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spk03: Good morning. Welcome to Saville Therapeutics' third quarter 2021 financial results conference call. At this time, I'll participate and listen on the mode. Later, you will have the opportunity to ask a question during the Q&A portion of the call. Please note that this call may be recorded. I will now hand it to Matt Calistri, Vice President, Corporate Strategy and Investment Relations.
spk08: Thank you. Good morning, everyone. We appreciate you joining us for our third quarter 2021 results call. On today's call, you'll be hearing from Dr. Tony Coles, our chairperson and chief executive officer, Dr. Ray Sanchez, our chief medical officer, Dr. John Renger, our chief scientific officer, and Mark Bodenrater, our interim chief financial officer. Please refer to our press release from this morning, detailing our Q3 performance, as well as our updated corporate presentation, both of which are available on our website. I would like to remind you that we will be making forward-looking statements that reflect our current views related to our financial performance, future events, and industry and market conditions, as well as forward-looking statements including the potential attributes and benefits of our product candidates and the format and timing of our product development activities and clinical trials. We strongly encourage you to review the information that we file with the SEC regarding specific risks and uncertainties. I will now hand it over to Dr. Tony Coles, Chairperson and CEO of Cerevel, to provide an overview of our achievements and outlook.
spk06: Thanks, Matt, and good morning, everyone. Thank you for joining us today. Earlier this year, we announced top-line results from our Phase 1b trial of CBL231, our M4-selective positive allosteric modulator, or PAM, in schizophrenia. That compelling data represented our first major step toward realizing our aspiration of becoming the premier neuroscience company. In the early part of the third quarter, we secured $350 million in a follow-on offering and redeemed our outstanding public warrants. Now, we're well equipped with the people, the capital, and the momentum to execute on our programs and bring much-needed medicines to patients as rapidly as possible. Last month, we held a virtual R&D event where we discussed CBL871, a D1, D5 partial agonist in development for dementia-related apathy, and released additional data for CBL231. These are just two of the many programs in our broad portfolio, all of which leverage our deep understanding of neurocircuitry and receptor subtype selectivity to drive therapeutic benefit while minimizing side effects. Specifically, we are advancing CBL231 rapidly into phase two. We shared the broad outlines of our development program during our R&D event a few weeks ago, which Ray will review again in just a moment. And we'll provide additional details on the timing and design of that program by mid to late first quarter of next year. We also expect additional data readouts in the next few years across other programs in our pipeline. We anticipate two data readouts for DERIGABAT in 2022 with data from our phase one acute anxiety trial now expected by the end of the first quarter of 2022 and the readout from our phase two focal epilepsy trial in the second half of the year. Also in the second half of 2022, we expect a phase two readout of CVL871 in dementia-related apathy. And in 2023, of course, We expect data from our Phase III program for Tevapidon in both early and late-stage Parkinson's. In addition, we have a robust early-stage pipeline, including multiple programs in development for substance use disorder and major depressive disorder. We also have state-of-the-art laboratories and discovery capabilities at our brand-new Cambridge Crossing facility, where we intend to identify new neuroscience drug targets, including some with disease-modifying potential. With the depth of a pipeline that spans all stages of development, we're well-positioned to deliver a number of important catalysts in 2022, 2023, and beyond. Now, let me ask Dr. Ray Sanchez, our Chief Medical Officer, to provide the latest updates on our clinical development efforts. Ray?
