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spk04: 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.
spk03: 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.
spk11: 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.
spk08: Ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your touchtone telephone. We'll pause for a moment while we compile our Q&A roster.
spk09: Our first question comes from . Your line is open.
spk10: Hi. Good morning. Congrats on the progress, and thanks for taking my question. You've shown data from the two Phase 3s in alopecia with primary endpoint SALT20 score that's roughly 10% better than the major competitors, Pfizer and Lilly. Can you talk about how meaningful the data is in the context of other factors like dosing convenience and safety to doctors and patients?
spk02: Hi, Maury. Jim here. So, thanks for the question. So, I think you're right. You know, the data we have clearly offers an advantage over the varicitinib and ribositinib data from Lilly and Pfizer in terms of the overall effect. I think we'd also like to highlight that we have, you know, I think meaningful differences in terms of the onset of activity, especially when you look at the SALT20 score. or look at changes from baseline, as Roger mentioned in the presentation. I think the other thing that is also important to highlight is the level of satisfaction that we see in our pivotal studies, where both studies have shown a high level of satisfaction as a key secondary endpoint. As we've noted in our previous discussions, we have a generally consistent and well-behaved compound here. We did not see, you know, any thrombotic activity in the Phase III program. We have side effects that I think are consistent with the JAK class, but overall, you know, our top adverse events were things that were seen not only with other JAK inhibitors, but also consistent with what we've seen in the Phase II program. In terms of what we're seeing in the phase three and what we're seeing for the compound overall, we have a very consistent safety profile, not unlike what you would expect to see with a JAK inhibitor, but very well-behaved and very consistent. So I think in terms of that, we have a well-established safety profile, consistent safety profile, and a very good, potentially best-in-class safety profile. So I'll pause there, see if you have any other questions.
spk10: Yeah, thank you for the perspective. Very helpful. And then I wanted to ask about gating factors to filing that you've discussed, including the need for supporting studies, the Phase II durability data, and open-label extension data. Can you talk about progress that's been made since your second quarter update call, and have any specific gating factors been completed yet?
spk02: Yeah, so, you know, an NDA is a rather large and complex document. We have made meaningful progress in the supporting studies and conduct of those studies. We have worked on all the other aspects of data that need to be included in the NDA filing. As you know, there are three major components of the NDA. There's the clinical section, there's the non-clinical section, and there's the chemistry manufacturing controls. So the team is very experienced. We're working diligently on wrapping up all the details that need to go into the NDA. So we've made a lot of progress. We're working steadily on it, and we are on track to file in the first half of 23.
spk10: Got it. Okay. Thanks for taking my questions. I'll hop back in the queue. Thank you.
spk08: One moment for our next question.
spk09: Our next question comes in June Lee with Truist. Your line is open.
spk06: Good morning. This is Les for June. Just in regards to the NDA filing, could you handicap the timeline in any sense? I understand you just gave some color around the factors that need to take place, but anything that could speed up the process? Would it be an early 23 event or something like a letter part of the first half?
spk02: I think, Wes, at this point, it's safe to keep it in the generality of the first half. We are really making the progress that we expect to make. We're on the timeline that we set out, and I don't think we could really give any more clarity around the first half, but we are on track. We're feeling very good about it, and we're making a lot of progress.
spk06: That's fair. Thank you. On the guide for your cash runway through second quarter of 23, I guess this would imply a step up in spend. Does the guidance actually include the initial launch preparations, or is this essentially all tied to the open label extension study and the costs around the NDA filing? Can you just provide a little bit more color on the puts and takes of this cash guide?
spk11: Sure. Hey, Les, it's Mark. I think you nailed it. I think that's exactly right. I think the open label extensions included in there and the cash guidance does include, you know, a fully burdened commercial effort, I would say. So there are a lot of pre-commercial costs in there as well as NDA prep, filing fees, et cetera. So that is why there's a step up.
spk06: Got it. Okay. Thank you. I guess last one for me then on the In regards to the 149 patent appeal, just provide any available updates if possible. And then on the 659, I guess based on today's filing, it looks like PTAB has denied the request for the final decision reconsideration. Does this essentially provide closure, or has the counterparty potentially can pursue other options there? Just thank you. Thank you.
spk03: Hi, yeah, thanks for the question, Roger. So with respect to the 149 patent that is currently in the Court of Appeals, we have filed our appeal to the PTAB's initial decision, and we're in the process of going back and forth with insight on that. We think we have very good arguments there and are looking forward to the adjudication by the Court of Appeals. In the case of the 659 patent, we were, of course, very happy to see that the PTAB denied the request for reconsideration from Insight. And we think that patent is on extremely strong grounds right now. They do have the right to file an appeal, but we think that given the very consistent and lengthy analysis given to their case, the PTAP judges really nailed the decision here, and we like the situation there. So we feel very strongly that the 659 patent is on solid ground.
spk06: Excellent. Thank you for the caller.
spk09: One moment for our next question. Our next question comes from Sean Kim with Jones Trading. Your line is open.
spk05: Hi, good morning. Now that you have both phase three trial results and also the pricing scheme from a computer specifically, how are you thinking about pricing for CTP543 as you move forward with filing and prepare for potential commercialization?
spk01: Hi, this is Nancy, and thanks so much for the question. You know, we, what we have said is we expect that our pricing will be in line with other JAK inhibitors in the autoimmune derm space, including aluminum. That price parity is what we will be going for.
spk05: Okay, great. Thank you. And also another question from . So, as far as the ongoing phase to ability of response trial goes, what's the expected timing of trial completion? with results, how the results kind of tie into the labeling discussions they will have with FDA.
spk02: Thank you. Yeah. Hi, this is Jim. So, you know, that is an ongoing study. It will be, you know, it's basically in two parts. The first part of that study where we look at the Dose reduction and dose termination will be included in the NDA filing. There's going to be an ongoing part of the study that will continue post-filing where we look at redosing again. So we are on track to have that first part in the NDA filing, and that's what the FDA is expecting.
spk09: Thank you.
spk08: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your touchtone telephone. One moment for our next question. Our next question comes from Jason Butler with JMP Securities. Your line is open.
spk07: Hi, thanks for taking the question. Just thinking about as you continue your awareness and education work ahead of the launch, when you talk to opinion leaders or potential prescribers, what you think is resonating? What are the messages that you think are resonating that could form part of the launch message? You know, you've mentioned things like the speed of onset, but what are you hearing back from physicians? Thanks.
spk02: Hey, Jason. This is Jim. So, great question. You know, we have, you know, a lot of enthusiastic support for our program and the data from the KOLs. I think, you know, we, what we talk about in terms of, you know, the overall effect that we see with the, the early onset of the fact patient satisfaction all resonate very well with. So, we hear that back from them. And I think that's that's also a very important part of the messaging. So I think we've, you know, we've got those, you know. you know, three legs to stand on, and I think, you know, that is, you know, pretty well recognized within the community.
spk11: Great. Thanks.
spk09: One moment for our next question.
spk08: Our next question is a follow-up from Mario Raycraft for Jeff. Actually, his line just left the queue, and I'm not showing any questions at the time. I turn the call back to Justine for any closing remarks.
spk04: Okay. Well, thank you for joining us this morning. Next week, we'll be at the Jeffries London Conference, and our head of development, Jim Casella, will be participating in a fireside chat on Wednesday. We hope you'll tune in. And in the meantime, if there are any follow-up questions, please don't hesitate to reach out. This concludes today's call.
spk08: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
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