Inhibikase Therapeutics, Inc.

Greetings, and welcome to the Inhibicase Therapeutics Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Lobo, PrecisionAQ Investor Relations. Thank you, sir. You may begin.

Good morning, and welcome to Inhibit Case Therapeutics second quarter 2024 financial results conference call and audio webcast. With me today is Dr. Milton Werner, Chief Executive Officer, and Garth Lees-Ralph, Chief Financial Officer. On August 14th, Inhibit Case issued a press release announcing financial results, but the second quarter ended June 30th, 2024. We encourage everyone to read to yesterday's press release, as well as Inhibit Case's quarterly report on Form 10-Q, which has been filed with the SEC. The company's press release and Form 10-Q are also available on Inhibit Case's website at inhibitcase.com. In addition, this conference call is being webcast through the investor relations section of the company's website and will be archived there for future reference. Please note that certain information on today's call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Participants are cautioned that this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 15, 2024. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. Information on potential risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this webcast, except as may be required by applicable securities law. With that said, I would like to turn the call over to Dr. Milton Werner. Milton, you may begin.

Thank you, Alex. Thank you everybody for joining us today to review our second quarter, 2024 financial results and recent clinical and business updates. We've been very pleased with the strength of our clinical progress to the first half of 2024. The speed at which we executed on key clinical and regulatory milestones has underscored what has been a very successful quarter marked by the accomplishment of many exciting achievements. We recently completed enrollment for our Phase 2-2.1 trial for Rizvodetinib, or often referred to as Rizvo in Parkinson's disease, which is a significant milestone that we have been working tirelessly towards in an effort to bring Rizvo to patients suffering from untreated Parkinson's. and we expect to report top-line data from the trial in November. Additionally, we have had a productive engagement with the US FDA over the past few months regarding IKT-001-PRO's opportunity in pulmonary arterial hypertension, or PAH. Imatinib, the active ingredient in O1-PRO, has previously been shown to be disease-modifying for PAH, and we believe that PRO has the potential to further demonstrate safe and efficacious treatment in PAH patients using our novel PRO drug technology. We filed the R&D for PH and plan to open clinical development with a de-risking phase 2b study as soon as practicable. Let me take a deeper dive into each of these programs as we expect the back half of 2024 will be a catalyst-rich period. Let me first start with Rizvedet today. Rizvo is a potent selective inhibitor of C-ABL that is administered once daily that we believe may slow or halt the progressions of Parkinson's disease. Our 201 trial was a two-phased trial with a 12-week double-blinded study across three doses plus placebo, for which enrollment has been completed. As of July 29th, 41 mild and 8 moderate adverse events have been observed that may be related to Rizvo treatment. We've had six people withdraw from the trial without completing 12 weeks of dosing. Looking ahead, we expect to report top-line results, evaluate the safety and tolerability of Rizzo in untreated Parkinson's disease in November of this year. Following completion of the 12-week double-bonded period, we anticipate meeting with the FDA by year's end to discuss our plans for Phase 3 and intend to launch a 12-month open-label extension study as soon as possible. Moving now to IKT-001-PRO, our PRO drug formulation of imatinib mesylate that has been designed to potentially improve the safety and tolerability profile of imatinib. We continue to make significant strides in the advancement of the PRO drug through our ongoing discussions with the FDA. We received final meeting minutes for our pre-IND meeting for pulmonary arterial hypertension in May and filed the IND on August 9th to open clinical development later this year, subject to the receipt of the study may receive letter from the agency. PAH is a rare disease of the pulmonary microvasculature. PAH can arise spontaneously or can be caused by genetic mutations, by drugs, or environmental toxins. PAH is also associated with connective tissue disease, congenital heart disease, HIV infection, and other insults that could affect the right side of the heart. Most treatments for PAH attempt to address symptoms of this progressive disorder, but the recent approval of Cetatricep highlights that disease modification is possible. We see tremendous opportunity in PAH, which has a global market value at $7.7 billion annually worldwide. Imatinib, the active ingredient in PRO, has already been shown to be disease-modifying more than 10 years ago, but the side effect profile observed at that time precluded approval. We believe that PRO has the potential to achieve similar potency to imatinib mesylate without the side effect profile that disqualified imatinib from approval studies reported in 2010. Based on our constructive discussions with the FDA, we believe that we have alignment on our proposed Phase IIb trial design and at the pre-NDA meeting, the FDA confirmed that O1Pro would be viewed as a new molecular entity for pH and that the appropriate path of approval appears to be 505B2 statute. Further, following the advice provided in our pre-NDA meeting with the FDA in January, we have scaled our manufacturing and processed our element efforts for Pro to support late-stage clinical development and NDA batch requirements. Activities include development of new dosage forms to differentiate O1 pro tablets from generic imatinib mesylate in alignment with the FDA feedback. Finally, turning to Rizvo Multiple System Atrophy, or MSA, we are currently exploring alternative financing opportunities, including potential grant funding through a new funding mechanism of clinical development in neuroscience from the National Institute of Neurological Diseases and Stroke, or NINDS. We look forward to advancing this program forward and providing further updates on the program as appropriate. Separately, we are also developing new antibody diagnostic and clinical biomarker tools that we believe will further differentiate the company's efforts in Parkinson's disease and enable analysis of both target engagement and potentially disease modification. Both of these efforts are being pursued through two grant applications that are under review by the NINDS. I'd like to now turn the call over to our Chief Financial Officer, Garth Lees-Rolph, to review our financial results for the quarter. Garth?

