Tvardi Therapeutics Inc (TVRD) 2015 Q1 法說會逐字稿

Good afternoon and welcome to the Cara Therapeutics first-quarter 2015 earnings conference call. (Operator Instructions)

Please be advised that this call is being recorded at Cara's request. I would like to turn the call over to the Cara team. Please proceed.

Good afternoon. This is Jesse Baumgartner with Stern Investor Relations. And welcome to Cara Therapeutics's first-quarter 2015 earnings conference call.

The news release with our first-quarter financial results and corporate update became available at 4:00 PM today and can be found on our website at www.caratherapeutics.com. You may also listen to a live webcast and replay of today's call on the investors section of the website.

Before we begin, let me remind you that statements made on today's call regarding matters that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of these forward-looking statements include statements concerning the expected timing for the Company's clinical trials and the reporting of clinical trial results; the acceptability to the FDA of the Company's proposed Phase III program for I.V. CR845; the potential results of ongoing and planned clinical trials; and future regulatory and development milestones for the Company's product candidates; and the potential for CR845 to provide a new therapeutic approach to treating uremic pruritus.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks are described more fully in Cara Therapeutics's filings with the Securities and Exchange Commission, including the risk factors section of the Company's annual report on Form 10-K for the year ended at December 31, 2014, and its other documents subsequently filed with or furnished to the SEC.

All forward-looking statements made on today's call speak only as of the date on which they were made. Cara Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Now let me turn the call over to Cara President and CEO, Dr. Derek Chalmers.

Okay, thanks, Jesse; and good afternoon, everyone. Thanks for being with us on the call this afternoon. I'm joined today by our Chief Financial Officer, Josef Schoell; and our Chief Medical Officer, Dr. Joseph Stauffer.

So the first part of 2015 has certainly been an exciting time for us here at Cara as we continue to make a number of important strategic planning decisions that will direct our clinical activity during the next 12 to 18 months. These include finalizing our lead Phase III program for I.V. CR845 in acute pain after end-of-phase II meeting last month; preparing to read out our Phase II data for our uremic pruritus program; and then evaluating next steps for that program and finalizing the protocol for our upcoming Phase II trial of oral CR845.

So let me start by generally describing our Phase III program for I.V. CR845 in acute pain, and then Joe Stauffer will then provide details of the upcoming trial. And I'll finish with our uremic pruritus and oral CR845 programs before Joe Schoell runs through the numbers and we head to Q&A.

Just as a reminder, CR845 is the novel kappa opioid receptor agonist that offers the potential of pain relief without typical opioid side effects. There is currently a significant unmet need in the postoperative pain market setting, where patients are not only dealing with generally inadequate pain treatment postsurgically, but also an array of debilitating adverse events associated with current reliance on traditional mu opioid pain medications such as fentanyl and hydrocodone. We believe that CR845, with its unique profile, has the ability to provide significant pain relief in this setting while also significantly reducing the burden of side effects currently experienced by the majority of patients.

In April we held our end-of-phase II meeting with the FDA to discuss the design of pivotal trials for our Phase III program for I.V. CR845. We're very happy with the general guidance we received from the agency at that meeting and currently anticipate initiating the first trial of the CR845 program in the third quarter of this year, once we finalize the study protocol with the FDA. And we expect to complete the entire program, as we previously guided, in 2016.

Based on these discussions with the Agency, we are modifying our Phase III program slightly from that which we described on our last call in March. We now expect the first Phase III trial for I.V. CR845 will be an adaptive pivotal trial in abdominal laparoscopic-assisted surgeries, including laparoscopic hysterectomy and other procedures associated with moderate to severe postoperative pain.

This is essentially the same adaptive trial that we discussed on our last call designed to optimize pre- and postoperative dosing. What differs here from the last call is the strategic use of this first Phase III trial, leveraging the adaptive design to optimize the next Phase III trials in laparoscopic hysterectomy and bunionectomy.