spk05: Thank you, Tony, and good morning to all of you. Today I'll be reviewing our late-stage programs, starting with CVL231, in development for the treatment of schizophrenia. CVL231 is designed as a once-daily oral medication without the need for titration that is highly selective for M4 over other muscarinic receptors. We believe this selective targeting enables CVL231 to drive antipsychotic effect while avoiding serious GI, extrapyramidal, akathisia, and metabolic side effects that are commonly observed with non-selective muscarinic agents and or approved antipsychotic agents. In June of this year, we released positive top-line data from our Phase 1b trial of CBL231. In this trial, we enrolled 81 subjects randomized in a 1 to 1 to 1 ratio to receive 30 milligrams QDA or 20 milligrams BID of CVL231 or placebo. Both doses of CVL231 demonstrated clinically meaningful and statistically significant antipsychotic effects with no meaningful differences in gastrointestinal side effects, extrapyramidal symptoms, or weight gain compared with placebo. The 30-milligram once-daily group demonstrated an absolute improvement versus baseline of 19.5 points while the 20 milligram twice daily cohort showed an improvement of 17.9 points on the PANS total score. In addition, relative to placebo, both treatment groups had statistically significant reductions of 12.7 and 11.1 respectively. To put this into context, previously approved medications have historically shown a 10 to 15 point or greater improvement relative to baseline or a 5 to 10 point improvement on a placebo-adjusted basis. Our trial results were further supported by clinically meaningful improvements in the PANS positive and PANS negative subscales, as well as the CGIS. The safety and tolerability data from this trial were also very encouraging. CVL231 was not associated with extrapyramidal side effects, akathisia, or weight gain. Treatment emergent adverse event rates were similar across all three arms, and very low rates of gastrointestinal AEs were observed. Importantly, there were no discontinuations related to cardiovascular or gastrointestinal side effects. As expected, we observed modest asymptomatic elevations in heart rate and blood pressure with CVL231, which attenuated over the six weeks of treatment and were not clinically significant. We will continue to monitor heart rate and blood pressure in our Phase II programs. Given the strong antipsychotic activity and the favorable tolerability profile observed in the Phase 1b trial, we are rapidly advancing CVL231 into Phase 2 development for the treatment of schizophrenia. At our R&D event on October 7th, we presented new pharmacokinetic and PET receptor occupancy data, which are essential to informing our next steps for CVL231. We plan to present additional PK PD data at the annual meeting of the American College of Neuropsychopharmacology in December. Based on the data we have seen to date, we will be pursuing once-daily doses without titration in our Phase II program. The selected doses will include the 30 mg once-daily dosing regimen that demonstrated impressive results in the Phase Ib trial. Our plan includes one or more adequately powered placebo-controlled Phase IIb trials to fully explore the dose range for CVL231. The trial design will follow established precedent for drug development in schizophrenia, which includes six weeks of inpatient treatment, a patient profile similar to Part B of our Phase 1B trial, and a primary endpoint of change from baseline on the PANS total score. We are looking forward to providing the full details of the Phase 2 program by mid to late first quarter of next year. The next expected data readout for CERVA will be for DERIGABAT, our alpha-235 selective GABA-A receptor positive allosteric modulator, or PAM, in acute anxiety. DERIGABAT is currently being studied in a Phase I randomized positive and placebo-controlled proof-of-principle trial in Healthy Volunteers. We can now say that we expect to have some data for this trial by the end of the first quarter of next year. Those results will inform how we advance this compound in one or more anxiety-related indications. We're also dosing to Rigabat in our Phase II Global Proof-of-Concept trial in focal epilepsy, known as the REALIZE trial, as well as its corresponding open-label extension trial. Data in focal epilepsy continues to be expected in the second half of 2022. Now, to round out the discussion of our late-stage programs, Our phase three global tempo program for tevapidon in Parkinson's disease is progressing nicely. We continue to dose in all three of the phase three trials, tempo three in late stage Parkinson's and tempos one and two in early stage Parkinson's. In addition, we're dosing both rollover and de novo patients in tempo four, our 58 week open label extension trial. We expect data from tempo three in the first half of 2023, and data from Tempos 1 and 2 in the second half of 2023. Now that I've reviewed the updates to our three lead clinical programs, I would like to turn it over to Dr. John Renger, our Chief Scientific Officer, to provide updates on the rest of our pipeline. John?
spk07: Thank you, Ray. Good morning, everyone. During our R&D event last month, we discussed CBL871, our D1, D5 dopamine receptor partial agonist, and Phase II development for the treatment of dementia-related apathy. Apathy is among the most common neuropsychiatric comorbidities associated with dementias and remains a devastating condition without a currently approved treatment option. Our 75-subject randomized Phase II aid trial is designed to test two doses of CVL871, three milligrams and one milligram once daily relative to placebo over 12 weeks of treatment. We will be assessing patients on a range of established apathy measures to understand the overall therapeutic potential of CVL871 and to determine the most appropriate fit-for-purpose metric to evaluate changes in this condition. We have now dosed the first patient in this trial, and we anticipate clinical results to be available in the second half of next year. In June, we received fast-track designation for a CVL871 in the treatment of dementia-related apathy, which has the potential to enable early and more frequent interactions with the FDA, as well as eligibility for rolling NDA submission and priority review. We are looking forward to interacting closely with the agency in determining the best path forward for developing a treatment in this novel indication. In addition, we're advancing a number of earlier stage clinical programs, including CVL936, our D3 preferring dopamine receptor antagonist for the treatment of opioid use disorder, CVL354, or Kappa Opioid Receptor Antagonist, in development for substance use disorder and major depressive disorder, or MDD, and CVL047, or selective PDE4B inhibitor, in development for schizophrenia and MDD. We're also building out a robust drug discovery engine at our research labs in Cambridge Crossing. With multiple discovery stage programs ongoing, we are leveraging our differentiated understanding of neurocircuitry and world-class chemistry to develop and explore potential of highly sophisticated small molecules. We believe this research engine will fuel a regenerative pipeline of novel therapeutics for many years to come, and we're looking forward to keeping you updated on our ongoing progress. I'll now turn it over to Mark Bodenreiter, our Interim Chief Financial Officer, to review our financial performance for the third quarter. Mark?
