BioXcel Therapeutics Inc (BTAI) 2020 Q3 法說會逐字稿

Good morning, and welcome to the BioXcel Therapeutics Third Quarter 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 public filings with the U.S. Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarter -- excuse me, for the quarterly period ended September 30, 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's now my pleasure to turn the call over to Vimal Mehta, CEO.

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 third quarter 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; Vince O'Neill, Chief Medical Officer; Reina Benabou, Chief Development Officer; Frank Yocca, Chief Scientific Officer; and Rob Risinger, Senior Vice President of Clinical Development.

As the COVID-19 pandemic continues to create uncertainty in the world, I am very proud of our team for their commitment, collaboration and drive as we make significant progress on the clinical, commercial and corporate fronts.

During this challenging time, most importantly, we remain dedicated to serving and protecting the health of our community.

I will begin today's call by discussing our lead clinical candidate, BXCL501.

As a reminder, 501 is a proprietary, orally dissolving, sublingual, thin film of dexmedetomidine for the treatment of agitation across numerous neuropsychiatric disorders and opioid withdrawal symptoms.

Earlier this year, we announced positive top line data from our pivotal SERENITY trials for the acute treatment of agitation in patients with schizophrenia and bipolar 1 and 2 disorders, which demonstrated 501's ability to quickly and safely calm patients without excessive sedation.

Last month, we had our pre-NDA meeting with the FDA.

Based on the outcome of our discussion, we have initiated rolling submission and are on track to submit a complete application to the FDA in the first quarter of 2021.

We continue to expand our leadership team and our core medical and commercial teams in order to build the corporate framework needed for the potential commercial launch of BXCL501 upon approval by the FDA.

Turning to our clinical development program.

We recently completed a crossover bioequivalence study in healthy volunteers that assess the bioequivalence of BXCL501 administered sublingually or buccally, meaning between the lower lip and gum.

This data from this trial supported the bioequivalence of 501 following sublingual or buccal delivery of the thin film and will be included in our NDA submission.

The ability to administer 501 either sublingually or buccally further shows the ease of our new product.

An FDA approval of 501 for the acute treatment of agitation in patients with schizophrenia and bipolar disorders would represent a giant step forward in our long-term vision of establishing a leading neuroscience franchise.

To this end, we are well on our way, exploring this candidate in multiple follow-on indications.

Moving to the TRANQUILITY study, our Phase Ib/II trial for the acute treatment of agitation in patients suffering from dementia, with the purpose of the study to identify the most effective and tolerable doses in this elderly patient population.

We will review the findings from this trial and either report top line results later this quarter or if needed, proceed to an additional dose cohort.

As you know, there are no FDA-approved treatment of agitation associated with dementia, and current off-label treatment have black box warning.

As a reminder, we have received fast track designation for this indication, which will help facilitate the development of BXCL501 in dementia with the FDA.

Turning to the RELEASE study, our Phase Ib/II trial of BXCL501 for the treatment of opioid withdrawal symptoms.

This study is progressing well and we remain on track to report top line results in the first quarter of 2021.

With opioid abuse cases on the rise, we believe BXCL501 has the potential ability to mitigate the debilitating withdrawal symptoms by reducing the individual's hyperarousal, resulting in an easier recovery period and decreasing the rate of relapse.

In addition, we recently received FDA clearance for our IND application for the acute treatment of agitation associated with delirium, a potential fifth indication for this candidate.

Delirium can be caused by multiple underlying diseases, including COVID-19, and presents itself across multiple medical settings, including ICUs, medical and surgical ward and emergency rooms.

We are preparing to initiate a Phase II trial in ICU patients with agitation associated with delirium, including COVID-19 patients, in the coming months.

As you can see, we remain committed to exploring the full potential of BXCL501 as a treatment for acute episodes of agitation in schizophrenia and bipolar disorders and dementia.

We are advancing our programs in sub-chronic treatment for opioid withdrawal symptom and agitation associated with delirium.

And we plan to evaluate 501 as a chronic treatment for managing agitation in dementia patients.

