Better Therapeutics, Inc.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1.

Good afternoon, and welcome to the Better Therapeutics Third Quarter 2022 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to turn the call over to Mark Heinen, Chief Financial Officer. Please begin.

Thank you, operator. Good afternoon, everyone, and welcome to the Better Therapeutics conference call to discuss our third quarter 2022 financial results and business update. Our press release was issued this afternoon and can be found in the investors section of our corporate website, bettertx.com. Joining me on the call today is Frank Karba, our president and chief executive officer, Dr. Mark Berman, our chief medical officer, and Diane Gomez-Venez, our Chief Commercial Officer. During today's call, we will provide a business and financial overview of the third quarter of 2022 and provide our outlook for the fourth quarter of 2022 and beyond. A Q&A session will follow our prepared remarks. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual events and results may differ materially from those expressed or implied by any forward-looking statements due to various risks, uncertainties, and other factors, including those described in the risk factor section of our most recent SEC filings and any other future filings we may with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to publicly update these statements. With that, I'll pass the call over to Frank Carva. Frank?

Thank you, Mark, and good afternoon, everyone. Thanks for joining us on the call today. Over the past quarter, We've achieved critical milestones, and I am proud of our team for having met these within the timelines we had set. I'll begin by touching on four of them. First, in July, we successfully completed the pivotal trial for BT001, our first-in-class investigational prescription digital therapy, or PDT, for the treatment of type 2 diabetes. The trial set a high bar for success by recruiting a diverse and difficult to treat population of patients with advanced type 2 diabetes, comparing BT-001 to a control group that received gold standard medical care. Additionally, patients were allowed to have medications adjusted throughout the trial, and they were neither mandated nor incentivized to use BT-001. The trial met both its primary and secondary endpoints, showing statistically and clinically significant durable decreases in A1c in the Bt001 group that exceeded those observed in the control group, despite a lower use of background medications. In addition, the study generated positive results across a range of exploratory endpoints. The trial also highlighted some of the unique and differentiated aspects of PDTs in general relative to more traditional pharmaceutical drugs. These include the potential to provide broad access, offer unique insights based on the data their use generates, and allow for continuous improvement of the therapy itself. Second, in September, we submitted and the FDA accepted our de novo classification request seeking marketing authorization for BT-001. If authorized, BT-001 would become the first prescription digital therapeutic for the treatment of type 2 diabetes in adults. Current clinical guidelines already highlight behavior change as the foundation of treatment for diabetes, and this would potentially provide physicians for the first time a prescribable therapy to effectively implement these guidelines. Addressing the root causes of disease with a digital therapy would be a paradigm shift in how healthcare is practiced and delivered for one of the most prevalent and costly chronic diseases with a promise of substantially reduced cost of care. Third, in October, the 90-day results from the BT-001 pivotal trial were published in the peer-reviewed journal Diabetes Care, produced by the American Diabetes Association. The pivotal trial results were also recently shared by independent physician experts within the medical community in a presentation at the Society for Vascular Medicine's annual scientific session, as well as at the late-breaking featured science session at the American Heart Association's annual meeting. Obtaining third-party recognition of our clinical data is an important part of our strategy to differentiate our approach within the digital health space. and to drive payer adoption and reimbursement. The fourth key milestone pertains to the continued positive engagement with payers, where we shared our clinical data and began evaluating coverage strategies. Our initial discussions are encouraging, and the feedback we received has been consistent and also mirrors findings from third-party research studies. Payers responded favorably to several aspects of our study, including the overall and sustained responses observed, the robust study design, strong patient retention at 180 days, which some viewed as better than drug compliance, positive secondary endpoint results, and the potential for cost offset. Overall, the idea of delivering a prescribable behavioral therapy as an intervention to the type 2 diabetes population has been well received by payers. The Academy of Managed Care Pharmacy, or AMCP, recently published findings from a digital therapeutics research study with 50 payer organizations, which closely matched what we had heard in our own discussions with payers. Awareness of digital therapies is clearly growing, with 88% of managed care payers surveyed having reviewed a DTX in the past 12 to 18 months. The study also highlights the diabetes is broadly viewed as the highest priority area for the potential utilization of prescription digital therapies among payers. Moreover, payers express a strong preference for prescription digital therapies versus non-prescription digital therapies. Clinical evidence, maintaining physicians at the center of providing care, and regulatory oversight are viewed as important. which again gives us confidence that our approach in developing BT.001 will resonate with payers and help in obtaining coverage if authorized for marketing. Furthermore, the broad clinical evidence data we have generated from our pivotal study and that is being compiled in our real-world evidence program specifically address what payers view as useful in making their coverage decisions. This third-party research data, as well as the encouraging feedback we have received directly, gives us confidence that we will be able to achieve meaningful payer coverage to support our potential commercial launch of BT.001. If authorized for marketing, our goal is to efficiently reach a large enough group of providers and patients to allow us to quickly gain meaningful traction with a modestly sized market access and sales organization. Different from the traditional sales model of reaching frequency with a product-first approach, we envision our field teams to serve as account managers, partnering with targeted payer and health systems. We intend for them to manage across diversified stakeholders with clinical, digital, and health economic expertise necessary to navigate unique local and regional needs. Digital therapies offer an opportunity to rethink how the needs of patients, providers, and payers are met. And that goes way beyond just the clinical profile of our product. We are laser focused on optimizing the entire experience around the prescription, use, and reimbursement of our PDT, and see this as an opportunity to further stand out and drive adoption of our product. I will let Diane, our new Chief Commercial Officer, provide additional updates on our preparations for potential commercialization in just a moment. But first, Diane is a powerful addition to our team. With more than two decades of experience in the healthcare industry, leading the commercialization and launch of medical device, prescription, and consumer health products for companies including Johnson & Johnson and Galderma. At Galderma, She led the company's largest US business, delivering double digit growth and directing the launch of more than 20 products during a transformative period for the company. She also spent 17 years at Johnson & Johnson, ultimately serving as a worldwide president for Mentor, where she led the return of that business to a number one global leadership position. Her extensive track record of building and leading highly successful commercial businesses in areas including first-of-kind medical devices, convinced us that she is the right fit to help us write the playbook of what a successful launch of a prescription digital therapy looks like. I will hand it over to her to provide a brief update on our commercial preparations. Diane?

