BioXcel Therapeutics Inc (BTAI) 2020 Q4 法說會逐字稿

Good morning, and welcome to the BioXcel Therapeutics Fourth Quarter and Full Year 2020 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 the 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 filings with the U.S. Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarterly period ended September 30, 2020, as will be updated by its annual report on Form 10-K for the year ended December 31, 2020, which can be found on its website, www.bioxceltherapeutics.com or on www.sec.gov.

A question-and-answer session will follow the formal presentation. As a reminder, this call is being recorded.

It is now my pleasure to turn the call over to Vimal Mehta, the CEO of BioXcel. Please go ahead, sir.

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 fourth quarter and full year of 2020. We appreciate everyone's time and attention.

Joining me on the call today are Richard Steinhart, Chief Financial Officer; Will Kane, Chief Commercial Officer; Frank Yocca, Chief Scientific Officer; Vince O'Neill, Chief Medical Officer; and Reina Benabou, Chief Development Officer. And we would like to extend a warm welcome to June Bray and Javier Rodriguez to our Board and management team, strengthening our leadership team and bringing strategic experience to support the transformation of BioXcel.

This is a historic time for BioXcel as we are preparing to transition to a commercial neuroscience-focused company. Today, we are pleased to announce that we have completed the submission of our new drug application to the FDA for the acute treatment of schizophrenia and bipolar disorder-related agitation.

I am proud of our team's hard work in completing these important milestones on schedule. We were able to accomplish this significant achievement with impressive speed from first-in-human trials to NDA submission in just over 2 years, supported by our powerful AI-based discovery and development platform. This is our first NDA and we believe, if approved, can be the first AI-derived drug to have received FDA approval. As our NDA application undergoes FDA's review, we have taken steps to begin the transition to a potentially commercial-stage organization. And we are actively advancing our launch readiness initiative.

In addition to establishing our commercial and medical teams with seasoned professionals, we are building our commercial infrastructure, including the design and structure of our sales force. Our medical science liaison team has been hired and is completing its training. This team will begin scientific exchange interactions by the end of this month. I'm confident that we will be well prepared for the potential commercialization of 501, which, if approved, would be a unique and an innovative treatment in the U.S. to specifically address schizophrenia and bipolar disorder-related agitation.

I'm also pleased to report that 2 abstracts on SERENITY 1 and SERENITY 2 have been accepted for presentation at this year's American Psychiatric Association Annual Meeting in early May.

The potential approval of 501 will help pave the way for our broad neuroscience franchise expansion, establishing this candidate as an important new treatment across the agitation spectrum in multiple neuropsychiatric disorders. Due to 501's unique mechanism of action, we are currently investigating 3 follow-on indications: dementia-related agitation, opioid withdrawal symptoms and delirium-related agitation as recently highlighted in our 501-focused KOL day.

Over the past 12 months, we have made tremendous progress with the development of the additional programs with the goal of providing 501, if approved, to the millions of neuropsychiatric patients suffering from agitation and other stress-related symptoms. We plan to submit supplemental NDAs for these follow-on indications in the years to come.

We recently announced positive data from the TRANQUILITY study, our Phase Ib/II trial for the acute treatment of dementia-related agitation. To recap results from this trial, BXCL501 was well tolerated with no severe or serious adverse events, such as syncope or fall, statistically. Significant and clinically meaningful reductions in agitation were achieved with both 30- and 60-microgram cohorts at 2 hours post dose, as measured by the PEC, PAS and modified CMAI scales. Rapid and durable reductions in agitation were seen with the 60-microgram cohort across all efficacy endpoints with significant reductions in agitation lasting up to 8 hours.

To build on the TRANQUILITY results, we have initiated a 46-patient, multi-center, placebo-controlled TRANQUILITY expansion study, investigating a 40-microgram dose cohort of BXCL501 with 1:1 randomization. We believe this supplemental cohort will help to inform our comprehensive clinical development strategy targeting the full range of dementia care setting from long-term care centers to at-home care. Furthermore, our end-of-Phase-II meeting with the FDA has been scheduled for the second quarter of this year, with plans to initiate our pivotal Phase III program in the second half of 2021.

Turning to the RELEASE study, our Phase Ib/II trial of BXCL501 for the treatment of opioid withdrawal symptom. We remain on track to report top line results later this month to further explore BXCL501's potential to alleviate the debilitating side effects of withdrawal, thereby helping patients overcome their addiction.

Last month, we initiated the PLACIDITY trial, a Phase II trial of BXCL501 for the treatment of ICU patients with delirium-related agitation. We expect to report top line results from this trial in the first quarter of 2022.

Most delirium patients experience agitation, which we estimate occurs in approximately 4 million U.S. patients annually, often complicating overall patient care and extending hospital stays. Delirium occurs in numerous hospital treatment settings, including the ICU, surgical wards, hospital wards and emergency departments.

Our strategy is to evaluate 501 in delirium patients across all these hospital setting, thus making this indication highly synergistic with the medical and commercial hospital-based infrastructure we are currently building in support of our first NDA.