We truly believe 501 can be effective therapy for the millions of individuals suffering from agitation, many of whom do not have any viable treatment options.

Now I would like to turn the conversation to our immuno-oncology clinical candidate, BXCL701, an orally available, systemic, innate immunity activator.

This week we, along with our collaborator, MD Anderson, presented 2 posters on safety and initial efficacy from both ongoing combination trials of BXCL701 and KEYTRUDA at the Society of Immunotherapy of Cancer Annual Meeting or SITC.

In the ongoing Phase Ib/II trial in advanced prostate cancer and the MD Anderson-led Phase II basket trial, we observed encouraging antitumor activity in both cold and hot tumors, supporting BXCL701's mechanism of action and ability to stimulate both the innate and acquired immune system and augment responses in combination with checkpoint inhibitors.

All in all, we believe BXCL701 is one of the most advanced cancer treatments in development designed to enhance innate immunity.

We look forward to continuing to advance 701 with plans to provide additional efficacy data from both trials.

As you can see, we have continued to execute on all fronts.

To support these increased activities, we raised gross proceeds of approximately $200 million in a public offering in July, providing BioXcel a cash runway well into 2022 to achieve our upcoming clinical, regulatory, operational and commercial milestones.

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

Richard?

Thanks, Vimal.

Once again, thank you all for joining us this morning.

BTI reported a net loss of $24.8 million for the third quarter 2020 compared to a net loss of $9 million for the same period in 2019.

The third quarter of 2020 results include approximately $5.3 million in noncash stock-based compensation compared to approximately $800,000 for the same period in 2019.

Research and development expenses were $16.3 million for the third quarter of 2020 compared to $7.1 million for the same period in 2019.

The increase was generally attributable to increased clinical trial costs and professional research costs related to the acceleration of the company's research and development activities primarily related to its SERENITY 1 and 2 trials as well as increased costs associated with its TRANQUILITY and RELEASE trials.

These amounts were partially offset by reduced costs related to the BXCL701 pancreatic cancer trial.

Personnel costs also increased primarily related to the growth of BTI's clinical team as the company continues to expand its clinical programs and in preparation of the potential commercial launch of BXCL501 in the U.S. Noncash stock-based compensation also increased as a result of the additional personnel combined with increased grant date fair values arising from higher market prices of the company's common stock.

General and administrative expenses were $8.5 million for the third quarter of 2020 compared to $2 million for the same period in 2019.

The increase was primarily due to increased noncash stock-based compensation and personnel costs related to the growth of BTI's operations combined with increased grant date fair values arising from higher market prices of the company's common stock.

Professional fees also increased, which is primarily attributable to increased corporate legal and investor relations fees combined with increased insurance premiums.

Total operating expenses for the third quarter of 2020 were approximately $24.8 million compared to total operating expenses of approximately $9.1 million for the same period in 2019.

As of September 30, 2020, cash and cash equivalents totaled approximately $233.4 million.

That concludes the financial review of our third quarter.

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.

Just had a couple actually on 501, maybe for Vimal or for Will.

I just wanted to maybe get an update about how the commercial preparations are going just for the launch and what efforts do you guys need to make at this point to educate physicians on the profile and maybe talk through the generic -- the availability of generic options and maybe the -- what kind of backdrop that provides?

And then just as it relates to the regulatory, just wanted to get, I mean, high level, whatever color you can give us on the pre-NDA meeting and maybe any points or any updates that you think you'd have to make with respect to the overall -- the totality of the development program?

Thanks, Geoff.

I will pass it on to Will to cover the commercial question, and then we'll take on the pre-NDA.

Thanks, Vimal.

And Geoff thanks for the question.

So I'm very pleased with the progress that we are making relative to preparation for commercial launch.

As we've talked about in previous calls, we have started adding core leadership to the commercial organization, including Head of Marketing.

We recently brought on Head of Commercial Operations, and I'm narrowing in on a Head of Market Access.

And we're building out the teams.

And so we're well on our way, not only to staffing, but we've embarked on a bolus of market research to help inform our launch strategy, et cetera, so that we'll be ready when the time comes.