Thank you, Frank. And before I give an update, I'd like to take a few minutes to share some thoughts as to why I joined Better Therapeutics. Like many in the industry, I have dedicated my career to healthcare, finding it personally rewarding to be working to advance science and bring meaningful innovation to improve or enhance the lives of patients. I've had the opportunity to be part of teams that have brought some of the most thrilling advancements in the interventional cardiovascular space and in the general surgery arena with combination devices that forever changed how patients are treated, such as the first drug-eluting stent. Further, I've worked with teams placing a greater focus on the consumer, patient, and clinician experience with a digital-first mindset. As I joined Better Therapeutics, I'm excited to be part of an organization at another frontier of life-changing innovation. I found here a company that is doing the work to truly change the paradigm for how people with chronic cardiometabolic diseases are cared for. The team has taken a well-researched cognitive behavioral therapy and applied it to create a novel digital platform and invested in a clinical trial following a similar path to that of traditional drug programs measuring the same clinical endpoint. This approach is keeping within the familiar framework of bringing to market new therapies and maintains the prescribing doctor at the center of delivering care. Innovation is often considered costly, which then often means it's reserved for those with the best access to healthcare. However, transformational innovation comes when there is an opportunity to impact the cost equation while also serving to improve the lives of patients across a spectrum of diverse backgrounds and socioeconomic status. The pivotal trial of BT-001 enrolled patients representative of the U.S. population, including groups underrepresented in clinical trials with historically poor access to care. The idea that a therapy can be delivered via a scalable digital platform has a meaningful impact for democratizing healthcare access and therefore improving the quality of care for all patients. In my first couple of weeks since joining the team, I feel the passion of my colleagues, committed to this mission of doing better for patients, and I share in that. I look forward to partnering closely with many of them as together we build a roadmap for commercializing BT-001, which has the potential, if approved, to be the first therapeutic to deal with the underlying behavioral causes of type 2 diabetes. As Frank indicated, we have continued to advance our go-to-market plan. While there are about 13 million uncontrolled adult type 2 diabetes patients in the U.S., our approach will be a focused one. To inform our approach, we are identifying the providers, the health systems, and the payers with the highest concentration of uncontrolled type 2 diabetes patients. Our work debate has pointed us to 50 integrated delivery networks or health systems which overlap with approximately 25 regionally dominant payers covering about 40 million lives or approximately 45% of total lives covered by regional payers. We believe this to be sufficient to support a strong initial launch with a comparatively nimble team deployed in those geographies where this overlap exists. We have also initiated a claims analysis that will identify a patient cohort with the greatest potential benefit and their providers to further refine our targeting. These same providers are expected to also have other patients with type 2 diabetes outside of the specific population used in our claims analysis, who may also be appropriate candidates for a prescription. We expect to execute on this strategy at launch with no more than about 50 field-facing representatives made up of a combination of payer leads, account managers, and medical science liaisons. Over time, as we gain coverage and access with both regional and national plans, we can expand. I look forward to sharing a more detailed plan for commercialization during our fourth quarter earnings call in the new year. Mark Heinen, our Chief Financial Officer, will now review our financial results for the third quarter. Mark?

