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Operator
Good morning and welcome to the BioAccel Therapeutics second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. If during the conference you require operator assistance, please press star zero on your telephone keypad. After the presentation, there will be a question and answer session. If you'd like to register a question, you may press star one on your telephone keypad. 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 or business performance of the company. Actual results could differ materially from those anticipated in these 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 March 31st, 2021, which can be found at www.bioexceltherapeutics.com or on www.sec.gov, which will be updated in its quarterly report on Form 10-Q for the quarter ended June 30th, 2022. As a reminder, today's conference is being recorded. Joining us on today's call are Dr. Vimal Mehta, Chief Executive Officer, Richard Steinhardt, Chief Financial Officer, Matt Wiley, Chief Commercial Officer, Dr. Rob Reisinger, Chief Medical Officer of Neuroscience, Dr. Frank Yacca, Chief Scientific Officer, and Dr. Vince O'Neill, Chief Medical Officer of Oncology. It is now my pleasure to turn the call over to Dr. Mehta, the CEO of BioXcel Therapeutics. Please go ahead.
Vimal Mehta
Thank you, operator. Welcome, everyone, and thank you for joining our call today to discuss BioXcel Therapeutics' financial performance and business highlights for the second quarter of 2022. It has been a busy but rewarding few months, and we have many exciting updates to review this morning. As you know, we are a biopharmaceutical company utilizing artificial intelligence approaches to develop transformative medicines in neuroscience and immunology. You have heard me discuss our five-year vision to become the premier AI-driven neuroscience company, and our progress from this past quarter across all parts of our business continues to bring us closer to this ambitious goal. Let me begin by highlighting our notable achievements across the organization. We have laid the foundation for a successful entry into the market for EGALMI. Our FDA approved acute treatment for mild, moderate, or severe agitation associated with bipolar I or II disorder or schizophrenia in adults. Our sales team has been in the field for over two months, and key commercial activities are in full swing to create awareness and drive eventual adoption. With trade launch in early July, our priority remains delivering this new treatment option to hospital systems, healthcare professionals, and patients. Our chief commercial officer, Matt Wiley, will discuss commercial progress and early feedback from the field in more detail shortly. While Egalme's trade launch marked an important milestone for the 501 program, we continue our heavy focus on our three-pillar portfolio expansion strategy for the franchise. Let me summarize our progress since last quarter. Following a successful Type B meeting with the FDA, we have further executed our strategy for our first strategic pillar, which is broadening the medical setting where 501 can be offered. On this front, I'm excited to announce our Serenity III trial for at-home use. This pivotal, double-blinded, placebo-controlled single study is designed to evaluate BXCL501 60-microgram dose for agitation associated with bipolar I or II disorder and schizophrenia, and will consist of two parts. The first part is similar to our Serenity I and II trials, which were the basis for our eGalmy approval earlier this year, and is designed to assess efficacy and safety in acutely agitated bipolar and schizophrenia patients in an institutional setting. Like Serenity 1 and 2, Serenity 3 primary efficacy endpoint is a change from baseline in PEP total score at two hours compared to placebo. The second part of Serenity 3 is designed to assess safety compared to placebo when self-administered at home. We believe Serenity 3 may be de-risked for the following reasons. First, it will utilize many of the same investigators and clinical sites as 3 and 81 and 2. Second, we have already observed dose-dependent responses in our phase 1 slash 2B study for 60, 80, 120, and 180 microgram doses. market research shows a significant number of newly identified unclaimed and untreated episodes in bipolar patients in the at-home setting. This is additive to the claims data research showing that one-third of the 25 million bipolar and schizophrenia agitation-related episodes occur outside the institutional setting. Coupled together, this is a clearly defined medical need and large market opportunity in which we have already demonstrated the efficacy and safety of Egalme. Additionally, the experience which psychiatrists will gain in the institutions with the current commercial effort will help build a strong bridge to eventual community use if approved. We expect to initiate Serenity III in the second half of 2022. Next, as part of our indication strategy, expansion strategy, we have made strides in our clinical development programs for 501. Our Tranquility Program for the