Lastly, BioXcel and its collaborators, the VA Connecticut Healthcare System and the Yale University Medical School, are investigating 501 for the first time as a potential chronic treatment in an at-home setting for patients suffering from PTSD related to alcohol and substance abuse disorders under a grant from the U.S. Department of Defense.

As you can see, we are actively exploring BXCL501 potential across numerous neuropsychiatric and neurodegenerative disorders, advancing 5 distinct indications with the goal of creating a highly valuable neuroscience ventures. Our clinical trials in various disorders have shown that 501 is well tolerated and has demonstrated a robust treatment effect at multiple dose ranges, helping to support a broad market strategy for the underlying diagnosis.

We are passionate about potentially bringing this novel treatment to the millions of patients that lack effective and tolerable options. And we continue to explore additional patient populations that are hallmarked by stress-related symptoms. We believe that BXCL501, if approved, has the potential to become the standard of care for the treatment of agitation. This significant development reinforce the power of our AI platform in identifying and developing potentially best-in-class therapy. We continue to leverage this evolving drug innovation model to identify and develop new programs to expand our neuroscience pipeline in addition to 501.

Now I would like to turn the conversation to our immuno-oncology clinical candidate, BXCL701, our oral immunomodulator designed to stimulate both the innate and acquired immune systems. Back in November, we presented safety and efficacy data from the ongoing combination trial of 701 in KEYTRUDA at the Society of Immunotherapy for Cancer Annual Meeting. Additionally, we provided an update on the ongoing Phase Ib/II trial in aggressive forms of prostate cancer at ASCO GU last month.

Based on these encouraging antitumor activity seen in both cold and hot tumors, we believe 701's mechanism of action, when combined with a checkpoint inhibitor, has the potential to enhance innate immunity and may be effective at targeting difficult-to-treat tumors. We look forward to continuing to advance 701 with plans to provide top line results from both the Phase Ib/II trial in aggressive forms of prostate cancer and the MD Anderson-led basket trial in advanced solid tumors in mid-2021.

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

Thank you, Vimal. We reported a net loss of $21.1 million for the fourth quarter of 2020 compared to a net loss of $8.3 million for the same period in 2019. For the full year, BioXcel reported a net loss of $82.2 million compared to a net loss of $33 million for the same period in 2019.

Research and development expenses totaled $11.4 million for the fourth quarter compared to approximately $6.5 million for the same period in 2019. The increase was generally due to growth in clinical trial expenses for our BXCL501 trials and related compensation costs.

Research and development expenses were $58 million for the full year 2020 as compared to $25.8 million for the same period in 2019. The increase in R&D costs for the full year 2020 was generally related to rise in clinical trial activity and the attendant personnel and professional research costs necessary to perform the trials.

General and administrative expenses in the fourth quarter of 2020 were approximately $9.7 million compared to about $1.9 million for the fourth quarter of 2019. The increase was primarily due to higher compensation-related costs and an increase in professional fees for legal and patent services, along with higher insurance premiums and market research fees.

General and administrative expenses were $24.3 million for the full year 2020 as compared to $7.8 million for the same period in 2019. The higher general and administrative expenses consisted of increased compensation costs related to the company's growth and preparation of the potential launch of BXCL501. There were also increases in professional fees for legal and investor relations expenses and insurance costs.

We had cash and cash equivalents of $213.1 million as of December 31, 2020.

That concludes our fourth quarter and full year 2020 financial review. Now I'd like to turn the call back to Vimal for any further comments. Vimal?

Thanks, Richard. We would now like to open the call to questions. Operator?

(Operator Instructions) Our first question comes from the line of Geoff Meacham with Bank of America.

Congrats on the NDA and all the progress. I just have 2 quick ones and mostly on 501. When could you have data from the 40-microgram cohort? I'm just -- in TRANQUILITY. I'm just curious to how that would impact your pivotal development plans. Would you delay starting a pivotal to include that?

And then the second question is, obviously, you guys have a very broad clinical plan for 501. Are there any other indications where agitation plays a role that you guys could explore down the road? It seems to me like it would be a pretty broad indication base, beyond what you guys have talked about across the neuroscience field.

Geoff, thanks for your question. This is Vimal. To answer your question about the 40-microgram dose cohort, we will expect the data readout sometime this year. We don't expect any delay in initiation of our Phase III trial because we already have 2 doses, 30 micrograms and 60 micrograms. Both are statistically significant. And we had good response rates as you have seen with both doses.

So we plan to initiate our Phase III trial after meeting with the FDA and getting the agreement with them on the dose, on the trial design as well as on the endpoint. Once -- after our Phase II meeting, we will initiate our Phase III trial. And we expect the trial to begin in second half of this year.

Coming back to your other question, yes, we do have a very broad clinical development plan and strategy. We continue to explore working with our experts in addition to using our AI platform to expand the potential of 501.

The upcoming, like 5 indications we have committed, we have ongoing trials in all of them. And we already have proof-of-concept done in 3 indications: schizophrenia, bipolar disorders and dementia. And opioid withdrawal data is expected sometime this month.

