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spk06: will be a key point of differentiation as smokers and their doctors consider using cytosinicline once available. Smoking cessation prescription therapies historically have had black box warnings and high rates of troublesome side effects such as abnormal dreams, insomnia, nausea, and vomiting, which increases treatment discontinuation and limits the overall utilization of current products. Quitting smoking is difficult enough due to withdrawal symptoms without the treatment making you feel even worse. We think offering a more tolerable product should help maintain strong treatment compliance, leading ultimately to better outcomes for smokers looking to quit. As we look ahead to the next milestone for the smoking cessation program, we continue to anticipate enrollment completion for our second confirmatory phase three trial to occur by the end of the third quarter this year. ORCA III aims to enroll 750 smokers across 20 clinical trial locations in the U.S. The design of the trial is similar to ORCA II in that it will evaluate six and 12 weeks of cytosine and clean treatment versus placebo in smokers using the same dosing schedule and endpoints for evaluation. This trial was initiated in the first quarter of this year and is currently enrolling smokers. We look forward to the next update on ORCA III, which we expect will be when enrollment has completed in the coming months. And we continue to anticipate top-line results to be available in the first half of next year. Moving on to the potential for cytosinicline in users of nicotine e-cigarettes or vapes. In June, we initiated our Phase 2 ORCAv1 trial, thanks to the continued funding from the NIH and NIDA, which awarded us the next $2.5 million in grant funding to conduct this trial. ORCAv1 aims to enroll approximately 150 adult nicotine e-cigarette users in the U.S. and is led by our ORCA2 PI, Dr. Nancy Rigotti, Professor of Medicine at Harvard Medical School and Director of the Tobacco Research and Treatment Center at Massachusetts General Hospital. ORCAv1 has two treatment arms evaluating the safety and efficacy of 3 mg cytosinicline dosed three times a day for 12 weeks compared to placebo. As with the other ORCA trials, all participants will receive behavioral support. The primary objective of the study will be to evaluate for successful nicotine vaping cessation. Vaping cessation is defined as weekly nicotine vaping abstinence for the last four weeks of treatment from weeks nine to 12. Other timing for weekly vaping abstinence will also be assessed as secondary outcomes. For example, between weeks three to six, as well as any reduction in nicotine vaping during the 12-week period. There's great enthusiasm and interest in ORCAv1, and we are encouraged by what we are seeing thus far in terms of patient recruitment for this trial. We expect enrollment to be completed in the fourth quarter of 2022 and top-line results in the first half of next year. There are currently no FDA-approved treatments indicated specifically for users of nicotine e-cigarettes or vapes. The CDC reported that there were nearly 11 million adult e-cigarette users in the U.S. alone in 2019. While it is believed that noncombustible forms of nicotine present lower health consequences than traditional cigarettes, complete abstinence from nicotine is ultimately the goal for many. In a survey conducted by Achieve of vape and e-cigarette users, approximately 73% of participants stated they intended to quit vaping in the next three to 12 months. And an overwhelming majority would be interested in trying a new natural prescription treatment to help them do so. We believe cytosine and clean has great potential to meet the needs of this population who are ready to quit nicotine for good. With that, I will now turn the call over to Jerry for our financial update.
spk01: Thank you, John. I would like to provide an update on our cash position as of June 30th, 2022. as well as review our operating expenses for the second quarter. As of June 30, 2022, the company's cash, cash equivalents, short-term investments, and restricted cash were $29.4 million, compared to $43 million as of December 31, 2021. We believe we have sufficient cash to bring us into 2023. Our cash forecast includes the recently awarded $2.5 million grant funding received from the NIH to initiate the Phase II ORCAv1 trial to evaluate the use of cytosinicrine as a treatment for cessation of nicotine e-cigarette use. As a reminder, approximately half of the costs from the ORCAv1 trial are funded through the grant from the NIH. With respect to our statement of operations, net loss decreased to 10.4 million for the quarter ended June 30th, 2022. compared to $11.3 million for the same quarter of 2021. Debt loss for the six months ended June 30, 2022, decreased to $18 million, compared to $19.3 million for the same period of 2021. Operating expenses decreased for the quarter ended June 30, 2022, due to lower costs associated with the completion of the ORCA-2 trial. This was partially offset with the initiation of the ORCA-3 trial in January 2022, and the initiation of the ORCAv1 trial in June 2022. We expect our quarterly operating expenses will increase as we progress forward with both the ORCA3 and ORCAv1 trials. I'll now turn the call back over to John.
