BioXcel Therapeutics Inc (BTAI) 2020 Q1 法說會逐字稿

Good morning, and welcome to BioXcel Therapeutics First Quarter Earnings Conference Call and Audio Webcast. Before we start, I would like to inform you that this conference is being recorded. (Operator Instructions).

Just to remind everyone, certain matters discussed in today's conference call 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 quarterly period ended March 31, 2020, which can be found on its website, www.bioxceltherapeutics.com or on www.sec.gov.

I would now like to turn the conference over to Vimal Mehta, Chief Executive Officer of BioXcel Therapeutics. 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 2020. We appreciate everyone's time and attention. Joining me for the call today are Richard Steinhart, Chief Financial Officer; Frank Yocca, Chief Scientific Officer; and Vince O'Neill, Chief Medical Officer.

Before we begin, I want to take some time to address these unprecedented times. The COVID-19 pandemic, a crisis that has created uncertainty around the world has truly affected each and every one of us. I personally want to thank all health care workers who are tirelessly fighting on the front line caring for patients and preventing the

further spread of the virus. Their hard work deserves our everlasting gratitude.

Following the guidance from the U.S. Centers for Disease Control and Prevention and the State of Connecticut, we have made vital adjustments across our company aimed at protecting our employees' health and safety, while maintaining key activities needed to advance the development of our clinical programs.

The BioXcel team remains motivated and on track to reach our 2020 milestones. In order to monitor the potential impact of this pandemic on our ongoing trials, we have been in close contact with our clinical sites. To date, we have not experienced any significant delays in our ongoing clinical trials, and have made great strides with our clinical programs.

We will continue to closely monitor the COVID-19 situation and provide any updates as needed.

Shifting our discussion back to our corporate highlights, I would like to first discuss our lead neuroscience clinical program, BXCL501. As a reminder, BXCL501 is our proprietary thin film formulation of dexmedetomidine or Dex for the acute treatment -- for the treatment of acute agitation. We have designed this candidate to be easily administered and have a rapid onset of actions in order to produce a calming effect without excessive sedation.

We have made key advances this quarter in our pivotal trials, SERENITY I and II, which are Phase III studies of BXCL501 for the acute treatment of agitation in patients with schizophrenia and bipolar disorder.

Back in March, we announced that more than 1/3 of the patients in both trials had been enrolled and treated. Enrollment continues to be progressing as planned, and we have not observed a change in enrollment rate due to the COVID-19 pandemic. We are on track to report top line data from the SERENITY program in mid-2020, and will communicate updates as we get closer to our clinical data readout.

It is important to note that all is schizophrenia and bipolar patients enrolled have successfully self-administered the BXCL501 treatment guided by a health care provider. With our pivotal program readouts only a few months away, we are hopeful that we will be able to submit our first NDA for BXCL501 during the first half of 2021, bringing a noninvasive fast-acting treatment with-in millions of patients who suffer from acute agitation associated with neuropsychiatric disorders.

Our clinical progress continued with the initiation of TRANQUILITY. This study, a Phase IB/II trial for the treatment of acute agitation in geriatric dementia highlight the potential versatility of neuro -- of our neuroscience program in treating disorders beyond neuropsychiatric conditions. Since the TRANQUILITY trial has an adaptive design, we are currently reviewing safety and tolerability data in order to choose the next test in dose. This trial's enrollment is on track, and top line data is expected in mid-2020.

With off-label drugs having a black box warning for the elderly and no FDA-approved therapies to treat agitation in geriatric dementia, there is a desperate need for a safe and effective treatment for patients that struggle with this psychological behavior. We designed BXCL501 to be a fast-acting easy to administer therapy to try to fill this unmet need and provide a treatment, if approved for caregivers, that have travel managing dementia-related agitation.

In parallel, we continue to investigate the use of wearable digital device technologies, such as the Apple Watch, to hopefully enhance the prevention and treatment of dementia-related agitation. Considering this patient population is among the highest risk category for severe illness and death associated with COVID-19, we have taken a cautionary measure to preserve the safety and health of our elderly patients. For the TRANQUILITY trial, all BXCL501 doses have already been manufactured and have been provided to the long-term care facility running the TRANQUILITY study, reducing the risk of exposing the patients.

