BioXcel Therapeutics Inc (BTAI) 2022 Q2 法說會逐字稿

Good morning, and welcome to the BioXcel Therapeutics Second Quarter 2022 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 related to future events and/or the future financial or business performance of the company. Actual results could differ materially from those anticipated in these forward-looking statements. Risk factors that may affect future results are detailed in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2021, which can be found at www.bioxceltherapeutics.com or on www.sec.gov, which will be updated in its quarterly report on Form 10-Q for the quarter ended June 30, 2022.

As a reminder, today's conference is being recording. Joining us on today's call are Dr. Vimal Mehta, Chief Executive Officer; Richard Steinhart, Chief Financial Officer; Matt Wiley, Chief Commercial Officer; Dr. Rob Risinger, Chief Medical Officer of Neuroscience; Dr. Frank Yocca, Chief Scientific Officer; and Dr. Vince O'Neill, Chief Medical Officer of Oncology. It is now my pleasure to turn the call over to Dr. Mehta, the CEO of BioXcel Therapeutics. Please go ahead.

Thank you, operator. Welcome, everyone, and thank you for joining our call today to discuss BioXcel Therapeutics' financial performance and business highlights for the second quarter of 2022. It has been a busy but rewarding few months, and we have been -- we have many exciting updates to review this morning. As you know, we are a biopharmaceutical company utilizing artificial intelligence approaches to develop transformative medicines in neuroscience and immuno-oncology. You have heard me discuss our 5-year vision to become the premier AI-driven neuroscience company, and our progress from this past quarter across all parts of our business continues to bring us closer to this ambitious goal.

Let me begin by highlighting our notable achievements across the organization. We have laid the foundation for a successful entry into the market for IGALMI, our FDA-approved acute treatment for mild, moderate or severe agitation associated with bipolar 1 or 2 disorder or schizophrenia in adults. Our sales team has been in the field for over 2 months, and key commercial activities are in full swing to create awareness and drive eventual adoption. With trade launch in early July, our priority remains delivering this new treatment option to hospital systems, healthcare professionals and patients. Our Chief Commercial Officer, Matt Wiley, will discuss commercial progress and early feedback from the field in more detail shortly.

While IGALMI trade launch marked an important milestone for the 501 program, we continue our heavy focus on our 3-pillar portfolio expansion strategy for the franchise. Let me summarize our progress since last quarter. Following a successful Type B meeting with the FDA, we have further executed our strategy for our first strategic pillar, which is broadening the medical settings where 501 can be offered. On this front, I'm excited to announce our SERENITY III trial for at-home use. This pivotal double-blinded, placebo-controlled single study is designed to evaluate BXCL501 60-microgram dose for agitation associated with bipolar 1 or 2 disorders and schizophrenia, and will consist of 2 parts.

The first part is similar to our SERENITY I and II trials, which were the basis for our IGALMI approval earlier this year, and is designed to assess efficacy and safety in acutely agitated bipolar and schizophrenia patients in an institutional setting. Like SERENITY I and II, SERENITY III primary efficacy endpoint is a change from baseline in PEC total score at 2 hours compared to placebo. The second part of SERENITY III is designed to assess safety compared to placebo when self-administered at home. We believe SERENITY III may be de-risked for the following reasons. First, it will utilize many of the same investigators and clinical sites as SERENITY 1 and 2. Second, we have already observed dose-dependent responses in our Phase I/IIb study for 60-, 80-, 120- and 180-microgram doses.

Recent market results show a significant number of newly identified unclaimed and untreated episodes in bipolar patients in the at-home setting. This is additive to the claims data research showing that 1/3 of the 25 million bipolar and schizophrenia agitation-related episodes occur outside the institutional setting. Coupled together, this is a clearly defined medical need and large market opportunity in which we have already demonstrated the efficacy and safety of IGALMI. Additionally, the experience which psychiatrists will gain in the institutions with the current commercial effort will help build a strong bridge to eventual community use, if approved. We expect to initiate SERENITY III in the second half of 2022.