Because of the nature of the adaptive design of this first study, we believe that will be able to complete the other two Phase III trials in the timeline we guided to previously -- that is, 2016. And because there's no change in the number of trials and no change in Agency guidance on overall patient exposure -- still being 1,500 total exposures required -- we believe there's no change in the overall timeline or cost of taking this program through to NDA submission.

Now let me turn over the call over to our CMO, Joe Stauffer, for a quick run-through of the design of this first trial and also a summary of our recent interactions with the FDA. Joe?

Thank you, Derek. So as Derek mentioned, our meeting last month the FDA provided valuable guidance around our whole Phase III program for I.V. CR845. And we are currently working with the Agency to finalize the protocol for that initial Phase III study.

Following the review, we believe it will initiate in the third quarter of this year. Additionally and importantly for our ultimate regulatory submission for the drug, the Agency has also acknowledged that it believes that the nonclinical and toxicology packages submitted for I.V. CR845 as well as our CMC strategy are supportive for ultimate NDA submission.

Turning to the trials themselves, as Derek discussed, we now anticipate that the first Phase III trial will be randomized, double-blind, placebo-controlled, adaptive design trial in male and female patients undergoing abdominal laparoscopic surgery, including laparoscopic hysterectomy and other procedures associated with moderate to severe postoperative pain. This is very similar to the adaptive surgical trial we discussed with you on our last earnings call in March.

CR845 will be administered both pre- and postoperatively, with patients assigned to receive one of three doses of I.V. CR845 or placebo. It's clear from our Phase II data in laparoscopic hysterectomy that pre- and post-surgical dosing for CR845 provides the largest analgesic effect and, speaking as an anesthesiologist, that's how we like to use analgesics -- to stay ahead of the pain curve. And the Agency has given us their support of this dosing protocol as well.

The trial will be designed to accommodate an interim assessment of efficacy and safety across doses by an independent monitoring committee in the first half of 2016, with an adaptation to the optimum doses at this time point. We will then proceed to complete enrollment and readout in 2016.

We would currently expect to disclose any dose optimization decisions coming out of that interim analysis. We still anticipate that the primary efficacy endpoint of this first Phase III trial will be a reduction in pain intensity over 24 hours, and that secondary endpoints will include standard measurements of rescue medication use as well as total pain relief over the drug treatment period.

In addition, we were pleased to receive helpful guidance from the Agency in terms of methodology to employ in this trial to assess the potential impact of CR845 in reducing postoperative nausea and vomiting. And based on this, we'll be looking primarily at prevention of vomiting, such as we measured in our earlier studies -- as secondarily as nausea intensity amongst other measures as part of our patient assessment procedures throughout the trial.

Following the interim analysis of this first adaptive Phase III study and selection of doses to carry forward, we plan to then submit additional Phase III protocols, as we have previously discussed, in bunionectomy surgery and laparoscopic-assisted hysterectomy, which we anticipate initiating in the first half of 2016. We believe this approach affords us the opportunity to identify the most efficacious doses of CR845 to complete our Phase III program, derived from the optimum dosing regimen of pre- and post-surgical administration, reflective of likely real-world future use of this drug in a perioperative setting.

We also believe that the additional soft tissue models in our first Phase III study sets us up for the strongest possible data package for a potential NDA. As Derek mentioned, we will expect data from our Phase III trials in 2016, with an NDA submission as soon as possible thereafter. And now I'd like to turn the call back over to Derek.

Okay, thanks, Joe. So as you can see, we're very excited about this program and the opportunity it provides to producing the strongest possible ultimate registration package while maintaining our data readout timelines and projected costs for the whole program. So we look forward to updating you as this first Phase III adaptive trial gets underway. And we'll be happy to provide more details about the final study protocol at that time.

Now before I turn the call over to Joe Schoell for our financials, I want to touch on our other two CR845 clinical development programs. For oral CR845, as you know, in the fourth quarter of 2014 we reported positive top-line data from a Phase Ia/Ib trial of the tablet formulation of oral CR845 conducted in approximately 150 healthy volunteers.

All tablet strengths tested were safe and well tolerated and were found to be pharmacologically active as determined by standard biomarker measurements. We have continued to use this data to inform the design of our first Phase II trial in osteoarthritis patients, which we anticipate initiating in the third quarter of this year -- with top-line data still expected by year-end, as we previously guided.