Additionally, we are continuing our investigation of BXCL501's calming capabilities through the initiation of a Phase II study being performed by researchers at Yale University. The aim of this study is to assess biomarkers associated with agitation, such as skin conductors response, heart rate variability and blood pressure in patients with schizophrenia and their response to treatment with BXCL501. Managing agitation is a challenge for both physicians and caregivers than being able to use these biomarkers as an initial signal prior to the onset of visible symptoms could be very beneficial. These bodily signals could provide sufficient time for caregivers to deliver BXCL501 to patients before an agitation episode becomes dangerous. Even though this study is being performed only on schizophrenia patients, we believe this trial will help open the door to investigate the potential use of BXCL501 in additional indications that exhibit similar physiological signals of hyperarousal, expanding the potential market of this candidate into chronic agitation.

To wrap up this quarter's neuroscience highlights, we received FDA clearance of our IND application for BXCL501 for the treatment of opioid withdrawal symptoms, a potential fourth indication for this candidate. As the #1 cause of death in the U.S. for individuals under the age of 50 years old, accidental drug overdose is rampant in this country, with a majority of fatalities opioid-related.

Furthermore, opioid withdrawal can be very debilitating and uncomfortable, and many addicts continue to take these drugs or relapse to avoid feeling these disturbing symptoms.

There is a desperate need for new efficacious treatment options to help aid this underserved population from continuous abuse. Due to BXCL501's intrinsic potency, favorable delivery method and mechanism of action, we feel this candidate has the potential to offer advantages to treating withdrawal symptoms, helping to combat and abuses urge to relapse.

We are encouraged by the promising results we've witnessed with intravenous drugs in elevating withdrawal symptoms, and we are planning to initiate the RELEASE trial, a Phase Ib 2 trial for the treatment of patients experiencing symptoms of opioid withdrawal shortly.

This past quarter, we have focused our efforts on expanding our neuroscience programs, clinical development strategy, exploring numerous indication in hopes of reaching an extensive patient population. We believe BXCL501 offers a differentiated therapy to treating the millions of patients that suffer from hyperarousal and lack effective alternative. We are focused on increasing the commercial value of this candidate and plan on exploring BXCL501 as a potential treatment for acute agitation in hyperactive delirium as well as for chronic agitation.

Turning the conversation over to our immuno-oncology clinical candidate, BXCL701, our orally available systemic innate immunity activator designed with a dual mechanism of action. Recently, we announced that we are initiating the Phase II efficacy portion of the Phase Ib/II trial of BXCL701 in combination with KEYTRUDA for treatment emergent Neuroendocrine Prostate Cancer or tNEPC. Results from the Phase Ib safety lead-in showed that a split dose, totaling 0.6 milligram per day, is the recommended dose when used in combination with KEYTRUDA. This split dose has shown on target side effects consistent with cytokine activation and has an improved safety profile. In the Phase II efficacy trial, approximately 30 eligible men with tNEPC will receive 0.3 milligram of BXCL701 twice daily on days 1 to 14 of each 21-day cycle plus 200 milligram of KEYTRUDA administered intravenously on Day 1 and then every 21 days. We expect to report initial interim data from the Phase II trial in the fourth quarter of 2020. Currently, there are no approved treatments for tNEPC, a rare and highly aggressive form of prostate cancer.

We believe BXCL701 has the potential to be an effective treatment for the subpopulation as it creates an aggressive adaptive immune response, making tumors more reactive to immunotherapies, including KEYTRUDA.

Furthermore, the company is also advancing the clinical evaluation of BXCL701 via the ongoing open-label Phase II basket trial conducted at the MD Anderson Cancer Center. This study is evaluating the combination of BXCL701 and KEYTRUDA in patients with advanced solid cancer that are either naive to or refractory to checkpoint happy and is following the dosing schedule using the Phase Ib/II study for tNEPC. The combination trial of BXCL701, bempeg from Nektar and avelumab from Pfizer and Merck KGaA in pancreatic cancer will start following the completion of Nektar and Pfizer's Phase Ib safety study of bempeg and avelumab and the outcome of that trial.

In February, we raised net proceeds of approximately $60 million in a public offering, which helped to significantly strengthen our balance sheet. This cash, together with our current results, provide BioXcel enough cash runway to fund preclinical regulatory and operational milestones into 2021.

