Marinus Pharmaceuticals Inc (MRNS) 2021 Q1 法說會逐字稿

Greetings, and welcome to the Marinus Pharmaceuticals First Quarter 2021 Business Update call. (Operator Instructions) As a reminder, this conference is being recorded. And it is now my pleasure to introduce your host, Sasha Damouni, Vice President, Investor Relations and Corporate Communications. You may begin, Ms. Damouni.

Thank you. With me from Marinus are Dr. Scott Braunstein, Chief Executive Officer; Dr. Joe Hulihan, Chief Medical Officer; Christy Shafer, Chief Commercial Officer; Steven Pfanstiel, Chief Financial Officer; and Kimberly McCormick, Vice President, Regulatory Affairs.

Before we begin, I would like to remind everyone that some of the statements made today are forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by such forward-looking statements. These risks and uncertainties and risks associated with our business are described in the company's reports filed with the Securities and Exchange Commission, including Form 10-K, 10-Q and 8-K.

I will now turn the call over to Scott.

Thank you, Sasha, and welcome to our first quarter 2021 business and financial update. This year is off to a tremendous start. We've continued to make progress across our oral and IV clinical programs, have intensified preparations for a commercial launch, deepened discussions with potential European partners, have made exciting headway in our next-generation formulation research and have strengthened our management team, scientific advisory Board and Board of Directors.

To support this continued progress, today we announced a $125 million credit financing that is being funded by Oaktree Capital Management, a global asset management firm specializing in alternative investment strategies. This financing provides us with access to additional capital to support our research programs and commercialization efforts as well as extending our cash runway through the end of 2022. The completion of this agreement assists in our ability to monetize the rare pediatric disease priority review voucher, we anticipate, would be granted with this potential approval of ganaxolone next year.

We believe the financing exemplifies Oaktree's confidence in our NDA submission, our company's ability to deliver on upcoming clinical milestones while providing capital to support our ongoing and future research and development programs as well as preparing for our first potential commercial launch. The NDA for the use of ganaxolone in CDKL5 deficiency disorder or CDD, is on track for submission by the middle of this year.

This is the first step in developing a sustainable oral franchise to address the meaningful opportunities that we envision over the long term. As a reminder, the sufficiency of the Marigold dataset to support approval will be determined during the FDA review process. The Marigold Study showed strong efficacy and a favorable safety profile and the open-label data from that study continues to display durability that has been noted since ganaxolone's early preclinical studies.

Let me give you a quick update on Europe. The company has had encouraging interactions with the European Medicines Agency, surrounding our planned oral ganaxolone EU submission and we remain on track to submit a pre-marketing authorization application by the end of the third quarter. We continue to have constructive discussions with potential European commercial partners and hope to have a partner selected over the coming weeks to months.

We would expect oral ganaxolone, if approved, to be commercially available in Europe beginning in the middle of next year. We have been intensifying our commercial planning efforts in front of potential mid-year 2022 CDD launch in the U.S. This is the first call that you will hear prepared remarks from our Chief Commercial Officer, Christy Shafer.

Christy has been building a fantastic team filled with experts in both the orphan disease space as well as the hospital arena. Our medical science liaisons are working diligently to prepare for their educational efforts with the clinical community. Our message will focus on the mechanism of action of ganaxolone and its modulation of the extrasynaptic GABA receptor and the unique characteristics and results of that binding. We believe that ganaxolone will have a differentiated profile based on efficacy, safety and durability. More to come on our commercial plans from Christy.

Let me move to our TSC program. We expect to share top line data from the 23-patient Phase II study with the investment community around the middle of the third quarter. We have completed the study design for our planned Phase III trial of ganaxolone in tuberous sclerosis complex, or TSC, and an end of Phase II meeting with the FDA, based on an interim data analysis is expected early in the third quarter.

As a result, we are planning for site initiations to begin for the Phase III trial in the latter portion of the summer, while the first patient enrolled is anticipated in the fourth quarter of 2021. We are targeting completion of site selection by the end of Q3, and we expect to share our timelines for the Phase III study by the end of September. We also plan to meet with EMA early in the fourth quarter to obtain scientific advice on the Phase III trial and clinical development program. We plan to submit an orphan drug designation request for the use of ganaxolone in TSC in both the U.S. and EU later this year.

We believe ganaxolone has the potential to play a critical role in the chronic treatment of refractory epilepsies. To further support our expanded clinical efforts, we announced today that we have strengthened our scientific advisory board with the appointment of separate leading experts in clinical neurology and pediatric seizure disorders.

