BioXcel Therapeutics Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 12, 2024

There are 13 speakers on the call.

Operator

Good morning, and welcome to the BioXcel Therapeutics Conference Call, which will include an update on the company's late stage clinical programs and a discussion of financial results for the Q4 and full year 2023. At this time, all participants are in a listen only mode. 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 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 those 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 September 30, 2023, which can be found at www.bioexhealththerapeutics.com or on www.sec.gov and which will be updated in its annual report on Form 10 ks for the year ended December 31, 2023.

Operator

As a reminder, today's call is being recorded. Speaking on today's call are Doctor. Vimal Mehta, Chief Executive Officer Doctor. Vince O'Neill, Chief of Product Development and Medical Officer and Richard Steinhardt, Chief Financial Officer. They will be joined in the Q and A session by Doctor.

Operator

Frank Yakov, Chief Scientific Officer Matt Wiley, Chief Commercial Officer and Doctor. Rob Reisinger, Chief Medical Officer of Neuroscience. It's now my pleasure to turn the call over to Doctor. Mehta. Please go ahead.

Speaker 1

Thank you, operator. Good morning and thank you for joining us. This is an exciting time for BioXcel Therapeutics. First, we are very pleased with the progress of our Tranquility program. As I have communicated previously, this is a top priority for capital allocation.

Speaker 1

2nd, we are focused on advancing the serenity program. Both programs provide significant opportunities for us to address the unmet need in treating patients struggling with episodes of acute agitation. During today's call, we will dedicate our prepared remarks to updates on Tranquility and serenity. These late stage clinical programs represent groundbreaking opportunities to advance our goal of bringing new treatment options to patients. As a reminder, there are no currently approved acute treatments for agitation associated with Alzheimer's disease or for bipolar disorder or schizophrenia in the at home setting.

Speaker 1

These conditions represent large, untapped markets. All of us at BioXcel Therapeutics are motivated to develop new treatment options for the greatest number of patients and caregivers. Vince will now provide a detailed update on Tranquility and serenity. After this, I will briefly discuss several corporate updates. Rich will then review our financial results before we open the call for Q and A.

Speaker 1

With that, I will turn the call over to Vince.

Speaker 2

Thank you, Vimal. So I appreciate the opportunity to speak with all of you this morning and provide an update on our 2 late stage clinical programs with BioXcel 501. Let me begin with Tranquility, where we are evaluating 501 as an acute treatment for agitation associated with Alzheimer's dementia or for short AAD. As Vimal said, tranquility remains a top priority to bring a novel treatment to this large underserved patient population. Every year, estimates show that millions of Americans with Alzheimer's disease experience agitation.

Speaker 2

Physicians often aim to address this with neuropsychiatric drugs used off label because there are no approved treatments specifically for acute agitation episodes. This area of neuroscience drug development for an episodic treatment is novel and uncharted, and we believe we are uniquely positioned in this space. At BioXcel Therapeutics, we have Igalmi already on the U. S. Market as an approved acute treatment for bipolar disorder and schizophrenia related agitation.

Speaker 2

This provides us with a strong foundation from which we are expanding into development in AED in our Tranquility program and into development in different settings serenity program. For Tranquility, we have completed now a Type B breakthrough therapy designation meeting with the FDA on February 20. This meeting followed the one we had in October of last year. Let me remind you that we are not in a position to provide detailed information about our overall program plans until after we receive and review the FDA's final meeting minutes. However, we can share now that based on the FDA's feedback, we plan to generate additional Phase III efficacy and safety data in care facilities to expand the database beyond the 70 patients who have been treated with 60 micrograms of 501 in TRANQUILITY 12 to date.

Speaker 2

We plan to generate these data, including repeat efficacy data in a variety of relevant care settings and to use PEC as the primary efficacy measure as used in the prior TRANQUILITY II study. To remind everyone, in November 23, we announced that we were planning to conduct a Phase 3 trial in the at home setting with safety as the primary objective, otherwise known as Tranquility at Home. Given the priority to expand the database to generate additional efficacy data in care facilities, the company is now reevaluating the timing for initiating Tranquility at Home. Lastly, the FDA has indicated that we will need to generate long term safety data. However, given the lack of any regulatory precedent for episodic treatment of AAD in patients, we plan to further engage with the FDA regarding this requirement.