spk06: Thanks, Jerry. We continue to make tremendous progress with the cytosinicline development program, especially with the announcement of positive Phase III ORCA2 results and the initiation of both our ORCA3 and ORCAv1 trials. We remain committed to moving these trials forward and ultimately bringing a new treatment option to the market for nicotine addiction. With a compelling efficacy and safety profile and a shortened treatment regimen, cytosinicline has the potential to make a strong impact in a market that has lacked innovation and new treatments in over 15 years. The most successful prescription smoking cessation product was Chantix, which had peak global sales of $1.1 billion before it was withdrawn in 2021 for safety concerns. There are currently only two non-nicotine prescription products available to the 30 million-plus smokers in the U.S., generic Chantix and generic Zyban. Despite being tainted with its historical black box warning and disruptive side effects, Generic Chantix is anticipated to reach approximately 300 million in U.S. sales over the coming year. We believe that cytosinicline's product profile, including robust efficacy, high tolerability, and shorter duration of treatment, has potential to resonate in this underserved market. We look forward to moving cytosinicline to market and providing smokers and their physicians a compelling new treatment option. We look forward to sharing with you our continued progress in the back end of this year, including completion of enrollment in our ORCA III and ORCA V1 studies, as well as potential for publication of the ORCA II results. At this time, I'd like to turn the call over to the operator and take any questions you might have. Operator?
spk02: Thank you. The floor is now open for questions. If you do have a question, you may press star 1 on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing 1. Again, ladies and gentlemen, it's star 1. And our first question comes from Thomas Fatten from Lake Street Capital. Go ahead, Thomas. Thomas, you may be muted. Your line is live. I think you dropped out. Okay. Next in line is Michael Higgins from Lattenburg-Thalman. Go ahead, Michael.
spk07: Thanks, Amber. Thanks, guys. Thanks for taking the questions. Congrats on continued results. Looking forward to seeing the results coming up for spring of next year. A couple questions for you as we look out to 23, if I could. What your thoughts are for the timing of the NDA filing, specifically if there's any additional studies or CMC work that needs to be completed, let's say by mid-year of next year. Any comments on the timing for that filing? Thanks.
spk06: Hi, Michael. Thanks for the questions. I'm going to hand it over to Cindy for this one.
spk09: Sure. We're looking at the timing for the NDA. The latter half of next year, there are two studies that we need to finish up. One is a PK study with renal impairment, and then a standard TQT study that we will be finishing up by early part of next year. As far as additional CMC. I'll let John kind of go over that, but that's kind of on the same timeframe for coming together by the end of next year.
spk06: Yeah, I think the clinical pieces are in motion, as Cindy mentioned. Then on the CMC side, we're working with SoPharm, our partner on this, to get the validation batches up and running later this year so we can be in a position for that NDA filing in the back half of 2023. thanks and then just to follow up on the validation batches uh how many patients worth of supply do you think you'll have ready um say by uh by the time the drone is approved thanks yeah on the uh validation batch side so what we've been focusing on is really stockpiling products in advance of commercial launch uh we look to be on track to have between two and three years of launch quantity by the end of 2022 We expect that to increase as we continue to progress in 2023 and 2024. I think as we get into next year more fully, we'll refine further kind of the batches that will be out there and ready for launch. But we've got plenty of supply to make sure that we get those squared away and out into the marketplace.
spk07: Very good. One last one here, if I could. I haven't heard much mentioned here so far on the call of potential partnering discussions. Anything you can share on those would be super helpful. And if there's been any changes over the summer months on that, thanks.
spk06: Yeah, on the partnering front, obviously we can't comment on any ongoing discussions that may be occurring. I will say that there has been continued interest in the program, and we expect that would likely continue as we move the program forward, and I would expect more interest the closer we bring this towards FDA approval and commercial launch. I think we continue to stay focused in running that in parallel to our own commercial planning exercises.
spk07: Sounds great. I've got a few more questions, but I'll jump back in the queue. Thanks, guys.
spk06: Yep. Thanks, Michael.
spk02: And our next question comes from Francois Berthbos from Oppenheimer. Go ahead.
spk03: Hi. Thanks for taking the question. Sorry if this was mentioned. It's breaking out a little on my end. But going forward with the effects here on the R&D side, I was just wondering any comments of what to expect maybe in 2023 or second half of 2022?
spk06: Yeah, so as Jerry mentioned on the call, in terms of expenses, we would expect those to be elevated, especially in the third quarter now that we're up and running on both ORCA 3 as well as ORCA V1. As we get to full enrollment on those and patients start to roll off of study, which will kind of progress into the early parts of 2023, we would expect those R&D expenses to taper off quite significantly. But as Cindy mentioned, we do have a couple of other trials in terms of TQT and renal impairment that will be running in parallel with those trials as well. But that's kind of how we see the expenses shaping up.
spk03: Okay, great. So I heard that I think you guys mentioned the cash should be sufficient to get into 2023, but I'm just wondering, I think data from ORCA 3 is first half 23. Do you guys comment on whether or not the cash is sufficient to get to data readout?