Joining our SAB, our new members, Dr. Elizabeth Thiel from Massachusetts General Hospital and a Professor of Neurology at Harvard Medical School; Dr Elia M. Pestana Knight, pediatric epileptologists in the pediatric epilepsy section at the Cleveland Clinic, and Dr. Nicola Specchio, Head of the Epilepsy unit in the Department of Neuroscience at the Bambino Gesù Children's Hospital, Rome, Italy. I'd like to shift gears and move to the IV program. Our Phase III clinical trial of IV ganaxolone for the treatment of refractory status epilepticus or RSE, the RAISE trial continues to advance.

I know that many of you have been tracking both the rate of new COVID infections and hospitalizations in the U.S., and we are thankful that the numbers continue to significantly move in the right direction. COVID hospitalizations are below 40,000 U.S. patients for the first time in almost a year and showing continued progress, which is encouraging news. Despite these challenging hospitalization numbers, interest in the study over the past several months has continued to be robust. Our clinical operations team has done a tremendous job to open sites in major academic centers in the middle of this pandemic.

We continue to open sight and evaluate enrollment accordingly. We are happy to report that currently, total patient per site numbers are tracking in line with our expectations thanks to the diligent interactions from our clinical development team, including Dr. [Henry Bekavac] and Dr. (inaudible). It is still early in the study. However, at this time, we are reiterating top line data readout for the RAISE trial in the first half of 2022, despite the persistent COVID headwinds and that have affected site activations for the past 6 months. More than half the trial sites are expected to be opened by the end of the second quarter, with the vast majority open by the third quarter.

Planning also continues for a separate European RSE trial recently named the RAISE II trial to begin in the first half of 2022. A meeting was recently held with the EMA, where we engaged in a very constructive dialogue and that Joe will describe in further detail. Our European strategic discussions encompass both the oral and IV franchises, and we believe a partner would bolster our ability to execute on a second appropriately powered IV registrational trial.

Our hope is that we will have a partner in place to help fortify our execution effort, specifically around site selection and medical education. We currently believe that the RAISE 2 trial would not only serve as a pivotal registrational trial for European approval, but has the potential to have an important clinical implications for the global market. More to come from Joe.

As we continue to build the team and strengthen the organization, this will be the first business update conference call for a newly appointed CFO, Steven Pfanstiel. Steve has been a major contributor in the completion of the credit financing and his amazing effort and strong leadership skills could not have come at a better time for the organization. Steve has only been with us a few weeks, but the entire leadership team is thrilled with his ability to jump right in and contribute in a meaningful way.

Finally, we are pleased to welcome Dr. Sara Nochur to our Board of Directors. Sara brings tremendous experience and success in managing global regulatory and drug development and has been involved in the approval of several novel drugs for rare diseases. Sara is currently serving as Alnylam Pharmaceuticals' Chief Diversity, Equity and Inclusion Officer. We plan on tapping into our expertise as we continue to build our corporate culture and drive to achieve our core values at Meredith. Commitment, innovation and community.

I would now like to turn the call over to Christy Shafer. Christy joined us as our first Chief Commercial Officer 6 months ago. I am pleased to have her provide more on her early thoughts as we plan for our first potential commercial launch.

Thanks, Scott, and thank you, everyone, for joining our call today. As Scott mentioned, we are fully engaged in developing our commercial launch strategy and plan. The commercial team continues to broaden its capabilities by solidifying the internal and external strategic plan. During Q1, Marinus finalized the senior leadership construct by welcoming its market access, sales and marketing, operations and commercial supply chain leaders who are in turn, developing the operational and tactical plans. Our most recent addition to the team is Lisa Legalon as Vice President of Sales, who joined us from Alexion.

We will continue to grow the commercial team commensurate with planning for a mid-2021 NDA submission of ganaxolone in the treatment of epileptic seizures associated with CDKL5 deficiency disorder and a midyear 2022 launch, if approved.

Our strategy is consistent with basic principles of orphan disease launches. First, we plan to keep the organization lean with 16 to 20 account managers and 4 payer representatives on specializing on Medicaid.

Our sales and marketing efforts will be focused on top treaters and high influencers as most of the commercial opportunity is concentrated in a limited number of facilities. We have completed several core pieces of market research that have been formed the assumptions and conclusions underlying our go-to-market strategy. We have now finalized several key critical elements in our process such as a patient journey, account segmentation, deployment strategy and market size and structure. This work has given us the foundation upon which to build our branding, messaging, print and digital platforms.

We are in the final stages of selecting our external marketing agency, an important decision to be made collaboratively amongst the Marinus cross-functional team with an emphasis on our cohesive and targeted messaging platform design that will prioritize the unmet needs of our CDD patient population. From a pricing perspective, we want to ensure our value proposition is reflected. As part of those efforts, we are generating health economics and outcomes research to bolster our value proposition. This includes managing the reimbursement and payer landscape to ensure timely access and assuring we can mitigate any potential complicating restrictions.