Speaker 2

We look forward to receiving final meeting minutes from the agency and sharing more details with you later this month. We're extremely motivated by this potential opportunity to bring a much needed acute treatment option to patients. Developing novel episodic treatments with no regulatory precedent comes with new learnings to create an optimal development path. At this time, we believe we have a clear path forward. To that point, we've had multiple meetings with the FDA for this uncharted regulatory path and have greatly appreciated the agency's guidance as we move forward to advancing our clinical program.

Speaker 2

Let's now turn to serenity, where we are evaluating the potential at home use of 501 for agitation associated with bipolar disorders or schizophrenia. On March 6, we completed a Type C meeting with the FDA. This follows the one we conducted last November. Based on FDA feedback, we plan to evaluate the 120 microgram dose of 501 as a reminder, an approved dose of IgALMII in the at home setting in an amendment to our Serenity III Part II protocol, which the company had voluntarily paused as we discussed the FDA's proposed changes to the protocol in light of the results of Sriananti-three Part And our current plan is to move forward with this study as amended with safety as the primary objective and efficacy measures as exploratory endpoints. Keep in mind, the label for origami currently includes a limitation on use, noting the lack of efficacy or safety data beyond 24 hours.

Speaker 2

We believe that our ability to seek labeling without the current LOU will depend in part on the number of agitation episodes we observe over the 3 month follow-up period. To support our pivotal trial with the 120 microgram dose, we are also planning to conduct small study, approximately 30 patients to evaluate the correlation between patient reported or informant reported efficacy with trained rater reported efficacy using PEG scores. We expect to provide additional information about the program plans after receiving and reviewing final meeting minutes from the FDA. And with that, I will turn the call back over to Billon.

Speaker 1

Thank you, Vince. We are also pleased with progress in other areas of the business. On January 1st, the permanent J code for IGALMI became effective and our commercialization efforts continue to progress. In addition, we continue building a robust intellectual property portfolio and strengthening our long term patent protection. Finally, we are pleased to have received Fast Track designation from the FDA for BXCL701.

Speaker 1

I would like to end my remarks by emphasizing that we remain focused on strengthening the company's balance sheet. To this end, we are actively exploring multiple financial options to extend our cash runway and fund our key clinical programs in order to create maximum value for our shareholders. I would now like to turn the call over to Rich, who will review our Q4 and full year 2023 financial results. Rich?

Speaker 3

Thank you, Vimal. Net revenue from Elgami was $376,000 for the Q4 of 2023 compared to $238,000 for the same period in 2022. Net revenue was $1,400,000 for the full year 2023 compared to CAD375,000 for 2022. Research and development expenses were CAD9.9 million for the 4th quarter of 2023 compared to CAD32.5 million for the same period in 2022. Research and development expenses were CAD84.3 million dollars for the full year of 2023 compared to $91,200,000 for 2022.

Speaker 3

The decreased expenses for both Q4 and the full year were primarily attributable to

Speaker 1

decreased clinical

Speaker 3

trial activity associated with the wind down of Serenity 3 and TRANQUILITY 2 studies, a decrease in chemical manufacturing and control costs and a decrease in personnel related to the company's reprioritization in August of 2023. Selling, general and administrative expenses were $9,600,000 for the Q4 of 2023 compared to $20,700,000 for the same period in 2022. SG and A expenses were $83,400,000 for the full year 2023 compared to $68,800,000 for 20 22. Increased costs for the full year are primarily attributable to an increase in legal and professional fees, costs associated with personnel and related expenses to support the commercialization of the Ophthalmic in the U. S.

Speaker 3

Prior to the company's reprioritization. BioXcel Therapeutics had a net loss of CAD22.3 million for the Q4 of 2023 compared to a net loss of CAD54.8 million for the same period in 2022. For the full year 2023, the company reported a net loss of $179,000,000 compared to a net loss of $165,800,000 for the full year 2022. Loss for 2023 includes approximately 18,600,000 dollars in non cash stock based compensation. Total cash expenditures for 2023 totaled approximately $155,000,000 Cash and cash equivalents totaled $65,200,000 as of December 31, 2023, compared to $193,700,000 as of December 31, 2022.

Speaker 3

Company estimates that its current cash and cash equivalents will fund its operations through mid-twenty 24. This estimated cash runway does not include any potential financing activities that may be undertaken by the company. Now, I'd like to turn the call back to Vimal.

Speaker 1

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

Operator

Thank you. We'll now be conducting a question and answer session. Our first question today is coming from Greg Harrison from Bank of America. Your line is now live.

