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spk05: Good morning and welcome to the BioExcel Therapeutics second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. If during the conference call you require operator assistance, please press star zero on your telephone keypad. After the formal remarks, there will be a question and answer session. If you would 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 annual report on Form 10-K for the year ended December 31, 2023, which can be found at www.bioexceltherapeutics.com or on www.sec.gov, and which will be updated in its quarterly report on Form 10-Q for the quarterly period ended June 30, 2024. As a reminder, today's call is being recorded. Speaking on today's call are Dr. Vimal Mehta, Chief Executive Officer, Dr. Vince O'Neill, Chief of Product Development and Medical Officer, and Richard Steinhardt, Chief Financial Officer. They will be joined in the question and answer session by Dr. Frank Yacca, Chief Scientific Officer, Matt Wiley, Chief Commercial Officer, and Dr. Rob Reisinger, Chief Medical Officer of Neuroscience. It is now my pleasure to turn the call over to Dr. Mehta. Please go ahead.
spk01: Thank you, operator. Good morning, and thank you for joining us today. At BioXcel Therapeutics, we are focused on expanding our lead asset, BXEL501, into the home setting for bipolar and schizophrenia-related agitation and into a new indication for Alzheimer's-related agitation. We are extremely passionate and motivated to bring this much-needed therapeutic option to millions of patients who are struggling with episodes of agitation. We believe BXEL 501 offers a compelling value proposition, and we look forward to advancing the development of our two clinical programs. At this time, we are delighted to reach an important juncture with the Serenity Program as we are finalizing development plans for BXEL 501 in the at-home setting. where the majority of agitation episodes occur. We truly believe that this is a much-needed treatment option for patients, caregivers, and healthcare providers as there are no FDA-approved therapies for agitation in the home setting. The Serenity at Home trial could represent a near-term value creation opportunity to potentially expand beyond the institutional setting where Egalme is currently marketed. Our Tranquility Program plans with BXAL 501 for Alzheimer's associated agitation are also progressing. This program could address a significant unmet medical need, and we are pleased to have received breakthrough therapy designation from the FDA for this indication. We believe this program could represent a larger longer-term growth opportunity to potentially address an estimated 100 million annual episodes of Alzheimer's-associated agitation. Vince will share updates on the Tranquility and Serenity Program shortly. Turning to EGALMI, we have seen growing adoption among psychiatric care clinics and behavioral health facilities. This market segment represents a community-adjacent opportunity characterized by strong product fit and lower administrative barriers. Given our small field commercial footprint, we believe targeting this market sector positions Regalmi for continued growth and scalability. This could also serve as a bridge to the home setting to the at-home setting if approved. We believe this approach, coupled with substantial patent protection that extends to 2043, could enable us to fully realize the potential of ecology. Finally, we remain focused on strengthening our balance sheet to support our late-stage clinical trials with the goal of reaching data readouts. We are also evaluating strategic financing alternatives such as royalty monetization, on-cause Excel monetization, as well as strategic partnerships. In summary, plans for our core clinical programs are advancing, our market access strategy with Regalme is progressing, and we are pleased with growing patent portfolio. With that, I will turn the call over to Vince.
spk02: Thank you, Vimal. So as Vimal announced, we're pleased to be preparing for initiation of our Serenity at Home trial. which, as a reminder, is designed to be a double-blind, placebo-controlled, multicenter study to evaluate the safety and efficacy of a 120-microgram dose of 501 over a 12-week period. The primary objective will be safety with efficacy measures as exploratory endpoints. We recently received feedback on the trial protocol from the FDA. We've completed the CMC work we believe is sufficient to support the use of childproof pouches in the home setting. and have finally defined the final statement of work in clinical site selection with our CRO, all preparing us for trial initiation. Plans for our Tranquility program are also advancing with the focus on our Tranquility in-care trial. The proposed trial design is substantially similar to Tranquility 2. As a reminder, Tranquility in Care is a double-blind, placebo-controlled, multicenter study to evaluate the efficacy and safety of a 60-microgram dose of 501 over a 12-week period. The primary endpoint is expected to be the change in PEC score at two hours post-first dose. The Tranquility in Care protocol is in final form, and we're planning to submit it to the agency. Turning to our PMR study with the GALMI, We were pleased to have reported positive top-line results evaluating PRN or as needed treatment of Egalme. The study achieved its objective and demonstrated no evidence of tachyphylaxis tolerance or withdrawal with the 180 microgram dose, the highest approved dose. Although the study was not statistically powered to evaluate repeat dose efficacy, a reduction in agitation was observed for each episode occurring during the seven-day study period. and no serious adverse events were reported following treatment. I would now like to turn the call over to Rich, who will review our financial results for the second quarter.