Next, as part of our indication expansion strategy, we have made strides in our clinical development programs for 501. Our TRANQUILITY program for the acute treatment of agitation in patients with Alzheimer's disease is advancing well. Our TRANQUILITY 2 pivotal trial is enrolling, with top-line data now expected in the first half of 2023, and we still anticipate initiating enrollment in the second half of this year for TRANQUILITY 3, our second pivotal trial in the program. With the recent approval of IGALMI and a strong initial label, we believe the TRANQUILITY program has been significantly de-risked.

Additionally, the positive efficacy, safety and tolerability data generated to date, along with breakthrough therapy designation from the FDA, provides us continued confidence in the pivotal TRANQUILITY program. We look forward to progressing 501 towards a supplemental NDA for agitation in patients with Alzheimer's. Alzheimer's disease-related agitation remains a clinical area of significant and growing unmet need, with an estimated 100 million episodes per year in the U.S. and no FDA-approved therapies. We are excited by the potential of 501 to play a key role in providing a much-sought-after solution for Alzheimer's-associated agitation.

Further to our indication expansion strategy, we are investigating the potential utility of 501 as an adjunctive treatment in major depressive disorder. Our Phase I multiple ascending dose trial in healthy volunteers is progressing well, with our 30- and 60-microgram dose cohorts complete. This double-blinded, placebo-controlled study includes multiple cohorts, each consisting of 18 volunteers. The 80-microgram dose escalation portion of the trial is currently underway.

Data readout for this daily dosing study is expected in the first half of 2023 and will inform our dose selection for a future proof-of-concept depression study. Over 300 million antidepression prescriptions are filled annually in the U.S. and current treatments are limited by slow onset of action and incomplete responses. More broadly, the 60-microgram dose daily dosing over 7 days in healthy volunteers is quite encouraging and supportive for our leading programs for at-home use.

Moving on to the third and final pillar for our 501 expansion strategy, growing geographic footprint, given the significant near-term U.S. market opportunities the company has available by developing 501 for bipolar 1 and 2 and schizophrenia patients in the home setting and as an adjunctive treatment for MDD, we have made the strategic choice to prioritize resources to execute on U.S. strategy over ex U.S. As a result, we have chosen not to file an MAA at this time. We fully intend to pursue a well-timed geographic expansion at the most appropriate and opportune time.

Moving beyond 501, we are leveraging our proven AI technology to build out a sustainable R&D pipeline. As part of our effort to build out our neuroscience franchise, we continue to advance formulation work for BXCL502, which demonstrates a novel and differentiated mechanism of action for the chronic treatment of agitation related to dementia and other neuropsychiatric conditions.

Shifting to our oncology franchise, we have established OnkosXcel, a fully operational focused subsidiary to provide maximum strategic and financial flexibility and position us for sustained expansion and optimization of the franchise. We are actively seeking strategic options, including third-party investments, to advance OnkosXcel and ultimately unlock significant value for our immuno-oncology franchise. Under OnkosXcel, we are advancing the clinical development of BXCL701, our leading immuno-oncology clinical candidate being developed for the treatment of aggressive forms of prostate cancer.

This includes progress on our metastatic castrate-resistant prostate cancer Phase II trial of BX - of 701 plus KEYTRUDA combination therapy in patients with either small cell neuroendocrine carcinoma or adenocarcinoma phenotype. Patient enrollment is in the SCLC or it is expected to be completed in the second half of this year. In addition, enrollment is advancing for our adenocarcinoma randomized trial expansion, evaluating 701 monotherapy versus 701 KEYTRUDA combination therapy. We look forward to providing additional updates on our plan to maximize shareholder value to our oncology subsidiary later this year.

On the corporate front, we have welcomed industry veteran Michael Miller to our Board of Directors and the BioXcel family. We are very pleased to have his strategic leadership and commercial growth experience available during this exciting time for BioXcel.

Lastly, we continue to fortify our intellectual property, with 2 new patents related to IGALMI's film formulations containing dexmedetomidine and methods of treating agitation using the films.