Thank you, Diane. I will begin by discussing our operating expenses for the third quarter of 2022. Research and development expenses for the third quarter were $5.5 million. This compares to $6.7 million for the same period last year. The decrease was primarily related to lower pivotal trial costs compared to last year as the company completed its pivotal trial for BT001 in the third quarter. This was somewhat offset by an increase in personnel and consulting costs related to the de novo submission of BT-001, as well as expanding our software development capabilities. R&D was higher in the third quarter when compared to the second quarter of 2022, as we incurred some closeout costs related to the pivotal trial of BT-001. Sales and marketing expenses for the third quarter were $1.6 million, compared to $0.6 million for the same period last year. The increase primarily reflects personnel, marketing, and consulting expenses associated with commercial readiness activities to support the potential launch of BT-001. General and administrative expenses were $4 million for the third quarter of 2022 and $1.8 million for the same period in 2021. The increase was primarily related to additional costs of being a publicly traded company. Approximately $1.1 million of this increase is related to an increase in our DNO insurance. The remainder is related to an increase in headcount, legal, and other professional fees. Better Therapeutics generated a net loss of $11.4 million in the third quarter of 2022 compared to $12.5 million in the same period last year. On a per share basis, net loss was 48 cents for the third quarter of 2022 compared to $1.20 for the same period last year. The decline in loss per share is primarily related to an increase in weighted average shares outstanding as a result of the SPAC transaction in the fourth quarter of last year. Now, looking ahead, we expect total operating expenses in the fourth quarter to be in line with third quarter total operating expenses. R&D expenses are expected to be lower after the successful completion of our pivotal trial for BT-001. And sales and marketing expenses are expected to increase, mainly driven by continued investment in our preparation for the potential commercial launch of BT-001, if authorized for marketing by the FDA. Turning to our balance sheet, we ended the third quarter with $22.3 million in cash and cash equivalents. compared to $29.7 million last quarter and $40.6 million as of December 31st. During the third quarter, our cash flow used in operating activities was $7 million. With that, I'll turn the call back over to Frank for some closing comments. Frank?