Our next indication that we are looking and where we have some good evidence is depression-related agitation because some of the patients in our bipolar patient population were depressed patients and we saw robust responses. So we are exploring that.

We are looking at PTSD and some of the other areas where mechanism of 501 is relevant. And this is an ongoing exercise. We believe, considering that our IP position is up to 2039 with our first patent, we have a lot of IP life to be able to bring these new sNDAs to the marketplace.

Our next question is from the line of Graig Suvannavejh with Goldman Sachs.

Congrats on the progress on the filing. Just a couple of questions. One, as you've now filed the NDA, I'm just trying to think about your continued precommercialization activities and primarily around how you can build awareness for the product with physicians.

And so my question is what is your sense of the current awareness of your product. How much education do you think you're going to need to do? APA is probably upcoming. Everything is virtual. So I'm just trying to get a sense of how you intend to build up your, perhaps, mindshare with physicians. So that's kind of my first question of sorts.

And then secondly, could you just give us a sense of where you are on manufacturing CMC? As we try to think about the filing and making sure all the boxes are checked, if you could give an update there.

And then lastly, just any comments on how we should think about the model in 2021. Especially given the ramp-up, I assume, in commercialization activities ahead of the launch, how we should be thinking about on a quarter-by-quarter basis or maybe just directionally your operating expenses, particularly SG&A.

Thanks, Graig. This is Vimal. I will take the CMC question. And then I will involve my colleagues, Will and Reina, to answer your awareness question as a part of our precommercialization strategy.

CMC, we have a like automated process. We use that to build batches for our Phase III trial. We have scaled up CMC. And whatever our forecast and projection is for up to next several years like 2025 or beyond, we have the capacity.

And it's a scalable process. By increasing the shift, you can increase the throughput. You can add another automated process. And then you can increase the throughput. So we believe, from a CMC perspective and a capacity perspective, we are in good shape to scale up from a commercialization perspective.

With that, I will pass it on to Will and Reina to address your question.

Sure. Thanks, Vimal, and good morning, Graig. This is Will. So relative to raising awareness, obviously, we see this as a great opportunity on 2 fronts: one, introducing BioXcel Therapeutics to the marketplace and establishing a reputation there as an innovator in neuropsychiatric drug development; and also raising the bar, if you will, on the treatment of patients who experience agitation associated with their mental health conditions.

In our market research, there is a high level of awareness about agitation, obviously, and the impact it can have on patients and also on the clinicians who treat them. There's also a high awareness of current therapy and some of the potential limitations of that therapy. So the profile that has emerged on 501 is well received.

So our plan is twofold over the next several weeks, actually, starting this month when we deploy the medical science liaison team, both from a clinical perspective and a payer perspective. And so they obviously will begin scientific medical-to-medical exchange to begin to educate and to be able to respond to questions regarding the program, et cetera.

And then secondly, we are advancing development of an educational campaign, which we are planning to launch in May, which is Mental Health Awareness Month and also the month of the APA meeting, to raise awareness about agitation and its impact on patients and also clinicians as a way to begin the process to lay the foundation for why a launch -- a potential launch of 501 could be helpful in the treatment of those patients.

So we have solid plans and they're starting to roll out. Reina?

Thank you, Will. So -- and as Vimal mentioned, we got 2 posters accepted at APA. And we're working very closely with this medical association to build scientific exchange virtual venues with our MSLs and medical information team.

The poster presentations, actually, they would be virtual -- in virtual poster hall from May 1 to June 1. And we still don't have all the details. But we're going to have approximately 12 sessions of those posters.

Graig, (inaudible)?

Yes. And then just maybe on the model -- on the modeling questions on how to think about SG&A throughout the year.

So in terms of specific guidance, we haven't provided the specific guidance yet because our pre-commercialization and commercialization plans are evolving and getting formed up. Our cash position, as you have seen, is $213 million as of December 31. This cash position is good to execute on key milestones that we have laid out today in 2021 and well into 2022. So as we move along, we'll provide more guidance as our plans form out.

The next question is from the line of Chris Howerton with Jefferies.

I guess just 2 quick ones from me. First, with respect to the NDA submission, what, if any, kind of communications can we expect throughout kind of the coming months in terms of interactions with the FDA acceptance and just kind of what might be our expectations there?

And then question two is with respect to the 701 data in the middle of this year. I guess just help us maybe understand or frame the expectations that we should have for what the "top line results" should be in the middle of the year relative to what we already know.

Thanks, Chris. This is Vimal. In terms of our communication, we just submitted the NDA. We'll go through the process, which is like a 60-day review process, which will -- then NDA will get accepted, then it's filed and then it will go through the rest of the process from -- until the approval.

So that's what we expect. We are preparing internally for a commercial launch on a standard review process, which is a 10 month. And in case we get priority review, then we will be ready to launch the product in Q4 of this year.

So our commercial teams and medical liaison team, medical affairs teams are preparing for both scenarios. Our base case scenario is standard review.