In summary, we have made great progress across all aspects of our business this quarter and are continuing our work to transform the agitation treatment landscape and other neuropsychiatric conditions. We have many exciting catalysts on the horizon and look forward to continuing our journey towards becoming the leading AI-enabled neuroscience company.

Now I would like to turn the call over to Matt Wiley, who will give an update on the IGALMI launch. Matt?

Thank you, Vimal, and good morning, everyone. I'm pleased to report our progress on 3 fronts this morning: our early market access momentum, key learnings from our initial field force efforts and our commercial strategy and execution.

The market access activities are progressing very well and are on schedule. While the contracting time frame with group purchasing organizations, or GPOs, can take 6 to 9 months on average, we have been encouraged by our early engagement. There are 3 national GPOs that represent over 90% of beds in our 1,700 targeted hospitals, and we are in various stages of discussions and negotiations with each. We expect to finalize the contracting process over the next few months, and we'll share our progress with you when these relationships are complete. In addition to national GPOs, we've engaged with integrated delivery network hospitals, or IDNs, to drive further downstream adoption of IGALMI. We have also executed a CMS contract and completed the federal supply schedule submission to unlock access to state and VA hospitals respectively.

We have completed the first phase of our commercial build-out and deployment of our sales personnel in the highest-priority targets. To date, our field force has successfully engaged a majority of their target hospitals and has made progress in P&T formulary review discussions. Multiple hospital systems and IDNs have indicated their interest for the product and expressed an intent to review. As the P&T committees review IGALMI in their scheduled meetings during the second half of this year, we will provide an update with more specific metrics. We've learned a lot since the field launch 10 weeks ago.

The early response to our awareness activity, sales messaging and IGALMI concept, for which there is no commercial precedent, has been starkly positive and has revealed tremendous opportunity within the bipolar and schizophrenia agitation markets. Through discussions with stakeholders and target hospitals, our understanding of the value proposition of IGALMI continues to strengthen. The challenges surrounding the administration of intramuscular injections is a market dynamic that is becoming increasingly worrisome to institutional stakeholders and one which creates a market environment favorable to IGALMI. The use of physical restraint is often required to inject agitated patients and can increase both the expenses and safety risk to staff.

Physical restraint can be costly and resource-intensive for hospitals at approximately $1,500 per patient, which typically surpasses the reimbursement. Consequently, a novel treatment option like IGALMI may offer an effective solution to address these issues while potentially limiting associated expenses. Furthermore, agitated patient outburst may result in patient, caregiver and staff injuries, which leads to lost work time, transfers, lawsuits and generally unsafe work environments. COVID-driven staffing pressures still exist at many of these places of care. As institutions look for ways to decrease the use of restraints and reduce injury to staff, we are observing a desire to increase the use of oral less-invasive medications for managing agitation consistent with consensus guidelines.

Turning now to marketing, we are deploying tactics to support the sales efforts and amplify the awareness of IGALMI. To educate healthcare providers on the core benefits of IGALMI, we have recently deployed our promotional speaker peer-to-peer program. These programs will ramp up significantly over the next 2 quarters to drive interest, formulary adoption and demand. The team has also successfully launched our IGALMI now available digital campaign, which has achieved over 100,000 visits to our HCP website and garnered meaningful engagement with the content in just a short period of time. Based on the positive market response to IGALMI, significant process with market access and increasingly favorable market dynamics, we are excited to begin our second phase of personal promotion and fully deploy our sales team across 70 territories over the next several months. This puts us in a strong position to take full advantage of the opportunity to treat volumes of patients.

Now I'll turn the call over to Richard, who will give a financial update. Rich?

Thank you, Matt. I will now review our second quarter 2022 financial results. Research and development expenses were $17.9 million for the second quarter of 2022 compared to $13.9 million for the same period in 2021. The increase in R&D expenses were primarily attributable to clinical costs related to the company's TRANQUILITY program. Selling, general and administrative expenses were $18.4 million for the second quarter of 2022 compared to $14.1 million for the same period in 2021. The increase in SG&A expenses were primarily due to personnel and costs related to the launch of IGALMI in the U.S.