acute treatment of agitation in patients with Alzheimer's disease is advancing well. Our Tranquility II Pivotal Trial is enrolling. with top-line data now expected in the first half of 2023, and we still anticipate initiating enrollment in the second half of this year for Tranquility III, our second pivotal trial in the program. With the recent approval of EGALMI and its strong initial level, we believe the Tranquility Program has been significantly de-risked. The positive efficacy, safety, and tolerability data generated today, along with breakthrough therapy designation from the FDA, provides us continued confidence in the Pivotal Tranquility Program. We look forward to progressing 501 towards a supplemental NDA for agitation in patients with Alzheimer's. Alzheimer's disease-related agitation remains a clinical area of significant and growing unmet need with an estimated 100 million episodes per year in the U.S. and no FDA-approved therapies. We are excited by the potential of 501 to play a key role in providing a much sought-after solution for Alzheimer's-associated agitation. Further to our indication expansion strategy, we are investigating the potential utility of 501 as an adjunctive treatment in major depressive disorders. Our phase one multiple ascending dose trial in healthy volunteers is progressing well, with our 30 and 60 microgram dose cohorts complete. This double-blinded placebo-controlled study includes multiple cohorts, each consisting of 18 volunteers. The 80-microgram dose escalation portion of the trial is currently underway. Data readout for this daily-dosing study is expected in the first half of 2023 and will inform our dose selection for a future proof-of-concept depression study. Over 300 million antidepressant prescriptions are filled annually in the U.S., and current treatments are limited by slow onset of action and incomplete responses. More broadly, the 60-megagram daily dosing over seven days in healthy volunteers is quite encouraging and supportive for our leading programs for at-home use. Moving on to the third and final pillar for our 501 expansion strategy, growing job geographic footprint. Given the significant near-term US market opportunity, the company has available by developing 501 for bipolar one and two and schizophrenia patients in the home setting. And as an adjunctive treatment for MDD, we have made the strategic choice to prioritize resources to execute on US strategy over ex-US. As a result, we have chosen not to file an MAA at this time. We fully intend to pursue a well-timed geographic expansion at the most appropriate and opportune time. Moving beyond 501, we are leveraging our proven AI technology to build out a sustainable R&D pipeline. As part of our efforts to build out our neuroscience franchise, we continue to advance formulation work for BXCL502, which demonstrates a novel and differentiated mechanism of action for the chronic treatment of agitation related to dementia and other neuropsychiatric conditions. Shifting to our oncology franchise, we have established Onco's Excel, a fully operational focus subsidiary to provide maximum strategic and financial flexibility and position us for sustained expansion and optimization of the franchise. We are actively seeking strategic options, including third-party investments to advance Onco's Excel and ultimately unlock significant value for our immuno-oncology franchise. Under OncoseXL, we are advancing the clinical development of BXEL 701, our leading immuno-oncology clinical candidate being developed for the treatment of aggressive forms of prostate cancer. This includes progress on our metastatic castrate-resistant prostate cancer phase two trial of 701 plus Keytruda combination therapy in patients with either small cell neuroendocrine carcinoma or adenocarcinoma phenotype. Patient enrollment in the SCNC OR is expected to be completed in the second half of this year. In addition, enrollment is advancing for our adenocarcinoma randomized trial expansion, evaluating 701 monotherapy versus 701 Keytruda combination therapy. We look forward to providing additional updates on our plans to maximize shareholder value to our oncology subsidiary later this year. On the corporate front, we have welcomed industry veteran Michael Miller to our board of directors and the BioXcel family. We are very pleased to have his strategic leadership and commercial growth experience available during this exciting time for BioExcel. Lastly, we continue to fortify our intellectual property with two new patents related to Egalme's film formulations containing dexmedimidine and methods of treating agitation using the film. In summary, we have made great progress across all aspects of our business this quarter. and are continuing our work to transform the agitation treatment landscape and other neuropsychiatric conditions. We have many exciting catalysts on the horizon and look forward to continuing our journey toward becoming the leading AI-enabled neuroscience company. Now, I would like to turn the call over to Matt Wiley, who will give an update on the IGALMI launch. Matt?