Additionally, we continue to monitor the competitive landscape and engage market access experts across the U.S. and Europe. We are confident that these efforts will characterize true value for our patients living with CDD, their families and for the physicians that treat them.

I'd like to turn the call now back to Scott.

Thank you, Christy. Two additional comments from me before I turn the call over to Joe. Joe will walk you through the updates to the CDD data and Kim will discuss our regulatory activities, but I am confident that we have been diligent with our preparation of the NDA and in our interactions to date with the U.S. and the EU regulatory authorities. Timing is on track for both our FDA and EU submissions, which are our top priority, the final data analysis does not affect the statistical and clinical conclusions of the study as reflected in our May 2021 corporate deck.

Finally, we continue to progress our oral reformulation and prodrug endeavors and evaluate other opportunities for ganaxolone in additional refractory epilepsy indications. We still expect to move at least 1 of these formulations into the clinic in the first half of 2022. As we announced this afternoon, we are planning on initiating a Phase II trial in Lennox-Gestaut syndrome, or LGS, in the middle of 2022, and if all proceeds as planned, with a potential new formulation.

Given the overlap in seizure types and etiologies with other disorders, where ganaxolone has shown meaningful potential, specifically CDD as well as early encouraging data in the TSC patient population, we believe the future investment is warranted. We understand that the LGS market is highly competitive and would look to enter the market with the best chance of a differentiated clinical profile. With that, I would now like to turn the call over to our Chief Medical Officer, Joe Hulihan. Joe?

Thank you, Scott, and welcome, everyone, to our business update call. Let me get right into it. I'll start with our program in refractory status epilepticus or RSE. In the RAISE RSE trial, even with COVID-19 delays, we're still expecting to have more than half the sites opened by the middle of the year, with the vast majority of sites opened by the end of the third quarter. We're encouraged to see that sites are screening appropriate patients and we're pleased with the rate of enrollment to date. Our experience with screening reinforces our conviction that we have the right study design, and we thought very carefully about response rates in the control arm.

Let me explain that a bit. The protocol requires that patients have failed 2 second line AEDs. We've asked sites to prescreen potential study candidates after they failed the first second line AED so they can be enrolled quickly after failing another. We believe that requiring failure of two second line AEDs will lessen the response to standard of care. In fact, some patients have actually responded to the second of those AEDs. If we'd enrolled those patients in the trial, it's likely they would have been placebo responders.

So we believe that requiring failure of two second line AEDs is the correct strategy for defining the population in this study. We're continuing plans for an RSE pivotal registration trial in Europe, which we have named the RAISE 2 trial targeted for the launch in the first half of 2022. We had a very productive dialogue with the European Medicines Agency and reached agreement on major features of the study design and endpoints.

Since one of our goals is establishing leadership in the treatment of status epilepticus. We were pleased to hear that our approach to studying RSE could influence the next version of EMA treatment guidelines for epilepsy. The U.S. and European studies have similar enrollment criteria study designs, but there are some key differences. Both studies are double-blind, placebo controlled trials. And in both, patients must have failed initial treatment with a benzodiazepine, such as Lorazepam and midazolam.

However, in the U.S. trial, as I mentioned, patients must then fail at least two second line IV AEDs, but in the European study, they will need to have failed only one. The reason for this is that, unlike in the U.S. study, in RAISE 2, IV ganaxolone or placebo is started at the same time as the second standard of care AED. We're aware that treating earlier in the course of RSE could allow a better response to standard of care, thereby producing a higher placebo response. However, we've anticipated that possibility and have incorporated other features into the study design intended to maintain the placebo response at a low rate. The U.S. trial has 2 co-primary endpoints: One, assessing early response; and the other, prevention of progression to IV anesthesia within 36 hours, looking at durability of response.

Since physicians don't use IV anesthesia for the treatment of status nearly as much in Europe as in the U.S., we modified the durability endpoint for the European trial to be any escalation of care whether an IV anesthetic or another AED to treat status.

Importantly, instead of co-primary endpoints is in the U.S., EU regulators prefer that we use a combined endpoint i.e., a responder analysis. A responder is defined as having cessation of status within 30 minutes and no escalation of care within 36 hours. The differences in design and study endpoints mean that these trials are now complementary to each other, further increasing the chance for success of the overall program, and having the potential to broaden the efficacy claim for IV ganaxolone and RSC.

Next, I'd like to give you an update on our trial in established status epilepticus, or ESC. ESC is earlier in the treatment continuum of status epilepticus as an RSC and is defined as status that continues following failure of benzodiazepines. The ESC study will enroll patients from emergency departments with convulsive rather than non-convulsive status.

We plan to initiate the study in early 2022 after we've completed the process of exception fully informed consent and gained alignment with the FDA. It's important to note that patients who qualify for the ESC trial have a type of status distinct from those who would enter the RAISE trial, who will have predominantly non-convulsive status epilepticus. So we can consider the same sites for our established status trial without compromising enrollment in RAISE study.

