BioXcel Therapeutics Inc (BTAI) 2019 Q1 法說會逐字稿

Good day, everyone, and welcome to the BioXcel Therapeutics' First Quarter 2019 Earnings Call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Brian Johnston at The Ruth Group.

Please go ahead, sir.

Thank you, operator.

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 annual report on Form 10-K for the fiscal year ended December 31, 2018, which can be found on its website, www.bioxceltherapeutics.com or on www.sec.gov.

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

With that said, it is my pleasure to turn the call over to the company CEO, Vimal Mehta.

Vimal?

Thanks, Brian.

Good morning, everyone, and thank you for joining our conference call to discuss BioXcel Therapeutics' financial results and business highlights for the first quarter of 2019.

In the first quarter of 2019, we achieved several key milestones, particularly related to the clinical development of our lead Neuroscience Program, BXCL501 and BXCL701 as we move toward transitioning into a commercial sales organization.

Through our sound business strategy, we believe the company is well-positioned to achieve further milestones in the coming quarters.

We have built a strong team and world-class capabilities to lead the clinical advancement of our 2 drug therapies.

We are executing according to our strategic plan and truly believe that 2019 will be a pivotal year for the company.

I would like to start by highlighting the exciting progress we have made in our lead Neuroscience clinical development program, BXCL501.

In December, we dosed the first cohort of subjects in our first-in-human study of BXCL501, our proprietary sublingual formulation of dexmedetomidine or Dex for the acute treatment of agitation.

As of today, we have completed dosing of multiple patient cohorts and are on track to report top line data from the Phase I pharmacokinetic, bioavailability and safety study of BXCL501 in May 2019.

We maintain our expectation that the result of the healthy volunteer study will enable us to launch registration trials in agitated patients in the second half of the year.

And we expect to provide more details on our specific plans for BXCL501 in the near future when we report the Phase I data.

With FDA fast-track designation secured at the end of 2018, we remain on track for filing our first NDA drug application for BXCL501 in the second half of 2020.

On the technical front, we have finalized formulation development and transition to automated process for BXCL501, the manufacturing process scale up is on track to support the planned registration study in the second half of this year.

As you may know, our sublingual thin-film is unique in its formulation and structure with demonstrated stability.

Our highly scalable manufacturing process provides the flexibility to produce a wide range of dose strengths and is designed for combination therapies.

Earlier this year, we reported positive proof-of-concept data from the Phase I study of intravenous Dex for acute treatment of agitation in patients with senile dementia of the Alzheimer's type, SDAT.

The trial method primary endpoint of identifying the same dose of IV Dex that produces a mild arousable sedation as defined by the Richmond Agitation and Sedation Scale or RASS score of minus 1.

Results from these proof-of-concept studies and previously conducted trials of IV Dex demonstrated a clinical benefit in agitated patients across multiple underlying neuropsychiatric disorders.

These findings validate our strong belief that BXCL501 represents a viable treatment option with the potential to treat acute agitation arising from a number of neuropsychiatric indications.

In addition to announcing positive data for Phase I trials of IV Dex in agitated patients with SDAT and completion of the film study in the first quarter, we reported exciting data from a small study of 15 patients with opioid-dependent evaluating intravenously administered Dex as a proof-of-concept in opioid withdrawal symptoms.

Ten subjects were enrolled in the treatment arm while 5 subjects were enrolled in the placebo arm.

All patients in the Dex arm of the study responded to treatment by displaying effective mitigation in physiological symptoms of opioid withdrawal, providing rationale for the expansion of BXCL501's application beyond our initial focus of acute agitation.

Opioid addiction represents a major health care crisis that is only growing in both prevalence and severity.

There's a dire need for new treatment for the symptoms of opioid withdrawal.

And we believe the current regulatory environment is conducive to development of such novel therapeutic options.

In addition to the treatment of opioid withdrawal symptoms as one of the several other potential indications for BXCL501, other potential indications include delirium and post -- PTSD.

