BioXcel Therapeutics, Inc.

Good morning and welcome to the BioXL Therapeutics third quarter 2024 earnings conference call. At this time all participants are in 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'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 or 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 could affect future results are detailed in the company's quarterly report on Form 10-Q for the quarterly period ended June 30th, 2024, which can be found at www.police.gov. bioexceltherapeutics.com or on www.scc.gov, and which will be updated in its quarterly report on Form 10Q for the quarterly period ended September 30, 2024. As a reminder, today's call is being recorded. Speaking on today's call are Dr. Vival Mehta, Chief Executive Officer, and Richard Steinhardt, Chief Financial Officer. We'll be joined in the Q&A session by Dr. Vince O'Neill, Chief of Product Development and Medical Officer, Dr. Frank Yacca, Chief Scientific Officer, and Dr. Rob Reisinger, Chief Medical Officer of Neuroscience. It's now my pleasure to turn the call over to Dr. Mehta.

Thank you, operator. Good morning, everyone, and thank you for joining us. This past Tuesday, we announced important milestones with our two pivotal phase C trials with BXL501. These trials are for agitation associated with bipolar disorder or schizophrenia in the home setting and for agitation associated with Alzheimer's dementia. We believe BXL501 could potentially be a much-needed acute treatment option for the millions of patients who do not have FDA approved therapy for these challenging conditions. Our goal is to transform the treatment paradigm. Starting with our serenity at home trial to evaluate BXCL501 for acute treatment of bipolar or schizophrenia related agitation, we believe this indication represents a near-term growth opportunity and is our immediate focus area. We designed this study leveraging our substantial clinical experience with BXEL 501, conducting 10 double-blinded placebo-controlled trials. We are particularly excited to advance this trial because it marks the first evaluation of BXEL 501 in the home setting. The first patient was randomized late last week, and we look forward to advancing enrollment. Trial duration is expected to be 9 to 12 months from the September initiation as we previously communicated. We are also continuing our planning for our Tranquility in Care trial to evaluate BXEL501 as a potential acute treatment for Alzheimer's-related agitation. This represents a much larger, longer-term growth opportunity. We recently received feedback from the FDA on our proposed protocol for the trial, which will be our second pivotal Phase III trial for this condition and which largely mirrors our Tranquility II Phase III study. In addition to acute education, we are pleased with the potential chronic treatment opportunities with BXCL501 through externally funded study currently being conducted by leading academic research institutions. We recently announced a Department of Defense grant to fund a Phase IIa efficacy and safety study of BXCL501 for acute stress disorder at the University of North Carolina. This marks the second externally funded stress-related trial of BXCL501. Just to remind everyone, we discovered using our AI platform and are pleased to see further validation of its broad therapeutic potential. While focusing on clinical development, we are continuing to maintain our approved product economy in the market with minimal resources. We are committed to making this drug available to patients while maintaining our brand equity. To support our trials with the goal of reaching data readout, we are working to strengthen our balance sheet. At the same time, we continue evaluating strategic financing alternatives. In summary, we are pleased with the progress of our serenity and tranquility program. We believe we have attractive opportunities to address substantial unmet medical needs while expanding the market potential for BXAL 501. This belief is reinforced by a growing intellectual property portfolio that provides long-term patent protection from which we aim to build a leadership position in the treatment of agitation. I would now like to turn the call over to Rich, who will review our financial results for the third quarter of 2024. Rich? Thank you, Vimal.

Net revenue for Milagami was $214,000 for the third quarter of 2024, compared to $341,000 for the same period in 2023. The decrease in sales was primarily due to the timing of reorders from existing customers. However, for context, it's important to point out that net revenue of $1.9 million for the nine months ended September 30, 2024, represents an 89% increase from $1 million in the same period in 2023. The increase in new customer acquisitions and increased sales activity reflects rising utilization. Cost of goods sold for the three months ended September 30, 2024 and 2023 were $1.2 million and $512,000, respectively. Cost of goods sold is related to the cost to produce, package, and deliver El Gami to customers, as well as costs related to excess or obsolete inventory. The increase in cost of goods sold for the three months ended September 30, 2024, is a result of higher non-cash charges or reserves for excess or obsolete inventory compared to the same period in 2023. Charges for reserves for excess or obsolete inventory were $1.2 million and $495,000 for the three months ended September 30, 2024 and 2023, respectively. Research and development expenses were $5.1 million for the third quarter of 2024 compared to $19.6 million for the same period in 2023. The decreased expenses were primarily due to decreased clinical trial expenses, professional fees, as well as personnel and related costs resulting from the company's reprioritization in August of 2023 and reduction in force in May 2024. Selling, general, and administrative expenses were $7.7 million for the third quarter of 2024, compared to $24.3 million for the same period in 2023. The lower expenses were primarily due to decreased personnel and related costs resulting from the company's reprioritization in August 2023 and further reduction in force in May 2024, as well as decreased professional fees and commercial expenses. BioXcel Therapeutics had a net loss of $13.7 million for the third quarter of 2024, compared to a net loss of $50.5 million for the same period in 2023. The company used $16.3 million in operating cash during the third quarter of 2024. Cash and cash equivalents total $40.4 million as of September 30th, 2024.