BioXcel Therapeutics, Inc. (BTAI) on Q2 2021 Results - Earnings Call Transcript
Operator: Good morning, and welcome to the BioXcel Therapeutics Second Quarter 2021 Financial Results Conference Call. 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 that are subject to risks and uncertainties related to future events and/or the future financial performance of the Company. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in the Company’s most recent public filings with the U.S. Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarterly period ended June 30, 2021, which could be found on its website at www.bioxceltherapeutics.com or on www.sec.gov. As a reminder, today’s conference is being recorded. Joining us on today’s call are Dr. Vimal Mehta, Chief Executive Officer; Richard Steinhart, Chief Financial Officer; Will Kane, Chief Commercial Officer; Dr. Vince O’Neill, Chief Medical Officer; Dr. Frank Yocca, Chief Scientific Officer; and Dr. Rob Risinger, Senior Vice President of Clinical Development. It is now my pleasure to turn the call over to Dr. Mehta, the CEO of BioXcel. Thank you, sir. Please go ahead. Dr. Vimal Mehta: Thank you, operator. Welcome, everyone, and thank you for joining our call today. We had a very exciting and productive second quarter as we continued to execute on our key initiatives that we believe will deliver long-term value to patients, health care providers and our shareholders. As many of you are familiar, we are a clinical stage biopharmaceutical company, utilizing artificial intelligence approaches to develop transformative medicines in neuroscience and immuno-oncology. Our two most advanced programs are BXCL501, our neuroscience investigational candidate that is being developed for the treatment of agitation; and BXCL701, our immuno-oncology investigational candidate, which is being developed for the treatment of aggressive forms of prostate cancer and advanced solid tumors. I will begin today’s call with an overview of the progress we have made with our neuroscience program and plans to expand into additional neuropsychiatric disorders. In just over 2.5 years, we were able to go from conducting our first-in-human trial with BXCL501 to receiving FDA acceptance of our NDA filing for the treatment of acute agitation associated with schizophrenia and bipolar disorders I & II. Thanks to the hard work of the entire BioXcel team, we were able to successfully conduct a total of 7 clinical trials in over 800 patients across a range of disorders, laying a robust clinical foundation for our 501 program. This is in alignment with our three-pillar growth strategy for our neuroscience franchise, which is designed to expand follow-on indications, including dementia across multiple treatment settings and our global reach. I’m pleased to report that we continued to successfully execute on these key initiatives and have made important progress across our clinical, regulatory and commercial objectives for our lead program, BXCL501. With regards to clinical progress, we continue to advance our plans for expanding the use of 501 into additional indications. We remain on track to commence a Phase 3 program of BXCL501 for the acute treatment of agitation associated with dementia in the fourth quarter of this year, which has been granted breakthrough therapy designation by the FDA. Agitation associated with dementia, including Alzheimer’s disease, is a significant market opportunity as the need for better treatment options is immense. We also plan to report top line data from our ongoing 40-microgram dose Phase 2 TRANQULITY trial of BXCL501 in patients with dementia during the fourth quarter of 2021. In May, we received FDA acceptance for the filing of our NDA for BXCL501 with a PDUFA action date of January 5, 2022, for the acute treatment of agitation associated with schizophrenia and bipolar disorder. This acceptance marks important progress towards our goal of providing a new treatment option for the millions of patients struggling with acute agitation. If approved, this would be the first major medical advancement for these two indications in almost a decade. In addition, we initiated a pediatric study for 501 for the acute treatment of agitation associated with schizophrenia and bipolar disorders. While the FDA reviews our application, we are executing on our comprehensive commercial readiness strategy to ensure that if we receive FDA approval, we are well-positioned to bring BXCL501 to patients and health care providers across the U.S. Our key initiatives in the last quarter included the deployment of our medical science liaisons and medical managed care teams who are continuing to engage in scientific and medical-to-medical exchange with the health care professionals and payers, respectively, to provide key insights to support commercial strategy. In May, data from the SERENITY Phase 3 trials were presented at the American Psychiatric Association Annual Meeting and at the International Society for Bipolar Disorders Global Conference, and additional data will be presented at leading medical conferences during the second half of this year. In late June, we held a commercial day where our team shared market insight, commercial opportunity and highlighting launch readiness plans. In preparation for go-to-market strategy, we have augmented commercial teams with several key hires and are further defining the designs of our sales force and market access strategy. We’re advancing our strategic initiative for geographic expansion, our plans are underway for a marketing authorization application with the European Medicines Agency for BXCL501 for the acute treatment of agitation associated with schizophrenia and bipolar disorders I & II. We believe the European market represents a sizable opportunity similar to the U.S., which we estimate is 9 million patients and approximately 40 million agitation