We look forward to assessing BXCL501's potential in these and other indications as we continue advancing its development in our initial target area of acute agitation in patients suffering from schizophrenia, bipolar disorders, Alzheimer's disease, dementia as well as opioid withdrawal symptoms.

The remainder of 2019 will be an important period for development of BXCL501, a product candidate that we believe has game-changing potential for patients suffering from agitation caused by a wide range of neuropsychiatric disorders.

We are confident in our development strategy and the strength of the team and look forward to reaching additional milestones in our clinical development.

Now I'd like to turn our second clinical program, BXCL501 -- BXCL701.

The Phase Ib/2a open label study of BXCL701 in combination with pembrolizumab or Keytruda in neuroendocrine prostate cancer patients is now open in multiple sites for patient enrollment.

Additionally, in late March, we took a major step toward expanding our global footprint with the filing of a clinical trial application with the U.K. authority, which once approved, will allow us to expand the Phase Ib/2a study to the U.K.

The principal investigator for the European study will be Professor Johann de Bono of The Royal Marsden NHS Foundation Trust and the Institute of Cancer Research, who also recently joined our Immuno-oncology clinical advisory board.

Professor de Bono is a prominent figure in the prostate cancer arena, and we are excited to be working with him on this trial and to benefit more broadly from his expertise as a member of our clinical advisory board.

Turning to the triple combination of BXCL501, NKTR-214 from Nektar and avelumab from Pfizer and Merck, we are pleased to report that we filed the IND with the U.S. Food and Drug Administration on proposed study for treatment of pancreatic cancer.

As a reminder, under the agreement, Pfizer and Merck KGaA will provide the avelumab and Nektar will provide NKTR-214.

We will initiate and manage the clinical program with development costs shared equally between ourselves and Nektar.

We have also selected 2 sites to conduct the proof of mechanism trial for BXCL701 in pancreatic cancer.

This trial will focus on validating BXCL701's mechanism of action.

The trial is expected to begin in the first half of this year.

At the AACR annual meeting in April, we presented data from a recent preclinical study of BXCL701 with an OX40 agonist as a possible combination therapy for certain solid tumors.

This combination achieved a significant increase in anticancer activity in the tumor models versus control, further validating BXCL701 as a potentially versatile and effective I/O agent based on its ability to stimulate both innate and adaptive immunity.

We plan to further study this promising combination and other combination potentially in clinical development.

Finally, we continue to strengthen our management team with the appointment of industry veteran, Dr. Pascal Borderies as the Vice President, Commercial Development and Medical Affairs.

Dr. Borderies is responsible for designing and executing BTI's global commercialization and medical affairs strategy including sales and marketing efforts.

He is a highly seasoned life science executive with over 25 years experience in commercial development medical affairs at companies including Novartis Consumer Health and Schering-Plough among others.

In the first quarter of 2019, we reached several significant milestones and positioned ourselves to achieve many other as the year progresses.

We are eagerly awaiting the data readout from our BXCL501 PK and safety study and look forward to sharing those results with all of you in the coming weeks.

As we noted in the press release this morning, we will be hosting a BXCL501-focused Investor Day on May 22 in New York.

Those in the area are welcome to join us for what should be an exciting event, including presentation from several members of our neuroscience clinical advisory board.

If you're interested in attending or would like more details, please contact Janhavi Mohite of The Ruth Group at (646) 536-7026.

As always, I thank you for your continued support of BioXcel Therapeutics, and our mission of developing the next wave of medicines across neuroscience and Immuno-oncology.

And hope that you share our excitement over what the future holds for the company.

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

Richard?

Thanks, Vimal.

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

The proceeds from our 2018 IPO are consistently being used to utilize -- being utilized to move our planned clinical development of BXCL501 and BXCL701, including initiation of multiple studies in each program throughout the year.

For the first quarter of 2019, we reported a net loss of approximately $7.2 million or $0.46 per share compared to a net loss of approximately $4.3 million or $0.37 per share for the first quarter of 2018.