And then, finally, we have our emerging clinical program in a non-pain condition -- that being uremic pruritus. And just as a reminder here, uremic pruritus is a chronic systemic itch condition that can occur in patients with renal failure, most often seen in patients receiving hemodialysis. There are approximately 400,000 patients in the US and 2.2 million globally undergoing hemodialysis. And it's estimated approximately 50% of these patients suffer from renal or uremic pruritus.

Currently there are no approved products in the US -- or the European Union, for that matter -- for this condition, which can be quite severe; resistant to treatment with the usual itch treatments, such as corticosteroids and antihistamines. In addition, drugs acting in the brain such as gabapentin and anti-depressants have also met with very limited success in this condition. So we believe that the anti-itch properties of CR845 should provide an important new therapeutic approach for this significant unmet clinical need.

In December of last year we reported positive top-line safety and PK data from Part A of our proof-of-concept trial in dialysis patients, showing that 845 was safe and well tolerated across a five-fold dose range after one week post-dialysis with three times a week dosing. The Phase II trial is currently enrolling in a total of 60 dialysis patients at multiple sites in the US in measuring the efficacy of I.V. CR845 compared to placebo and reducing the intensity of itch in these patients over a two-week dosing period.

Endpoints include change in worst itching scores over the two-week period as well as validated quality-of-life measures associated with pruritus burden. We've seen enrollment for this study increase significantly during the past few months, and we currently still expect to report top-line efficacy results right around the end of the second quarter of this year.

So with that update, let me now turn the call over to Joe Schoell, our Chief Financial Officer, to run through the financial results. Joe?

Thanks, Derek. Net loss was $4.7 million or $0.21 per basic and diluted share for the first quarter of 2015 compared to a net loss of $3.4 million or $0.22 per basic and diluted share for the same period in 2014. Collaborative revenue was $489,000 for the first quarter of 2015 compared to $151,000 for the same period of 2014, comprising of revenue that had been deferred upon entry into the license agreement with Maruishi Pharmaceutical Company.

Clinical compound revenue was zero for the first quarter of 2015 compared to $27,000 for the same period in 2014 from the sale of clinical compound to Maruishi. Research and development expenses were $3.4 million in the first quarter of 2015 compared to $2.2 million for the same period of 2014.

Higher R&D expenses in the first quarter of 2015 were principally due to a net increase in direct preclinical studies and clinical trial costs; an increase in consultant services in support of preclinical and clinical trials; and increases in payroll, recruiting, and related costs, including stock option expense associated with R&D personnel. General and administrative expenses were $1.8 million in the first quarter of 2015 compared to $1.4 million in the same period of 2014. The increase in the first quarter of 2015 was primarily due to increases in professional fees, public investor relation costs, payroll and related costs -- mostly due to increases in headcount and directors and officers insurance costs.

Interest income was $14,000 for the first quarter of 2015 compared to $22,000 for the same period in 2014. As of March 31, 2015, cash and cash equivalents were $47.4 million compared to $52.4 million at December 31, 2014. The decrease was principally related to cash and cash equivalents used in operating activities during the first quarter of 2015.

Now we'll turn the call back over to the operator for Q&A. Thank you.

(Operator Instructions) Annabel Samimy, Stifel.

Hi guys. Thanks for taking my question. I just wanted to clarify -- with the Phase III program, is this a change in the way the FDA is looking at these pain trials now? Because initially it's always been about a hard-tissue and a soft-tissue trial. And then it seemed like the adaptive trial design was almost a secondary, supportive type of trial for your Phase III program. Now it seems like this is guiding the rest of your Phase III program. So can you just help us understand the shift here with the FDA?

And then also, with the oral, you're moving into osteoarthritis, which seems a chronic indication. We always thought that the first indication was going to be more acute, for like, maybe, the discharge population. So maybe you can help us understand the change there. Is the oral more of a proof-of-concept? And how do you get this trial done by the end of the year if you're starting it in the third quarter? Thanks.