In addition, collaborating with Reina and the medical affairs team, we've moved to add medical -- field medical leadership to the company including a head of our MSL team and our payer MSL team, and they will be building out their teams.

And as we've talked about previously, we intend to deploy them in the first quarter of 2021 so that they can begin interacting with key opinion leaders and other key clinicians and health care providers to begin the process of educating on agitation and being able to answer questions, et cetera relative to the 501 clinical data to date.

So we are well on our way, and things are progressing very nicely.

Specific to your question on the marketplace and generic options.

So as I mentioned, we've done a good bit of market research to date.

We have more to go.

But the feedback is not inconsistent with what we thought.

The clinical profile of the drug actually is very well received by both clinicians and pharmacists.

Yes, they acknowledge that their current treatment of standard of care is generics, but they also point out the limitations, which we've highlighted many times with those treatments, such as their tolerability and safety concerns, et cetera and of course, the nature of injections, which is really not counter to the relationship and the treatment paradigm that they would like to use.

So they have another treatment option.

So the oral thin film, as you know, should facilitate the opportunity to engage these clinicians to consider 501 as a viable treatment option for patients with mild to moderate agitation.

And there are a significant number of those as we talked about as well.

So I'll turn it over to Vimal for the regulatory question.

So regarding our pre-NDA meeting, like we agreed to a rolling submission and we have already submitted some of the first package.

And we are on track to submit complete application in 2021.

The -- primarily some of the things that need to be put together is CMC package, which is related to the 12-month stability of the film as well as some of the clinical analysis and subgroup analysis that we'll be presenting.

So all in all, overall we feel that we are in a good position to submit our NDA and is on track for Q1 2021.

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

Could you maybe walk us through for the dementia study what you might be looking for from the 90 dose?

And then what you might expect to see in higher doses you're testing if you end up going there?

Yes.

Thank you for the question.

So the primary outcome of the TRANQUILITY study is really looking at the safety and tolerability profile.

This is what we have been looking throughout the clinical trial.

So at the end, we're going to review the study findings and either report top line results this quarter or if necessary, we will proceed to another dose cohort, giving the results on the safety and the tolerability.

And Graig, I will just add to what Reina said that we will look at also the PK data, exposure data and any data we can glean about the efficacy from the blinded data and triangulate all that information to make our decision on the 90-microgram dose or if needed, go to another dose cohort.

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

Congrats on the progress.

So I have 2 questions.

First, congrats on more IP.

I would like you to maybe outline for us if you can, I don't know if you can, what additional IP we should expect over the next 12 to 18 months that might really solidify your position to protect against any generics?

And then second, for delirium, it's a newer market for all of us.

Can you walk us through how many films do you think patients might take?

How diverse is this market?

In other words, like how variable are patients, and how many -- how much film might each patient take?

Help us understand how to model that market.

Thanks, Robyn.

We'll handle this question in 2 parts.

I will take the IP question and Will will take the second question.

Regarding the IP, we are very excited that we got our patent issued in October.

That's our first patent on BXCL501 related to the composition of the film and its use in agitation.

So that's our first strategy, and that patent will provide us market exclusivity until 2039.

In addition, the overarching strategy of the company has been to look at the exposure levels that we are experiencing in each trial whether it's schizophrenia-bipolar patients or dementia patients or opioid and coming up with the different dose ranges at which these patients will be treated.

As you can understand that in acute agitation scenario versus sub-chronic, the dose requirements are different.

And also in a chronic situation, dose requirements will be different.

So we are presenting those exposure levels also.

So that's our second part of the strategy besides our film patent.

In addition, we continue -- we have already filed patents related to method of use for dexmedetomidine, particularly for treatment of agitation.

So there is a broad IP strategy around to maintain the market exclusivity for our different indication as well as for the whole franchise.

And we have almost dozen patents -- family of patents that are in progress and being prosecuted for BXCL501.

With that, I will pass it on to Will and Reina to provide color on the delirium, both in the medical setting as well as the commercial setting.