In the ESC study, ganaxolone is intended to act as an adjuvant to standard of care, which will be the initial second line IV AED. The ESET study in established status epilepticus showed that response rates to the standard of care AEDs is less than 50% within the first hour. We believe that ganaxolone has the potential to reduce the time to response and increase the durability of effect of standard of care IV AEDs. Our goal in the study is to find a safe and well-tolerated dose of ganaxolone.

The study design we proposed on the FDA involves the initiation of ganaxolone at the same time as the first AED following benzodiazepine failure. The trial utilizes a novel sequential design to assess the safety and efficacy of several doses and infusion durations of ganaxolone, with the optimal dose regimen progressing to a double-blind Phase II study versus placebo.

Now I'd like to give you a quick update on our Oral ganaxolone programs. In PCDH19 related epilepsy, we still plan to submit the results from our Phase II study for presentation and an upcoming scientific meeting and for publication in the medical journal. We recognize that this condition is a difficult one to study due to the intermittent and variable nature of seizure activity.

Importantly, we'll continue to offer ganaxolone to any patient who participated in the study and wishes to continue treatment. And in CBD, as Scott mentioned, we're on track for a midyear FDA submission and for filing with the EMA in the third quarter. We also plan to submit a series of abstracts for the upcoming AES meeting in December, including the 1-year open-label extension data from the Marigold study.

So far, with data on 48 patients who reached 1 year of open label treatment, we're seeing percent reductions from baseline during open-label months 11 and 12 of 46.5% in patients who are on ganaxolone double blind. Those who have been on placebo and transitioned to open-label ganaxolone achieved a percent reduction of 53.8%. We continue to work with several centers across the U.S. who have shown interest in the CDD expanded access program, and we are committed to making ganaxolone available to patients prior to a potential U.S. approval.

We recently discovered that the top line data that we previously presented included duplicate seizure diary entries resulting from a data transfer error. This affected less than 2% of the over 73,000 total diary entries, though there were some small differences between the top line seizure reduction data and the validated data set for regulatory submission.

The final statistical analysis of the primary endpoint showed that the percent change in major motor seizures in the ganaxolone group was 30.7%. And for placebo, it was 6.9%, with a p-value of 0.0036. The previously reported top line data analysis showed a reduction of 32.2% for ganaxolone and 4% for placebo with a p-value of 0.002. These changes do not affect the statistical or clinical conclusions of the study, and there were no changes in key secondary endpoints, safety data or other study outcomes.

With regard to TSC, we're planning an end of Phase II meeting with the FDA early in the third quarter and with the EMA in the fourth quarter. We're also anticipating a second meeting with the FDA to receive scientific advice on our IND submission. We expect to initiate our Phase III TSC study with the first patient enrolled in the fourth quarter of this year. The study will enroll 160 patients who failed at least 2 prior AEDs.

We anticipate that study participants will be taking a range of concomitant medications. And unlike the Epidiolex study, our trial will allow enrollment of patients taking the mTOR inhibitor, Afinitor or everolimus, which is used for treatment of seizures and also for TSC associated tumors. And we expect that roughly 50% of patients will enter the study taking or having failed Epidiolex.

We're also exploring new indications this year, including Lennox-Gastaut syndrome. Our current thinking is that this would complement our work in other pediatric epilepsies, as we've had several patients in our CDD and TSC studies who carry the diagnosis of LGS, unlike a genetic epilepsy diagnosis, LGS represents a clinical syndrome that can have a number of different underlying etiologies. We'll share more of our thinking about a clinical trial sometime later this year.

As always, in closing, I would like to thank the patients, families, medical professionals and advocacy groups who've been so supportive of our efforts. Now I'd like to turn the call over to Kim for a regulatory review.

Thanks, Joe. Since we've been receiving an uptick of regulatory questions from the investment community, we wanted to discuss our interactions and communications with the FDA and EMA. A pre-NDA CMC meeting was held with the FDA in August of 2020 for the Marigold study. During the meeting, the FDA provided very constructive feedback and overall agreement on the format and content of the CMC section of the NDA was achieved. Subsequently, in January, we had a Type A meeting with the FDA to review our proposal that 1 Phase III study would be adequate to support our NDA submission for CBD.

Prime to the meeting at the FDA's request in addition to the details of the Marigold Study, we provide information on legacy epilepsy studies conducted by the company that have failed to show efficacy, most notably a Phase III study of focal seizures in adults. We reviewed key aspects of that study in the Marigold trial, in particular, differences in dosing and PK that we believe explain the discrepancy and study outcomes and support the efficacy that ganaxolone demonstrated in the Phase III CBD trial. Following review of the data and information we provided, the FDA agreed that the Marigold Study would be adequate to support our NDA filing and that the adequacy of the data for NDA approval would be determined by the review of the NDA during the process.