BioXcel Therapeutics reported a net loss of $37.7 million for the second quarter of 2022 compared to a net loss of $27.6 million in the same period in 2021. Cash burn for the quarter was approximately $33 million, which includes approximately $700,000 in inventory costs and $3.6 million in prepaid clinical trial fees. As of June 30, 2022, cash and cash equivalents totaled approximately $233.5 million. This excludes $30 million of contributions from the $260 million strategic financing announced in April. To date, the company has met the milestones and received $100 million from that agreement.

Now I'd like to turn the call back to Vimal.

Thank you, Richard. We would now like to open the call for questions. Operator?

Our first question is coming from the line of Greg Harrison with Bank of America.

Maybe, to start out, could you provide some more color on the ex U.S. strategy? Maybe just talk a little bit about the drivers behind the decision and how you would characterize the discussions that you've had with potential partners.

Regarding the ex U.S. strategy, it has been evolving, considering that our program is evolving really fast. And U.S. opportunity is so attractive in the short run with our recent announcement of the SERENITY III program, where our drug is already approved -- IGALMI. It can go to the home setting. Alzheimer's program is progressing, and we will be ready to file an sNDA in that program after completion of 2 pivotal trials. So opportunity in the U.S. is really large. In addition, we are pursuing MDD. It's a strategic choice on resource deployment.

Shall we focus on U.S. or continue to focus both in U.S. and outside U.S.? So once we have captured opportunity in U.S., then we will start deployment of strategy outside -- ex-U.S. And our goal will be to look for a partner who can cover multiple geographies, rather than originally we were thinking or just, like, looking for a single partner in Europe. Now Japan is a very attractive market, considering the Alzheimer's-related agitation, and we have very strong IP position. So we are making strategic choices just from a resource deployment perspective. Otherwise, opportunity is very attractive outside U.S. in addition to U.S.

Okay. That makes sense. And then maybe just one more -- maybe an update on the IGALMI launch. Have you seen any early adopters in the month or so since trade launch, and if not, when would you expect the first to start to come on board?

Well, the process, Greg -- first of all, thanks for the question. The process takes 6 to 12 months on average to just get the formulary approval in the hospitals, and so driving adoption typically happens after that process has been completed. So the steps that we're taking now, that we've been taking over the last 10 weeks, is to drive interest, identify P&T stakeholders and begin the process to get formulary adoption in those hospitals. Once that happens, we'll see swifter uptake, but this is how typical hospital launches proceed. It's an operational fact, and we're just working within that set of facts.

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

So on SERENITY III, why just 60 milligrams? Can you repeat dose? And what percentage of the population might that exclude that would need a higher dose? That's my first question, and then I have a follow-up.

That's a great question, Robyn. 60 microgram, as you know, in our previous dose escalation study, we saw that 60, 80, 120, 180 -- they were all effective. We're starting with 60 because that's a dose, like, most relevant in an outpatient setting, and I will have Rob outline why we chose the 60-microgram dose. Rob?

Sure. So we chose the 60, as Vimal pointed out, because we actually have data on 60 micrograms from our dose-ranging study in schizophrenia. It separated from placebo at 2 hours. It has a large proportion of patients who respond to 60, so the number that might, let's say, need another dose is very small. So the trial is designed -- it's a frankly very slick design. We're demonstrating the efficacy in almost an identical population. It will be a combination of schizophrenia and bipolar disorder. It will be done at the very same sites that completed SERENITY I and II. So we expect identical results in terms of an improvement from baseline in the PEC total score at 2 hours, and then we're testing it for safety purposes at home, which we've received agreement from the FDA that this is a pivotal trial and will allow us to expand the label for this same indication, if you will -- agitation associated with schizophrenia or bipolar disorder -- but at-home use.

And so, just to be clear, can you repeat dose? And is the first portion just in the hospital and then the second portion's at home, or is it all at home and just the second portion is more for safety?

The first portion is identical to what we've done in SERENITY I and II. It will be acutely agitated patients who present in an acutely agitated state. We will be able to demonstrate the 60-microgram dose is efficacious, and then the second portion of the study is testing the safety at home.