Sure.

Thanks, Vimal.

And Robyn, thanks for the question.

So as we've discussed, in our view, the commercial potential for 501 as a treatment for agitation and delirium is significant, especially when you consider that there are no approved treatment options for agitation associated with this condition.

According to the American Delirium Society, there are more than 7 million hospitalized patients every year that suffer from delirium, and the majority of them actually do experience agitation as part of their episode.

We're focused on multiple settings in the hospitals.

We talked about the ICU, which is where Reina's Phase II study will be conducted, but also medical and surgical wards, where we believe the opportunity is equally, if not a little more, significant for the product and, of course, in emergency departments.

Relative to the number of films, the way I think about it and the way I think we'll learn more about it through the trial is that an average episode of delirium can last 3 to 5 days.

And in any given day, there could be multiple films used.

The trial is designed to test that.

So I can't give you an exact number, but it could be certainly greater than 1 or 2, which we would expect to be the case in the emergency department, to maybe 4 -- 3 to 4 in the medical and surgical wards and ICU settings, but that will be informed by the trial.

Reina?

Yes.

Thank you, Will.

So absolutely right.

We are putting together this Phase II trial, which is a multicenter, randomized, adaptive sequentially ascending dose-finding design.

And we selected our dose -- our doses based on the robust data from SERENITY but also from a wealth of literature data on dexmedetomidine in agitated delirium culminating with the Carrasco paper that really showed the tremendous efficacy even in HALDOL-resistant patients.

So that, we're going to evaluate those doses, the 120, 180, 240 and 300 milligrams (sic) [micrograms] and we're going to evaluate also with the PK data and with also some preliminary efficacy data associated with the RASS scale.

Well, then our goal is really to find the best efficacious and tolerable dose to move to then another Phase II trials and discuss in very close alignment with the FDA how we're going to do that, and this is when we're going to decide where -- which our doses are going to be.

And just to follow up and be clear, so at what point -- in other trials you've not been able to redose, right, except for maybe opioid withdrawal where you're dosing more frequently.

In this study, would you be able to give more than one film over a certain period of time?

Or in the Phase II, would you be able to give more than one film over a certain period of time?

Because that would be different, right, than other agitation trials outside of opioid withdrawal.

Exactly, Robyn.

So as Will said, the average duration of delirium is between 3 to 5 days.

So that is why in our Phase II trial, we're trying to evaluate the optimal starting dose.

So the patient would likely have a good reduction in the RASS scale with the first dose, and then he will take other doses in a period of 2 to 4 hours.

And then that will lead the patient into a calming zone during that period of 24 hours, 3 days or even 5 days.

This is what we're shooting for.

So Robyn, I can add.

In terms of the frequency of dosing, that will be determined through the trial.

But coming back to your question, can we do more than one film in a day?

Yes, we can dose multiple films in a day.

That's how the trial is designed.

Great.

And then last question, sorry for so many.

So when you're thinking about dementia for the next studies after your Phase I, is that something you would also explore?

Because dementia, obviously, people can have episodic experiences that are lasting more than 1 day.

Would you incorporate the ability for more than one dose because that would, again, be different than what you've done in the past for pivotal -- for the next step for dementia is the question?

So TRANQUILITY study is a foundational study.

And once we have the unblinding and we have the data in front of us, that will inform us what dosing can be used.

Can we -- what you are referring is can we use more than one dose, repeat dosing?

And we'll find out through this study.

In addition, we'll get a very good understanding, and we will get informed how we can use it in an episodic setting when somebody has the agitation and they need treatment immediately.

How it can be used in a chronic setting, and we have stated that we plan to move 501 into the chronic setting.

So can it be used daily or can it be used alternate days?

All of that will be informed by the results we'll get from the TRANQUILITY study.

In addition, we are developing Apple Watch to catch the agitation in very early stages and what doses will be required for that.

So I think we are getting very close on TRANQUILITY.

And once TRANQUILITY data card has been rolled out, that will inform on all of those what decisions we can make, and then we will be able to discuss that with The Street more broadly.