We completed a pre-NDA meeting with the FDA at the end of the first quarter. The FDA has been very engaged and responsive and provide constructive feedback in the pre-NDA meeting on what information they wanted to see in the NDA and in what format. Rapid response teams are being set up to quickly respond to any potential requests from the FDA. We believe that the final data analysis for the Marigold Study fully supports this submission, and we remain on track with our U.S. and EU regulatory filings.

It's worth noting that we had a successful pre MAA meeting with EMA in March 2021, and an overall agreement was achieved on the format and content of the MAA, a meeting with the Rapporteur and collaborator to discuss the MAA is planned for the end of May. Now I would like to turn the call over to Steve for a review of our financials.

Thank you, Kim. I am pleased to be able to share our financial results. For the first quarter of 2021, we recognized $1.8 million in federal contract revenue related to the BARDA contract. This contract was signed in September 2020, and so there are no revenues associated with this from the first quarter of the prior year. As a reminder, our base BARDA contract extends approximately through the third quarter of 2022 and is expected to provide a total of $21 million of non-dilutive funding over this time.

The potential exists to extend the BARDA contracts further based on success-based milestones with potential total funding of up to $51 million. Research and development expenses increased to $18.6 million for the 3 months ended March 31, 2021, as compared to $15 million for the same period in the prior year. The change versus the prior year was due primarily to costs associated with increased clinical activity, including start-up of the RSE Phase III trial and increased resourcing, primarily within our clinical and CMC teams.

General and administrative expenses increased to $10.4 million for the 3 months ended March 31, 2021, compared to $3.9 million for the same period in the prior year. The primary drivers of the change over the prior year were increased support for scale-up of the company's operations as well as preparation for commercialization.

The company reported a net loss of $27.1 million for the 3 months ended March 31, 2021, compared to $18.7 million in the same period a year ago. These totals include noncash stock-based compensation expense of $5 million and $1.9 million in Q1 2021 and 2020, respectively. The first quarter of 2021 included $2.1 million of stock-based compensation related to a severance agreement with our prior CFO.

Cash used in operating activities increased to $16.2 million for the 3 months ended March 31, 2021, compared to $14 million for the same period a year ago. As of March 31, 2021, we had cash and cash equivalents of $123.5 million. This balance, combined with the net upfront proceeds of the Oaktree credit agreement, will enable us to fund the company's current scale of operating expenses and capital expenditures through the second quarter of 2022.

As a result of the credit facility, our focus on executing a European partnership in our plans to monetize the priority review voucher associated with an anticipated CDD approval, we look to accelerate several key investments within the business, including the TSC and RAISE 2 Phase III trials, activities to support European approval and additional formulation work related to ganaxolone.

As a result of this, we estimate operational expenses of between $113 million and $118 million for the fiscal year 2021. This total includes approximately $16 million of stock-based compensation. Offsetting these expenses, we estimate BARDA revenues of between $9 million and $12 million for the fiscal year 2021. In addition to the first quarter financial results, I would like to provide additional details of the credit facility with Oaktree Capital signed on May 11, 2021.

Under this agreement, we have the ability to access up to $125 million of credit financing, subject to certain conditions, to be taken down in tranches upon successful completion of certain milestones. We have already received the initial $15 million upfront payment in connection with our signing. Two additional tranches of $30 million each occur based on progression of the CDD indication with one funded at FDA acceptance of the NDA filing and a second funded upon FDA approval.

The remaining $50 million will be available at our discretion upon successfully achieving certain clinical, financial and commercial milestones. Importantly, this facility provides the potential to extend our cash runway significantly based on just the CDD indication alone and does not encumber our ability to monetize the potential priority review voucher.

With that, let me say I'm excited to be a part of Marinus and work alongside such a talented and top-notch group of experts. My first few weeks at Marinus have been incredibly productive, and I am excited to see this company become a commercial leader in rare epilepsies.

Now turning the call back to Scott, who will provide concluding remarks.

Thanks, Steve, and once again, welcome aboard. Before concluding our prepared remarks, I want to thank the entire Marinus team who has been responsible for the significant progress we have made and continue to strive to bring ingenuity and solutions to challenges. Our headcount has hit a milestone of close to 100 employees, and I could not be more enthusiastic about the next stages in the company's history. Operator, can you now open the call to questions.

(Operator Instructions) Your first question comes from the line of Joe Thome with Cowen & Company.

Maybe just one on the RAISE 2 study design. Is there any consideration for which specific AEDs can be used in conjunction with ganaxolone? And is there any worry that there could be drug-drug interactions or any exacerbations of potential AEs when you do the combination of ganaxolone and other AED?