episodes per year. All of this work will serve as a solid foundation for the commercial launch of additional follow-on indications, paving the way for further growth opportunities in our neuroscience business. We remain confident in BXCL501’s potential across multiple indications where there is a significant need for new innovative treatment options. We continue to leverage our AI technology and our proprietary clinical data to strategically expand market opportunity across a broad spectrum of neuropsychiatric disorders where BXCL501 can become a valuable therapeutic option. In the fall of this year, we plan to host an R&D Day to provide an update on our BXCL501 program, pipeline within a product and additional neuroscience pipeline candidate. We look forward to providing more information in the coming weeks. Looking beyond our neuroscience program, our Phase 1/2b study for castrate-resistant prostate cancer with is nearing completion. And a more complete efficacy update from the Phase 2 portion of the trial is expected in the third quarter of this year. Based on these results, we plan to design our next phase of the CRPC program and leverage BXCL701’s novel mechanism to build our immuno-oncology franchise. As we move into the second half of this year, we look forward to further building on the important progress we have discussed today and continue to drive forward sustainable growth strategy for our business. Now, I would like to turn the call over to Richard, who will give a financial update. Richard Steinhart: Thank you, Vimal. I would now like to review our financial results for the second quarter 2021. Research and development expenses were $13.5 million during the second quarter of 2021 as compared to $17.9 million for the same period in 2020. The decreased expenses were primarily attributable to a reduction in clinical trial costs related to our SERENITY trials. These amounts were offset in part by an increase in personnel and related costs, necessary to enlarge our development and medical teams. In addition, we experienced increased professional fees related primarily to toxicology studies as well as increased regulatory and consulting fees, all related to BXCL501. General and administrative expenses were $14.1 million for the second quarter of 2021 as compared to $3.5 million for the same period in 2020. The increase was primarily due to the overall growth of the Company, including higher personnel costs and stock-based compensation. In addition, we experienced increased related to legal, professional and insurance fees and expenses related to the potential commercial launch of BXCL501 in the U.S. The Company reported a net loss of $27.6 million for the second quarter of 2021 compared to a net loss of $21.4 million for the same period in 2020. The second quarter of 2021 results include approximately $6.8 million in noncash stock-based compensation costs compared to noncash stock-based compensation of $2 million for the same period in 2020. As of June 30, 2021, cash and cash equivalents totaled approximately $273.1 million. Now, I’d like to turn the call back to Vimal for any further comments. Vimal? Dr. Vimal Mehta: Thanks, Richard. We would now like to open the call for questions. Operator? Operator: Thank you. Our first questions come from the line of Geoff Meacham with Bank of America. Greg Harrison: Hi. This is Greg Harrison on for Geoff. Thanks for taking our questions. So, looking to the upcoming readout of 701, what sort of efficacy profile would you expect to see that would give you confidence, both in moving the program forward through the clinic as well as in the commercial potential of the asset? Dr. Vimal Mehta: Thank you, Greg, for the question. I will turn this question to Will. Will Kane: So, as we previously said elsewhere, we’re looking really for a 20% response rate roughly. That would probably be very relevant for adenocarcinoma CRPC and arguably a slightly lower response rate, so mid-teens may be relevant in NEPC. And I say that based on the fact that both of these flavors of castrate-resistant disease are essentially unmet medical need. Bear in mind, our patient population have failed three lines of systemic therapy. Operator: Thank you. Our next questions come from the line of Ram Selvaraju with H.C. Wainwright. Ram Selvaraju: Can you give us an update on the availability of what you deem to be qualified sales personnel to enable you to appropriately support the BXCL501 launch? And relative to Vimal’s comments earlier on the call regarding the European opportunity, and opportunities in other ex-U.S. territories for 501, can you perhaps give us an overview of your partnering strategy, your overall commercial outreach strategy as it pertains to those regions, and in particular, enumerate for us which territories beyond the U.S. and Europe might potentially be the most second commercial opportunities for 501? Thanks. Dr. Vimal Mehta: Thanks, Ram. So, I will just take on the first question about -- like on the partnering. As we have indicated that we plan to find a partner in Europe for co-development and co-commercialization of BXCL501. And as I mentioned, that we are -- plans are underway to file an MAA. So, things are progressing well on both fronts. With that, I will pass it on to Will to answer your first part of the question. Will? Will Kane: Thank you, Vimal. Good morning, Ram. Relative to the build-out of the sales force, as we’ve indicated, our timing is to higher sales leadership in the third quarter and then plan for hiring a sales force in the fourth quarter, obviously, dependent upon the progression of the NDA review and labeling negotiations. I’m happy to report that we recently hired our Head of Sales, our VP of Sales, who brings with him significant and substantive experience of hospital setting and clearly, a large network of individuals that he has already