Our next question comes from the line of Yatin Suneja with Guggenheim Partners.

I have a quick one on TRANQUILITY and then on 701.

So when you said you could go for additional dose, could you actually go down on the dose?

And then if you go down on the dose, will you be able to expand the 90-microgram arm or not?

It's not clear to us whether the expansion will happen if you downtitrate versus an uptitration, which you did when the 60-microgram dose was expanded.

And then I'll ask you about the 701 after this.

So thanks for the question, Yatin.

I think the data from 90 micrograms will inform what the next dose cohort will -- needs to be, whether we go up in terms of the titration or we go down.

The PK data, exposure data will inform us that what exposure levels we are getting.

So it's really going to be a triangulation of exposure data, tolerability data and what dose and what scale we need to take to the FDA to convince them to go to the next stage of the development, that's our goal.

So at this point in time, both scenarios are very much possible, whether to go up or down on the dose cohort.

Okay.

And then on 701, we saw the data at SITC.

Can you maybe talk about how the expansion phase of those trials are going to work out?

It seems like there were PR in different type -- different tumor types, especially in the MD Anderson study.

So as you expand, are you going to be enriching for those tumor type where you saw PR?

And then who makes that decision given that this is, I think, an MD Anderson-conducted study?

And then on the safety side, like what sort of modification you are implementing to -- as it relates to the hypertension?

Vince, you want to take that question?

Sure.

Thanks, Vimal.

Yes.

I'll take actually the prostate study first.

That's the easiest one to answer.

So obviously there are 2 cohorts there.

And cohort 1 is adenocarcinoma castrate-resistant disease and cohort 2 is an EPC.

So those are purer or pure, if you will, patient subsegments or subgroups.

In the MD Anderson study, you're absolutely right, this is a basket trial.

I think going forward, having seen activity, as you just said and if you look at the waterfall plot that does quite nicely illustrate that point, what would typically happen in a study like this is that, yes, where the activity has been seen, the investigator would tend to enrich -- it's not a hard and fast rule, but would tend to enrich for those types of patients going forward.

And we anticipate that's what will happen here.

You're absolutely right.

This is an IST.

It's MD Anderson study.

They hold the IND.

They are the decision-makers on the trial.

But I would anticipate that happening going forward.

You're absolutely right.

I agree.

And yes, on your second point, sorry, on the safety and risk mitigation and so on.

So again, I would make the point that based on the data we presented, we are seeing on-target toxicity that was expected.

That's being seen with other agents that also activate the innate immune system.

So some of the cytokines have seen similar safety profiles, the bispecifics are seeing very similar safety profiles.

And again, they have introduced safety mitigation plans that essentially increase or better the tolerability.

And we are doing something very, very similar currently.

The actual detail, and it really shouldn't be any mystery, comes down to a closer follow-up, closer monitoring of patients within the first week because really these events are all occurring within the first week.

The detail, the granularity, we will present that at ASCO in a few months' time.

So hopefully that answers your question.

So Yatin let me just add a little bit more color to what Vince said at overarching.

We -- this is one of the most advanced innate immunity activator, which is systemic.

And we are trying to find the efficacy signal in both cold and hot tumors.

So both the studies that are ongoing gives us what the agent's activity is, and it will allow us to develop our more advanced development plans and have probability path.

All of that work will be done once we have these 2 trials completed.

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

I have 3 questions, actually.

The first one is on TRANQUILITY.

If you do decide to go to another cohort, how can you help frame what that means for investors?

Because the only real conclusion that might be able to be drawn is that the prior highest dose is safe enough for you to be comfortable to proceed.

So any thoughts on how the company might be able to take an interim look at efficacy in the fourth quarter as you move on to the next dose?

That's the first question.

Rob, do you want to take that question?

Sure.

Thanks, Sumant.

You're pretty much right.

I mean as we as we escalate the dose, we are dose escalating essentially based on safety.

And so when a dose is safe and well tolerated, we escalate to the next higher planned dose level.