Joe, thanks for your question. No, there's no limitation on the other AEDs. It's the investigator's choice. The number of available AEDs, it isn't that many. And so -- but we do expect we'll get randomization will balance out. What drugs are using that that'll reflect standard of care. In terms of drug interactions, no, there is potential interaction with the SIP3 or enzyme inducing drugs. But we -- in an oral epilepsy study, we didn't see any effect, any difference in efficacy based on the use of the other drugs. And the dose of ganaxolone used in the trial was high enough we wouldn't expect to see any interaction, especially with acute use. I don't think that will be a factor at all.

Your next question comes from the line of Alethia Young with Cantor Fitzgerald.

Congrats on the progress. This is Nina on for thank you. For the full TSE readout, what additional data will we see? And how do you think about what is comparable data versus competitors?

Joe, why don't you take it?

Yes.

I am not going to do anything. I'm going to let everyone else do all the work.

Yes, I think this Phase II study focuses on kind of key efficacy and safety data. So there'll be some other ways to look at the seizure data, obviously, the usual safety data and then one of the things we're interested in with this study is how -- if we see any differences with different drug combinations, particularly Epidiolex or Afinitor, and also seizure types. The seizure types in this disorder are different in some ways than those we see in CDD. So those are the main things we're looking at. In the Phase III study, we'll have a range of Peter reported outcomes and other assessments, but we're focusing on the key data from the Phase II.

Your next question from the line of Joon Lee with Truist Securities.

Thanks for the update. For the loan from Oaktree, one of the interest terms was East Draw, are there any clawback provisions if the outcome doesn't use certain expectations? And is there any flexibility with Oaktree for further funding for general indications?

Before I turn it over to Steve for the details, let me just hit on the big picture, Joon, and thanks for the question. First of all, we're thrilled to do this deal with the Oaktree team. They've been great. They've been a fantastic partner. And I'll have Steve walk you through the specifics of this deal, but I think we believe that this is a partnership that could expand in many different forms over time. And I think they've taken a lot of time to be quite thoughtful in this deal. So happy to have them as a partner, but Steve, why don't you walk through all the details of the deal for Joon?

Yes. June, yes, certainly, happy to walk you through. So I think we've mentioned it's up to $125 million of financing. Obviously, tranche, the first $75 million we can take relative to CDD indication alone. The remaining $50 million is driven by clinical, financial as well as commercial targets. The interest rate on it is 11.5%. It's interest-only for the first 3 years. And then it is at full maturity after 5 years. There is a picking fee that starts 120 days after funding of the $30 million tranche from the CDD filing acceptance, that first $30 million tranche of funding. I think it's worth noting, there's a couple of things worth calling out. We could still monetize the PRD, we still have the ability to do a U.S.-based synthetic royalty, and we are able to do a European partnership. So those are kind of a number of the key things. In terms of expanding further, I think that's something we can discuss further as we go along, and we look at this as a relationship, a long-term relationship with Oaktree.

Your next question comes from the line of Marc Goodman with SBB Leerink.

Joe, can you talk about LGS a little bit, what proof-of-concept data you have that made you want to pursue this indication?

Yes. So we did have -- LGS is a diagnosis. It's not a specific genetic diagnosis. It's multiple etiologies. So we had some patients in the CBD study that also carry the diagnosis of LGS. And so we're -- we started to analyze that data, but without giving too many specifics, I think it gives us confidence that an LGS study, not a large number of patients, but it heads in the right direction. And so we've had a previous study in multiple seizure types, developmental and epileptic encephalopathies.

And there was a small number of LGS patients in that, but that study really didn't capture the data in a way that we could you to see whether there's a proof of concept. The other thing that gives me confidence about LGS is the seizure types are largely similar to CDD and so I'd expect to see the same efficacy in other etiologies as we did in CBD. And if we pursue it, it would likely be with a reformulation, it's going to give us some better and more even exposure to the drug. So I think that's a plus 2.

And Joe and Marc, I'll add one additional comment, Marc. We've updated our slide deck, and we've now included in that slide deck, the PK analysis that Joe and Alex have performed on -- at least the failed 3 focal onset study. And I think we're seeing clear differences in PK levels in studies that were previously performed by the company. We think that is just a function of dose titration over the course of a month, 3 times a day dosing. And I think when we look back at the LGS study, you're seeing a consistent signal -- or inconsistent signal in terms of PK, which we think is very different than what we've seen in the CDD study. Thanks for the question, Marc.

And your next question comes from the line of Douglas Tsao with H.C. Wainwright.

I'm just curious, in terms of the RAISE 2 trial, I know you mentioned the opportunity potential is sort of expand the utilization of drug. Are you engaged with the FDA? Or do you plan to engage with the U.S. FDA about whether that would meet standards to have inclusion in terms of the label and sort of potentially sort of move up the treatment paradigm?

