on COVID-19 patients exhibiting acute delirium, rather patients who are exhibiting delirium in the postsurgical setting.

And do you think that it would be feasible to conduct such a study without running into the same logistical problems that you previously had?

There are 4 settings for delirium: ICU, post-operative setting, medical wards and ER.

So we have a choice to make that in any of those settings, trial can be conducted.

We chose ICU for a very fundamental reason.

There was a data label with IV Dex about a proof-of-concept that when Dex was used, all patients responded who were refractory to haloperidol.

So that was rationale to choose ICU.

But considering the operational difficulties, medical ward can be another very viable option.

Our next question is coming from Yatin Suneja of Guggenheim Partners.

With regard to the potential dementia-related agitation study, is there a thought of going after dementia?

Or could you narrow it to a particular dementia subset, like, let's say, Alzheimer?

Just wanted to get a sense, the learning that you might be applying from what happened at Acadia?

Yatin, thanks for the question.

In our TRANQUILITY trial, our majority of the patients were Alzheimer's patient.

If you look at it, they were about 85% or more.

And then second largest was vascular dementia.

When we looked at that data, we did not see, like in our subgroup analysis, much difference between the 2 types of dementia population, and the third was FTD.

We did not have Parkinson's patients as well as Lewy body.

So we are already narrow in terms of our dementia subpopulation.

And what you mentioned, what learnings can we have?

We learn from that, and then we will have a conversation with the FDA, what is the most optimal path to get to the sNDA.

Is it the dementia with Alzheimer's as a major subtype and some of the other dementia, which I mentioned, or it's only Alzheimer's?

Those things need to be discussed with FDA.

And then just one question on 701.

Could you maybe talk about what you need to see in stage 2 for you to move into, let's say, pivotal development?

And how much data are we going to be expecting later this year?

Will, do you want to take that question?

Sure.

I'll take that.

So as you may recall, the study is divided in stage 1 and stage 2. So 15 patients in stage 1 and then a further 13 patients in stage 2, so 28 patients in total.

We'd previously said that we're aiming to see an objective response rate at around -- composite response rate, I should say, sorry, around 20%.

And given that this is an end-stage patient population, we think that's compelling.

So were we to see that, then the next step would be actually to expand up the study and continue to run the trial essentially to accrue more patients and get a what precise handle and what that response rate is?

Hopefully, that answers your question.

Our next question is coming from Colin Bristow of UBS.

This is Rich calling in for Colin.

A couple of questions from us.

The -- we only saw the MD Anderson Basket Study presentation at the upcoming ASCO, and I believe you guys mentioned that you would present the prostate cancer in midyear, but seems to be delayed now, so just any reason for that?

And also a follow-up question on, you mentioned the cash position after 1Q at $194 million.

When do you expect to do another raise to support commercialization of 501?

You are right that regarding ASCO, our, like, investigator at MD Anderson is going to present the data that is related to the hot tumors, like either refractory or treatment naive patient.

And we have indicated that we will plan to announce the data mid-year sometime with the prostrate, we are with the trial where we have moved to the stage 2. We feel good and confident that trial enrollment is progressing well.

These are open-label trials.

We want to accumulate sufficient number of patients; and see responses over a period of time.

And we believe that there's no material change in our guidance when we will be ready to share the data on the 701 trial.

Regarding your question, do you have any question or does it address your 701 question?

Yes, that answers it.

Okay.

And as we indicated, cash position is $194 million.

Our past 3 quarters, if you look at it, our burn rate has been in the order of about $25 million per quarter.

So this cash position gives us a very strong position to achieve the key milestones that we want to achieve that we have highlighted today.

So we feel, currently, we are in a good position as far as our cash is concerned.

Our next question is coming from Sumant Kulkarni of Canaccord.

I have a couple.

So first, we know you said you expect potential acceptance of your 501 NDA this month and we're right at the 60-day mark since your press release.

So could you characterize any new interactions with the FDA that you might have specifically had on this NDA after submission?

And the second question is, what are the latest levers you have for non-dilutive finance funding?

And do you have any preference for geography, EU versus Japan or perhaps royalty deals in the U.S.?

So Sumant, you are right that we have completed the 60-day cycle with the FDA.

The questions FDA has asked us prior to the 60-day, all of those portions were addressed.

We expect to hear from the FDA on the now 74th day when we will potentially learn about the acceptance as well as about the PDUFA date.

Your second question is about the non-dilutive financing.

Considering we are filing our MAA with EMA, so Europe will be the first priority.

As you noticed that we got 2 additional patents issued in Japan, that's a real market opportunity.

We will continue to evaluate, and we will schedule that as a next priority to the Europe.

And sometimes, when you are seeking these partnerships, you do find partners who may be interested in both geographies.

So it's very difficult to predict, but I think we are making progress on both fronts outside U.S.

Our next question is coming from Samir Devani of Rx Securities.

I just want to confirm, you mentioned you're using the NDA package for the European filing, but is there any other data that you may need ahead of that submission, and so that's, I guess, the first question.

That -- Samir, thanks for asking the question.

That was our question when we had meeting with the agency.

And now we believe we have the alignment that we don't need to generate any additional data than what we already have in our NDA package to submit the MAA application.

And then just one follow-up.

Just on the PLACIDITY and delirium opportunity.

I'm just wondering if you can maybe just remind us of why docs would not prefer in that setting to use sort of IV Dex rather than the film?

That's a very relevant question, Samir.

As you know, IV Dex is only available in a surgical suite currently.

And also, it involves some sort of titration and other difficulties that are associated in administering IV Dex to treat the agitation.

So what we have learned is there are settings like medical ward and other settings, where there could be opportunity for a 501.

So that's part of the reason we feel that it is across an institutional setting, but there are certain places, like particularly in medical wards and all that, it's a big burden to be able to put a IV line and do the titration with IV Dex.

So our research indicates the delirium opportunity in medical wards and some of the other places in the institution can be very relevant for the film.

Our next question is coming from Anita Dushyanth of Berenberg Capital Markets.

Just a couple here.

Can you talk about the enrollment rate in the TRANQUILITY expansion study?

And also -- sorry, if I missed this one.

Were you able to mention what the size of the sales force is for the commercialization of the 501?

So in terms of the enrollment in the supplemental cohort of 40 microgram, enrollment is progressing well.

And we expect that we will be able to complete that enrollment and have our data in our hand to make decisions for our Phase III program.

Regarding the sales force, Will has mentioned that our range is 75 to 100, but more or less, the sizing work that is being done for priority hospitals, about 1,500, it may be more or like 75.

We're showing no additional questions in queue at this time.

I'd like to turn the floor back over to management for any additional or closing comments.

Thank you, operator.

Our #1 goal as a company is to deliver transformative medicines to patients in need, and we are confident this can become a reality in the near future.

Thank you all for joining our call today.

Ladies and gentlemen, thank you for your participation.

You may disconnect your lines at this time, and have a wonderful day.