Thanks, Annabel. Let me just make a couple of comments, and then I'll turn it to Joe, and he can run through the details of what you've asked. First of all, in terms of the Agency's opinion on the model we use, I think the Agency regards us, as you know, as in NCEs -- a novel class of compound. They're keen to see additional patient exposures across a broader range of surgeries with this molecule; also keen to see a range of doses, with both pre- and post-surgical dosing. So this is really in our estimation a way optimize the doses we're going to use going forward.

As you indicated, we previously got into multiple doses in multiple models. This really gives us an avenue to streamline the program, select the doses from the first study, and then move a smaller amount of doses -- optimally one, possibly two -- into additional models to complete the program. And I'll let Joe comment further on that, and then maybe can handle the OA in patients, too.

On the OA. Sure. So the Agency still likes the hard-tissue/soft-tissue model, and we do too. This particular design we actually submitted to them in anticipation of them looking at something like this. And as Derek said, it does provide us an opportunity to optimize our dosing -- not only in women, but in men as well, because we're going to be doing other surgical procedures that don't just involve women. That's very helpful to us and helpful to our label, ultimately.

And it also it also helps us make smarter decisions about whittling down certain doses -- and the minimal effective dose, as an example -- not only in this trial, but in our other two trials. So that's all very helpful to us and to them to generate data that would instruct the label, as we used to say at FDA.

On the OA piece, the OA trial is a smaller PK safety, tolerability, and effectiveness trial. It is not designed to be a placebo -- it's not a placebo-controlled trial. It's single-blind and open-label. But it helps us get an understanding of steady-state PK in patients. Up until now we haven't had any exposures in patients with our oral drug. We've had very good experience with steady-state PK in healthy subjects out to one week. But now we have to go to the next level and put it into sicker patients with osteoarthritis.

So in a very staged way, we're going to make sure that the PK that we saw that we like in healthy subjects is the same as in patients. We expect it to be the same or similar, with a similar safety profile as well. After we get that data in a way -- again, with the oral -- we would then look at scoping out an efficacy trial.

Right. And just one other additional point, Annabel, in relation to the patient choice: of course, very much an inflammatory condition. And as you know, CR845 is potently anti-inflammatory, unlike standard mu agonists. So we really wanted to select a patient group where we could take advantage and optimize that particular aspect of the pharmacology also.

Okay. If I could just ask a follow-up: in this chronic condition in OA, are you going to be able to go further with this development program yourself? Or are you going to have to partner it out? Because this was always a bigger indication for you.

We'd certainly like to take this through Phase II placebo-controlled proof-of-concept studies. That's always something we've indicated. And then at that point, we'd most likely look for a partner on this particular program.

Okay, great. Thank you.

Charles Duncan, Piper Jaffray.

Thanks for taking the question, and congrats with the progress on the Phase III program. My question is related to this adaptive design thing. I know that you haven't fully articulated the protocol, but I'm wondering if that is meant to be, say, an interim look in terms of sizing? Or is it specifically going to be looking at doses? And I think, Joe, you mentioned an opportunity to focus on a lower dose or higher dose if necessary.

That's correct. So it actually allows us to do both of what you mentioned. It allows us to optimize the doses -- both low and high -- and it also allows us to size and potentially even drop a treatment arm if we find during our interim assessments that we find the treatment arm is just not living up to the expectation that we would have. So allowing you to go up in size is helpful, because you want to make sure that you can get to a win on one of those doses.

And the other thing is when you can drop the treatment arm, as an example, you can perhaps skinny down your trial and go faster. In other words, you don't have to necessarily carry through all the treatment arms the whole way through, particularly if one doesn't seem to be working as well. And that's part of the adaptation.

And all that is built into the charter of the protocol that we are working along with the FDA. And this is something that this division is open to. I mean, I was at the FDA meeting, and those discussions went quite well with them. And so I think they appreciate what we're trying to do here. And hopefully that answers your question on those two pieces -- sizing and treatment arm.

Yes, it does, Joe. And also I really like the pre- and post-operative treatment paradigm. I think that that will show well for your candidate.