And coming back to your question related to the 701, what to expect. Both trials, the aggressive form of the prostate cancer, which is CRPC and tNEPC, and then we have a basket trial, which is with MD Anderson, we expect that whatever initial signs of activity we have seen, that data will mature and more patient data will come. That will build our further confidence, what activities we are seeing in the cold tumors and in the hot tumor, which is a basket trial, which is primarily the KEYTRUDA-refractory or KEYTRUDA-naive patient.

So it will be the more mature data which provides us clarity, which direction we want to move the program as a next step in terms of approvability path or in terms of a late-stage trial. So those are the decisions we like to reach once this data from these 2 trials have been completed.

The next question is coming from the line of Sumant Kulkarni with Canaccord.

I have a couple. So at your recent key opinion leader event, it seemed like there was a consistent theme that the real opportunity for 501 seems to be an at-home use setting. At least initially, your product will be used in a caregiver setting. So specifically, what steps do you need to take to bring the product home from a regulatory perspective? How soon after approval in the first indication might you be able to achieve that goal? And would that meaningfully change your commercial infrastructure needs? That's the first question.

The second one is given the recent developments in the dementia-related psychosis space, do you have any specific plans with respect to the potential use of 501 in the DRP setting, either on an episodic or sub-chronic basis?

Two great questions, Sumant. So let me try to address the first question. And I will invite Will to add more.

In terms of our plan, initially, we are building our commercial infrastructure for the institutional setting. And we will know once we get our label from our first NDA what the label agreement we get with the FDA. Once we know the label, and if it has, because trial was conducted in an institutional setting, that institutional restriction, then we will work with the FDA that what do we need to do to take it into a home care setting. And that would involve -- and this is not based on our conversations, based on our experts and internal thinking that, that will require providing additional evidence to FDA that in a home setting, there is safety and tolerability for the drug.

I just want to remind everyone that in our Phase Ib/II trial of schizophrenia, we saw that even lower doses than 120, 80 microgram, even 60, were numerically separating. So we have a very good dose response. And this gives us a lot of flexibility how we design our strategy to take this drug in the home setting.

Partly in dementia, we initiated the 40-microgram dose cohort because we are thinking now long term. Will and his team has done quite a bit of assessment of the dementia market. And it's very clear, that market is almost divided into 50-50 in the long-term care centers as well as at-home care center.

So since we started seeing statistical significance with lower doses with 501 and there is a very good reason why we are seeing because exposure levels are much higher in the dementia patient, which we have observed in our PK/PD modeling, it gives us a lot of flexibility in terms of the dosing that how do we think and builds optionality for a long-term care setting, our Phase III trial, where we have 2 clear doses, 30 and 60, to initiate a Phase III trial. And 40 gives us additional optionality to be able to explore when we do home care setting and when we have conversations with the FDA.

So that's kind of our overall thinking around how we'll take it into the home care setting. Will, do you want to add a little bit about the market insights you have?

Sure. Sumant, so let me characterize it this way. There's lots of opportunity in multiple treatment settings with 501. I don't want to minimize the importance of the institutional setting because many, many patients channel through that, whether they have schizophrenia, bipolar disorder, dementia, delirium, et cetera, in order to get help in treatment for the agitation symptoms that they're experiencing.

So as Vimal pointed out, as we look across at least the initial 3: schizophrenia, bipolar and dementia, the institutional setting is a place of high-frequency of agitation episodes and treatment. So that's why we believe, out of the gate with the label, that enables us to start there. We'll be able to achieve a good rate of adoption.

Longer term, though, obviously, we can take the product in the community setting based on how Vimal outlined our plan to get there. The community setting is an important one for a couple of reasons, not the least of which is there's obviously a high-volume of patients that are living either in nursing homes, et cetera, in one context or literally at home in the dementia population. And that number is going to grow as the Alzheimer's patient increases rapidly over the next 20 years.

And so in terms of how we think about the commercial kind of infrastructure, if you will, we have our land-and-expand approach, where we'll land, obviously, based on our initial label in the hospital. And as the label allows for expansion, we can build sequentially from the hospital setting to then to the assisted living nursing home setting and then eventually at home. And when we get to that point, we can decide how best to do that commercially in terms of whether we go it alone or we bring on additional co-promotion help.

To answer your second question about the psychosis. We all know agitation and psychosis and dementia patients are a part of a spectrum. That's very clear. And our drug, 501, works in the agitation. That's where we have proven the efficacy of 501 and PEC, which is the measurement we use for agitation, it's a subset of the PANSS, which measure psychosis.

So as we continue to evolve our program, we will continue to assess and see what impact 501 can have outside agitation into psychosis. And then we will be in a position to discuss like what possibilities are there for 501 outside agitation. Currently, we are laser-focused on the agitation with an eye on expansion into other indications.

Our next question is from the line of Robyn Karnauskas with Truist.

Congratulations on the progress. I have 3, I'll try to read them slowly. So one on PLACIDITY, one on RELEASE and one on your filing.