reached out to. So, we feel -- from that perspective, we’re in a very good position. Plus, we have a solid plan in place with recruiting firm in order to access top talent, and that’s what we’ll be initiating after we bring on the sales leadership team to begin that process. So, I think we’re right on plan as we have always indicated. Ram Selvaraju: Okay, great. And then, just with respect to Vimal’s earlier comments regarding the broadening of the neuroscience pipeline, can you maybe elaborate for us what general indications or sub-indications within neuroscience you intend to focus on most, and if you’re going to primarily prioritize neuropsychiatry-related indications versus neurodegeneration, or if you’re going to give equal weight to both? Thank you. Dr. Vimal Mehta: So, BXCL501, as you know, is a pipeline within a product. So, we continue to focus on clinical execution. In terms of our additional pipeline that we’re using our AI platform to identify additional pipeline candidate, our strategy is to focus on stress-related access. So initially, we’re focusing on neuropsychiatric disorders. And as we move along, our platform is very much applicable to other disease areas, as you said, neurodegenerative rare diseases. And we believe that will be our next progression. But, our next candidate that we plan to discuss in R&D Day will be in the neuropsychiatric space. Operator: Thank you. Our next questions come from the line of Greg Savanovich with Goldman Sachs. Unidentified Analyst: This is Anna on for Greg Savanovich. Thanks for taking our questions. Just one, first, could you please help us frame the 40-microgram data? And what do you expect to see? And how should we think about that data in the context of potentially getting a label that’s for at-home use? Dr. Vimal Mehta: That’s a great question. 40-microgram cohort was initiated to build additional optionality in our dosing regimen. So, we already have 30 and 60 microgram, which were showing good efficacy as well as safety profile. And we wanted to make sure that in dementia, our opportunity lies in the acute to intermittent chronic and also it lies in AL nursing and in the home setting. So, data from 40-microgram will inform us what is the efficacy and safety intersection. And we continue to do blinded analysis of the safety in the midpoint of our 40-microgram dosing. And this will also inform us what two doses to take forward in our Phase 3 program that we plan to start in Q4 of 2021. So, this 40-microgram dose has an additional optionality to what we currently have, 30 and 60 micrograms. Operator: Our next questions come from the line of Yatin Suneja with Guggenheim. Eddie Hickman: This is Eddie on for Yatin. Just two for me. How are you thinking about enrollment in the dementia study? Do you think you’ll need a specific percentage of patients with Alzheimer’s or a similar type of dementia to match the real-world numbers, like, how are you proposing to the FDA to avoid any subgroup analysis scrutiny? And then for Will, are there recently approved drugs that are administered in a similar setting to 501 that might be a good comp to track payer dynamics in those trends next year? Dr. Vimal Mehta: For our dementia program, we are very cognizant that what kind of analysis we will need to present to get sNDA approval. And that’s exactly what we are working with the FDA that if we have in our Alzheimer’s population, which is expected to be the major population in dementia and that was almost 85% in our TRANQUILITY trial, if we have statistical significance, would we get a broader level or we need to demonstrate it into the subtypes. And having alignment with the FDA, we’ll make the choice and the decision what trial or what the trial design should be to achieve those goals. Will Kane: And then, Eddie, on the second question relative to any recently approved drugs that may be useful as comps, as we’ve talked about and as we indicated on the Commercial Day presentation, there isn’t a specific drug that we believe is a true comp for 501, and 501 is bringing an innovative new approach to the treatment of agitation in patients where there was none for a while. I think the more relevant way to look at it is by setting. And in the hospital setting, which is where we will end obviously with the first indication, it is the hospital that kind of controls formulary access, and payers usually defer to them in terms of their decisions there. Hospitals have their own processes, as we indicated, relative to timing and advocacy needed within their institutions. So, we’re clearly aware of those, and we’ll be building a deeper understanding of those among target hospitals. And then, adoption in hospitals just tends to be a little bit slower, right? There’s a little more inertia we need to work through. But, as we’ve indicated, we believe we have a paradigm-changing treatment and a valuable new option for hospitals to consider. And the feedback so far has been very favorable. So, we’re very motivated that we will be able to drive this steadily forward. Dr. Vimal Mehta: In addition, I would just add that our medical science liaison continue to generate additional market insight. And they’re always bringing it back that there is opportunity in pre-ED settings like pre-emergency department, like those are the settings which are in community hospitals, it could be group homes, it could be like the EMS, and you might know some of the drugs are used in those settings before patients are brought in. So, we continue to evaluate whatever we are learning from the market in shaping our commercial strategy. And once we have done complete work, which is expected in the next several months, we’ll provide an update. Operator: Our next questions come from the line of Sumant Kulkarni with Canaccord. Sumant Kulkarni: I have just one. We’ve seen the FDA become more unpredictable with pending