But let me ask you about what you anticipate the differences to be with the second two Phase IIIs. One of them is obvious; it's a heart tissue bunionectomy. But the other one, laparoscopic hysterectomy -- I'm kind of wondering why it's actually three Phase IIIs that are needed, not two.

Sure. Well, as we said before in the previous guidance, you only need two trials to win. Many companies have done more than two trials -- you know, a more-shots-on-goal approach. So we believe that doing these three trials will give us the minimum two that we would need for pivotal efficacy.

On your second question about -- I think where you might have been going was size of those trials?

Yes.

My anticipation is that the size of those trials gets smaller, because we get smarter about how we optimize our dosing in this current Phase III adaptive trial that we are looking at now. That's why we're able to start those later and still finish on time -- because the full expectation is that they would be smaller trials.

Okay. That is helpful. So the timelines for the overall program are pretty much the same. And you mentioned something in your press release whereby currently a proposed trial is better positioned for the strongest possible regulatory submission. It better positions it versus what? What would the alternative be?

Well, when you can conduct at least two and likely three trials, first of all, it gets you to sample size that the Agency is looking at. Remember, they want an overall 500 -- or not 500 exposures; they want 1,500 exposures.

Sure.

But what they really would like to see is most of those exposures in the dosing regimen that you intend to use for your label. And so by doing that, you don't have to waste time in some of your other pivotal trials exploring doses that likely won't be used in your label, either because they are a minimum effective dose or they don't work at all.

And really, the adaptive trial design is a risk reducer in terms of just missing --.

Correct.

Okay, that's helpful. And then, I guess at this point, it's probably too early, but did you get any feedback from the Agency in the end-of-Phase II meeting regarding the potential scheduling of the drug or what would be required to show for a positive schedule?

So, Charles, we got very positive feedback on our HAL data; and we also got constructive feedback on our preclinical package in relation to abuse potential. But as you know, that will be a decision for contemplation at the NDA level. So no firm commitment in terms of scheduling at this point.

Correct.

Okay. Thanks for the added color.

Corey Davis, Canaccord.

Thanks. With respect to the things that you're going to vary on the dosing in the Phase III I.V., is it a change in the length of time that a patient is exposed to it? Or is it just a change in the concentration that's in the I.V.?

Concentration. Sorry about that.

And also, okay. That's okay. And is it different pre- and post-surgery?

No. The dose that we are going to give pre-surgery is the same as the dose we're going to give post-surgery. And then we continue that dosing regimen out, you know, in a fixed-interval kind of way -- to make it really reflect what would happen in the real world and also optimize our chance for a win in terms of efficacy.

So the Agency was actually quite happy and supportive of us pre-dosing this drug. They know that it's got some anti-inflammatory properties. We've always believed that.

Our current Phase II data suggests that as well. And that only makes sense in terms of when you're taking care of these kind of patients. So pre-op and post-op dosing continued throughout the dosing scheme is what we are going to do. And it's what we had done in a previous the Phase II hysterectomy trial -- at least in one of the arms.

And do they continue to get drug beyond that 24-hour endpoint?

No, they only get drugged for 24 hours. We have to observe them, though, past 24 hours, because typically these patients are in the hospital for at least 24 hours, if not 48 to 72.

Okay. And the dosing wouldn't vary based on the type of procedure?

Correct.

Okay. And then on the Phase II study, it sounds like you're not going to get any real efficacy data at all from that. Is that correct?

Well, so if you define efficacy the way I do, which is the need for a placebo, then you are correct. We would not get efficacy, because there is no placebo control or even active control in the dosing regimen.

However, we will be getting effectiveness. And effectiveness is defined as: are the patients changing their pain scores from the beginning to the end of the trial? This trial will be a short trial. It's only two weeks long. As I said, it's really set up to look at PK safety, tolerability, and effectiveness -- in that order.

So just understand -- so we are really looking at steady-state PK as the primary endpoint. And we want to make sure that we believe that what we saw in our healthy subjects we see in our chronic pain patients with OA.