spk03: Thank you, Vince. Net revenue from Ogami was $1.1 million for the second quarter of 2024, compared to $457,000 for the same period in 2023. This represented a 141% increase. Sequential quarterly revenue increased 90% in Q2 2024 from the first quarter of 2024. The growth in revenue for both periods was primarily driven by an increase in contracting with psychiatric care clinics and behavioral health facilities. Research and development expenses were $8 million for the second quarter of 2024 compared to $27 million for the same period in 2023. The decreased expenses were primarily attributable to the wind-down of the Serenity III and Tranquility II and III trials, as well as decreased professional fees, personnel, and related costs. Selling, general, and administrative expenses were $9.5 million for the second quarter of 2024, compared to $25.9 million for the same period in 2023. The expense reduction was primarily attributable to a decrease in personnel and costs associated with the commercialization of El Gami compared to the second quarter of 2023 driven by our reprioritization. BioXcel Therapeutics had a net loss of $8.3 million for the second quarter of 2024 compared to a net loss of $53.5 million for the same period in 2023. In the second quarter of 2024, the loss from operations of $17.3 million was offset by unrealized gains related to derivative liabilities. The company used $23.2 million in operating cash during the second quarter of 2024. Cash and cash equivalents totaled $56.3 million as of June 30, 2024. Finally, to enable us to deliver on our strategic clinical priorities that Vimal and Vince have described earlier, we are continuing to optimize operational efficiencies across our business. Now I'd like to turn the call back to Vimal.
spk01: Thank you, Rich. We would now like to open the call for questions. Operator?
spk07: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in question two. You may press star two 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 key. One moment, please, while we poll for questions. Your first question comes from Suman Kulkarni with Connacore Genuity. Please go ahead.
spk09: Good morning. Thanks for the questions. three fairly quick ones. On tranquility and care, at what point do you expect to be able to let us know when data might be available? And on that trial, are there any new variables that might make the trial more or less expensive relative to how you've characterized the cost previously?
spk02: So, morning, Suman. This is Vin. So, for tranquility and care, today we're not in a position to provide specific timing. To your second question in terms of cost, we don't obviously typically give specific cost guidance, but we see no reason to have changed our view on the cost of the study recently. It's essentially as previously thought or planned.
spk09: Got it. And then my third one is on serenity at home, how aligned would you say you are with the FDA on that trial, and is the child-proof packaging the key part of enabling that trial to proceed?
spk02: So I would say we are very aligned with the FDA. As I mentioned in prepared remarks, we did receive feedback from the FDA. That has been incorporated into the protocol. Also, as mentioned, CMC work is complete. The statement of work with the CRO has also been defined. So essentially, the make ready work for that study is complete.
spk09: And I'll squeeze one last point, sorry. Can you talk about any potential areas of discussion that you might have with the FDA on the specific tranquility in care protocol?
spk02: I think one point I'll make is obviously tranquility versus serenity is an efficacy primary endpoint study. It's obviously a little more complicated, a little longer in duration, and actually a little bit more expensive. We know that the FDA is very interested in repeat dose efficacy, and I think that would be the one point that we want to get right going forward with that protocol. Thank you.
spk07: Next question, Alex Stranahan with Bank of America. Please go ahead.
spk06: Good morning. This is Mary Kate on for Alex this morning. And we were just wondering, what are your expectations for the pace of trial execution for the phase three trials upon initiation, maybe specifically Serenity here, and maybe could you add an additional color on the potential market opportunity for the at-home population here as well? Thank you.
spk02: Thanks. This is Vince. Just to paraphrase your first question, essentially you're asking about the timing of the Serenity at-home study, correct?