So I guess, first, on the filing. I know that in TRANQUILITY, you did not see age-related increased side effects from exposure. And I'm just curious if proactively, you'll be including the dementia data in your filing. Just trying to get a sense of if there's a chance that the FDA might say, "Hey, we may want to see data in patients over 65 to give you the label." And that's a question there of how you're going to manage that because the FDA has been asking or behaving in ways, I think, that the Wall Street might say is a little different.

Second question is on RELEASE, the upcoming trial. Could you set the bar for what is good data on the COWS and the SOWS point? And can you affirm that we'll be getting all 5 dose data in a more classic way versus dementia, we only got a few doses?

And then for PLACIDITY, obviously, you're looking again at different doses and also at older patients. And while you're saying data is coming in first quarter of 2022, again, the question of, sort of what happened in the dementia trial, are you planning on just waiting until you get all that data from all the different doses? Or do you expect that you might be able to stop the trial at some point early if you're seeing a dose that is a little bit more -- if you're seeing a group of patients that are more sensitive, like the over-65 population that are given half the dose? So I'm happy to rephrase those. But those are my 3 questions.

Thank you, Robyn. I have jotted them down. So I will try to address one by one and also invite my colleagues.

So your first question related to the NDA and providing any additional data. We just submitted the NDA. And we have an end-of-Phase-II meeting coming up with the FDA for the dementia. We don't have any inclination or any conversation that any additional data is needed once we had a pre-NDA meeting with the FDA. Whatever was needed and whatever was agreed, we have provided that as a part of our NDA submission.

You are right, there are patient -- schizophrenia and bipolar patient which are 65 and older and they were in our trial. And it's very interesting that whenever we have done any analysis -- subset analysis, we haven't seen much difference in those patients versus the younger schizophrenia and bipolar patients. So dementia patient, what we are seeing may be very specific in these patients as well as in these elderly patients.

Coming back to your question about the bar for the RELEASE trial, the most important questions that we will be -- or we are trying to address in our trial is what is the safety and tolerability. That's the first because for the first time, this drug is being dosed 2 times a day for 7 to 10 days, 12 hours apart. So it's almost a sub-chronic dosing. So we want to understand that. And as you said, we are testing 5 dose cohorts. And you will get the data from all dose cohorts.

Second, in terms of retention, like how long these patients will get retained on the drug is a very, very important efficacy benchmark because keeping them within the program is important. So retention is important and some of the other non-opioid-based drugs that have been approved. And there is only one with a similar mechanism. So retention is important. And second and the third piece will be what the SOWS and COWS reduction is and at what doses we start seeing efficacy.

So that's -- those are the kind of things, I would say, we are trying to achieve so that we can take this data to the FDA and have a conversation with them about the next steps and what the next trial will look like.

Regarding the PLACIDITY, you are right. We have designed the trial based on our understanding, based on proof-of-concept that is there that in delirium-related agitation, patients who were on haloperidol or refractory to haloperidol, what doses were required to treat them.

So we use that data. We use all our experience or multiple indications to come up with the doses. As we test the doses and we see safety, tolerability and efficacy, at that point, we will make a decision, do we need to go further in assessing the patients in delirium ICU patients for agitation.

So it will -- these are ascending dose. These are adaptive trials. We make decisions as we move along. So can the data come out early? It is possible. But currently, based on our -- all the work we have done in terms of the recruitment rate and what doses we need to do, our guidance is Q1 of 2022.

And just a quick follow-up. So what is clinically meaningful for COWS and SOWS? And just, I guess, retention is going to be something we're looking at. So what is that number? Because those are the endpoints I'm less familiar with. And then are there any -- with opioid-based patients, any other side effects that you're sort of looking for to not occur during the 7 days they're on the drug?

And also, when you're watching these patients, I guess, you're following them for 10 days, what is your expectation after the 7 days? That they go back on to an opioid-based drug? Or are you looking to see if they can stay off that drug? Is 7 days enough for these patients?

Sorry for all the questions. But it's coming up...

Those are very good questions. And I will invite Frank to provide a little perspective on what happens, what we are trying to achieve for these patients and what happens to them post their withdrawal symptom phase. Frank?

Right. So Robyn, I think from a side effect profile, I think what we really care about most is making sure that these patients stay in the study, okay? I'm sure that they're experiencing a lot of different things and some of them are getting relief from some and others not and so on. But the most important thing is that they stay in the study.

In terms of relating SOWS and COWS, it's basically just looking at it versus placebo. You're going to get -- you get a lot of variability in these studies because of the way these patients handle, okay, the withdrawal process. So that's also very important.

But at the end of the day, what we're trying to achieve here is to get these patients through this withdrawal process and get them onto treatment like naltrexone or things like that, where they can begin rehab. That, to me and to us, is probably the most important thing that we could gain with a 501 treatment.

And Robyn, coming back to your question in terms of the safety, we will -- are watching similar kind of parameters like we did in schizophrenia, bipolar and dementia, what the impacts are on the cardiovascular parameter and other things because we are doing 2 doses 12-hour apart for 7 to 10 days. So it's a more or less, say, a validation of a more sub-chronic range of dosing for opioid withdrawal symptoms.

Our next question is from the line of Ram Selvaraju with H.C. Wainwright.