Matt Wiley
Thank you, Vimal, and good morning, everyone. I'm pleased to report our progress on three fronts this morning. Our early market access momentum, key learnings from our initial field force efforts, and our commercial strategy and execution. The market access activities are progressing very well and are on schedule. While the contracting timeframe with group purchasing organizations or GPOs can take six to nine months on average, we have been encouraged by our early engagement. There are three national GPOs that represent over 90% of the beds in our 1,700 targeted hospitals, and we are in various stages of discussions and negotiations with each. We expect to finalize the contracting process over the next few months, and we'll share our progress with you when these relationships are complete. In addition to national GPOs, we've engaged with Integrated Delivery Network Hospitals, or IDNs, to drive further downstream adoption of IGOMI. We have also executed the CMS contract and completed the federal supply schedule submission to unlock access to state and VA hospitals, respectively. We have completed the first phase of our commercial build-out and deployment of our sales personnel in the highest priority targets. To date, our field force has successfully engaged a majority of their target hospitals and has made progress in P&T formulary review discussions. Multiple hospital systems and IDNs have indicated their interest for the product and expressed an intent to review. As the P&T committees review Agami in their scheduled meetings during the second half of this year, we will provide an update with more specific metrics. We've learned a lot since the field launch 10 weeks ago. The early response to our awareness activity, sales messaging, and Agami concept, for which there is no commercial precedent, has been starkly positive and has revealed tremendous opportunity within the bipolar and schizophrenia agitation markets. Through discussions with stakeholders in target hospitals, our understanding of the value proposition of IGALMI continues to strengthen. The challenges surrounding the administration of intramuscular injections is a market dynamic that is becoming increasingly worrisome to institutional stakeholders and one which creates a market environment favorable to IGALMI. The use of physical restraint is often required to inject agitated patients and can increase both the expenses and safety risk to staff. Physical restraint can be costly and resource intensive for hospitals at approximately $1,500 per patient, which typically surpasses the reimbursement. Consequently, a novel treatment option like Agami may offer an effective solution to address these issues while potentially limiting associated expenses. Furthermore, Agitated patient outburst may result in patient, caregiver, and staff injuries, which leads to lost work time, transfers, lawsuits, and generally unsafe work environments. COVID-driven staffing pressures still exist at many of these places of care. As institutions look for ways to decrease the use of restraints and reduce injury to staff, we are observing a desire to increase the use of oral less invasive medications for managing agitation consistent with consensus guidelines. Turning now to marketing, we are deploying tactics to support the sales efforts and amplify the awareness of Agalmi. To educate healthcare providers on the core benefits of Agalmi, we have recently deployed our promotional speaker peer-to-peer program. These programs will ramp up significantly over the next two quarters to drive interest, formulary adoption, and demand. The team has also successfully launched our Agalme Now available digital campaign, which has achieved over 100,000 visits to our HCP website and garnered meaningful engagement with content in just a short period of time. Based on the positive market response to Agalme, significant process with market access, and increasingly favorable market dynamics, we are excited to begin our second phase of personal promotion and fully deploy our sales team across 70 territories over the next several months. This puts us in a strong position to take full advantage of the opportunity to treat volumes of patients. Now, I'll turn the call over to Richard, who will give a financial update.
Vimal
Rich? Thank you, Matt. I will now review our second quarter 2022 financial results. Research and development expenses were $17.9 million for the second quarter of 2022, compared to $13.9 million for the same period in 2021. The increase in R&D expenses were primarily attributable to clinical costs related to the company's Tranquility Program. Selling, general, and administrative expenses were $18.4 million for the second quarter of 2022, compared to $14.1 million for the same period in 2021. The increase in SG&A expenses were primarily due to personnel and costs related to the launch of Algami in the U.S. BioXcel Therapeutics reported a net loss of $37.7 million for the second quarter of 2022, compared to a net loss of $27.6 million in the same period in 2021. Cash burden for the quarter was approximately $33 million, which includes approximately $700,000 in inventory costs and $3.6 million in prepaid clinical trial fees. As of June 30, 2022, cash and cash equivalents totaled approximately $233.5 million. This excludes $30 million of contributions from the $260 million strategic financing announced in April. To date, the company has met the milestones and received $100 million from that agreement. Now I'd like to turn the call back to Vimal.
Vimal Mehta
Thank you, Richard. We would now like to open the call for questions. Operator?
Operator
Thank you. At this time, ladies and gentlemen, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is coming from the line of Greg Harrison with Bank of America. Please proceed with your question.
Greg Harrison
Hey, good morning, guys. Thanks for taking the questions. Maybe to start out, could you provide some more color on the XUS strategy? Maybe just talk a little bit about the drivers behind the decision and how you would characterize the discussions that you've had with potential partners.