So the first portion is in a hospital setting, just to be clear.

Yes.

Just to be clear.

And there is -- I mean, there is a reason for it, because we are using PEC score, and it's a lot more convenient to have a PEC core rated by some experts rather than in a home setting. And that's why the reason to split the 2 phases.

It bridges the PEC score with what we've already demonstrated.

That makes sense. And then the second question I had was regarding the impact of the healthcare reform Bill. I mean, obviously, if you sell this drug significantly in Alzheimer's, it's a rather large Medicare population and, like, 9 years after launch, you could be outside of that small biotech exclusion criteria, putting you within the 50 top drugs in Medicare. Have you thought about how we should think about -- I guess the first question would be, what is your estimated split for Alzheimer's for Medicare in the United States? And have you thought about how we should model that, given that that's now going to look like it's going to be in law?

So the Med D provision in the draft Bill is really focused in on those drugs that are already costing CMS billions of dollars. So that's where the negotiations are going to happen first. We - so, to answer your question, the Medicare portion of Alzheimer's opportunity is roughly 1/3 of the total opportunity that we've seen in our modeling. And we would expect that we would address these potential issues down the line as we're thinking about, for instance, pricing flexibility that we've communicated in the past and how we want to approach this particular market. The fact is we've got a long way to go to get to FDA approval, and thinking downstream about a Bill that has not yet been ratified is a little premature.

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

I have a couple. The first one is on SERENITY III. On the safety aspect, what exactly do you plan to collect in terms of metrics for the at-home use component?

The metrics for adverse events, for example, would be collected as you collect adverse events in any trial. The patients will be collecting adverse events at the time of dosing. There will be a reliable informant, we'll say. It may be a caregiver, it may be a spouse, may be a family member. A son, daughter, whomever will be there to also report adverse events, and they'll report these to the investigators. So the adverse events are collected identically to how you might study adverse events in other trials as an outpatient. A patient comes into the office and says, 'This is what happens. This is how I felt', and the investigator records that.

And then my follow-up is, given that the label currently does not restrict use of IGALMI to a specific setting, is there anything that precludes a position from sending a patient home with the film today as things stand?

Sumant, that's a great question. As you said, label focus is on under the supervision. So wherever there is a supervision available, IGALMI, we believe, can be used. We're just focusing in the hospital setting because 2/3 of the patients, out of 25 million episode, comes to the hospital market. It's a very well-defined and focused approach. How physicians will use it once they develop experience, all of that will unfold in the next 6 to 12 months.

Our next question is coming from the line of Kambiz Yazdi with Jefferies.

What's the significance of in-home use for SERENITY III? Do you anticipate that freeing the outpatient completely as a second indication? Regarding clinical meaningfulness in Alzheimer's agitation and psychosis, was there -- what gives you confidence in your endpoint and interpretation as clinically meaningful? And then for - lastly, for your MDD trial, what are the drivers for dose selection in that trial?

I will pass it on to Rob to answer both the TRANQUILITY program as well as then followed up with MDD.

Sure. So, let me be clear, it's the same indication in SERENITY III. This is acute agitation episodes associated with schizophrenia or bipolar disorder, and so we believe that using IGALMI for episodes that aren't just in the hospital or just directly in front of a healthcare provider, but enabling the patient to take this when they're agitated at home, could potentially even prevent the patient from requiring hospitalization or going to the emergency room or running to a clinic. So it's exactly the same indication, but there's tremendous value to the patient and the people around the patient to sort of prevent an escalation from occurring.

And then the second piece is that why patients end up in the emergency room, because agitation is a spectrum -- mild, moderate and severe. It escalates. So if you are preventing the agitation when it's in early stages or mild stages at home, it's very different than these patients will not need to go to the emergency room. So I think it's the dynamics between the institution -- the reason patients end up there, because they don't have a choice or no treatment options at home. So that's why they end up, 2/3 of the patient, in institution. And if IGALMI is available and when their PEC scores are lower compared to when they end up in the emergency room, you could treat these patients with the dose we have selected.