However, looking at effectiveness, though, without a placebo still does give you a sense of how does the drug perform in those first two weeks of dosing. Our expectation is that patients' pain scores will come down, but they may not. But the point is that we at least get a sense from, say, a patient global or some of the other secondary endpoints that we'd be looking at as to whether or not there's any type of trend lower in their pain scores, which we do expect to see.

And so -- and Corey, we also get the opportunity to directly measure anti-inflammatory biomarkers and so on in these patients, something we haven't had the opportunity to do in chronic inflammatory pain to this point.

And how many patients would you envision in the Phase II and how many different dosing arms?

Right. So right now it's still under discussion with the Agency, but it's looking like anywhere between three and four dosing arms. So three and four different doses of drug and anywhere between 60 and 80 patients.

Total.

Total.

Okay. Then -- sorry -- back to the I.V. Phase III for that first trial. Do you know how many patients yet you'd need?

In general it's going to be anywhere, finally, between 400 and 600 patients. We're still in negotiations with the Agency, but you can expect it to land around that sample size.

Because you said you needed 1,500 total for the whole Phase III I.V. program?

We need 1,500 total for the entire program. But clearly we're not going to get 1,500 patients out of this trial. But with 400 to 600 exposures -- remember, some of this exposures are going to be in placebo, so they won't count -- but those exposures that we'll get out of this trial will then be added to the current exposures that we already have out of our Phase II program, as well as our Phase I program, and then the additional Phase III trial that we'll have to do.

And all those exposures will be wrapped up into the submission. And all of that, again, will be a discussion for the FDA at the pre-NDA meeting. But right now they have been consistent with what they're looking for: 1,500 total exposures.

And the interim analysis -- do you how many patients you need before that interim analysis can take place, or is that still under discussion?

It's still under discussion. We have an idea, and I think we are in the right spot with that. But the protocol hasn't been finalized yet with the Agency.

And then last question is: how are you feeling about the ability to enroll these kinds of patients? Competition from other drugs out there. How many centers are you going to need? Is this something that can take place quickly?

No, we'll need more than 10 centers and likely less than 1,000 centers. But I'm feeling pretty good about it, Corey. It's always one of those things where you won't really know until you get going.

We have an idea of how many centers we need, and it will be in double digits. But we also have to keep in mind that keeping those centers to as few as possible to reduce variability amongst the surgeons and surgical technique is something that we pay attention to. But I think it's completely manageable. And in fact, a lot of centers that we used in the past we'll be going back to. They know us, and we know them.

Okay. And then, sorry, I lied; I have one more. The Phase II pruritus study -- if that doesn't work, is there read-through for the pain indications? Or is it independent mechanisms where you couldn't say one way or another?

You know, we think that's independent, Corey.

Okay. All right, that's all I had. Thanks.

Alan Carr, Needham.

I wondered if you could clarify a bit about -- following up with Corey -- about size of these trials. 400 to 600 patients for each of the three? And you mentioned an additional Phase III trial. Could you clarify that?

Sure. So for this current Phase III trial, there will be between 400 and 600 patients that we'll have. All of those patients are either going to be on active drug or placebo.

That's the adaptive one, the first one.

That the adaptive trial that we're currently talking about. So I think Corey asked me about how many patients in this trial. So when I said 400 to 600 patients, I mean 400 to 600 patients in this adaptive trial.

In the other trials that we still are planning for, those trials will likely not be that big. They may not have to be that big, because we can optimize which doses we want to use. It may be just one or two. In either case, we're still able to get ourselves to the overall exposures that we need for the total package.

Okay. So those three trials will get you over the 1,500 number. How many have been in Phase I and Phase II? How many exposures do you have previously?

That's correct. Total exposures is like almost 500 between Phase I and Phase II.

Okay. What's left to -- I guess in terms of -- you mentioned there are still some things to finalize with the FDA. Are there -- I guess, could you go over that? And then for the other Joe, if you could comment on burn and how long you expect the cash to last. Thank you.

Sure. So one of the things we have to finalize is the charter with the independent data monitoring committee. So that's one of the things we're going to finalize. That's actually going quite well.