Vimal Mehta
Regarding the strategy, it has been evolving considering that our program is evolving really fast. And U.S. opportunity is so attractive in a short run with our recent announcement of the Serenity 3 program where our drug is already approved . It can go to the home setting. Alzheimer's program is progressing and we will be ready to file a SNDA in that program after completion of two pivotal trials. So opportunity in U.S. is really large. In addition, we are pursuing MDD. It's a strategic choice on resource deployment. Shall we focus on U.S. or continue to focus both in U.S. and outside U.S.? So once we have captured opportunity in U.S., then we will start deployment of strategy outside ex-U.S. and our goal will be to look for a partner who can cover multiple geographies rather than originally we were thinking of just like looking for a single partner in Europe. Now Japan is a very attractive market considering the Alzheimer's related agitation and we are very strong IP position. So we are making strategic choices just from a resource deployment perspective. Otherwise, opportunity is very attractive outside U.S. in addition to U.S.
Greg Harrison
Okay, that makes sense. And then maybe just one more, maybe an update on the Agami launch. Have you seen any early adopters in the month or so since trade launch? And if not, when would you expect the first to start to come on board?
Matt Wiley
Well, the process, Greg, first of all, thanks for the question. The process takes six to 12 months on average to just get the formulary approval in the hospitals. And so driving adoption typically happens after that process has been completed. So the steps that we're taking now that we've been taking over the last 10 weeks is to drive interest, identify P&T stakeholders, and begin the process to get formulary adoption in those hospitals. Once that happens, we'll see swifter uptake. But this is how typical hospital launches proceed. It's an operational fact, and we're just working within that set of facts.
Greg Harrison
Got it. Okay. Well, thanks again, and congrats on the progress.
Vimal Mehta
Thank you, Greg.
Operator
Thank you. Our next question is coming from the line of Robin Karnascus with Truist Securities. Please proceed with your question.
Robin Karnascus
Hi. Thank you for taking my question, and again, good work on the progress. So on Serenity 3, why just 60 milligrams? Can you repeat dose? And what percentage of the population might that exclude that would need a higher dose? That's my first question, then I have a follow-up.
Vimal Mehta
That's a great question, Robin. 60 micrograms, as you know, in our previous dose escalation study, we saw that 60, 80, 120, 180, they were all effective. We're starting with 60 because that's the dose, like, you know, most relevant in an outpatient setting, and I will have Rob outline why we chose the 60 microgram dose. Rob?
Robin
Sure. So we chose the 60 as VIML pointed out because we actually have data on 60 micrograms from our dose ranging study in schizophrenia. It separated from placebo at two hours. It has a large proportion of patients who respond to 60. So the number that might, let's say, need another dose is very small. So the trial is designed, it's a frankly very slick design. We're demonstrating the efficacy in almost an identical population. It will be a combination of schizophrenia and bipolar disorder. It will be done at the very same sites that completed serenity one and two, so we expect identical results in terms of an improvement from baseline and the PEC total score at two hours. And then we're testing it for safety purposes at home, which we've received agreement from the FDA that this is a pivotal trial and will allow us to expand the label for this same indication, if you will, agitation associated with schizophrenia or bipolar disorder, but at home use.
Robin Karnascus
So just to be clear, can you repeat those? And is the first portion just in the hospital and then the second portion is at home? Or is it all at home and just the second portion is more for safety?
Robin
The first portion is identical to what we've done in Serenity 1 and 2. It will be acutely agitated patients who present in an acutely agitated state. We will be able to demonstrate the 60-microgram dose is efficacious, and then the second dose portion of the study is testing the safety at home.
Robin Karnascus
So the first portion is in a hospital setting, just to be clear.
Vimal Mehta
Just to be clear. And there is a reason for it, because we are using PEC score, and it's a lot more convenient to have a PEC score rated by some experts rather than at a home setting. And that's why the reason we split the two phases.
Robin
Bridges the PEX score with what we've already demonstrated.
Robin Karnascus
That makes sense. And then the second question I had was regarding the impact of the health care reform bill. I mean, obviously, if you sell this drug significantly in Alzheimer's, it's a rather large Medicare population. And by nine years after launch, you could be outside of that small biotech exclusion criteria, putting you within the 50 top drugs in Medicare. Have you thought about how we should think about that? I guess the first question would be, what is your estimated split for Alzheimer's for Medicare in the United States? And have you thought about how we should model that, given that that's now going to look like it's going to be in law?