spk06: Yes, yeah, and how long it could potentially take in terms of enrollment once you guys initiate the trial.
spk02: Sure, so again, not in a position to give precise timelines today, but I'll actually just repeat what I said a moment ago, and that is that Serenity, of the two studies, Serenity is the less complex study, therefore the faster study, and the less expensive study.
spk00: Yeah, Mary Kate, this is Matt. I'll talk a little bit about the market opportunities. So there are 23 million episodes in the at-home market. What we found in market research is that Patients who experience agitation with bipolar schizophrenia indicated that they would use BXCL 501 in 80% of their episodes, oftentimes at the very beginning or even before those episodes started, so in the prodromal phase of the episode. So the patients are motivated, and clearly we could imagine taking some of the 23 million episodes, adding to that as we draw some of those episodes out of the emergency department in the hospital.
spk07: Next question, Greg Suvinovich with Mizuho. Please go ahead.
spk04: Hi, this is Avantika on for Greg. I just had a couple questions. The first was, what is the company's current cash runway? And the second is for both the Serenity and Tranquility studies, are you still planning to finance it yourself? Are you thinking of partnering with someone to actually run the trials? And the last is what are the gating factors for actually initiating the trials now that you've discussed the protocol with the FDA specifically for Serenity? Thanks.
spk03: Hi, this is Rich on the cash runway. We really haven't changed our guidance on cash runway at all, so it remains similar to what we had talked about in the past.
spk01: Good morning, Avantika. This is Vimal. Regarding your question on the financing, our fundraising strategy is based on funding both trials through various alternatives, as I mentioned. So we are exploring all those opportunities in parallel. As you said, both Trials are at a point where we already have a feedback, and serenity at home can begin shortly. And we are finalizing our plans for that tranquility and care, which Vince already mentioned. So both are strategic priorities, and we are moving them along. And as I mentioned in my prepared remarks, we are looking at strategic partnerships as well as a part of this exercise.
spk04: Okay, thank you.
spk07: Next question, Ram Selvaraju with HC Wainwright. Please go ahead.
spk08: Thanks very much for taking my questions. Three quick ones here. Firstly, just a question on the commercial side. Can you comment on any favorable tailwinds that you see the product experiencing at this juncture and what impact that might have on the cadence of revenue growth and prescription uptake over the course of the second half of 2024? Secondly, with respect to Oncosec Cell, can you provide any update with respect to potential spin-out of that entity or other ways in which you could conceivably monetize BXCL701? And then lastly, if you could perhaps comment on your plans for the neurology pipeline beyond BXCL501. and to what extent that might potentially provide you with additional sources of non-dilutive funding. Thank you.
spk00: Hey, Ram. So this is Matt again. To answer your question about tailwinds, I mean, one of the things that we've observed over the last three quarters is an increase in the interest from these community behavioral health centers. There are about 36,000 of these in the United States. We know from previous market research that psychiatrists have the highest intent to use the product of all the constituents in a hospital setting. So we think that that translates nicely to this community mental health clinic type setting. We also, based on our experience, we know that the process for acquiring a GOMI does not require the type of administrative hurdles that you typically see in a hospital or IDN setting. So we feel like this is an opportunity that is near-term low-hanging fruit, and we will continue to progress on that over the balance of the year and into next year as well.
spk02: Sure. This is Vince. Morning, Ram. So just to reiterate what you've said, we're obviously committed to monetizing 701. So we have initiated partner outreach through a retained firm, a firm that specializes in this area. And that's in addition to assessing, formally assessing the commercial value of our indications. So we're pleased with progress so far, and we'll update you in June.
spk01: Good morning, Ram. This is Vimal. Regarding your third question, plan for our neuroscience pipeline. Currently, as I mentioned, we are very focused on moving to late-stage pivotal trials, but we will continue to look at it, what are the best options to progress the pipeline, which is 502, 503, either through a partnership mechanism or any other ways to move those programs forward.
spk09: Thank you.
spk07: Thank you. I would like to turn the floor over to Dr. Metz for closing remarks.
spk01: Thank you. Thank you, everyone, for joining us today and for your continued interest in BioXcel Therapeutics. Have a great day.
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