Thank you, Mark. I will now review our key priorities and milestones expected in the fourth quarter of 2022 and beyond. We're on track to report top line results from the LiftVita liver study in the fourth quarter of 2022. The study is evaluating the feasibility of our investigational digitally delivered cognitive behavioral therapy to reduce liver fat and improve liver disease biomarkers as a potential treatment for fatty liver disease. As a reminder, non-alcoholic fatty liver disease or NAFLD and non-alcoholic steatohepatitis or NASH have been steadily on the rise and affect over 64 million adults in the United States, resulting over $100 billion in direct healthcare costs annually. Yet, there's currently no FDA-approved therapy to treat these conditions. We've continued our assessment of potential financing options with a goal to address our financing needs in the coming months. We've conducted a broad outreach to potential investors and are engaged in multiple discussions. The feedback received today, coupled with the strength of our data, the magnitude of the commercial opportunities we are pursuing, and the quality of our team gives us confidence we will be able to raise sufficient capital to reach several key milestones. We anticipate potential marketing authorization for our de novo classification request for BT001 for the treatment of type 2 diabetes in mid-2023. We further expect to release interim data from our ongoing BT-001 real-world evidence program in the second half of 2023 after a sufficient number of patients have completed a treatment period of at least six months. These randomized controlled multi-site studies are designed to generate real-world evidence to provide additional support in our payer coverage and reimbursement discussions. And lastly, we plan to utilize pilot data from the BT-001 pivotal study and VitaLiver study to inform the initiation of an additional pivotal trial in the second half of 2023, pending sufficient capital and continued positive data. Now, we expect the next 12 months to be transformational for Better Therapeutics as we enter the next phase of growth as a commercial company, and we look forward to sharing our progress with you in the months to come. The status quo in our healthcare system particularly with regards to management of chronic diseases, is not sustainable, and change and innovation are urgently needed. The current standard of care for type 2 diabetes and other cardiometabolic diseases overwhelmingly focuses on prescription medications that manage symptoms but don't address the loss of these conditions. So with an investigational therapy that was developed to tackle the root cause of disease that potentially could be added to any existing drug regimen and that has potentially massive health economic benefits, one has to ask why this should not be the first or next line of defense for most adults with type 2 diabetes. Beyond that, the data generated by the use of digital therapies offers opportunities for truly innovative, practical, value-based pricing solutions which payers have already taken note of. I want to thank the entire Better Therapeutics team for their passionate engagement and tireless efforts to advance the mission of our company. It is their curiosity, drive, creativity, sometimes the courage to try and fail, and always the capacity to learn that makes us such an awesome organization. With that, we're ready to take your questions. Thank you.

And thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. Please stand by while we compile the Q&A roster. One moment for our first question. And our first question comes from Charles Reed from Cowan & Company. Your line is now open. Hi, this is Lucas Alpert-Charles.

If we could dig deeper into payer conversations you guys are having, you noted that you started having them in 3Q. What payer types have you guys been focusing on? How has the reception been amongst those payers? And then also, too, how has the reception been specifically to BT-001's trial design, given that it was more representative of real-world conditions? Thanks.

Thanks for your question. Let me maybe comment on this first and I'll hand it over to Diane. So the first thing I would say, it's still early days because we've begun in the third quarter with the outreach to payers, but that is an ongoing process that will continue to intensify, particularly as we complete our health economic models later this quarter. As we said in our prepared remarks, overall, the reception has been very positive, and you highlighted some of the reasons for that. I think PEARS particularly took note of the trial design and the fact that we have enrolled a very diverse population that is representative of the real world, meaning it included a number of patients that are often underrepresented in biotech research. And so you're right that the design of our pivotal study had some real-world characteristics to it, which payers noted as positive. But as you know, in addition, we're also running a real-world evidence program that I think will further generate data, particularly beyond six months, that will help in those payer discussions. Diane, do you want to comment a little bit further on what else we've heard?

Sure. Thanks, Frank. And Lou, thanks for the question. I would add that following the readout of our pivotal data results, we had a series of meetings with payer advisors and you asked who they are and what the makeup is. These included current or recent payer decision makers, included pharmacy and medical leaders from both regional and national payers. And as Frank mentioned, the feedback has been consistent. So aside from the diversity of the patient population, that is very well received. Another point that is often raised is the complexity of our patient population. As payers are noting that we had the majority of our patients in our study with multiple comorbidities, many on two-plus medications for lowering blood sugars, They also had an average of 11 years of having had diabetes and yet failing to achieve the glycemic target of getting their A1C to 7 or below. And payers have confirmed that this is a population that drives their costs and for whom they're most concerned or that they're most motivated to try to address. I'll also note that we hear good feedback on the retention of our patients at 180 days, in some cases even better than drug compliance. So overall, I mean, there is this recognition that BT-001 may address a gap in clinical care. And so this idea of delivering a prescribable behavioral therapy as an intervention to the diabetes population is well-received. What I will say is that most recently, especially coming out of the recent AMCP Nexus meeting in October, there is more awareness of digital therapeutics. 88% of payers have reviewed a digital therapeutic in the past 12 to 18 months. And very recently, Highmark, who is known to be an innovative payer, has announced that it will be covering prescription digital therapeutics. And so that's likely to influence payers as well.

Great. That's really helpful. And then my second question revolves around, you know, the patents. patents you received for features of your PDT platform related to monitoring therapy regimen and using that engagement data to develop predictive models, you know, to predict how use patterns can affect clinical outcomes. Can you give us any color on how you'll look to roll out that technology? Will it be paired with the launch of BG001? Any color on that would be really helpful. Thanks.