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, and welcome to our shareholders. BTI reported a net loss of $14.9 million for the first quarter of 2020 compared to a net loss of $7.2 million for the same period in 2019. The first quarter of 2020 results include about $800,000 in noncash stock-based compensation. The increase in net loss was primarily due to cost associated with our pivotal Phase III trials. Research and development expenses were $12.4 million for this first quarter of 2020 as compared to $5.7 million for the same period in 2019. The increase was primarily due to an increase in clinical trial costs, salaries, bonus and related costs, professional research and project-related costs and chemical manufacturing and controls related to our BXCL501 and BXCL701 product candidates. General and administrative expenses were $2.6 million for the first quarter of 2020 compared to $1.7 million for the same period in 2019. The increase was primarily due to professional fees for legal and patent matters. Total operating expenses for the first quarter of 2020 were approximately $15 million as compared to total operating expenses of approximately $7.4 million for the same period in 2019. We had cash and cash equivalents of $80.1 million as of March 31, 2020.

That concludes the financial review of the first 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 today comes from Geoff Meacham of Bank of America.

This is Scott on for Jeff. I wanted to ask about the Phase I/II study for 501 in dementia. It seems the doses are lower at 30, 60, 90 micrograms due to the elderly patient population. However, in the Phase Ib trial in schizophrenia, the 60 milligram -- microgram dose was not statistically significant. So I was wondering if we should anticipate a tighter window for success given the need to balance dosing and efficacy in these patients. And then as a follow-up for 701, you recently noted the 0.6 milligram dose is recommended. And that's flooding the dose can be associated with an improved safety profile. There are certainly concerns around the safety for 701 given the drug's prior history. So can you give us any insight as to whether splitting the dose might impact efficacy for any reason? And the potential concerns you're seeing around dosing it as a once daily?

Thanks, Scott. This is Vimal. I'm going to pass this question to Rob Risinger, who is our VP of Clinical Neuroscience, to answer the fiber on question, and then Vince will pick up the question related to BXCL701. Rob?

Sure. Thank you, Geoff. Good question. The dose range in schizophrenia, we're not banking, if you will, on a thing identical in dementia. As you point out, they are older. They tend to be more frail. And so we are testing a slightly different dose range, simply to determine the doses that may be safe, but also effective.

Vince?

Yes. Thanks, Scott, for the question. So on 701, it was really around splitting dose versus not, I believe. So what we saw on the once daily dosing, so non-split dose at 0.6 milligrams or 600 micrograms was an event of syncope. And this was presented at the ASCO GU poster just a couple of months ago. That required us to expand the cohort, or otherwise, essentially identify a better tolerated dose and schedule. What we found is that by splitting the dose, we no longer saw those types of events. We certainly still saw some on target toxicity. And in oncology, as you know, that's not necessarily a bad thing at all. It speaks that the drug is doing what it's expected to do, but the events of syncope were simply no longer present. So that's -- we believe we fixed the tolerability by splitting the dose. Hopefully, that answers your question.

The next question is from Robyn Karnauskas of SunTrust Robinson Humphrey.

So first of all, can you give us some data points on what steps are needed to be completed in order to start the opioid withdrawal trial? And what are the rate limiting steps? And then do you think we'll -- we still can see a -- do you think we still can see data this year? And then on 701, so when you think about what you've learned on the safety profile, what is the safety sort of hints you around the efficacy of the drug? Did you learn anything about if the drug is working in the way it should be working? Just give us some thoughts on what you've learned so far from the early data.

Thanks, Robyn. This is Vimal. Regarding the opioid withdrawal trial, we had all the pieces ready to go to initiate the trials. And we were running 3 trials, SERENITY 1 into our pivotal Phase III and TRANQUILITY trial and this COVID situation a role. We made a conscious choice, as a company to, like, not start the opioid withdrawal trial, right, in the middle of COVID-19 in the interest of our employees, our partners, employees as well as for the patient safety. As you might have noticed that COVID-19 is creating even a bigger opioid crisis, which is in the press all over the place. The number of patients are plenty, and they keep coming to these sites, and that's what we have been advised by our CRO and the clinical side. We could initiate this study any time. I don't think there is any rate-limiting step. And we will provide the guidance shortly as we indicated that we are about to initiate that trial. So we are in a good position to initiate that opioid withdrawal trial. Regarding the 701 question, I will ask Vince to weigh in what we have been able to observe, besides the safety, any signal from the efficacy aspect. Vince?