So just a few kind of technical ones here. First is for Will. I was wondering if you could comment on what strategy you're going to take with regard to bringing on actual salespeople and if you're going to pursue this on a contingent offer basis. And if so, with what timing you anticipate putting that in place.

Second question is, generally speaking, on R&D directionality of spending. If you could provide us with some commentary on that, how you expect R&D to trend in 2021 relative to 2020. Because the profiles of the clinical trials that you're running in 2021 are a bit different from the profiles of the trials that were being run in 2020. But I just wanted to get a sense of whether that's going to directly translate into higher R&D spending in 2021 relative to 2020.

Also wanted to clarify the time line for results with the 40-microgram dose in dementia. And then just wanted to ask about your outlook right now as far as 701 is concerned. I know that previously, we had speculated on the possibility of 701 being spun out into a separate entity. But I wanted to get a sense of if you would contemplate that, when would you contemplate that? And what preponderance of clinical evidence with 701 would you need to see in order to be in a position to make a determination as to whether that is a likely strategy or not?

Ram, I can take on the 40-microgram dose question as well as 701 question. And then I will pass it back to Will.

Regarding the 40-microgram dose question, we will expect data sometime this year. And we will provide in due course timing when the data will be announced from the 40-microgram dose.

Regarding your next question, which is related to the 701. 701 has encouraging antitumor activity. It has 700-patient data from the previous work that was done by a previous company before we acquired. It has a single-agent activity in melanoma. We already had very good evidence that this drug can convert some of these cold tumors to hot or increase the response rates in the tumor which are refracted to KEYTRUDA or treatment line.

So key question we will be addressing will be what tumor types we would want to build a next development plan and where we're going to focus that will allow us to develop an approvability path for 701. At that point in time, once we have this data in our hand, we will make a decision on what is the best choice partnering, as you mentioned, like in some strategic options. And we will work with our Board. Whatever is best for our shareholders, we will explore that option.

So it's a work in progress. Stay tuned. And we will provide an update as we get to learn ourselves about the data and as we build our strategy.

One thing we have made clear is that we are, as a company, becoming a focused neuroscience company from AI all the way to drug discovery, development. And now we have integrated commercialization. So we have a very unique capability to be able to come up with the drug under one roof and be able to commercialize. So we want to continue to build on that capability.

So with that, I will pass it on to Will so he can address your question on the commercial side.

Sure. Thanks, Vimal. Hello, Ram. Our sales force-built strategy is in place. As we've talked about previously, we intend to build our own hospital-based sales force with 75 to 100 representatives. That number will be informed as we complete the ongoing project to design, size and structure that sales force. But 75 to 100 certainly is a reasonable assumption at this point.

We will track the NDA review over the course of the year, starting with the day 74 letter. Then obviously, we'll know not only if the filing has been accepted but we'll know our PDUFA. That will obviously continue to support the build if we're successful there.

We are building the commercial infrastructure today. We will have that ready for September, in the event we do receive a priority review. And then the lever that would need to be pulled then is just the hiring of the sales reps.

We'll monitor that. We'll have the mid-cycle review meeting, et cetera, just to track where we're at. But our goal is to hire that sales force to have it ready in the fourth quarter to be trained and then, under our base case assumption, to have them ready to launch in Q1. Or we'll just move that earlier if we get positive news on a priority review.

Okay. Just 2 quick clarificatory points there. Are you saying that you would meaningfully accelerate the sales force activities when you get to the mid-cycle review point or when you are in kind of draft labeling discussions with the FDA? I just wanted to clarify that.

Sure. No, thank you for the clarification. No, we'll just track. I mean our plan is to recruit and hire in the fourth quarter so that the sales organization can complete its training. It will be trained in everything except, obviously, the product label, which would come at approval. And then we'll complete the training then. And then we'll have our launch if the drug is approved.

So yes -- no, I was just referring to tracking progress. You don't know until you know at the very end. So I didn't want to represent it any other way that the mid-cycle will give us any guarantee. It's just we'll track questions from the FDA, et cetera.

And you anticipate that there's likely to be a rich talent pool to choose from as and when you're looking to make those hiring decisions? Is that a reasonable assumption?

That is my reasonable assumption. So yes.

Okay. And then just wanted to circle back on the R&D directionality of spending in 2021 relative to 2020, how we should be thinking about that.

Ram, that -- our major trial that we'll be initiating is in the dementia Phase III trial. Those have the bigger spend. But our trial, even if we look at our SERENITY trial 1 and 2, which was 2 Phase III trials with 750 patients, the R&D spend was quite limited to complete those trials.

So I would say that Phase III trial for dementia will be something of that order in terms of our spend. Per patient cost can be $15,000 to $20,000 per patient cost. So that basically we use in building our assumptions. And depending on where we end up with the opioid withdrawal after our data release comes and what the late-stage plan is, that will add it to our planning for 2021, '22.

So at this point in time, I think it's -- we are not providing any granular guidance. But our overall guidance is that our cash is in a good position to achieve all these milestones and -- in 2021 and get well into 2022.