Sure. I'll let Mark address this in a second. And I just want to say, yes, you're right. There was one patent that has issued, but there are several other patent families that are currently still under review. So that's actually a much broader IP portfolio that we're pursuing at the moment. Mark, do you want to address what this patent covers and what we're getting to with that?

Yeah, thank you, Frank. I think the summary that you provide nicely captures the extent of the patent, the ability to personalize a treatment approach and predict how patients are going to do in conjunction with a behavioral therapeutic and to use that data to ongoingly personalize the experience with the patients over time. You know, much of this research thinking and work is already embedded in our platform and will be a part of the rollout. But I think what's also very exciting about this patent and also the underlying concepts is that it allows us to paint a future whereby over time as our data grows in a commercial world where we're having many more patients experiencing the digital therapy and we're collecting data, on outcomes and how that relates to engagement within the app, that our ability to leverage that data is going to grow continuously over the course of our commercial story as well. And that's one of the elements that gives us a lot of excitement about this.

Thanks. And then I guess my last question is on the commercial strategy. You gave us a lot of information in terms of how you'll be targeting patients. Just curious, will you guys look to target more primary care physicians or endocrinologists? You know, anything physician-specific would be really helpful. Thank you.

Yeah, I'll hand that over to Diane here in a second as well. But before I do that, let me just maybe frame again the opportunity and the challenge that we're faced with here, right? I mean, the opportunity, I think we're all aware, type 2 diabetes presents a massive opportunity with a very significant unmet medical need. There's 37 million type 2 diabetes patients, and on top of that, another 96 million adults that are pre-diabetic. About half of the type 2 diabetic patients that are diagnosed with diabetes have uncontrolled blood sugar, and the vast majority of diabetics and pre-diabetics progress in their disease. So it's a massive problem. And the challenge that I think we and investors are facing is there's currently no proven commercial model to help investors understand what a successful launch of a PDT looks like. And perhaps even whether it is a meaningful commercial category at all. And so we recognize we need to demonstrate that. And we need to do that in a way where we demonstrate meaningful commercial traction with a minimal amount of resources spent. And I think the approach that we have designed, or are still designing and that Diane will speak to a little bit, accomplishes that. And it's meant to demonstrate the proof that this therapy is getting traction and it is being adopted by providers and by patients. And then once we have demonstrated that, then of course we would expand our reach. I think that's very important to recognize. So what we start off with here at the beginning is just the beginning so that we can basically prove that this all works. And then the plan is to expand. And I think we're optimistic that we'll succeed in this, not only because we're addressing a massive opportunity, but largely because we've developed a novel therapy, I think, that has generated clinical evidence about this efficacy and safety that is scalable in the sense that we can make it easily accessible to anyone with a smartphone that is demonstrated not only to improve A1C but also impact a host of other health measures and with that has the promise to very substantially reduce the long-term cost of care. And maybe lastly, it's a therapy that can easily be added to all existing drug regimens without compounding risk. And now back to the, you know, your, your, your initial question to, to do it, to take an approach here where we don't spend an enormous amount of money in trying to go into a primary care space, we have to be very focused and we cannot afford to chase thousands and thousands of individual primary care physicians. And, um, Diane, maybe you want to elaborate a little bit on what our thinking currently is and how we expect to achieve that.

Yes, I'm happy to. And it is a massive problem and absolutely a challenge, you know, to think differently about going to market differently with this type of therapeutic. And so our focus initially will be on the innovative large health systems and the dominant regional payers in that geography. And that will allow us to reach a significant percentage of our target population with a modestly sized market access and sales organization. So our work has been to identify these regional dominant payers that overlap with these health systems we're looking at. And our work ahead right now will be to characterize them further and really identify those who are considered innovative and most likely to adopt new therapies and technologies. I mentioned earlier Highmark as an innovative payer. And so we're looking to characterize payers and health systems so that our reach to our target patient population and the providers that treat them will be in a much more focused approach. And as I mentioned, we believe that with this approach, we'll be able to size of field team of about 50 folks, 50 people made up of either payer leads or account managers, and to have this different approach in the marketplace. And once they're in these geographies which overlap, of course, we'll pay attention to the healthcare professionals who are considered to be the biggest potential opportunity for us treating the most patients in our target patient population.