And on the reverse, if we see that like peak exposure levels and we think that we need to go down on the dose, we'll consider that as well.

So -- but I think after 90-microgram dose, conclusion is done.

That's the best way to put it.

And then these decisions will be made, and then we can either announce the top line data or inform that we are moving to another dose cohort.

Got it.

And then I'll ask the next 2 questions upfront.

So if you move to chronic treatment of agitation in dementia, could you comment on the potential for any cognitive upsides or downsides of dex in the geriatric patient population?

And on 701, there were some very intriguing data at SITC recently.

Now that the triple combo is not proceeding, what are your priorities for your next indication other than prostate cancer?

I can try that.

So we will take -- divide the question into 2 and Frank and Rob will answer the first question.

And then Vince will take on the 701 question.

So Sumant, with regard to your question on chronic, usage and cognition, I would hazard a guess to say that I'm not sure that the drug would enhance cognition, but I don't think it would deter it either.

So I think it would have a neutral effect as opposed to some of the other drugs that are being used.

And of course, the use of benzodiazepines in this population, this is something where you do get a negative cognitive effect.

So that's what I would be thinking upfront.

Vince, do you want to take the second question?

Sure.

So I think the question was, where do we go after this, I'm boiling it down.

So we certainly had some discussions with our advisers and our collaborators.

We have some initial thoughts on that.

We haven't made any public statements yet.

I think you're probably -- you will be on the right track if you view it in the following way.

We clearly -- and this would be a standard approach, of course, we would be thinking of pursuing indications in the tumor types where we're seeing activity.

I think we would need a bit more information on that, a bit more data.

But it is worth noting that uveal melanoma is an extremely difficult cancer to treat, pleomorphic sarcoma similarly.

But both orphans or ultra-orphans, with both high-end medical needs.

And from a development point of view, there's probably quite a straightforward approach there.

So again, this is under discussion just now.

I think we'll make the definitive statement subsequently, but that would be the initial thinking.

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

We'll move on to our next question, which is coming from the line of Samir Devani with Rx Securities.

I've just got a couple.

The first one, just following your pre-NDA meeting, wondering if you just can comment on your confidence potentially in getting priority review.

And the second question is just on 701, some very encouraging data there, I just wondered if you could elaborate on the responses in the prostate cancer study and the responses you've seen.

Can you comment on whether they are in the NEPC group or the adenocarcinoma group?

So I will take the first question, Samir.

Thank you for asking the question.

In the pre-NDA, like once we submit full application, after 74 days we will learn from the FDA whether priority review has been accepted.

If that is the case, then we could get an approval of the drug 4 months -- approximately 4 months earlier than the standard review.

And our medical and commercial teams both are preparing for both scenarios.

If it turns out to be that we'll get the approval early, we'll be ready to do the commercial launch.

For your question related to the 701, I will pass it on to Vince.

Vince?

Sure.

Thanks, Vimal.

So on the prostate side, just to be clear, what we're presenting, or we have presented I should say, at SITC is really a complete and final Phase Ib safety experience with associated efficacy or activity.

So the efficacy portion is well underway, and we will give an update, as we said, towards end of the year.

To answer your question directly, of the 12 patients, actually 13 but 12 were evaluable, detailed in the poster, about half of those were adenocarcinoma, CRPC.

The other half were neuroendocrine disease.

And the very deep, i.e., 85% reduction in PSA with some minor shrinkage in CT scan, that was in an adeno patient.

So that's the direct answer to your question.

It appears we have no additional questions at this time.

So I'd like to pass the floor back to management for closing comments.

Before we conclude, I want to thank everybody for joining us today.

As you have heard throughout the call, BioXcel has made significant progress advancing both BXCL501 and BXCL701 this quarter.

And we look forward to providing results from the ongoing trials as well as updates on our other upcoming key milestones over the next several months.

Have a great day, and please reach out to us if you have any additional questions.

Thank you.

Ladies and gentlemen, this does conclude today's teleconference and webcast.

Once again, we thank you for your participation, and you may disconnect your lines at this time.