Research and development expenses totaled approximately $5.6 million for the first quarter of 2019 compared to approximately $2.9 million for the same period in 2018, an increase of 93.1%.

The increase in research and development expenses reflects increased clinical development activity in both of our programs, BXCL501 and BXCL701.

General and administrative expenses in the first quarter of 2019 were approximately $1.7 million compared to approximately $1.3 million in the first quarter of 2018, an increase of 31%.

The increase is a result of increased expenses consisting primarily of salaries and related costs for additional personnel added to support our executive, finance and administrative teams as well as our Corporate Development and other administrative functions.

Total operating expenses for the first quarter of 2019 were approximately $7.4 million, an increase of 76.2% as compared to the total operating expenses of approximately $4.2 million for the same period of -- as in 2018.

The 2019 results also include approximately $682,000 in noncash stock-based compensation.

We had total cash and cash equivalents of $36.3 million as of March 31, 2019.

We expect our cash burn to increase going forward as we continue to advance clinical trials for both BXCL501 and BXCL701.

Nevertheless, we believe that our current cash position is sufficient to meet our needs for at least the next 12 months.

That concludes the financial review, and I'd like to turn it back to Vimal for any closing remarks.

Once again, thank you, everyone, for joining our conference call to discuss BioXcel Therapeutics Financial Results for the First Quarter of 2019.

We hope to provide additional updates on our programs in the coming quarters.

That concludes our prepared remarks.

We would like to open the call to questions.

Operator?

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

This is Jason Zemansky on for Jeff.

On the 501 program, as we're moving forward in development, can you provide a little color with regards to the developmental plans once approval occurs and you want a lateral into other indications like you mentioned, PTSD or perhaps alcohol withdrawal.

Would each of those require a separate study and approval?

Or is kind of the expectation that physicians will be able to use the drug as needed?

And then I have a follow-up for the 701 program.

Okay.

So on 501 program, as you know, we are currently focused on announcing the data from our current study.

Once that data is announced, we will roll out the larger plan, what our first indication trial will be to initiate the Phase II/III program.

And with that program, we will then stagger other indications, and we are in constant communication with the FDA what they will consider allowing in these neuropsychiatric indications and what they will allow us to bundle.

Currently, that conversations are ongoing.

Perfect.

Thanks so much for the color.

And then with regards to 701, now that the trial is underway, can you give us a little -- your expectations or what we should be looking for as the trial moves forward and what sort of initial results you're looking for and kind of the threshold necessary to potentially move forward?

Sure.

I will pass this question to Vince O'Neill, our Chief Medical Officer.

Vince?

It looks like he may be having some difficulties.

But I will try to answer that question.

BXCL701 currently is in 2 trials are open for neuroendocrine prostate cancer as well as the trial for proof of mechanism in pancreatic cancer.

Patient recruitment has been ongoing, and we expect that we will have the data readout from the safety learning and some preliminary efficacy by the end of this year for tNEPC as well as more understanding of the mechanism of action for 701 as a single agent in pancreatic patient by the end of the year.

And we will then mature that data and present more color or more mature data in the first half of 2020.

In terms of the pancreatic cancer, we have filed the IND.

We expect to initiate this trial soon.

This -- in first half of 2019.

And initially, it's a triple combination so our data will be more focused on the safety learning for the next 6 to 9 months, and then we will get the efficacy data next year.

So that's the plan for 3 trials for BXCL701 in terms of the data readouts and -- both from the safety learning as well as efficacy.

And we'll take the next question from Carter Gould of UBS.

This is Andrew in for Carter.

So two on 501.

I understand the data -- you said your study is expected soon, but just a couple of questions here.

So first, I was wondering if you could discuss what your clinical expectations are here to move forward to the pivotal?

Are you still looking to, for example, a Cmax of 20 to 30 minutes?

I guess I just want to get a sense of what the clinical gating factors are here.

And second, given your transition to another development process for 501, would there be any work required to ensure comparability between what you're using the Phase I to what you'll be using the pivotal and commercial use thereafter?

Thank you for asking a very comprehensive question related to the 501 development program.