And thank you. And one moment for our next question. And our next question comes from Thomas Flatton from Lake Street Capital Markets. Your line is now open.

Yeah, great. Thanks so much for taking the questions. Dan, you mentioned earlier that among the payers you've spoken to, there were both people from the medical and pharmacy benefit side. And maybe this is obvious to others, but is there a reason to suspect this wouldn't be a pharmacy benefit and would slide over to medical? Or how are the payers talking about that? Yeah, Dan, go ahead.

Yes, it's a great question. And we actually see a mix. As a matter of fact, coming out of this recent AMPP meeting I referenced earlier, there was also some feedback from this 50-payer survey really looking as to how this technology may be covered. And we see that the first answer is Don't know yet. But the second is medical benefit and the third pharmacy benefit. And so as we think about, you know, our approach, we have to consider optionality in what we design.

Understood. Understood. And the 50, and I just want to make sure I heard the 5-0, right, size field team. Is that, I'm assuming that's heavier on the payer team and the account reps and less so on the MSLs, or how are you viewing that in terms of distribution, just out of curiosity?

We'll work through the detail there. We do consider within the 50, about 50 that we've sized so far with preliminary data that they would be made up of account managers, the MSLs, and the payer leads. But I'll be prepared to provide a deeper understanding of our commercial strategies come early next year.

And maybe this is one I'll have to hold on as well, but are you viewing this, given that you're going after the health systems, more like a hospital sale where you get through P&T and then you can really drive adoption with the physicians in that kind of a stepwise approach? Or are you thinking about more driving demand and then getting to P&T from there?

We'll be able to, yes, provide more details. But, you know, as Frank has noted in a little bit of my experience, what's wonderful about the team is that we have both hospital experience and then traditional care. primary care, pharmaceutical experience. And, you know, all of that is coming to the table as we work with the different health systems and the payers and this early research to determine what our approach to market would look like. So we look forward to bringing you a little bit more of that detail as I'm fairly new into a few weeks here, but digging into these to really drive up the our research in this area and deliver a plan for you all to understand.

I would expect this mix to change over time, right? As we said at the beginning, our focus is to ensure that we show meaningful traction with the least amount of resources spent so that we and investors can gain confidence that we're on the right track. And as we gain that, yeah, go ahead.

No, sorry, please finish.

Yeah, then as we gain that traction, I think the activities that we pursue obviously will change. Not only will it be a broad outreach, but also the mix of the channels we pursue will change as well.

And then just one quick final one. Any insight you can provide on enrollment pacing into the real-world studies?

Mark, do you want to comment on that?

yeah our um our real world studies as you know we're conducting these uh across a broad array of sites partner sites across the country uh we're still actively recruiting uh for patients and we've uh set expectations before this will be uh you know roughly a thousand person study uh we've been moving along with enrollment we did slow down temporarily in the course of receiving our data from the pivotal study so that we could, you know, make sure we understood the lessons and the insights gained from the pivotal study and then apply those to the real-world population and so those patients could get the most benefit. That work's been done. Enrollment is well underway. And as we've, you know, set expectations during the call, We expect to have an interim readout next year sometime.

Excellent.

Thanks so much.

And thank you. And one moment for our next question. And our next question comes from Raoul Raquette from LifeSci Capital. Your line is now open.

Hey, guys. Thanks for taking questions. You know, I know we covered a lot already. Just one from me. Yeah, I know that you have a readout in NASH on the horizon. So I was just wondering if you could provide us with a high-level overview of the opportunity there and why you guys believe that Better Therapeutics is well-positioned to tackle the unmet needs in this challenging condition. Thanks.

Yeah, thanks, Raul. Let me maybe take that first and then hand it over to Mark, and I will maybe point back to some of the numbers we cited in our prepared remarks. So there are about 64 million people people in the United States, that's 30% of the U.S. adult population that are estimated to have nephility. And they generate a total economic burden of almost $300 billion, of which about $100 billion is estimated to be direct medical costs. Now, those numbers are a few years old, so I would guess that by now they're a little bit higher because national nephility have continued to rise, same as type 2 diabetes and other cardiometabolic conditions. What's interesting is lifestyle modifications have been shown in other studies to reduce the risk of national progression and improve histological NASH biomarkers. So we, of course, looked at those studies, and that was one of the reasons why we decided to conduct a study of our own to test the feasibility of our PDT in this patient population. Mark, do you want to elaborate a little bit more on... what we're looking at in this study and what people might expect or what kind of data they might expect once we release our top line data.