Matt Wiley
So the MedD provision in the draft bill is really focused in on those drugs that are already costing CMS billions of dollars. So that's where the negotiations are gonna happen first. So to answer your question, the Medicare portion of Alzheimer's opportunity is roughly a third of the total opportunity that we've seen in our modeling. And we would expect that we would address these potential issues down the line as we're thinking about, for instance, pricing flexibility that we've communicated in the past and how we want to approach this particular market. The fact is we've got a long way to go to get to FDA approval, and thinking downstream about a bill that has not yet been ratified is a little premature.
Robin Karnascus
Okay, great. Thank you.
Vimal Mehta
Thanks, Robin.
Operator
Thank you. Our next question is coming from the line of Simon Kulkarni with Canaccord. Please proceed with your question.
Simon Kulkarni
Thanks for taking my question, and sorry for any background noise. I have a couple. The first one is on 73. On the safety aspect, what exactly do you plan to collect in terms of metrics for the at-home use component?
Robin
Thanks, Suman. It's Rob Reisinger. The metrics for adverse events, for example, would be collected as you collect adverse events in any trial. The patients will be collecting adverse events at the time of dosing. There will be a reliable informant, we'll say, maybe a caregiver, maybe a spouse, maybe a family member, a son, daughter, whomever, will be there to also report adverse events, and they'll report these to the investigators. So the adverse events are collected identically to how you might study adverse events in other trials. As an outpatient, a patient comes into the office and says, this is what happened, this is how I felt, and the investigator records that.
Simon Kulkarni
And then my follow-up is, given that the label currently does not restrict use of Egalme to a specific setting, is there anything that precludes a physician from sending a patient home with the film today as things stand?
Vimal Mehta
Suman, that's a great question. As you said, label focuses on under the supervision. So wherever there is a supervision available, Egalme, we believe, can be used. We're just focusing in the hospital setting because two-thirds of the patients out of 25 million episodes comes to the hospital market. It's a very well-defined and focused approach. How physicians will use it once they develop experience, all of that will unfold in the next six to 12 months. Thank you. Thank you so much.
Operator
Thank you. Our next question is coming from the line of Kambiz Yazdi with Jefferies. Please proceed with your question.
Kambiz Yazdi
Hi, team. This is Kambiz on for Chris. What's the significance of in-home use for Serenity 3? Do you anticipate that freeing the outpatient completely as a second indication? Regarding clinical meaningfulness in Alzheimer's, agitation and psychosis, What gives you confidence in your endpoint and interpretation is clinically meaningful? And then lastly for your MDD trial, what are the drivers for dose selection in that trial?
Vimal Mehta
Thank you for your questions. I will pass it on to Rob to answer both the Tranquility Program as well as then follow up with the MDD.
Robin
Sure. Let me be clear, it's the same indication in Serenity 3. This is acute agitation episodes associated with schizophrenia or bipolar disorder. And so we believe that using IGAL-ME for episodes that aren't just in the hospital or just directly in front of a healthcare provider, but enabling the patient to take this when they're agitated at home could potentially even prevent the patient from requiring hospitalization or going to the emergency room or running to a clinic. So it's exactly the same indication, but there's tremendous value to the patient and the people around the patient to sort of prevent an escalation from occurring.
Vimal Mehta
And then the second piece is that why patients end up in the emergency room. because agitation is a spectrum, mild, moderate, and severe. It escalates. So if you are preventing the agitation when it's in early stages or mild stages at home, it's very different than these patients will not need to go to the emergency room. So I think it's a dynamics between the institution, the reason patients end up there because they don't have a choice. or no treatment options at home. So that's why they end up two-thirds of the patients in the institution. And if Regalme is available, and when their PEC scores are lower compared to when they end up in the emergency room, you could treat these patients with the dose we have selected.
Robin
So with respect to the major depression and dose selection, we are testing the tolerability and, of course, safety of escalating doses, both escalating individual doses and dosing at more than once a day. For example, dividing doses, a morning and an evening dose, for example. And so the tolerability is really important prior to testing this in a proof of concept study for depression. So those are the sort of very simple biomarkers that would enable us to select a dose. How well is it tolerated? Are there any safety issues? And thus far, we continue to escalate.
Operator
Thank you. We'll move on to our next question, which is coming from the line of Yatin Suneja with Guggenheim. Please proceed with your question.