NDAs just ahead of action dates. In that context, could you remind us as to how confident you may be about satisfying pre-approval requirements with something such as site inspections, so that you can receive approval in a timely fashion? And when do you expect labeling discussions to begin, if they haven’t already? Dr. Vimal Mehta: The pre-approval inspection, we continue to do the mock exercises using the third party. And our manufacturer is based in Pennsylvania. So, we continue to monitor that if FDA will do on-site visit, and depending on the pandemic situation, will it be a virtual tour? So, we are prepared for both situations, plan A and plan B. About your second question, can you just please remind me what was the second part of the question? Sumant Kulkarni: Related to the same pre-approval type discussions. Have labeling discussions started, or when do you expect them to start? Dr. Vimal Mehta: We expect the labeling discussions to begin towards the end of this year. Operator: Thank you. Our next questions come from the line of Anita Dushyanth with Berenberg Capital Markets. Anita Dushyanth: Just wanted -- based on one question earlier. I was wondering, like when 501 is initially introduced in the hospital setting, but eventually when it’s expanded for other treatments, that’s where it could be administered at home. Could you sort of describe the market size and opportunity for that? Will Kane: Thanks for the question, Anita. So, as we’ve indicated previously, our strategy is one of landing and expanding. And so the hospital becomes our primary start. But as Vimal indicated, we cast a wide net to understand opportunity that may present itself, ultimately based on the label we receive and the enabling of that label to promote in various settings. So, we will continue to look at that. But our base, if you will, out of the gateway, will be the hospital setting. Beyond that, as we’ve indicated, there is significant opportunity in bipolar disorder patients in the community. They many oftentimes experience agitation at home. And that is, in many ways, self-treated or treated with benzodiazepines before it rises to the level where it needs to be treated in an emergency department setting. And so, we believe over time, there is an opportunity to help those patients. And there’s a study out of Europe that was conducted by Robert, which indicated that that opportunity presents itself in terms of their agitation. And then, relative to the dementia market, which we’ve indicated, that is a very large market with currently 6 million Alzheimer’s patients in the U.S. That’s expected to double over the next 20 years. There’s a high rate of agitation in those patients. And they obviously are cared for across treatment settings, not only in nursing homes, but assisted living facilities and obviously at home. And given the rise in the size of that population, the home setting will become increasingly I think important. So, the whole plan is to enable helping those patients with 501, and that’s what the clinical development plan is looking to do. And from a marketing perspective and a commercial perspective, we will build accordingly to capitalize on those opportunities. Anita Dushyanth: Thank you. That was helpful. And just one more. Also, like how do you sort of plan to allocate your resources between 501 and potentially developing that in the other indications, and then the early-stage 701 candidate? Dr. Vimal Mehta: So strategically, we have like made a choice to continue to build our neuroscience franchise. And BioXcel Therapeutics will continue to -- we want BioXcel Therapeutics in five years down the road to be a leader in neuropsychiatric and in addition, neuro rare diseases. So, that’s what our vision of the company we are building. Regarding the 701, now we will have data in Q3 time frame this year. And that will provide a good confidence in our human proof-of-concept for this mechanism. And that’s what exactly we are trying to prove, because it’s activator of innate immunity. And we are testing it for the first time, a combination of orally available such advanced agent in combination with KEYTRUDA. Once we achieve that, we will seek strategic options, what will be best in the interest of our shareholders. We continue to evaluate various options that will make sense for the business. Operator: Our next questions come from the line of Samir Devani with Rx Securities. Samir Devani: If you could just remind me what the status is of the MD Anderson study with 701, I’d be glad. Thanks. Dr. Vimal Mehta: Vince? Dr. Vince O’Neill: Sure. Thanks. So, I think as we previously announced, both arms of the study have moved from stage 1 to stage 2. And that study will now complete -- or proceed to completion, I should say. And just a reminder, it’s a basin style design. So, a fairly small sample size, 15 approximately patients in each arm. Samir Devani: Just as a follow-up, when would you expect for us to see any data from that study? Dr. Vince O’Neill: Yes. So, just bear in mind, this is an IST. And obviously, we’re not in charge of the enrollment of the study. We would expect to see enrollment probably complete by turn of the year, approximately. Again, just to stress, we don’t have direct control over the trial. But that’s certainly how MD Anderson has positioned it to us. Operator: Thank you. There are no further questions at this time. I would now like to hand the call back over to Vimal Mehta for any closing comments. Dr. Vimal Mehta: Thank you, everyone, for joining us today. I’m looking forward to connecting with many of you at upcoming conferences this fall. In the meantime, if you have any questions, please feel free to reach out. Have a great day. Operator: Thank you. This does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a great day.BTAI Ratings Summary
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