Speaker 4

Good morning, guys. Thanks for taking the questions. So after your recent FDA meetings, it seems you have more clarity for the Tranquility programs. Would you say now you have 2 separate paths to sNDA and Alzheimer's, 1 in the care setting and one at home? And then how are you thinking about funding the program and the company as a whole as you get closer to the end of your cash runways?

Speaker 4

Are there any specific avenues that you're exploring? Thanks.

Speaker 2

Good morning, Greg. This is Vince. Thanks for the question. So to answer it correctly, yes, we believe so. So obviously, the tranquility efficacy PEG primary study and also the safety at home study would be run with registrational intent.

Speaker 2

So yes, in terms of funding, I would refer back to Bill.

Speaker 1

So as Greg stated in my opening remarks, we are looking at multiple options to fund the company. Now having a clarity from the FDA clearly tells us what are the trials we need to do to capture these large market opportunities, both in the Tranquility and serenity. And as we speak, we are very actively working on those fronts.

Speaker 4

Great. Thanks again.

Operator

Thanks. Our next question is coming from Robin Karnauskas from Truist Securities. Your line is now live.

Speaker 5

Hi. Thank you for taking my question. So, I have 2. After the recent meetings with the FDA, you've chosen the 120 milligram dose. And does that mean that would allow for expansion in AFM setting?

Speaker 5

I have a follow-up for that.

Speaker 2

Yes. Good morning, Robin. So I think the choice of 120 microgram dose, we believe, is a good choice for the following reasons. Efficacy is fundamentally established for that dose. That's clearly an approved dose of Egalmi, 1 of 2 approved doses of Egalmi.

Speaker 2

So yes, we believe that with that, again, a registrational intended study with safety as the primary is what we need to go back to the FDA with data in

Speaker 5

And following up on that a little bit. So you'll give them a minute. Have you spoken to the FDA clearly about that dose? And you'll give them minutes later at some point?

Speaker 2

Yes, sorry to interrupt you. Yes, absolutely. We've spoken to the FDA. We have crystal clarity, I think, on the choice of dose.

Speaker 5

Okay. Then last question. Sorry for 3. That's bad. Like funding the program like Zimmel, like how do you think about you have a lot going on, you talked about like a lot of options, how do we think about the fact that you have to fund a lot of these programs, they're giving you feedback.

Speaker 5

How do investors think about the fact that actually, how did they think about the options on the table for you?

Speaker 1

So Robin, good morning. In terms of the priority, we will focus on TRANQUILITY, the trial that Vince has discussed, because that can help us on a path to a potential sNDA in the care setting, as discussed on this call. And also on the serenity program, we have a clarity what dose we can take it forward for a potential registration trial. So, our trials, we have a tremendous experience in the company. We have done more than 11 placebo controlled double blinded trials.

Speaker 1

These trials are capital efficient. And the opportunity we have in front of us is very large, but we want to be very focused. And as I mentioned, tranquility will be the top priority followed by serenity.

Speaker 5

Great. Thank you.

Operator

Thank you. Our next question is coming from Greg Kouzanales from Mizuho Securities. Your line is now live.

Speaker 6

Hey, good morning. Thanks for taking my questions and for the clarity. 2, please, for me. I don't know if the first one is already asked. My apologies.

Speaker 6

Just on the Tranquility at Home or just the Tranquility program overall, the pivot to needing to collect now efficacy data. Can you tell us kind of what changed versus a previous plan just to focus on study on safety? And then secondly, while I realize that you've got to figure out the financing for the company on a go forward basis, I'm just trying to get a sense of whether you can provide us clarity around how much you think it might take to get to complete Tranquility at home in order to

Speaker 4

be able to get it

Speaker 6

in a position to be able to file an sNDA? And similarly, what you think that total cost would be for completing the Serenity program? It's just important just in light of your current cash just to for investors to know what more funds you need to get to really the next revenue inflection point? Thank you.

Speaker 2

Yes. Good morning, Greg. So I'll take the first part of that question. It's obviously an important question. So after we met with the FDA last year and we began to think about the design of the study in-depth and in detail and begin to engage with our advisors and KOLs, it became clear that using non validated caregiver assessed instruments would be challenging and would frankly carry risk.

Speaker 2

So, with that better understood, we went back to the FDA to rediscuss what additional efficacy meant, And obviously, we've now agreed on formal efficacy analysis with PEC as a primary endpoint, clearly an endpoint we've used before with success. So hopefully that provides clarity.