Yatin Suneja
Good morning. This is Eddie on for Yatin. Thanks for taking our questions and congrats on all the progress. For the at-home expansion program in 73, in part one, what would be a reason why a patient wouldn't proceed to at-home dosing? Does the company or experts you've spoken to or regulators have some safety bar for what would need to happen to ensure a patient can safely move to at-home administration? And then would there be a limit to the number of doses a patient can take in part two? And then for the MDD program, given the rapid onset of action you saw for agitation, would you expect to see a rapid onset of antidepressant efficacy and what are the earliest time points you're looking for for efficacy in this study?
Robin
So, thank you. So, the patients in Serenity 3, the first portion will be dosed with either placebo or the 60 microgram dose. Those patients are independent of the patients in Part 2. Part two is testing the dose at home. It's not a gateway. So I realize that your question implies that you think a patient's going to start with part one and continue to use it at home. That's not what we're doing. The first part of the trial is patients who are acutely agitated, they present with agitation, and we're treating it with the 60 microgram dose. So we'll have very accurate bead, if you will, on efficacy as well as safety in a tightly controlled situation where everything can be monitored just as if you were in the emergency room. The second part of the study is entirely at home in a whole different set of patients. So again, we will have enough data. The FDA has said that they will consider this a pivotal trial for the indication at home.
Vimal Mehta
So there were no safety concerns or any reasons that we could not do the first portion in the at-home setting. As I mentioned previously, it's all about having the robustness of the data and using the scale that we have used in Synergy 1 and 2 PEC, and we were able to use this and at the same time demonstrate the safety at home so that it can become a package for label expansion or for another SNDA.
Yatin Suneja
Gotcha, that's helpful. And then on efficacy.
Vimal Mehta
Can you say that again, please?
Yatin Suneja
The MDD study, if you could talk about what the earliest time points you're going to look at for antidepressant efficacy and whether that would be similar to what you'd see for agitation.
Robin
In MDD, we're not looking at one or two hours. We're looking at days and weeks. Efficacy and MDD we expect to see very early, but remains to be seen. We'll be likely testing this within the first week, second week, et cetera. And we're not just looking at the acceleration of antidepressant response. We're also looking at the proportion of patients who improve. We know that SSRIs are not the be all and end all, for example. Antidepressants don't work for everyone. Maybe they work for a large proportion greater than 50%, but we'd like to greatly improve that. So we're looking at both acceleration and responders or response overall when treated with BXCL501.
Vimal Mehta
And this study is going to have four weeks or something like that, right?
Robin
Daily dosing over a period of four weeks.
Operator
Thank you. We'll move on to our next question, which is coming from the line of Colin Bristow with UBS. Please proceed with your question.
Colin Bristow
Hey, good morning. Thanks for taking the questions. I guess as we think about subsequent quarters where you're going to report revenue, can you just give us any details around how revenue will be recognized? Is it when orders are made? Is it when they're shipped? Is it when they're received? So that's question one. Question two, sorry if I've missed this, but it looks like Tranquility 2 timing slipped a little from end of this year to first half of next. Just curious what's the rationale behind this. And then third, any details or anything further you can give us on the other assets you're moving into the Senate? Thanks.
Vimal
This is Richard. On the sales, we're going to recognize sales when it's sold to the final customer, so the hospital. That's when we actually will recognize sales.
Robin
Okay, great.
Vimal Mehta
And regarding the tranquility program, we are conducting this trial in ALF where the elderly patients reside and in residential settings. And we have observed COVID disruptions sometimes in these sites, and that restricts access for CRO to go into the elderly center. And we don't know what could happen in the next several months in the fall with the COVID. So we are just being cautious and providing a guidance that there could be slip on the data readout because of those reasons. In terms of operational aspect we are not seeing any issues in terms of number of patients that are there these are elderly patients they are frail so you do get little bit more screen failure than you will get it in the serenity trial because those are younger patients so i would say those are the reasons nothing very specific except covert related delay or you can get more screen failures because these patients are frail and they may have some other associated medical complications and they can get excluded.
Colin Bristow
Okay, great. Thank you.
Vimal Mehta
And you had the third question. Was it related to MDD or our, I just want to clarify.
Colin Bristow
Just in terms of the, when do we get more information on your other assets that are somewhat under moving stealthily forward?