In terms of plan, like we initially -- in terms of the clinical development for 501, once we have this data, which is undergoing analysis and we will be announcing shortly, this will help formulate our Phase II/III design, which we are currently crafting, working with the key opinion leaders.

And that design will roll out shortly with The Street.

That will give you a very good, deeper understanding what the Phase II plan will look like and how the Phase II plan will be converted into the registration trial that we expect to initiate our first trial by the end of this year.

In terms of expectations, it's very clear that in terms of registration trial, the primary endpoint is always a reduction in PEC score at 2 hours.

And we expect that to be the primary endpoint at least for the schizophrenia and bipolar trial.

And on the -- just to follow-up on the development process.

Is there any work that you need to do to ensure comparability between the Phase I and Phase II product?

No.

(Operator Instructions) Our next question will come from Do Kim from BMO Capital Markets.

Congrats on the progress.

First on 501, maybe this is a pretty simplistic question.

But when we see the bioavailability data, how should we be interpreting the results?

Is it as straightforward as just assuming that a similar PK will give you the same responses as the intravenous proof-of-concept studies?

Or are there other factors we should be considering?

That's a great question.

So the data that we will be announcing will encompass -- we expect that it will encompass the following: it will give the PK for the product with the film.

It will provide safety and tolerability assessment, and also indication of our therapeutic exposure levels that we are achieving with the film.

And we already understand and know what therapeutic levels were effective when we were using IV Dex in the schizophrenia study.

So all that work is being currently analyzed and that's exactly what we will announce in a few weeks.

Great.

And if Vince is on -- I had a question on the AACR presentation in combo with OX40.

Maybe if you could go over the rationale of combining OX40 agonist over targeting other co-stimulatory molecules.

Is there anything specific about OX40?

So I will take the question (multiple speakers)

Vimal, Vimal, this is Vince.

Apologies, I got locked out of the call.

I do apologize.

Okay, okay.

Then go ahead, Vince.

So I think I have the tail end of the question.

I think it was around the choice of OX40.

So I think -- a couple of ways to answer that.

Essentially, we've generated a large body of data using many different I/O combo and approaches that really demonstrate 701's combined ability and its ability to augment activity with other agents and drugs.

So we've presented some of that data, actually a lot of that data but not all of it.

So the OX40 is really in that bucket or in that bracket.

It's a co-stimulation molecule as you know, and it shows that we can clearly -- OX40 I think it's probably fair to say in the clinic has not demonstrated a huge level of activity, and there'll be some people who disagree with that, but I think that's probably true.

And I think the whole thrust of this experiment as well as the others we published and will publish throughout the year, really, really simply make the point that 701 is highly combinable and does seem to augment activity with other agents really very broadly.

Our next question will come from Ram Selvaraju from H.C. Wainwright.

So a few on 501 to start off.

Could you maybe comment on the differentiation between the acute and chronic agitation paradigms?

And what this would mean for the nature of the evaluation window in a potentially pivotal trial program for 501 in the acute agitation context.

And also, it would be helpful if you could give us some additional background information on the acute delirium indication at this juncture and specifically what you anticipate being the operatory primary efficacy endpoint or endpoints in that specific subindication as well.

Also, I wanted to know whether following up on the success you've had so far with investigating 501 in opioid use withdrawal disorder, whether you would be in the near term potentially actually looking to do additional proof-of-concept work in the context of alcohol addiction.

Ram, this is Vimal.

I will give you a very high-level strategic plan that the company has put together for 501 development.

Good news is that we have a lot of indications to move forward.

First and foremost, our goal is to initiate a Phase II/III study in 1 indication where we think we have a very high, like you know, probability of success considering we understand completely the clinical environment in terms of what primary endpoints are needed.

We understand regulatory environment and we have some indication of what the reimbursement will look like for those indications.

So that's how we are using it to prioritize.

So having said that, your question is very relevant.

After this, what to come.

And in terms of that, we are continuing to explore how we can move the Alzheimer's and dementia trial forward, and what is the most effective path.