Okay. And then just one minor technical question on the PLACIDITY trial. I was wondering if you could clarify. When you look at the secondary endpoint, which was classified as the earliest time at which a 2-point drop is seen in RASS after 501 administration, what would you consider to be a good outcome on that secondary endpoint?

And can you explain kind of the relationship between the secondary endpoint and the primary endpoint? In other words, is the secondary endpoint only of real importance if the primary endpoint wasn't met? How are you thinking about the relationship between the primary and the secondary?

So I will invite Reina for this.

Thank you for the question. So yes, the primary endpoint, according to all the experts, is very significant, which is a drop of RASS of 2 where the patient is not somnolent. And the secondary endpoint is how quick it goes.

So as you may understand, in an ICU, we want to make sure that we calm appropriately the patient as soon as possible. And because we saw excellent results with SERENITY 1 and 2 with a statistically significant calming period of 20 minutes, so that will be also very good. And we talked about this with all our experts.

So to your second point. If, of course, we would -- we intend to meet our primary endpoint. And that is why we have all the escalation of the doses. And then we're going to triangulate that also with how soon that can be done but also with the duration of the effect.

Yes. So basically, the way we should be thinking about this is it's very possible that you could see a 2-point drop in the RASS significantly earlier than 2 hours. And that's what the secondary endpoint is designed to capture, right?

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That is correct. That is correct. And this is this -- we have the precedence from SERENITY 1 and 2 and even in TRANQUILITY. That's correct.

Our next question is from the line of Eddie Hickman with Guggenheim Securities.

I'm on for Yatin this morning. So given the recent setback by Acadia, there's some increasing worry from investors on the lack of clarity that companies are getting from the FDA on the regulatory front. So could you just give us a sense of what your baseline proposition will be for the dementia study and like the size and scope and how many studies you needed that will give us comfort if you see success down the line?

And then on the schizophrenia, bipolar, can you give us any update on sort of pricing now that you filed with the -- your NDA?

Thanks, Eddie, for this question. This is Vimal. I will address your first question about the Acadia and the FDA.

So our indication, dementia-related agitation is acute. And it has a -- like in our 2-hour endpoint, it's a very different situation. And also, if you look at our data from our TRANQUILITY, effect size is very large. Even with smaller number of patients, we are seeing efficacy, dose-dependent responses, safety and tolerability.

So I think our interaction with the FDA, based on such a strong TRANQUILITY data that we have in our hand and efficacy on multiple endpoints, we will design or we'll propose a trial which could be of the order of something like SERENITY. But we will not need anything more than that, we believe, at least if it's a single trial. And we will have a conversation with the FDA if 1 Phase III trial is sufficient or 2 trials are needed or 1 trial is sufficient and additional safety database needs to be expanded.

All those questions will be addressed in our end-of-Phase-II meeting. That's the purpose of the end-of-Phase-II meeting in Q2. Once we get that agreement with the FDA on the number of trials, trial design, doses as well as on the endpoint, then we will be in a position to initiate and develop a plan for our Phase III trial and, also thinking through this, what would be required to get the sNDA in the dementia patient.

As you know, in last 2 decades, almost, there has not been a new drug that have come -- been approved or helping these patients. So unmet need is very high. We've been very encouraged with all our interaction with the FDA. As you can imagine, we have multiple interactions around these 5 indications.

So we are very pleased so far with all our interactions. And then we are very confident with the strong data we have for acute treatment of agitation from the TRANQUILITY trial, we will have productive conversations with the FDA to develop the next stage of the plan.

Your second question, Will, do you want to address that?

Sure. So Eddie, your question was on pricing for the initial launch indication?

Yes.

So obviously, pricing work will be ongoing over the course of the year. We wouldn't announce a price until we get an approval because our process involves gaining insights from payers and, in this case, hospital, pharmacists and P&T committee members.

We've begun that process. I'll say that the unmet need is certainly recognized by those individuals. And the profile of 501 is well received. And so we'll continue to gain insights from the market. Our payer MSL team will be deployed shortly. And so they'll begin to have conversations and get more insight into the reaction and the potential opportunity for 501 initially in the hospital setting.

But the value proposition, we believe, will be a strong one given the clinical data. And also, we've talked about this in other context. But even the hospital pharmacists, et cetera, recognize the opportunities that may exist if patients can be more efficiently treated in the emergency department setting. And so that will be something we'll be exploring as the process continues to put together a solid value proposition.

Do you think it will be priced as a single film? Or is there a reason to believe that in that setting, can we be priced as like needing multiple doses over the course of several hours?

So our current thinking is it would be priced on a per film basis is the current thinking. So that if a patient needed a single film, it could be obviously used in that context. If they needed more than 1 film, which is not unlikely, it could happen, each film would be billed separately.

Okay. And then just one quickly on the PTSD. Can you give us any color on sort of size, dose and timing of that study?

Let's say, [IST] like done, like Yale is pursuing that. So we don't like to comment on those things. But these trials are designed efficiently to test that whether we can explore 501 potential in a home care setting.

Our next question is from the line of Colin Bristow with UBS.