spk06: Yeah, I think at the moment we're focused on getting ORCA 3 enrollment complete. I think once we have that in hand, we'll be able to clarify further kind of where that puts us in terms of where we might expect top line results. So I think as we move forward, we'll be able to narrow in on the timing of that.
spk03: Okay, great. And just lastly, you talked about potentially a publication of ORCA II. I was just wondering, you talked about a medical conference. Any conferences in this space to kind of think about that would make sense for you guys?
spk06: Yeah, so on the medical conference front, I think historically one of the core forums for us has been SRNT, or the Society for Research on Nicotine and Tobacco. The biggest of those events is the annual U.S. conference, which is typically in kind of late first quarter of the year. There is European conferences in the fall, so I think we're looking at what makes sense, but I would stay tuned, especially for that annual U.S. conference is the one that we'd be focused on.
spk03: Can you just comment on maybe the interest for the program ex-U.S.? ?
spk06: Yeah, so we have seen, I would say, global interest. Historically, we've seen, I would say, overweight interest out of Asia, but we also see interest out of Europe as well. So it really does span the globe. But for us, I think the most interesting would be a single global partner as opposed to, you know, dividing this up into multiple regions around the globe.
spk03: Got you. All right, thank you.
spk06: Thanks, Frank.
spk02: And our next question comes from John Vandermosten from SACS. Go ahead.
spk05: Good afternoon. I had a couple questions on just how the vaping trial had started and how it's going. I assume that you started enrolling the first patient in July. Is that right? And you had all five sites open at that point?
spk06: Yeah, so we initiated right at the end of June. So over the last month and a half or so, we've really been kind of getting everything up and running. We do have patients that have been randomized or subjects being randomized on that trial. And, you know, as we mentioned on the call, we're quite encouraged with what we're seeing so far in terms of interest on the recruitment side. So I think we look forward to further updates on that one as we kind of get into the back end of the year here.
spk05: Okay, sounds good. I guess after doing two of them so far, two other ones, you're learning how to efficiently enroll those. Question on kind of a general question on medical consensus about low-nicotine cigarettes. I mean, maybe that's a little bit outside of kind of what you're looking at, but I have had some questions from investors on that and wondering if you had heard of any research that shows that that's effective at all.
spk06: Yeah, good question. I think there has been some data in particular around another product that's out in the market that just launched earlier this year that is a low-nicotine cigarette. I think what we have seen is that that data set may not be the most robust in terms of how it relates directly to real-world circumstances. But I think, yeah, clearly if you remove nicotine or lower them considerably, you're probably going to get people either smoking less or smoking them more deeply to get the same nicotine. that they're used to getting. You know, so this is an area that, you know, we're obviously tracking. FDA has been, you know, very keenly looking to regulate this further. You know, we'll look forward to the proposal in the second quarter of next year on kind of what those plans look like. You know, that will likely move forward then with a public comment period. So I think either way, this is going to be several years out before any potential changes disruption. And I think the beauty is at that stage we'll likely be on the market and be there ready for smokers if the cigarettes that they're used to smoking is disrupted.
spk05: Got it. And the last one for me is just on the trend in generic VeronaClean. I was able to find some of the data in Endo's report. It looks like, you know, they've been doing pretty well there. But I was wondering if you had seen any other data maybe in terms of scripts and sequential growth there, if you had any color on that at all.
spk06: Yeah, I think the only thing I would note, so we did mention that it looks like a run rate probably north of $300 million at the moment in terms of where they're at. But I think the big piece there is that it's only roughly half of the Chantix unit sales before it was withdrawn from the market last year. So they are still, they just launched last September, so it's still early days in terms of them being out in the marketplace and kind of replicating that historic Chantix demand. So I think it'll be interesting to see how that progresses. But I think it's a good day to point out in the market just in terms of continued interest in smoking cessation products overall, including as we move forward to market here in the next couple of years. Great. Thanks for taking my question, John. Yep. Thanks, John.
spk02: And our next question comes from Vernon Bernardino from HC Wainwright. Go ahead, Vernon.
spk04: Hey, John. Thanks for taking my question. So you mentioned in June that Achieve initiated the ORCA-V1 clinical trial across five trial locations. Just wondering if you started dosing in all of those five trial locations, and when might we see data from the OCAV1 trial.
spk06: Yeah, thanks for the question, Vernon. So on the vaping trial, we've got four out of five of the sites that are fully activated at this point. So we've got one that's kind of in process at the moment, so they should all be up and running here shortly. But, yeah, excited to see what has come through thus far. And I think of, you know, just a reminder, we've got Nancy Rigotti from Harvard Mass General here. as the PI. She was also the PI on our ORCA-2 study. And then we basically looked for four other sites that were high-quality, high-performers on our previous studies as well. So we like the group that we have activated for this and happy with what we've seen so far in terms of recruitment.
spk04: And as far as timing, you think?