Speaker 1

Good morning, Greg. This is Vimal. Financing question So, regarding the TRANCLIDI trial, efficacy trial that Vince mentioned, it's underactively being designed and we will be able to share more details about it once we have received meeting minutes, which we expect after 30 days from our meeting on February 20. In terms of the serenity at home trial, we have tremendous experience with serenity 1, 2 and serenity 3. We have a very good idea in terms of the timing as well as capital requirement for that trial.

Speaker 1

And as I said in the beginning, per patient costs are low for these trials. And overall, these trials are capital efficient, and they can be delivered in a reasonable time. So we are working on all of that and we will come back and lay out the plan for Tranquility as well as serenity. And we will be having conversations what the capital requirements are based on our current cash position and how much cash runway we need to extend using the means we have, which are equity investment versus monetization of any asset we have orpartnering. But all these things are being pursued in parallel and we will be able to provide a clarity on the plan and financing as we progress.

Operator

Our next question is coming from Sumant Kulkarni from Canaccord Genuity.

Speaker 7

Thanks for taking my questions. So you mentioned in your prepared remarks that for labeling purposes, the limitation of use is over a 24 to 48 hour period and you'll need to generate more data over 3 months. When you're doing so, what's the risk that you might find that agitation is not necessarily episodic? And in that case, do you still think you might pursue 501 as a rescue therapy?

Speaker 2

So I think the first way to answer that is that's not our expectations, but I'm going to ask Doctor. Reisinger, our CMO to comment a little bit further on that. I mean, I guess it revolves around

Speaker 8

tally of It's a tally of on certain number of episodes plus severity. The FDA has agreed to our PEC as a pivotal endpoint for acute agitation. And we would all like to understand what the relationship is with the chronic condition with episodic or episodes of acute agitation. So we hope to be able to speak a little bit to that data, but the reality is these patients have acute episodes that need treatment even now and even with every treatment that is used, whether it's on label or off label.

Speaker 7

And then my follow-up is a financial question. So what do all these latest updates mean with respect to your ability to be in line with the covenants associated with the prior financings? Or will you need to rework those again?

Speaker 1

Good question, Sumant. We are always in discussion with our strategic partner and they are very supportive of facilitating and having company be able to get financing because they really believe in this asset and they see that this is a large market opportunity. So it's a very good partnership and we work together to chart out the optimal path. I think most important from this call is that we have a clarity from an FDA perspective what we need to do in terms of our path forward for these 2 protons.

Speaker 7

Thank you.

Operator

Thank you. Next question is coming from Ram Selvaraju from H. C. Wainwright. Your line is now live.

Speaker 9

Thanks very much for taking my questions. Can you hear me?

Speaker 2

We can.

Speaker 9

Okay. So just wanted to see if you could offer some clarity, whether quantitative or qualitative, regarding the PAULED study and how much data from that study that was collected before its pause you expect to be usable in furtherance of the development plans for 501?

Speaker 2

I'm going to ask Doctor. Reising, our CMO to comment on that as far as he can.

Speaker 8

When you submit for an NDA, all data in all patients who were ever treated with the medication is used. And so to that extent, safety data from that trial is entirely submitted to the FDA.

Speaker 9

With respect to whatever information was collected on the activity profile, is any of that information likely to be useful in potentially offsetting future development costs? Or I'm just trying to ascertain to what extent you have to recapitulate anything, if indeed you do?

Speaker 8

I think the pregnant pause here is we're trying to I think I captured the gist of your question in that, can that data be then sort of rolled into another study? And typically, you can't do that. It just has to be separate studies. That doesn't mean it doesn't offset cost because in the end, FDA wants to see exposures and safety, safety, safety, and that's what we have. That safety data is part of the NDA package.

Speaker 2

I think, Bram, maybe another way to say it, it probably is in the final analysis a minor cost consideration.

Speaker 9

Okay. And then just really quickly, do you have any updates on your plans for OncoS XL at this time? Thank you.

Speaker 1

Ram, we have formally started the process to explore the opportunities, whether it's partnering or monetization. Company was extremely focused right now on getting the plans for the neuroscience business, which is Tranquility and Serenity, having the clarity, we will have more time and to dedicate to focus on Onco's XL because as you know, if we can monetize our partner that can help bring non dilutive financing to the company.