spk04: Thank you, John. Good morning, everyone, and thank you for joining today's call. Please refer to this morning's press release for the full details of our financial update. For the third quarter, total operating expenses were approximately $55 million, which includes R&D expense of $40 million and G&A expense of $14 million. As expected, total operating expenses for the third quarter grew over prior quarters, which is primarily driven by the ramp-up of our clinical trials and higher public company G&A costs as we grow our business. Relative to the third quarter last year, R&D expense increased by approximately $16 million. This increase was primarily driven by the advancement of our late and early stage programs, an increase in spending as we build out our laboratories in Cambridge Crossing, and an increase in infrastructure costs to support the progress of our pipeline. R&D expense for the third quarter also included $2.5 million of equity-based compensation expense relative to $1 million for the third quarter last year. We expect R&D expenses to continue to increase as we advance our clinical programs. G&A expense for the third quarter was $14 million compared to $10 million for the same period in the prior year. G&A expense for the third quarter also included equity-based compensation expense of approximately $3.6 million versus $2.4 million for the third quarter last year. We continue to expect G&A expense to increase over the coming quarters as we support the growth of the company including the progression of our R&D programs and our public company infrastructure. As of September 30th, our cash and cash equivalents were $670 million, which includes proceeds received from our follow-on offering in July and proceeds from the redemption and exercise of our public warrants. With our strong balance sheet position, we're prepared to continue to advance our lead programs, including CVL 231, DeRigabat, and Tevapadon, while also pursuing earlier stage clinical programs and drug discovery initiatives. And with multiple value creation opportunities expected over the next three years, we expect our current cash position to fund our operations into 2024. I will now turn the call over to Tony for concluding remarks.
spk06: Thanks, Mark. Well, as you can see, we're advancing our broad pipeline and building what we hope will become the premier neuroscience company. Neuroscience, we know, is the next great frontier of medicine, and Cerebellum is at the forefront. We expect multiple important data readouts in the next few years and are excited about the potential we have in our pipeline to transform the lives of patients and their caregivers. Thank you for joining us this morning. I also want to thank our employees, without whom we certainly could not do what we do without your passion, your devotion, and your hard work. And I want to express my deep appreciation for the participants and investigators in all of our clinical trials for your continued contribution to the development of these much-needed medicines. With that, operator, we can now open the floor for questions.
spk03: Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask a question, press star 1. Our first question comes from Michael Yee with Jefferies. Your line is open.
spk01: Hi, this is Dennis staying on for Mike. Thanks for taking the question. Can you please give a little bit more color on the upcoming anxiety data, design empowering assumptions? I think in the prepared remarks you emphasized that you'll be presenting some data in the first quarter, which I thought was an interesting comment. what are you planning to report and what would be considered promising in a Phase I anxiety trial? And as a follow-up, can you put that into context with J&J's prior data?
spk06: Thank you. Sure. Thank you for the question. Ray, why don't you take that question?
spk05: Thank you, Tony. Thank you for that question. So, as you know, we are using the carbon dioxide inhalation challenge model to understand the potential signal of our use of DERIGABAT in treating panic symptoms. This is a model that's been sensitive to drugs that have been used to treat anxiety disorders, including benzodiazepine and the SSRIs. And our hope is that we will be delivering the data readout of this trial by the end of the first quarter. As you know, this is a trial that is being conducted in Healthy Volunteers in the Center for Human Drug Research in the Netherlands. It's a two-period, two-sequence crossover design that has three cohorts and looks at 50 milligrams a day, 15 milligrams a day, and also two milligrams of extended alprazolam a day as well. And the reason for including the alprazolam treatment arm is that was also used in the orexin-1 inhibitor program that was conducted by J&J, so it will give us an opportunity to really juxtapose the data and better understand how we fare on the panic symptoms checklist, which traditionally a clinically meaningful outcome has been two to three points placebo-adjusted on the scale. Prazil and the orexin trial showed a 3.1 placebo-adjusted difference. So we will use the collective information working with our advisors who are familiar with this approach, this design, and this population to make a decision on our next steps in treating anxiety.