Those discussions are happening with both key opinion leaders as well as with the FDA.

And in terms of opioid withdrawal where response rates were very high, that's a slightly different development path because that development path takes a route that we have to go to a different division with FDA.

So that will require another IND and that is a path we are exploring, that what we need to do there, and how fast we can move that trial forward.

So I think at a very high level -- overall level, first and foremost, getting 1 indication to initiate a decision trial by the end of this year, in 2019, and then stagger the other trials in terms of the Alzheimer's, dementia and opioid withdrawal beyond that.

And I'm going to now pass it on to Frank, who has been working with the key opinion leaders to understand what the opportunities with the delirium and what the potential endpoints will look like.

So Ram, just trying to take your questions one at a time.

With regard to acute versus chronic, we identify the acute space as being a space of high unmet need.

We know that there are other drugs that are being tested, in particular, dextromethorphan combinations.

They're being tested for chronic.

But we still see a need for something to take the place, for example, of injectable Haldol in an acute situation.

And given the fact that we have an ease of administration and that the drug is not an antipsychotic, we see value, clear value in treating geriatric patients.

In schizophrenia, there is always a need, okay, for a non-injectable and the fact that we have a non-antipsychotic mechanism is really a benefit, I think, to the schizophrenia/bipolar population.

Now with regard to the other question that you had around delirium.

These are really good questions as to how we would measure success.

And at our Analyst Day on May 22, Maurizio Fava will be our KOL and his primary goal really is he'll speak to what he thinks is the best way to approach delirium with a drug like dexmedetomidine and what the film actually has to offer.

So I think that those types of questions we are discussing right now and we're hoping to come up with answers to, and even with regard to, say, for example, setting up a trial.

And then finally, I think your last question was a segue into alcohol treatment.

And I think that with -- given a type of drug and the fact that we're treating withdrawal symptoms for opioid withdrawal, going into alcohol withdrawal is just a natural segue for a drug like this, okay?

Again with the ease of administration and what we know about the drug, we think that this would be something that would be relatively easy to do and something that's really on our radar screen.

So I hope I've answered all your questions.

Yes.

Very helpful and obviously, we look forward to the event on May 22 to hear more about these topics from the horse's mouth, as it were.

I just have a couple of other questions on 701 if I may.

So firstly, I wanted to ask about -- in the context of treatment-emergent neuroendocrine prostate cancer, whether the advent of drugs like, for example, darolutamide or for example, those next generation androgen receptor antagonists that are specifically aimed at addressing splice variant androgen receptor versions of prostate cancer, whether these would have any potential implications on the evolution of the target population in tNEPC that would be addressable with 701.

And then secondly, with respect to the pancreatic cancer study, I believe that you had indicated that you had already selected 2 clinical sites.

Could you give us an indication of whether you've made a final determination regarding what the full complement of clinical sites would be to enroll patients into this study?

And what you anticipate the target enrollment number to be?

So Ram, this is Vince.

So on your first question, I think, as you know, the androgen deprivation agents, the newer (inaudible) agents are really moving into earlier lanes of therapy.

And so the expectation is that the prevalence of NEPC because it's clearly linked to the use of those agents, will increase over time.

So that's probably the first part.

How the specific, for example, V7, anti-V7 drugs would influence the target population for us, probably less clear.

But I think androgen deprivation therapies essentially because of their MOE, will be expected to have, as we've already said, something like a 1 in 4 probability of seeing NEPC essentially as an escape mechanism.

And I think as those drugs increase in use and prevalence, especially in early lines, the NEPC population is only going to rise; and that's certainly the feedback we've been given from our clinical advisers just now.

These numbers, these patients seem to be increasing in number.

So that was your first question.

Can you repeat your second -- I do this to you all the time.

Apologies.

Can you repeat your second question, please?

The second question was with respect to the clinical sites that would be involved in the pancreatic cancer triple combo study.

How many sites you expect to have at the full complement?

I understand that 2 have been selected but how many you expect to eventually be working with?