This is Rich calling in for Colin. A couple of questions from us. So I want to get some more clarity regarding the 40-mcg dose at the -- for dementia, especially how that relates to at-home setting. Would that be included in the pivotal Phase III trial only if you're able to get into the at-home setting now? Or would that be sort of a separate study in the future?

And then another question from us is that regarding the 65-year, older patients for schizophrenia and bipolar disorder. What is the expected label scenario for that? Would there be a warning regarding that population? Or would there be any usage difference in terms of the dose level or the frequency? Yes. So I just want to get some idea on that.

So we have just submitted the NDA. We haven't had any conversation with the FDA. But the data that we have in hand and subgroup analysis we have done, we don't expect that will be -- or label will be any different for the younger patient or the elderly patient in schizophrenia and bipolar.

Coming back to your question about the 40-microgram dose, it's an optionality that is being built once we have data in our hand. Currently, our focus -- laser focus is on initiating a Phase III trial in the ALF setting, where we had the TRANQUILITY data and we had very positive data with multiple doses now.

So we're going to stay focused on that. And community setting is almost considered as a home care setting. And we may not have any restriction on the label for using in the home care setting.

What we are preparing is, if it's a supervised setting, ALF or nursing home and the need to prove anything else in a home care setting and we need to expand the label at that point in time, an hour after end-of-Phase-II meeting, understanding what FDA requirements are, whether 1 trial or 2 trials. Then we will be able to make choices and decisions. What is the smart Phase III trial design that we can deploy, having the optionality that we will have in our hand, which is very clear, 30 and 60; and then what we learned from the 40? And then we will be in a position to expand on that plan once we had the meeting with the FDA and we are initiating our Phase III trial.

Colin (sic) [Rich], did it answer your question?

Yes. So just kind of another follow-up on that. So your 40 mcg data may come after your initiation of the Phase III. I just want to see like how that timing is going to influence what those are you going to be including in the Phase III. Are you going to be doing 3 doses? Or are you going to do 2 and maybe add the 40 later on?

Current thinking is that 2 doses are good in the ALF setting with 30 and 60. Both are effective. They are safe and tolerable. There is sufficient difference in their PK profile. So there's no need to add any third dose.

40, additional insights will help us determine if, in future, we need to design any trial, which could be involving a lower dose and a mid-dose. Then we could use that, particularly for a home care setting.

So that is just the optionality. And it also builds up to what already data we have in our hand in terms of the number of patients who present to the FDA. We don't have a specific plan for 3 doses. And we don't see any need for that.

Our next question is from the line of Samir Devani with Rx Securities.

Congrats on completion of the filing. I've just got a couple, actually. One is really a point of interest more than anything else. But I was wondering why you chose 40 micrograms as the extra cohort dose as opposed to the midpoint, which would have been 45 micrograms.

And then the second question is just on the RELEASE trial. Assuming we see positive data, are you assuming that we will need a Phase IIb? Or would it go to a Phase III trial?

So let me address the question, RELEASE trial. Once we have the data, then we'll make a decision and a choice that we can go to the Phase III and what do we need to convince the FDA. If we see any gap, then we may do some bridging study. But at this point in time, data from the 5 cohort should be able to inform as what our Phase III program should look like and what do we need to present to the FDA unless FDA asks for some information.

In terms of the question about the 40, I think we know 30 and 60 are effective and they are like efficacious. 45 would have been effective also. And 40 is effective also based on our PK/PD modeling and prediction where we will be with the package costs and all that.

So we chose 40 because it gives us more flexibility, as I have been saying, that in a home care setting with lower doses. And that's exactly what the thinking, that it is separated enough for 60 and it is -- has like a lower dose efficacy. So it will provide more flexibility as we expand our market in dementia. There's no other reason. 40 or 45, both would be effective. So this was a choice made after doing very detailed PK/PD modeling.

Our next question is from the line of Sumant Kulkarni with Canaccord.

So as 501 gets closer and closer to the market, and as you think about expanding your franchise and agitation especially as you go into some chronic settings, how are you thinking about the potential for tachyphylaxis and/or tolerance of Dex? While we know that IV Dex is a very different dosing ballgame versus something worked on. But are you aware of any limiting maximum number of doses of the Dex spin per month or per year to treat episodes of agitation on an acute basis?

So we are not aware of any limitation but we are aware that we need to know that. And if you look at most of the -- some of the alpha-2 agonists that have been used, they've been used chronically.

So we don't expect that, that will be an issue. But it's a good question to keep an eye on it. If we are going for chronic agitation with 501, then we will need to demonstrate that.

Thank you. At this time, we've reached the end of the question-and-answer session. I will now turn the call back over to Vimal Mehta for closing remarks.

Before we conclude, I want to thank everybody for joining us today. 2020 was a great year for BioXcel as we continue to execute on milestones across our program. This momentum positions us for an exciting year ahead as we plan to expand the commercial potential of BXCL501 and grow our pipeline, employing our proprietary neuroscience AI platform to create long-term value for our shareholders.

Please reach out to us if you have any additional questions.

Thank you. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.