Vimal Mehta
Sure. So that asset is now going through the formulation. We expect that work to complete, and then once we have done all the, like, you know, preclinical workup and we are ready to take to the clinic, we will disclose what that asset is, which indications we are choosing. Initially, we have mentioned that, like, you know, one of the Indication where it fits in very well is treatment of chronic agitation and dementia. But we continue to explore additional options where the mechanism will fit in, and we will lay out the plan in 2023.
Colin Bristow
Great. Thank you, guys.
Vimal Mehta
Thank you, Colin.
Operator
Thank you. Our next question is coming from the line of Greg Suvanovich with Mizuho. Please proceed with your question.
Greg Suvanovich
Good morning. I hope everyone's having a fantastic day. This is Richard Wynn for Greg Sivanovich, who sent it best, and it's great to be back on the main. So my first question goes on to Serenity's three plans. How large do you expect the study to be with the goal of enrolling how many patients, and by when do you expect enrollment to end? And my second part of that is that what do you think is the incremental increase to revenue since a third of episodes occur outside? of institutional settings? Can we assume a 30% increase to peak revenues, or what would the company think? Thank you.
Vimal Mehta
Thank you, Richard, for those questions around the serenity three. First question, I will pass it on to Rob so he can outline. He's agreeing on number of patients and everything, but we expect this trial to be pretty short. Just to remind everyone, our board trials, serenity one and two, We had 750 patients, 375 each, and three-arm study. There we were testing two doses and a placebo, and we completed the enrollment in about five months or so. So these are very fast trials in terms of the timing. And in terms of the number of patients, I will pass it on to Rob, because he is currently doing powering studies to make sure we power the studies. Rob?
Robin
So each portion of the study, the first and second half, will be well under the, I believe it was 350 patients in Serenity 1, 350 in Serenity 2. So because they're independent patients, they're essentially, in a way, independent studies, we know that these will enroll relatively quickly. In addition, There's no exclusion. So unlike Serenity 1 and 2, Serenity 1 was patients with schizophrenia. Serenity 2 was patients with bipolar disorders. We're mixing that. And the FDA has agreed that we can test this in both patients with schizophrenia and bipolar disorder at the same time in the same study because our effects are similar. Humans are humans regardless of what the underlying illness is and thus we expect an even faster enrollment. We don't anticipate any problems with recruitment for this. Agitation is relatively common and we were able to enroll both the Serenity 1 and 2 very rapidly even in the midst of the kind of the major part of the COVID pandemic.
Vimal Mehta
So Richard, we will provide a guidance once we roll out the plan, pivotal plan, then when the data readout is expected. But it will certainly be in 2023, and we'll provide more granular guidance on first half or second half.
Matt Wiley
So Richard, this is Matt. Just to take your question on revenues for the community setting. So the math that you're that you're calculating here is correct in that there are roughly a third of the agitation episodes in the community setting. But one of the things that we've learned in recent market research is that specifically in the bipolar population, which represents the majority of agitation, we see approximately 10 additional episodes that are not captured in the claims data. So this is roughly a 60% increase in what we previously thought community setting opportunity was. These episodes were not seen in the schizophrenia patients, and typically when they're compliant with their antipsychotics, it would suppress the agitation episode, so it makes sense. It was identical to what we saw in claims. But in bipolar, those 10 well-called shadow episodes, are being managed through meditation, exercise, illicit drug use, alcohol. We believe that those are opportunities for 501 should we get the approval for that indication.
Greg Suvanovich
Great. Thank you. So then, and you also mentioned that GALMI exceeded expectations in their value proposition. What do you think the uptake curve should look like for Egami then? Are you comfortable with where consensus is currently, or do you see that shifting?
Matt Wiley
So there's a, as I said, there's an operational or mechanical process to unlock the value and uptake in hospitals. And we still have to deal with that process. However, The early signs have been very encouraging. The interest in the drug is very encouraging, and we see things moving in a very positive direction. So, you know, I wouldn't see that impacting the uptake curves near term just because of the mechanics of getting drug on formulary and unlocking the potential for demand. But once that's behind us, I see a big opportunity in helping a lot of patients.
Vimal Mehta
And we continue to see a lot of face-to-face meetings. Our sales teams are getting a lot of face-to-face time, despite the COVID or any other reason. And they're getting very positive feedback, as Matt said. It's all very encouraging. In fact, whatever we were thinking this drug potential will be, now being in the marketplace for 10 weeks, we are even more excited about it.