And then also if you could give us a sense of what the target enrollment range is going to be for this study.

Sure.

So let me take the patient numbers first, that might be easier because it puts it into context.

So the efficacy portion would be approximately 30 patients.

It's assigned in 2-stage design, so it will be approximately 15.

I think statistics dictate that it's either 13 or 14 patients in the stage 1. And then 15 or 16 to make up 30 patients in this stage 2.

Now as you know, the triple combination essentially combines 1 approved agent and 2 unapproved agents and so there will be a number of escalation steps and it's a standard 3 plus 3 design.

So I think 30 for the efficacy portion and something like -- I mean it clearly depends on what we see in terms of tolerability and so on, something like 9 to 12 for the safety component.

So that hopefully will give you an idea of the size of the study.

In terms of number of sites, we're planning between 8 and 12.

And we'll almost certainly activate at least 8 sites and probably bring more than that on.

Then just a couple of very quick housekeeping items.

Vimal or Richard, please feel free to take these.

I just wanted to know how you anticipate stock-based comp to trend over the course of the remainder of this year?

And then also if you could give us an idea of how clinical R&D spending is likely to trend or evolve over the course of 2019, specifically within the context of gearing up the preparations for potentially launching that pivotal program with 501 before the end of this year.

If you could give us an idea of how much of those expenses are likely to be front-end loaded.

Let me -- this is Rich.

Let me tackle the stock-based comp.

I think in the call this morning, I said that the stock-based comp for the first quarter was about $682,000.

It's expected to increase slightly quarter-to-quarter for the rest of the year.

Great.

And with regard to R&D spending?

I think those expenses will probably begin to hit towards the end of the year, Ram.

And our next question will come from Sumant Kulkarni of Canaccord.

I have 2. The first on 501.

I know you have a lot of indications going on, on that film.

But I was especially intrigued by language in your press release on the same formulation that said it might be flexible for combination therapies.

So what are some of the options that might be on the table in terms of products that could be combined in the film and what types of indications could be tolerated there?

And then I have a follow-up on 701.

So that's a great question, Sumant.

When we were creating the architecture for the film, we wanted to be cognizant that some of the indications that drugs can be combined with Dex or other drugs using the film.

So we are evaluating and we have some plans and those things will be more discussed in the Investor Day that how we are planning to use the combination approaches going forward to build our next generation of candidates.

At this point in time, it's a work in progress, and we will discuss with The Street as things mature that what would make more sense to bring new candidates in our pipeline.

Got it.

And then on 701, could you remind us of some of the specific timelines of when we should be seeing data readouts from trials in tNEPC and in pancreatic cancer?

Or asked another way, I guess what should we be expecting on that program in the second half of this year in terms of data readouts?

Yes.

I'll take that.

So for NEPC, as you know the study is open, a number of sites is ramping up right now.

So really all these studies are open label and so we will get data flow really throughout.

So the intent for NEPC is essentially to present data.

It will be safety -- safety plus I'm going to call it right now.

So safety and potentially efficacy, but that clearly depends on accrual at SITC this year.

So that's for NEPC.

So I think for the triple study and -- so bear in mind that the escalation, as we previously discussed, 3 agents, 2 of which are unapproved, that will take longer than we planned for NEPC, that's a much quicker and essentially safety run-in basically and -- for NEPC.

So that will occur throughout this year.

So we will aim to present data at a suitable venue beginning of next year.

So obviously, the one that comes to mind would be ACR, there's ASCO, SITC early on, there's ASCO G.I. and then, of course, the main event for oncology is obviously ASCO.

So hope that gives you a flavor.

(Operator Instructions) And it does appear we have no further questions at this time.

I'll turn the conference back over to our speakers for any additional or closing remarks.

Once again, I'd like to thank you, everyone, for joining our conference call to discuss BioXcel Therapeutics' financial results and business update for the first quarter.

We hope to provide additional updates to our programs in the coming quarters.

Thank you very much.

That does conclude today's teleconference.

Thank you all for your participation.