Sure. Thanks, Vimal and good morning, Robyn. So again, I'm going to turn it back to the data that we presented at ASCO GU. In terms of the learnings, I think an important one is that this drug seems to be a strong activator of the innate immune system, and I think that's important because thus far, many of the other potential approaches to activating in the community have been weak. So we do see things like fever and chills, myalgias and puffy ankles, all of which are actually transient. They tend to settle down after the first or second cycle. What we did see, as I mentioned from the previous question, was hypotension and one episode of syncope. By splitting the dose, hypotension events seem to have mitigated substantially. And yet, we see -- we still see the remainder of those on target toxicity. So our belief is that we have a strong innate activator that is, at the same time, safe. And of course, you'll know we have a large safety database behind the drug already at this point. So that's 1 important learning. We haven’t released any new data from the ASCO GU or since the ASCO GU presentation, but I would simply point out that on efficacy, I mean, this is the Ib portion. This is fundamentally a safety study. The majority of patients were stable and if they would disease and remained on study at the time of that presentation.

Can you just also give an update on the other trials in going with 701? And if they're proceeding with any issues due to COVID and just the latest update there, and when we can see the next data set from 701?

Sure. So I'll take them off. I mean, I'll take the triple combination study first. So I think as we've mentioned, the doublet of bempeg on NKTR-214 plus avelumab has to be combined before we add in 701. So that study is in the hands of Pfizer. Pfizer did announce maybe 6 weeks ago that they were pausing all trials. They announced approximately a week ago that they're reopening all trials. So that study was underway, the patients were enrolled, and it's now reopened again to accrual. So our anticipation is that, as we previously guided, we will add in the 701 portion to that doublet once we have safety data later on this year. So that's the triple combination. And then the MD Anderson study, and that's an important part of the development plan. As you're aware, that's in hot tumors, both in patients who are KEYTRUDA naive and also patients who feel KEYTRUDA progressed through it. That study is open. It opened just at the turn of the year, and that's progressing. Again, consistent with guidance, we are anticipating to be able to present data at the end of the year from that trial study.

The next question is from Do Kim of BMO Capital Markets.

I was hoping you could review for us what you or could be -- what would be considered clinically meaningful in terms of reduction in the SERENITY trials. And when you look at the ADASUVE studies, you saw a slightly benefit in bipolar patients versus placebo than for schizophrenia. Is that something you also expect? Or is it just within normal variability for agitation studies?

Thanks, Do, for the questions. I will ask Rob to answer that question about the schizophrenia versus bipolar drop.

Yes. So Do, the difference between schizophrenia effect and bipolar effect for antipsychotics tends to be relatively minimal. There -- I realize that ADASUVE had a slightly better efficacy in bipolar patients than schizophrenia. We're seeing from the 102 data, the Phase II or the acidotic dose trial that we did, we saw a clinical benefit, some improvement by CGI of 1 point equated to an improvement on the PAN's Excitatory Component score of around 2 to 3 points. So we expect to see a similar effect for patients with bipolar as schizophrenia. It's possible that it will be greater, but we -- that remains to be seen. I could wax on about potential reasons why it might be more efficacious in bipolar than schizophrenia having related to, for example, the autonomic nervous system and the relationship of activation in bipolar patients who are agitated and manic or hypomanic, but we'll know a lot more once we have the actual data. So short answer, don't know if there will be a difference. It would be interesting, but we're not counting on that in terms of the powering of the trial.

And do you still see a negative 3 point reduction in PEC score as the bar for clinically meaningful in either patient population?

Yes. It's about -- yes. We were able to demonstrate that in the smaller study, and really expect that, that degree of change would represent a clinically meaningful improvement.

Great. And could you also speak to the rising cases in delirium in hospital ER settings due to COVID-19? And whether you should actually start looking at a 501 study in that setting now versus later?

So Do, this is Vimal. As there is a lot of press around like these COVID-19 patients who are elderly due to pre-integration as well as post-intubation or mechanical vendors use, they are getting delirium. And there are tons of reasons why they are getting it, but a lot of patients are getting that. So we continuously evaluate how we can help these patients, and we talk to our [Q P&L] leaders and explore those opportunities. In terms of delirium program, we already -- it's a strategic part of our development. So we are trying to speed up that, considering that this is a tremendous need in the hospital settings for treating the agitation resulting from delirium for the benefit of COVID-19 patients as well as for our own strategic reasons. So Rob, would you like to add anything on that?

I would just say that the API for BXCL501 dexmedetomidine is already commonly used to treat delirium in the ICU setting. And so we do see that as a sort of low-hanging fruit, and we're exploring potential development options in that area.

The next question is from Sumant Kulkarni of Canaccord.