spk06: Thanks, Ray. And I'm sure everyone did here, but we are bringing our guidance in for top-line data. to the first quarter into the first half of next year. So stay tuned. We expect to have some data here very shortly. Thank you, Ray. Operator, we'll take the next question.
spk03: Our next question comes from Paul Matisse with Stiefel. Your line is open.
spk02: Great. Thanks so much for taking the question. A couple on DurigaBat as well. I was wondering if you could just kind of remind us about the powering of this study, and then kind of separately sort of taking a step back, right, the hope with the alpha-1 selectivity hypothesis is that this can give you sort of the good of the benzodiazepine class without the bad. So in this study specifically, what are you expecting to see from the comparator arm in terms of things like sedation rates, evidence of tolerance or withdrawal, and what do you see as kind of the clearest cut avenues in this trial to sort of prove out the alpha-1 selectivity hypothesis? Thanks so much.
spk06: Okay. Thank you, Paul. JR, if you would actually take the alpha-1 selectivity piece, I know that we have gone through this before, but I think let's just set the context for Paul's question, talk a little bit about the mechanistic rationality. the regabat might be efficacious. And then, Ray, if you would answer the questions about powering of this trial and then the expected side effect profile that we'd be looking for. So first on the mechanism, JR.
spk07: Sure. Thank you, Tony, and thanks for the question, Paul. Good to hear from you. Yeah, so as you may remember, the intent of having an alpha-1 sparing alpha-235 compound is to be able to enhance inhibition in the neural circuits that underlie both epilepsy, and that's why we're looking at focal onset epilepsy in a phase two study. And as you know, that is the more appropriate study to look for tolerance, and that is part of the trial design. And so we believe that alpha-1 sparing will allow us to show that we don't have the tolerance that is seen with the alpha-1 directed compounds. Also, as you mentioned, you know, the sedation piece. So we know alpha one is expressed in the circuits in the brain that underlie sedation. And so by avoiding that, we have actually been able to go to very high receptor occupancies, including in clinical setting and not see the sedation. And so what we want to do is demonstrate that two, three, five plays a role in the circuitry that underlies panic and anxiety. but avoid the very common side effects that are seen with benzo use, which is the dose-limiting sedation that's seen when you dose to even moderate levels of receptor occupancy. So at even 20% receptor occupancy, you can see impairing levels of motor control and sedation. And so what we want to do is demonstrate the ability to have that panic benefit, avoid any of the cognitive, the motor coordination issues, or sedating effects that are commonly seen with non-selective benzodiazepines. And so with that, I'll turn it back to Tony.
spk06: Ray, just before I take the next question, Ray, if you would talk a little bit about the powering of the study, that was one part of Paul's question, and any of the other relative clinical commentary you'd like to make.
spk05: Right, right. So, Paul, as you know, this is a a proof of principle trial that is fairly small. It's got three cohorts of 18 healthy volunteers in each cohort. It's not powered to show any differences. We'll look at, of course, the confidence intervals and the like. Because the treatment duration is so short that issues like withdrawal and tolerance and the like will not be readily evaluated just given the nature of the design. But what we do want to see is on the panic symptoms checklist relative to Alprazolam is really what that placebo-adjusted difference shows in the minimum effective dose of 15 milligrams and the top dose of 50 milligrams a day. And then, of course, looking for some of the adverse events or some of the side effects that John articulated, which are usually, as you know, driven by Alpha-1. One of the things that we also want to understand is sedation versus somnolence. As you know, historically, we've seen some somnolence in the minority of participants with DERIGABAT, but we have not seen sedation. You know, the two are quite different and are labeled quite differently. So we'll also be looking for that in the Elprazolam treatment group versus the other treatment groups with DERIGABAT.
spk02: Great. Thanks so much for the detailed answer.
spk06: All right. Thank you, Paul. Thanks for the question. Operator, we'll take the next question.
spk03: There are no other questions in the queue. I'd like to turn it back to Tony for any closing remarks.
spk06: Okay. Well, guys, thank you for joining us this morning. It's certainly been an eventful year and a very productive quarter with both the capital raise and the earlier year announcement of the 231 results. We're making great progress across the entire pipeline, and 2022 should be a very important year for the company as well, just given some of the data readouts we've got. We've got a terrific team, as you can see through today's call, and we look forward to bringing you further updates as the weeks and months progress. Thanks for joining us today. Enjoy your day, and happy end to the year. Take care.
spk03: this concludes today's conference call thank you for participating you may now disconnect
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