Greg Suvanovich
Great, thank you so much. Thank you, Richard.
Operator
Thank you. The next question is coming from the line of Ram Selvaraju with HC Wainwright. Please proceed with your question.
Ram Selvaraju
Thanks very much for taking my questions. Just a comment here. I wanted to ask if you could give some additional information regarding the regulatory process for the indication for the utilization of Valmi within the context of what you are trying to capture with Serenity 3. So, if Serenity 3 proves to be positive, what we should be thinking about with respect to a regulatory situation timeline, period. And also, if you could comment on any intent on your side with respect to doing any exploratory clinical work in generalized anxiety disorder, if any. Thank you.
Vimal Mehta
Thank you, Ram. So, Rob, you want
Robin
So, Ron, we would expect once the trial is complete to be able to put together a package for a supplemental NDA application very rapidly within a few months. And the review timeline will depend on the FDA, of course. We could request, for example, FastTrack. on the basis of several findings which we fully anticipate should have robust efficacy and similar or even better safety than what we have been approved with 120 and 180 microgram doses. And so that regulatory process we can certainly outline in a future discussion, but we really need to get this data. We believe we'll have the data relatively quickly because we're enrolling all comers, if you will, with schizophrenia and bipolar disorder. And then we can provide more clarity and an update in the future. With regard to additional indications such as generalized anxiety disorder, we are planning studies to look at a variety of or potential indications, if you will, putting our toes in the water For indications like generalized anxiety disorder, we could look at any anxiety disorder, panic, PTSD, excuse me, acute stress disorder, might even look at developmental disorders. We've had a lot of discussions with, in fact, investors who have said, well, why aren't you studying this in autism, for example? And so we have plans to do basket studies These are studies where you take small numbers of patients and sort of preliminary, they tend to be open label studies, and you just determine if there's a signal or not. They're cheap, they're fast, and they are a way for us to give a certain directionality to the next steps in development. But let me point out that our focus has been and continues to be primarily on the expansion to at-home use, demonstrate utility, efficacy, and safety in Alzheimer's disease and agitation associated with Alzheimer's and major depressive disorder. These will be the next, if you will, for IGALME.
Greg Suvanovich
Thank you.
Operator
Thank you. Our next question is coming from the line of Corinne Jenkins with Goldman Sachs. Please proceed with your question.
Matt Wiley
hi how should we think about your pricing strategy for potential indication expansion to include include as needed or chronic dosing of economy thank you yeah so um you know as we think of of further downstream indications we we continue to have flexibility in how we might think about pricing in those settings we haven't made any determinations yet uh we'll still continue to monitor the market You know, per the previous question around legislation and things of that nature, we'll watch the market dynamics closely and we'll make a decision on pricing to best fit the markets that we're going into. Suffice to say that we have a very smart pricing strategy now in the institutional setting, and that may actually fit future downstream indications. So we'll continue to monitor and make that decision as should we get approval for those indications and at the time that we enter those markets.
marijuana
Sure, thanks. And could you also please confirm how many doses of EGAL-Me are you expecting patients to receive in Part 2 of the Serenity 3 trial, and for how long will you be evaluating the patients?
Robin
Patients will be using the BXL-501 at home when they have an episode of acute agitation. And so we're giving the film and monitoring them over a period of months so that we pick up the frequency and what happens when they use the film. Patients, because it's placebo-controlled, patients are able to take, if you will, a rescue medication. That will be very much an individual thing. Patients do take additional medications at home to attempt to treat their anxiety. They obviously also take alcohol or marijuana, try meditation. There's a lot of things that they take, but principally we're testing the effect of a single dose of BXCL 501, that's 60 microgram dose. And there is a possibility for an additional dose, but that would, that will have to be up to the patient as to whether or not they're feeling something from the initial dose and calming.
marijuana
Sure, thank you.
Operator
Thank you. It appears we have no additional questions at this time, so I'd like to pass the floor back over to Dr. Mehta for an additional concluding remarks.
Vimal Mehta
Thank you, everyone, for joining us today. We look forward to connecting with many of you in the coming weeks, including at the Canaccord Growth Conference where Matt and I will be hosting meetings and participating in a fireside chat. Have a great day.
Operator
Ladies and gentlemen, this does conclude today's teleconference and webcast. Once again, we thank you for your participation, and you may disconnect your lines at this time.
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