spk06: Yeah, so it's going to depend on when enrollment gets complete, but I think at the moment we've been guiding likely the first half of next year. Obviously, a big range will be triggered off of enrollment, the first half of next year for top-line results.
spk04: Do you anticipate most of the enrollment will be in that one site?
spk06: Yeah, so we've got – there's five total sites in the ORCA V1 trial, and so I think we would look to have that you know, as evenly spread as we can across those study centers. And that's in 150 e-cigarette users or vapers.
spk04: Okay, I was just trying to get some visibility. Thanks for taking my questions. I'm looking forward to the further progress.
spk06: Thanks, Vernon.
spk02: Again, ladies and gentlemen, it's Star 1 to ask a question on the phone. And our next question comes from Michael Higgins from Lattenburg-Thompson. Go ahead.
spk07: Thanks again, operator. Thanks, guys. Just some follow-ups here, if I could. There was a study in JAMA not long ago on cytosinicline against renicline, NRT, and placebo. Wondering if you're aware of any other ongoing investigator-initiated studies. These seem to be more and more popular. Just trying to get a sense as to what's coming. Thanks.
spk06: Yeah, thanks, Michael. Yeah, I mean, there is continued interest for cytosinicline around the globe. I think we are aware of some other smaller trials being run across Europe as well as, I'm thinking, to Asia or Mongolia, some work being done. None of it that's really as, I think, analogous to what we put together here in the U.S. It's typically on the Eastern European dose and administration. But I think as some of those come out, if they're interesting data points, then we'll be sure to share that with everyone.
spk07: Just a follow-up on that one. Do you know if any of these have come around yet to your dosing regimen with TAD?
spk06: Yeah, none that we've seen. Not yet, anyway.
spk07: Okay. And then this fall, it doesn't sound like you have anything at ESRNT. I just want to clarify on that. And then thinking ahead to next spring, what might we see? Maybe ORCA 2. I don't think you'll have a chance then. I'm just thinking of the timing of it to have even late breakers at SRNT. But if you could let us know on those, it would be great. Thank you.
spk06: Yeah, so I think I, you know, barring any major disruptions, we would anticipate having some data sets at the annual U.S. SRNT conference in the spring of next year. Between now and then, you know, we've been focused on working with the investigators on ORCID 2, including Dr. Rigotti, on getting the ORCID 2 results published, and we're going to focus that on high-quality journals, but the focus is to get that published first and then move forward with additional data sets that we'll be able to share with everyone.
spk07: Makes sense. Appreciate it. Thanks, John.
spk06: Thanks, Michael.
spk02: And our next question comes from Jim Malloy from Alliance Global Partners. Go ahead.
spk08: Hi, thank you for taking my questions. Hey, John, kind of a bigger picture question on the manufacturing. How goes the plants that try to chemically manufacture cytosine clean versus, you know, the current growing, getting it from the trees? And how goes, you know, expanding, broadening, diversifying the risk of the planting sites to other locales?
spk06: Yeah, Jim, thanks for the question. So on the synthetic side, this has continued to be an area that we're poking around on. If someone's going to crack a way to make this synthetically, we want it to be us so we can protect that administration, that way of producing it. So far, that's proven very difficult. So our focus here in real time has been more on stockpile, as I mentioned earlier, getting three to four years of launch material in hand at the time of of commercial launch. We have made some progress on additional plantations or areas to plant, including down in Latin America, early days on that. But we think having another growing cycle in the southern hemisphere would make sense. And then we're close to moving forward with a partnership with a university here in the U.S. to look at areas where we could plant cytosinicline right here in North America. So, yeah, a lot's going on there, but we'll have additional updates as some of that progresses over time.
spk08: Understood. And I know you touched on that earlier, but would there be a way to characterize the environment for bringing in partners? Would you say the buyer-seller's market? Talk a little bit about the level of interest that you're seeing for partnerships?
spk06: Yeah, I mean, I think, you know, not just here at post-ORCA2 data, but I think overall historically we have seen continued interest around cytosinicline. I think, as I mentioned earlier, you know, historically it's probably been overweight to Asia, but we have seen folks that have global scale as well as strong capabilities in Europe. So I think it really is quite broad. You know, I think in terms of appetite, you know, I think until these things move ahead to the point where, you know, we start to get into contracting and things like that, it's a bit hard to predict outcomes. But I do think as we move forward, the closer we get to commercializing this, the more and more interest there will be on the program.
spk08: Understood. Thank you very much for taking the questions.
spk06: Yep. Thanks, Jim.
spk02: And at this time, there appear to be no further questions. I would now like to turn it back to management for any closing remarks.
spk06: Thanks, operator. And thanks, everyone, for joining us today and for your continued interest in the company. We look forward to sharing additional information with you in the coming months. And thanks again for joining us. Take care.
spk02: Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
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