So, with respect to the major depression and dose selection, we are testing the tolerability and, of course, safety of escalating doses, both escalating individual doses and dosing at more than once a day -- for example, dividing doses. A morning and an evening dose, for example. And so the tolerability is really important prior to testing this in a proof-of-concept study for depression. So those are the sort of very simple biomarkers that would enable us to select the dose. How well is it tolerated? Are there any safety issues? And thus far, we continue to escalate patients.

We'll move on to our next question, which is coming from the line of Yatin Suneja with Guggenheim.

This is Eddie on for Yatin. For the at-home expansion program in SERENITY III, in part 1, what would be a reason why a patient wouldn't proceed to at-home dosing? Does the company, or experts you've spoken to, or regulators, have some safety bar for what would need to happen to ensure a patient can safely move to at-home administration? And then would there be a limit to the number of doses a patient can take in part 2? And then, for the MDD program, given the rapid onset of action you saw for agitation, do you expect to see a rapid onset of antidepressant efficacy, and what are the earliest time points you're looking for efficacy in those studies?

So the patients in SERENITY III, in the first portion, will be dosed with either placebo or the 60-microgram dose. Those patients are independent of the patients in part 2. Part 2 is testing the dose at home. It's not a gateway. So I realize that your question implies that you think a patient's going to start with part 1 and continue to use it at home. That's not what we're doing. The first part of the trial is patients who are acutely agitated, they present with agitation, and we're treating it with the 60-microgram dose. So we'll have very accurate bead, if you will, on efficacy as well as safety in a tightly controlled situation where everything can be monitored, just as if you were in the emergency room.

The second part of the study is entirely at home in a whole different set of patients. So again, we will have enough data. The FDA has said that they will consider this a pivotal trial for the indication at home.

So there were no safety concerns or any reasons that we could not do the first portion in the at-home setting. As I mentioned previously, it's all about having the robustness of the data and using the scale that we have used in SERENITY I and II pack, and we were able to use this and at the same time demonstrate the safety at home so that it can become a package to -- for label expansion or for another sNDA.

And then on (technical difficulty) efficacy?

Sorry, say that again, please?

The MDD study, if you could talk about what earliest time points you're going to look at for anti-depressive efficacy and whether that would be similar to what you'd see for agitation.

In MDD, we're not looking at 1 or 2 hours. We're looking at days and weeks. Efficacy in MDD, we expect to see very early, but remains to be seen. We'll be likely testing this within the first week, second week, et cetera, and we're not just looking at the acceleration of antidepressant response. We're also looking at the proportion of patients who improve. We know that SSRIs are not the be-all and end-all, for example. Antidepressants don't work for everyone. Maybe they work for a large proportion, greater than 50%, but we'd like to greatly improve that. So we're looking at both acceleration and responders or response overall when treated with BXCL501.

And this study is going to have 4 weeks or something like that, right? Treatment of...

Daily dosing over a period of 4 weeks.

We'll move on to our next question, which is coming from the line of Colin Bristow with UBS.

I guess, as we think about subsequent quarters where you're going to report revenue, can you just give us any details around how revenue will be recognized? Is it when order made? Is it when it's shipped? Is it when it's received? So that's question one.

Question two. Sorry if I've missed this, but it looks like TRANQUILITY 2 timing slipped a little from end of this year to first half of next. Just curious what's the rationale behind this.

And then, third, you -- any details or anything further you can give us on the other assets you're moving into the clinic?

On the sales, we're going to recognize sales when it's sold to the final customer, so the hospital. That's when we actually recognize sales.

And regarding the TRANQUILITY program, we are conducting this trial in ALF where the early patients reside and in residential setting. And we have observed COVID disruption sometimes in these sites, and that restricts access for CRO to go into the elderly center, and we don't know what could happen in the next several months, in the fall, with the COVID. So we are just being cautious in providing a guidance that there could be a slip on the data readout because of those reasons.