Go ahead, Joe, do you want to start?

Yes. No, maybe I could turn this one over to Kim for the regulatory piece of this.

Sure. Thanks, Joe, and I can take that. So we have not yet discussed the RAISE 2 study with the FDA. The current plan is to -- once we have the data from that study, we will then discuss the FDA how and what our potential options are for expanding that delay at that time.

Yes. And let me just give a little more color. I think we understood -- I think we have to step back and say, "Hey, we knew we would require a different regulatory path with the European agency." I think we've gotten to a very good place with the European regulatory agency. And given that study design, we do believe it is so complementary to what we're doing in the U.S. that it would be logical for us to have that interaction with the agency. We'd love to have sites in the study in the U.S. as well. I think from a timing perspective, we would only initiate those sites in the U.S. when the RAISE trial itself was significantly enrolled that we wouldn't see it as a conflict. So we think it's a pretty logical discussion for us to have and certainly, we'd love to have their buy-in from where we are today. But I think as we all know, anytime we do additional studies, it's always going to be a discussion or a filing with the agency in terms of a potential label expansion. Thanks for the question.

Your next question comes from the line of Jay Olson with Oppenheimer.

Congrats on the progress, and we're curious about CDD. Can you talk about any feedback you've gotten from payer discussions or other prelaunch activities? And do you think the 50% seizure frequency reduction for CDD that you saw in the first 12 months of the OLE could improve beyond 12 months? Or is that a plateau effect? And then I had a follow-up question, if I could.

Christy, maybe you want to jump right in and take that?

Go ahead.

I'm sorry, Joe, it's going to have Christy.

No, please. Please. Yes.

Hey, so from a payer perspective, we've done a significant amount of research, just understanding the marketplace, how they use CDD and the expectations that they have. We have finalized that research and we're moving into our phase of just the internal discussions of that research and how we move into a more strategic plan. I will say, though, because this will be the first and only payer discussions have been very, very, very positive.

So we're increasingly more secure in our value proposition in this patient population. I will also say that based on the market research that we've done with payers and physicians, there is an incredible appetite for a new medication for these patients that is over that 25% reduction standpoint. So that lower threshold certainly supports our communications. So from a clinical perspective, I'll certainly turn it over to Joe.

Yes. So in terms of the long-term follow-up, yes, there is a potential right now, patients are still moving through. And I think we need to see more patients with the longer-term follow-up to see what happens. I think at a minimum, they'll maintain the efficacy, but there is an opportunity, especially some patients could potentially become teaser free or we could see a change in the overall median, but I think there's possibility that we could continue to see improvement.

Operator, why don't we go to the next question.

And your next question comes from the line of Brian Skorney with Baird.

Thanks for all the hollow and transparent in the call. I guess when it comes to the CDD indication, I was wondering if you could just kind of walk us through what the kind of gating factors here are for the NDA submission. And can you just review are both the CDD and TSC pathways under the division of Neurology 2? And last, for TSC, you said the upcoming FDA meeting will be based on an interim analysis. I guess it's an open-label study. So maybe you can talk us a little bit about what you've learned from the study so far, if anything, to kind of give the confidence into moving into Phase III and that you sort of already have an idea of the interim analysis you'll be discussing in that meeting?

Kim, you want to kick off on the -- where we are with the NDA filing and your thoughts about the TSC meeting in the next year wants to add anything you can hop in if.

Sure. So in regards to the NDA submission, we're actively in the process of preparing the NDA submission for filing as targeted by the end of June. So there's a lot of work ongoing at this time, and a lot of preparations, but we're still on track to have everything delivered as soon as by the end of the month. In regards to the PSC study, we are planning to use the data cut from the open-label study to submit request to the FDA for an Endo Phase II meeting in July, and hopefully, having that meeting in the August, September timeframe to support the initiation of our Phase II study. I will also be discussing the study with the European agency as well in parallel, but slightly [staggered] timeframe between discussions.

Yes. And yes, I could comment on the TSC in terms of what we're looking for. I mean, I think the most recent benchmark would be Epidiolex. And so obviously, we'd like to see a magnitude of effect similar to that. It is an open-label single-arm study. So in terms of predicting a placebo response, we have to use historical control, but really knows the magnitude and the direction of the effect and we're seeing in the interim look, we're seeing things head in the right direction. And we'll present the full data set. I think later this summer, we should have that.

And your next question comes from the line of Michael Higgins with Ladenburg Thallmann.

Congrats on the continued execution. Certainly a lot going on these days. Look forward to seeing the continued progress. Question for you coming out of Europe. We've discussed for some time now about the differences in the protocols between U.S. and European ED departments and I think that's driving the difference in the design of the RAISE 2 study over there, but also posed some challenge because of the placebo response, which you mentioned. Can you help us a little bit in understanding what you expected efficacy rates would be for the 2 different regions RAISE versus RAISE 2?