Other than that, some little tweaks here and there on certain entry criteria, enrollment criteria, those types of things -- you know, how many patients per site. Those are the type of statistical issues that we have to finalize. But all of those are manageable; they just take time to work with the Agency.

So it's just details around the interim analysis, it sounds like, is the key remaining issue.

Correct.

And then, Joe, around burn?

Yes. The burn -- we are expecting about 15 months.

Okay, thanks very much.

Chiara Russo, Janney.

Thanks for taking my question. A lot of them have been asked and answered, particularly about the study sites. But I was curious about the uremic pruritus; I know that you're currently only looking at it over the course of two weeks. I'm curious if, further out in the studies, you are going to have to do sort of longer exposure times -- because pruritus, I am assuming, is more of a chronic condition.

Hi, Chiara. Thanks for the question. Yes, we do anticipate we're going to extend those efficacy trials to probably between six and eight weeks, based on the guidance the Agency has given to other people in this area.

Okay. And my second question is: do you think that there is the potential for any sort of accelerated programs on the pruritus front?

We believe so. It's an unmet clinical need. There's nothing approved in the US. And this certainly would, in our minds, qualify as a breakthrough medication.

Okay, great. And hold on -- I did have one more. With the Phase III trials, I'm assuming -- you said that you're all going to get them done within the 2016 time frame. I'm assuming that the gap between data from the first one to the last one is going to be very short. So we're kind of going to get a big data dump at the end of the year. Do I have sort of that correct?

Correct.

Okay. So there's no going to be -- there's no space there, for instance, to ask whether you could file an NDA with two out of the three. You probably won't do that, because the data is going to be so close together.

And the other thing, too, is that -- in terms of total patient exposures -- if I don't get enough exposures out of two trials, there's no way we're going to go to the Agency and have that discussion. Because we know the answer is going to be.

Okay.

So a lot of it just depends on upon how many exposures we get out of two trials.

Okay, all right. Great, that was all I had, thank you.

Ken Trbovich, MLV & Company.

I just wanted to follow-up on the question I think Charles had asked earlier about the scheduling. As it pertains to the NDA, I know that the Agency wouldn't necessarily give you their feedback at this point. But is it your intention to file it with a request that is not be scheduled? Or are you going to look at Schedule IV when you submit it?

No, that's our absolute intent -- is to submit it requesting non-scheduling. We're not going to request Schedule IV. So as I said, we're going to request non-scheduling. Our anticipation is it will be lower than IV, which -- the only one left is non-scheduling or V.

Sure, sure. So their response to your filing, obviously, you can't determine. But your intention is file it as non-scheduled and rely on the preclinical data showing that it doesn't cross the blood/brain barrier -- and then, obviously, the HAL data, as well.

That's correct.

Absolutely.

Okay. And then the elephant in the room that nobody asked: patient exposures -- I know there's a dose difference for uremic pruritus. And I know we won't know for certain how much more you're going to do in that indication until we see the data later this quarter. But wouldn't you be able to use the uremic pruritus patients as part of the 1,500 exposures?

No, you can't; it's a good question, though. You can't because they're two different patient populations; they're two different dosing regimens; they're two different divisions at the FDA. And they're two completely different indications.

So even though it's the same chemical entity --?

Correct.

So when we think about it from a safety standpoint, will the FDA look at it separately from that standpoint as well? So in other words, if there was safety -- it is a sicker patient population, so we'd expect to see some of those patients, both on placebo and active, having serious adverse events. In some ways it may not be drug-related. But I'm assuming, then, that safety database is somewhat viewed the same way, or no?

Well, the way you're thinking about it, I know, makes all kinds of common sense, Ken. But from an FDA perspective -- and these discussions have really never come up since I've been here at the Company about mixing these two databases -- safety is a relevant term, right? It's relative to the types of patients that are using it and the way you're dosing it.

And so they're two completely, as I said, different patient populations. One patient population is chronic; they're getting it three days a week, and their kidneys don't work. And in the case of surgical patients, they are getting a dosing regimen over 24 hours, and then they're out of the hospital.