In terms of operational aspect, we are not seeing any issues in terms of number of patients that are there. These are entirely patients. They are frail, so you do get a little bit more screen failure than you will get it in the SERENITY trial, because those are younger patients. So I would say those are the reasons. Nothing very specific, except COVID-related delay or you can get more screen failures because these patients are frail and they may have some other associated medical complications, and they can get excluded.

Okay. Great.

And you had the third question. Was it related to MDD or our -- I just want to clarify.

Just in terms of the -- when do we get more information on your other assets that are somewhat under -- moving stealthily forward?

Sure. So that asset is now going through the formulation. We expect that work to complete, and then once we have done all the, like, preclinical work stuff and we are ready to take to the clinic, we will disclose what that asset is, which indications we are choosing. Initially, we have mentioned that, like, one of the indication where it fits in very well is chronic agitation in -- treatment of chronic agitation in dementia. But we continue to explore additional options where the mechanism will fit in, and we will lay out the plan in 2023.

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

This is [Richard Wynne] for Graig Suvannavejh, who sends his best, and it's great to be back on the name. So my first question goes on to SERENITY III plans. How large do you expect the study to be, with the goal of enrolling how many patients, and by when do you expect enrollment to end? And my second part of that is, what do you think is the incremental increase to revenue since 1/3 of episodes occur outside of institutional settings? Can we assume a 30% increase to peak revenues, or what would the company think?

First question, I will pass it on to Rob, so he can outline. He's agreeing on number of patients and everything, but we expect this trial to be pretty short. Just to remind everyone, our both trials, SERENITY I and II, had 750 patients, 375 each, and 3-arm study. There, we were testing 2 doses and a placebo, and we completed the enrollment in about 5 months or so. So these are very fast trial in terms of the timing, and in terms of the number of patients, I will pass it on to Rob because he is currently doing powering studies to make sure we power the study. Rob?

Yes. So each portion of the study -- the first and second half -- will be well under the, I believe it was, 350 patients in SERENITY I, 350 in SERENITY II. So, because they're independent patients, there are essentially, in a way, independent studies. We know that these will enroll relatively quickly. In addition, this -- there's no exclusion. So, unlike SERENITY I and II -- SERENITY I was patients with schizophrenia, SERENITY II was patients with bipolar disorders -- we're mixing that.

And the FDA has agreed that we can test this in both patients with schizophrenia and bipolar disorder at the same time in the same study, because our effects are similar. Humans are humans, regardless of what the underlying illness is, and thus we expect an even faster enrollment. We don't anticipate any problems with recruitment for this. Agitation is relatively common, and we were able to enroll both the SERENITY I and II very rapidly, even in the midst of the kind of the major part of the COVID pandemic.

So, Richard, we will provide a guidance once we roll out the plan -- pivotal plan, then when the data readout is expected. But it will certainly be in 2023, and we'll provide more granular guidance on first half or second half.

Just to take your question on revenues for the community setting, so the math that you're calculating here is correct in that there are roughly 1/3 of the agitation episodes in the community setting. But one of the things that we've learned in recent market research is that, specifically in the bipolar population, which represents the majority of agitation, we see approximately 10 additional episodes that are not captured in the claims data. So this is roughly a 60% increase in what we previously thought the community setting opportunity was. These episodes were not seen in the schizophrenia patients as typically, when they're compliant with their antipsychotics, it would suppress the agitation episode, so it made sense. It was identical to what we saw in claims. But in bipolar, those 10, what I'll call, shadow episodes are being managed through meditation, exercise, illicit drug use, alcohol. We believe that those are opportunities for 501, should we get the approval for that indication.

So then -- and you also mentioned that IGALMI exceeded expectations in their value proposition. What do you think the uptake curve should look like for IGALMI, then? Are you comfortable with where consensus is currently, or do you see that shifting?

So there's a -- as I said, there's an operational or mechanical process to unlock the value and uptake in hospitals, and we still have to deal with that process. However, the early signs have been very encouraging. The interest in the drug is very encouraging, and we see things moving in a very positive direction. So I wouldn't see that impacting the uptake curves near term, just because of the mechanics of getting drug on formulary and unlocking the potential for demand. But once that's behind us, I see a big opportunity in helping a lot of patients.