First one on 501, and then I have a follow-up on 701. So we've seen some developments on the competitive side in chronic management of agitation in Alzheimer's patients. How specifically do you expect to potentially bridge from acute treatment of 501 to the chronic management side, if that's possible? And on 701, we were encouraged to see your progress into the Phase II efficacy part of the trial for tNEPC in combination with KEYTRUDA, but could you give us a sense of what to expect in terms of the bar you might need to hit on efficacy? And how to potentially parse out single-agent activity of 701 versus activity of the combo?

Thanks, Sumant. Regarding the 501 question related to -- can you please repeat the question? Just I want to make sure we answer it right.

Sure. So the question specifically was we've seen some developments on the competitive side on chronic management of agitation in Alzheimer's patients. You have a product right now that has -- is in development for acute agitation. How could that potentially be translated to maybe chronic management of agitation also in the longer run?

Great question. I think we see that any success related to treating agitation in dementia/Alzheimer's is a big progress. Currently, as you know, there are no treatments available to treat these patients. Under those circumstances, we all know neurological conditions, as they progress, the agitation episode or spectrum start changing. You may be in a pre-agitation state, then you go to sporadic agitation and sub-chronic agitation and chronic agitation. So any kind of a treatment that can treat chronic agitation will be good because that can help reduce number of episodes. But still, if you think about the agitation that's happening and acute agitation that's still happening in these patients, and in the beginning, you have sporadic agitation, there's no need to use a chronic agitation when agitation can be treated with something that is acute treatment as well as in sub-chronic. So the way we think about this is, the sporadic can be 2 episodes a month. And do you really need a chronic agitation? Or it could be 2 episodes a week, still sub-chronic treatment will be sufficient. In the -- once it does become a chronic and there is a treatment that can be effective in reducing number of episodes, but they're still going to have breakout episode. So that needs -- where 501 will fit in as well as some of these chronic agitations, drugs take quite a long time, 6 to 8 weeks to become effective, and you need to manage the patient. So we think that both 501 for acute treatment of agitation will fit in very well with any chronic agitation. It will help, in fact, support and build the market if treatment is available for both kind of situations. So did it answer your question or I'm happy to embellish more on it.

No, that’s great.

Okay. So regarding the 701 question, I will pass it on to Vince to describe what the bar is, and what to expect from our Neuroendocrine prostate cancer trial?

Sure. Sumant, so I think the question was really twofold. So one is what might the bar be, and how will we know the contribution of 701 or the individual contribution, right? So I'll take the latter question first. And there has been a study with single-agent KEYTRUDA. This was really why we did not include an internal KEYTRUDA alone control arm in a similar, not identical, but similar population. And in that setting, this was a cancer-resistant prostate cancer group of patients who'd had treatment with ADT or androgen blockers. And in that setting, the response rate is very low indeed. It's between 3% and 5%. And so I think we have a reasonable handle on what KEYTRUDA can do in this classic cold tumor. Given the fact that there is no standard of care here, we believe their response rate -- provided it's durable, okay, and that's a feature, obviously, of immuno agents, a response rate in the teens, typically 15% or above, would be of interest to the field, and actually would move the field on quite substantially.

The next question is from Samir Devani of Rx Securities.

It's good to see that the trials are on track despite these challenging times. My question is actually on the delirium study you're planning. It looks like -- again, coming back to dosing, looks like you're exploring 20 and 60 micrograms in that study. So I guess, could you perhaps just elaborate on how that compares to what's currently being used with the intravenous product currently? And also, whether there are any extra R&D costs associated with that program this year?

Samir, thanks for your questions. Regarding the delirium, we have not spelled out what the plan is, what doses we'll be using, because that's still in a planning stage. Dementia, obviously, it's on the clinicaltrial.com and delirium is in a planning stage. Considering that there is such a big pandemic situation with COVID-19 and these patients are in need, we are kind of speeding up development. As part of our overall strategy, we always do a Phase Ib/II. These styles don't tend to be that much capital intensive, and we do it on a short number of patients, as you have seen with our schizophrenia and dementia. And these trials tend to be like enrolled rapidly and finished fast. So because of all those reasons, we don't see much impact on our clinical trial spend, but there will be some. And we are still in the planning stage. We will provide the guidance once we have all pieces come together when this trial will start and when we can provide the data readout on delirium.

There are no additional questions at this time. I'd like to turn the call back to Vimal Mehta for closing remarks.

Thank you again for joining our call today. During the first quarter of 2020, we remain focused on advancing the development of our 2 clinical programs, BXCL501 and 701, with key data readouts occurring in the coming months. Have a great day. And 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. Thank you for your participation.