Yeah, happy to, Frank. And I'll just add, you know, a little bit more color on the opportunity here is that, you know, as Frank mentioned, these are conditions that are rooted fundamentally in behavioral changes and therefore, not surprisingly, the trajectory of NASH and NAFOL mirrors the pandemic of type 2 diabetes and other cardiometabolic diseases. So these are massive problems with unmet needs, particularly in NASH and NAFL because there is no FDA-approved treatment for these conditions. There has been, you know, much effort put into developing pharmacological treatments over the last many years, given how massive the problem is, given how big the unmet need is. But many have failed, and largely they've failed because of their side effect or safety profiles. And so while we do expect that eventually some pharmaceuticals will make it through, if they do eventually make it through the approval process, in all likelihood, they will also come with side effects and then use for lifelong treatment. And so we see, you know, great potential here to develop a PDT that addresses the root behavioral causes of NASH and NAFL with a potentially safe non-pharmacological approach, which would also come hand in hand with potentially other secondary benefits like other cardiometabolic or quality of life benefits. So as Frank mentioned, we undertook an initial feasibility study that we're looking forward to sharing top line results with everybody later on in this quarter. And in this study, we've recruited 22 patients, a diverse spectrum of patients across the disease spectrum of NASH and NAFLD. And we're looking at MRI, PDFS, that's proton density fat fraction, which is a robust measure of the status of the amount of fat in the liver, looking for changes in MRI values, as well as a host of other related liver biomarker results. And so we're going to be reading out those top line results. Our objective here with the study, you know, with this first feasibility study is really to assess whether or not we see a potential efficacy signal, whether in fact we do, you know, see the continued safety profile that we saw in Bt001 in the Nashor and Afl-D population. factors together will give us the data that we need to know whether or not this opportunity is worth pursuing. So, we're excited to see the data and share that with you. Got it. Very helpful. Thank you, guys.

Thank you. And one moment for our next question. And our next question comes from Kay Nakia from Chardon. Your line is now open.

Yes, thanks. Since submitting the de novo request and having it accepted, has there been any other back and forth with the FDA?

Yeah, thanks for your question, Kel. So while we are under active review with the FDA, we will not comment on our interactions with the agency. The only thing we have said and I will reiterate here is not only have we submitted, the FDA has accepted our submission. And we're under active review, but we won't comment any further than that.

Okay. And Frank, this is, I guess, maybe a longer term strategic and operational question, but assuming you get the authorization, you've talked about a target headcount for sales and marketing. You'll need some additional capital. You know, at what point would you envision you'd be able to give, you know, more detailed guidance on yearly operating expense and then at some point perhaps guidance on product revenue?

Yeah, so I would expect that we will provide guidance on operating expense early next year, so on the Q4 earnings call. and we would then provide operating expense guidance for 2023. I do not expect that we will provide revenue guidance on this call. Revenue guidance I think we will not provide until we are well down the launch path and we have good visibility into how revenues are evolving. Typically that is at least two to three quarters post initial launch. One thing I will say with regards to operating expense, which I find actually quite exciting about the sector that we're in. As you know, I've spent most of my career in biotech, traditional drug development and commercialization. The operating expense to develop and commercialize a digital therapeutic are in fact far less than what it is for a traditional drug. And that is one of the many benefits of these types of therapies. But we will have more specific numbers on operating expense guidance for next year on the Q4 call. At that time, Diane will also have had a chance to come fully up to speed. I would expect at that time we'll have good visibility on what our financial situation looks like, and that will be a good time to provide that guidance.

Okay, very good. That's helpful. Thanks.

And thank you. And I am showing no further questions. I would now like to turn the call back over to management for further remarks.

All right. Thank you. Let me just say thank you to all of you for your time this afternoon and a good discussion. We look forward to keeping you informed as we continue to execute on our upcoming clinical and regulatory milestones. And please feel free to reach out to us if you have any additional questions. Thank you.

Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.