Sure.

I can see where you're going. But as I said, two different divisions at the Agency, two different indications, two different NDAs.

Ken, you raise an interesting point, though, in terms of safety, of course, because these are -- as Joe indicates -- the sickest of the sick patients. And as you know, we're exposing these people to essentially two weeks' worth of constant exposure to our drug.

And to date we haven't seen any serious adverse events and certainly haven't seen any CNS issues with these patients. So for us, as with the HAL study, we are pretty much confirming we don't have any CNS liability with the drug, as we've seen with previous -- what we like to call first-generation kappa molecules.

So that data is really confirming safety for us. But to Joe's point, as I said, per IND -- and to this point we haven't mixed and matched our INDs in terms of safety numbers.

Got it. And so they'll look at it as a completely separate patient population as well, then?

Correct.

Okay. And then I guess Joseph or -- for the financials, can you break out at all how much of sort of the planned revenue or the revenue that was reported in the quarter -- I know you mentioned none of it was clinical compound. Was any of it related to the Maruishi milestone that was the triggering milestone I think you guys have discussed before? How much of that was recognized in first quarter?

There was no milestone recognized in the first quarter. We would have indicated that. The revenue that we did have in the first quarter related to strictly the deferred revenue from the initial licensing transaction, not milestones. And we had no compound sales this quarter.

Right. So then the $2 million -- the milestone that's going to be earned when they begin the study -- can you give us some guidance on recognition?

It looks like probably the third quarter.

Yes. That study will initiate, Ken, at the completion of our proof-of-concept trial. So we anticipate later this year.

Okay. But you expect it will all be recognized in a single period as opposed to spread out over multiple periods?

Yes. I do expect it to be (technical difficulty) in the period.

Terrific.

Jim Molloy, Laidlaw.

Thanks for taking my question. Thank me for unmuting it. Sorry about that.

The Phase III trials that you're running -- when you switch, the abdominal surgery will go first. And obviously the bunionectomy and hysterectomy are following the adaptive trial design informing that. Is that a significant savings in money as well, with a potential smaller trial size?

Approximately the same cost.

Yes, it's about the same cost. It's just a matter of a slight timing. The overall Phase III program cost is still the same.

Okay. And did you have -- I guess just reveal what -- you said what the ultimate cost was all three of these trials likely will be?

No, we have not.

Will you?

I really don't think so.

Jim, we have made predictions on runway and cash burn, but not individual trial costs.

Okay, great. Now, as we're looking at these trials -- I mean, obviously this is quite a change. Last it was going to start second quarter; now it's starting in 2016, with the laparoscopic starting here in the third quarter, on target.

At what point -- you know, from the outside looking in, when can we have an idea that these are on track, and you'll still hit the end of 2016? Will there be data points along the way where we'll be able to know that things are remaining on track?

We're certainly going to gate when we start this first trial, and we're also going to provide a little more detail after the FDA has confirmed the protocol we submitted. And we're probably going to guide -- although not with efficacy data -- but we're going to guide at the interim point in this first trial, also.

Okay, perfect. And then last question on the pruritus indication. What are the next steps after this Phase II data? And I'm assuming, I guess if it's a two-week trial, you must be -- final patient must be coming in any day now. Is that a fair assumption? And the next steps for an end-of-Phase II meeting or start of Phase III. What's the thoughts on timing there?

You're right on that, Jim. I think the next steps is if the trial is as positive as we hope, then we would go down to the Agency and look for guidance on how to move this to registration.

You anticipate that's something that could happen in 2015? Or we are looking at the second half of 2016 for a start on this one?

Well, I'm almost not too keen to predict timelines as it comes with the FDA restrictions on those. But as soon as we have data on this, we'll be requesting a meeting with the Agency and looking for guidance on how we can move this to registration.

Outstanding. Well, thank you for taking the questions.

And I'm not showing any further questions at this time. I'd like to turn the conference back over to our host.

Great, thank you, everybody. Thanks for participating on today's call. And we look forward to updating you very soon as we start this first trial. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.