And we continue to see a lot of face-to-face meeting. Our sales teams are getting a lot of face-to-face time, despite the COVID or any other reason, and they're getting very positive feedback, as Matt said. So it's all very encouraging. In fact, whatever we were thinking this drug potential will be, now, being in the marketplace for 10 weeks, we are even more excited about it.

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

Just (technical difficulty) I wanted to ask if you could (technical difficulty) some additional information regarding the regulatory process for the indication for the (technical difficulty) IGALMI within the context of what you are trying to capture with SERENITY III. So if SERENITY III proves to be positive, what we should be thinking about with respect to a regulatory (technical difficulty) period. And also, if you could comment on any intent on your side with respect to doing any exploratory clinical work in generalized anxiety disorder, if any?

So, Ram, we would expect, once the trial is complete, to be able to put together a package for a supplemental NDA application very rapidly -- within a few months. And the review timeline will depend on the FDA, of course. We could request, for example, fast track, on the basis of several findings which we fully anticipate should have robust efficacy and similar or even better safety than what we have been approved with 120- and 180-microgram doses. And so that regulatory process we can certainly outline in a future discussion, but we really need to get this data. We believe we'll have the data relatively quickly, because we're enrolling all comers, if you will, with schizophrenia and bipolar disorder, and then we can provide more clarity and an update in the future.

With regard to additional indications such as generalized anxiety disorder, we are planning studies to look at a variety of potential indications, if you will, putting our toes in the water for indications like generalized anxiety disorder. We could look at any anxiety disorder -- panic, PTSD, acute stress disorder, might even look at developmental disorders. We've had a lot of discussions with, in fact, investors who have said, 'Well, why aren't you studying this in autism?', for example. And so we have plans to do basket studies.

These are studies where we take small numbers of patients and -- sort of preliminary. They tend to be open-label studies, and you just determine if there's a signal or not. They're cheap, they're fast, and they are a way for us to give a certain directionality to the next steps in development. But let me point out that our focus has been, and continues to be, primarily on the expansion to at-home use to demonstrate utility, efficacy and safety in Alzheimer's disease and agitation associated with Alzheimer's and major depressive disorder. These will be the next, if you will, for IGALMI.

Our next question is coming from the line of Corinne Jenkins with Goldman Sachs.

How should we think about your pricing strategy for potential indication expansion to include as-needed or chronic dosing of IGALMI?

Yes, so as we think of further downstream indications, we continue to have flexibility in how we might think about pricing in those settings. We haven't made any determinations yet. We'll still continue to monitor the market per the previous question around legislation and things of that nature. We'll watch the market dynamics closely, and we'll make a decision on pricing to best fit the markets that we're going into. Suffice to say that we have a very smart pricing strategy now in the institutional setting, and that may actually fit future downstream indications. So we'll continue to monitor and make that decision as -- if -- should we get approval for those indications and at the time that we enter those markets.

And could you also please confirm how many doses of IGALMI are you expecting patients to receive in part 2 of the SERENITY III trial, and for how long will you be evaluating the patients?

Patients will be using the BXCL501 at home when they have an episode of acute agitation. And so we're giving the film and monitoring them over a period of months so that we pick up the frequency and what happens when they use the film. Patients -- because it's placebo-controlled, patients are able to take, if you will, a rescue medication that will be very much an individual thing. Patients do take additional medications at home to attempt to treat their acute anxiety. They obviously also take alcohol or marijuana, try meditation -- there's a lot of things that they take. But principally we're testing the effect of a single dose of BXCL501 in that 60-microgram dose. And there is a possibility for an additional dose, but that will have to be up to the patient as to whether or not they're feeling something from the initial dose and calming.

It appears we have no additional questions at this time, so I'd like to pass the floor back over to Dr. Mehta for any additional concluding remarks.

Thank you, everyone, for joining us today. We look forward to connecting with many of you in the coming weeks, including at the Canaccord Growth Conference, where Matt and I will be hosting meetings and participating in a fireside chat. Have a great day.

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.