Sure. Yes, it's a bit complicated. I think the endpoints are different. As I mentioned, in the EU, they tend not to use IV anesthesia nearly as much. It's the standard of practice, really neurologists in ICUs by the time it gets to that stage of status. And so the second part of the endpoint is any escalation there rather than escalation to IV anesthesia, that's one accommodation on to make to that. And actually, the endpoint itself is different. In the U.S. is 2 co-primary endpoints. They each have to hit on their own.

And the EU is a combined endpoint responder analysis that -- so a given patient has to have an early response as well as a durable response. And I think that because they have to have the early response, in particular, that the power of the study has actually increased because of that. And also I think escalation of care, I think you can extend, obviously, we'll show superiority there to standard of care alone. And so the overall magnitude of the effect is the same in the U.S., we're expecting to see a 30% delta between ganaxolone and placebo, but for different reasons, the parameters for that are different, and that's reflected in the sample size.

Initially, we were going to do a combined study with the U.S. pool -- the data, but with this complementary rather than identical design, the study is being done on its own, but we can achieve the same power with a much smaller number of patients, the planned sample in Europe with 70 patients. And so again, that's a reflection of the increased power with the responder endpoint.

And your next question comes from the line of Andrew (inaudible) with Jefferies.

So my question is on CDD. Should we expect an ADCOM panel once you file, what do precedents suggest in rare epilepsies? And just wanted to confirm, investors should assume a 12-month standard review once you submit?

Thanks for the question, Andrew. I'm going to turn it over to Kim. We all heard typing in the background. We thought it was us. I guess, it was Michael, who is keeping us all a little bit on our toes. Thanks, Andrew. Kim, why don't you take the question?

Sure. Thanks, Scott. So the FDA will actually determine if there is a need for an ADCOM as part of any typical NDA planning we are actually repairing for potential ADCOM. And so we hear confirmation from the FDA, whether or not we will (inaudible). So at this point in time, we have (inaudible) since we are going to have one (inaudible) otherwise from the agency.

In regards to the filing duration, as this is an organ in a rare disease, we will be requesting prior review as part of the NDA commission. And I'm very confident that we'll be able to obtain that priority review for the very high unmet medical need. Therefore, getting the reduced review time of the 6 months versus the typical standard 10-month filing. So we do anticipate when you consider the 60-day fileability timeframe plus the 6-month review, that we're targeting to have approval by the end of first quarter of next year. Does that Answer your question?

And your next question comes from the line of Jason Butler with JMP Securities.

Congrats on the progress. Just one on the formulation work you're doing. Can you just give us your kind of thoughts on target profile for the first formulation in terms of bioavailability and PK dynamics and how you're thinking about prioritizing the indications that you could move into with the different formulations?

Thanks, Jason. I appreciate it. This is Scott. I'll take it. So we recognize the formulation program will be a multistep approach. And I think it starts with the basics that we understand the current bioavailability and the variability of the current formulation is significant. And so what we want to do as a first step is replicate tid dosing and really give patients, physicians the ability to all obtain a therapeutic blood level and potentially allow physicians to titrate that blood level.

And so right now, our 3 programs, as we mentioned in prepared remarks, any 3 could go into the clinic next week are all about better bioavailability, but really replicating that t.i.d. dosing paradigm. After that, we will work very aggressively on the drug delivery technology platform to stretch dosing from either t.i.d. to b.i.d. or even t.i.d. a q.d., but I think more importantly, from a drug delivery standpoint, on a formulation standpoint, we want to minimize CMAX and make sure we have stable CMins.

And I think we now know very clearly from Marigold that we don't want our CMins to go below 75 nanograms per ml and I think we can ultimately create a formulation, which is better tolerated, gives physicians flexibility on dose titration, ultimately will be incrementally easier for patients and family members to administer their patients, but I think quite honestly, the b.i.d. or q.d. formulation is much more importantly about having a good control of CMax and CMin. So that's how we're thinking about it, and we're excited about the progress we've made to date. And we're going to try to move very quickly, but we also have a long-term vision for the franchise, which we're thinking about quite a bit. So with that, operator, we're going to make that the last question that's coming upon 09:30.

We want to thank everyone for dialing in. Certainly, it is great to have you all. We know there was a lot in the press release to digest so we'll be available for follow-up calls. And I just want to thank the team again. They've just done a great job of helping us move the ball forward, thrilled to have the Oaktree team on board and having Steve, Christy on this call with Joe, Kim, myself, Sasha, and we didn't hear from Alex today. I just aren't thrilled about where our team is today and us moving forward as an organization. So thanks, everyone, and we'll talk to you soon. Operator?

And this concludes today's conference call. Thank you for your participation. You may now disconnect.