Speaker 9

Thank you very much.

Operator

Thank you. Our next question today is coming from Collin Bristow from UBS. Your line is now live.

Speaker 10

Hey, good morning guys and thanks for the update. Probably sort of piggybacking on a few of the questions that have been already been asked. Firstly, on the TRANQUILITY program, can you give us any indication on sort of trial size or perhaps more usually sort of timing? It feels like this is now going to be a back half initiation. So is it reasonable for us to assume that we'll probably see data in the back half of 'twenty five?

Speaker 10

Secondly, on the existing Agami launch, sales are down sequentially. Now acknowledging there's no sales effort, the is it a surprise to you? Or can you tell us why sales are not at least staying flat? And then just a point of clarification on the credit agreement. Again, acknowledging you didn't satisfy one of the requirements, is it reasonable to expect that we'll get an update shortly after you cement things with FDA?

Speaker 10

Thank you.

Speaker 2

Good morning, Colin. This is Vince. I'll take the first of your 3 parter. In terms of timelines, we clearly want to have the meeting minutes in hand and digested before we make any definitive statements there. And with that, I'll hand over to Michael.

Speaker 11

Sure. Good morning. This is Matt. So to answer your question about Q4 versus Q3, in Q3, remember that we had a fulsome commercial effort for most of that quarter. In Q4, we saw revenues increase 10% versus Q3.

Speaker 11

We saw our cartons shipped increase by about 8%. That's a pretty tall order considering the fact that we have 6 corporate account directors in the field versus the 70 reps plus managers we had in the field previously in addition to the cats. So the cat team has really punched above their weight to get to this revenue. We've seen some of the contracting efforts in Q4 begin to matriculate. We're seeing more of that in Q1.

Speaker 11

And we expect to see continued

Speaker 10

growth. Great. Thanks. And then on the credit?

Speaker 1

Hi, Collyn. This is Vimal. As I mentioned that we are closely partnering with our strategic financing partners, both Oki and QIA. And any questions or any condition that needs to be met, they are very collaborative with us and we update those amendments if needed. So if there is anything needed, we will update you what is needed on the credit agreement.

Speaker 10

Thank you. That's helpful.

Operator

Thank you. Next question is coming from Sameer Devani from Rx Securities. Your line is now live.

Speaker 12

Hi, guys. Thanks for taking my questions. I've got just a couple. So I just want to make sure I understand the Tranquility program strategy correctly. So is it now the plan to do to get the label expanded first in care facilities and then do the subsequent at home trial?

Speaker 12

And if that's the case, what's the marketing strategy in that scenario? And then the second question is just on maybe this is for Richard. OpEx is significantly lower in the quarter than I had. I'm just wondering if Q4 is a good run rate for Q1? Thanks very much.

Speaker 2

Hi, morning. This is Vincent again. I'll take the first part of your question. So that is a good way to look at it, right? I think it's also probably reasonable to say that in principle or in theory, we could run both studies together, but I think your description is our the way we look at it, and I think that's a sensible way to approach it.

Speaker 3

In terms of the run rate, Sameer, yes, it's probably a good marker, plus or minus a few dollars, but generally a pretty good marker.

Speaker 11

This is Matt. I'll just dovetail to what Vince outlined just now. Market entry strategy in this market, you think about going into the care setting, a lot of those are contracted through IDNs. So we're actively engaged with them now. And it's going to take a much smaller footprint to engage with those care facilities and SNFs versus the home setting.

Speaker 11

So we feel that building a beachhead there makes really good commercial sense.

Operator

Okay. That's great. Thanks very much. Thank you. Our next question is a follow-up from Sumant Kulkarni from Canaccord Genuity.

Operator

Your line is now live.

Speaker 7

So this might be somewhat of a premature question, but it's still an important one, I think, from a financial modeling perspective. So what are your latest thoughts about eventual commercial pricing of 501 in the Alzheimer's agitation setting as it appears that the product might be underpriced currently given the potential value it might bring to the table?

Speaker 11

Yes. So, that's a great question and I appreciate it. I mean right now when you look at the price point of Rexulte, it's just over $1400 a month. So there does seem to be some pricing

Operator

of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments.

Speaker 1

Thank you, everyone, for joining us today and for your continued interest in BioXcel Therapeutics. Have a great day.

Operator

You. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Powered by Quartr
Earnings Conference Call
BioXcel Therapeutics Q4 2023
00:00 / 00:00