Concert Pharmaceuticals, Inc.

Good morning and welcome to Concert Pharmaceutical's third quarter 2022 investor update. Before we begin, I'd like to mention that in addition to our corporate website as a source of information, we encourage you to follow along on our social media platforms, including Twitter, Instagram, and LinkedIn. We recently added Instagram as a social media platform, and collectively you can find corporate news as well as information geared towards our science, culture, and community initiatives on these platforms. Joining me this morning with prepared remarks are Roger Tung, President and CEO, and Mark Becker, Chief Financial Officer. Nancy Stewart, Chief Operating Officer, and Jim Casella, Chief Development Officer, will join the team for Q&A. As a reminder, today's discussion will include forward-looking statements about our future expectations, plans, and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A description of these risks can be found in our most recent 10Q filed with the SEC. Any forward-looking statements speak only as of today's date, and we assume no obligation to update any forward-looking statements made on today's call. With that, I would now like to turn the call over to Roger.

Thank you for joining us today. We're at an exciting inflection point for Concert as we continue our journey from a late-stage development company to becoming a commercial organization. Going forward, we will now refer to CTP543, a deuterated JAK12 inhibitor, by its USAN name, duruxolitinib. We believe that alopecia areata is a largely untapped, multibillion-dollar market, and that duruxolitinib potentially has the best overall profile of agents studied to date in that disease. The positive and consistent phase three results from our Thrive AA1 and Thrive AA2 international clinical trials position duruxolitinib as a potential best-in-class treatment for alopecia areata. After releasing top-line data from our first pivotal clinical trial in the second quarter of 2022, this past August, we released top-line results from Thrive AA2. And in September, we presented additional results from Thrive AA1 during the late breaking news session at the EADD Congress in Milan. These data showed significant and clinically meaningful scalp regrowth for both doses of duruxolitinib at 24 weeks compared to placebo, early onset of effect, and high degrees of patient satisfaction. In both TRIVE AA trials, duruxolitinib met the primary and key secondary endpoints with both doses evaluated. Importantly, we now have over three years of duraruxolitinib treatment experience in some of the patients participating in the open-label extension study, giving us a sizable safety database to support our planned NDA filing in the first half of 2023 and supporting future commercialization. It's been gratifying for us to be able to present the excellent Thrive AA data and to share additional detailed results with dermatology experts and clinicians. And we'll continue to present data for duluxolitinib and grow awareness within the treatment community in the months ahead. As a prime example, we were very happy to have Dr. Brett King of Yale University present the Thrive AA1 results at the 2022 EADB Congress during the late breaking news session. Building on the previously released top line results, he showcased SALT10 scores a more stringent measure of hair regrowth, and the effect of duruxolipinib on eyebrow and eyelash regrowth. As with the SALT20 primary endpoint data, we believe duruxolipinib continues to demonstrate impressive efficacy by these additional measures. As we parse the extensive data from the phase three trials, we look forward to sharing additional analyses with the medical community. Beyond the quantitative hair regrowth data described by Dr. King, we feel it important to highlight two other key attributes of duruxolitinib, which are rapid onset of effect and high patient satisfaction. Both of these measurements were built into our statistical analysis plan as key secondary endpoints, and both showed significant results versus placebo in the Thrive AA trials. Specifically, onset of effect at the SALT20 level in ThriveAA1 was statistically significant as early as eight weeks and in the ThriveAA2 as early as 12 weeks. When we look at relative change versus placebo in SALT scores, we see significant changes favoring duraxilidinib as early as four weeks. The SALT scores continue to improve throughout the course of the study, and as we've described previously, continue to improve beyond the 24-week study completion in patients who continue to receive duraxolitinib in the open-label extension study. Regarding safety data from the Thrive AA studies, the duraxolitinib safety profile in both trials was similar to that we observed in the Phase 2, which we believe is well-suited for the treatment of alopecia areata. Later this month, Dr. King will present additional ThriveAA1 results at the World Congress for Hair Research in Australia, which will include a look at the effect of duruxolitinib stratified by disease severity and by duration of current hair loss episode. We expect that duruxolitinib will be an important addition to the market where effective treatment options are only beginning to emerge. clearer than ever that alopecia areata is a large and compelling therapeutic opportunity, a common autoimmune disease that affects millions of patients worldwide, and that offers blockbuster commercial potential for duroxilidinib. Within CONCERT, we've had a core team in place for some time to prepare our NDA filing, which we plan to submit in the first half of 2023. The data from our large phase three trials forms the basis of our NDA application, However, there are several supporting studies and, of course, CMC work that we have conducted or are wrapping up to support the filing. We have a well-defined plan going forward, and I have every confidence that our team will continue to consistently execute to our timelines as they have throughout the program. In closing, let me underscore that we're highly committed to bringing duruxolitinib to market as quickly as possible. And I'm extremely proud of what our team has accomplished and where we're headed. Let me pause here and turn the discussion to Mark to review our third quarter financial results.

Thanks, Roger. As I review our third quarter 2022 financial results, please reference the financial tables found in today's press release. Research and development expenses were $24.4 million during the third quarter of 2022, compared to $21.9 million during the third quarter of 2021. We continue to incur clinical costs associated with the open-label extension studies for duraxalitinib. As a reminder, the North American extension study is expected to continue until approval. General and administrative expenses were $5.3 million during the third quarter of 2022, compared to $5.5 million during the third quarter of 2021. The decrease in general and administrative expenses relates primarily to decreased non-cash stock-based compensation and external professional services. A net loss attributable to common stockholders for the third quarter of 2022 was $28.9 million, or 58 cents per share, compared to a net loss attributable to common stockholders of $26.7 million, or 78 cents per share, for the same period in 2021. We ended the third quarter of 2022 with $148.9 million in cash, cash equivalents, and investments. Under our current operating plan, we expect our cash runway to extend through the second quarter of 2023. To summarize and recap Roger's comments, we are very excited about the potential for duraxolitinib. It not only addresses a large underserved market opportunity, but it has the potential to be the best in class based on the overall treatment profile. We're on track with our plan to file our NDA in the first half of next year and believe we will have a meaningful treatment option that could significantly help patients who suffer from alopecia areata. This concludes our prepared remarks, and we would be happy to answer any questions.