Thank you, Milton. At Inhibicase, we remain committed to being good stewards of capital as we advance multiple high-value programs in both neurodegenerative and cardiopulmonary disease. As we approach multiple inflection points this year, we are pleased to bolster our balance sheet in May, raising $4 million in aggregate gross proceeds from our registered direct offering and concurrent private placement. These funds extend our cash runway into December 2024 and are sufficient to see us through top line data for our 201 trial in Parkinson's disease. Now I'd like to take a moment to review highlights from our financial results for the quarter ended June 30th, 2024. Net loss for the quarter ended June 30th, 2024 was 5.0 million or 0.66 per share. compared to a net loss of $5.8 million or $0.94 per share for the quarter ended June 30th, 2023. Research and development expenses for the quarter ended June 30th, 2024 were $3.1 million compared to $4.5 million for the same period in 2023. The $1.5 million decrease in research and development expenses was due to a decrease of $1.4 million in IKT-001 Pro expenses due to the completion of a three-part dose finding dose equivalent study in 2023, and a net decrease of $0.1 million in other research and development expenses. Selling, general, and administrative expenses for the quarter ended June 30, 2024, with $2.0 million compared to $1.8 million for the same period in 2023. The $0.2 million increase was primarily driven by a $0.4 million increase in legal and consulting fees, partially offset by a $0.1 million decrease in D&O insurance and a $0.1 million net decrease in all other normal selling, general, and administrative expenses. As of June 30th, 2024, we had $7.9 million in cash, cash equivalents, and marketable securities. We expect that existing cash and cash equivalents will be sufficient to fund operations into December 2024. That concludes our review of our financial statements. I'd like to hand the call back over to Milton for closing remarks.

Thank you, Garth. We expect the back half of the year will accelerate the momentum that we've seen through the first half. We're proud of the hard work we've put in by our clinical investigators across multiple trial sites, and we appreciate the continued support we receive from our dedicated shareholders. We have multiple exciting near-term milestones we expect to achieve, including top-line data from our 201 trial of Rizzo and Parkinson's disease, and anticipate the opening of clinical development of IKT-01-PRO and TAH that will further differentiate a pipeline of neurological and cardiopulmonary acids.

I'd like to now open the call to questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for questions. Our first question comes from Jason McCarthy with the Maxim Group. Please proceed with your question.

Good morning, Milton. Thank you for taking the question. As far as the RISVO Phase 2 study, in the last update back in June, around 70 people had completed the 12 weeks. You completed enrollment. Obviously, the data is coming in November. And you had mentioned starting up the 12-month OLE. Is there going to be some lag time between when patients complete this trial and when they have the option to move to the OLE? And is there the potential that they might opt for symptomatic treatment during that time?

Well, so the answer is that's already been occurring. I believe currently 89 people are completed in the trial. That leaves 31 total who are still on medication. And the last person who left the trial in late September. Because it's an ongoing trial, we've had people that have completed treatment of 12 weeks as long as 12, nine months ago. I believe it's the oldest patient who entered the trial. And while we have been trying to get the OLE studied, running in a full force, we've done all of the preparative work. We've completed now all the regulatory steps, as well as the ethics review board steps. We've had some financial constraints, but I think those are mostly been worked out now. And I hope the OLE will be formally launched in the coming couple of months. At least that's our current thinking. And so, Yes, it has a potential impact on patients, some of whom, because of the progression of their disease, following 12 weeks of this regutinib treatment, who may go on to symptomatic meds. And we are tracking the number of people who've done that. So far, it's been a small group. The patient experience, at least what we hear anecdotally from the sites, has been extremely positive on the drug. That doesn't necessarily mean anything. It just means the drug didn't make them feel badly, so that's a good sign. But we don't draw any conclusions from that kind of anecdotal commentary. And we'll be communicating this month with all of the sites about the timelines we anticipate for launching the 12-month study with full force. And some of the people in the trial may actually be on symptomatic meds. As you know, Jason, most of these extension studies are there to develop and begin to collect a safety database. And so in our view, we also wanted to have as much measurement in the absence of symptomatic meds as we can. At least at the last measurement point we had about a week and a half ago, very few people had gone on symptomatic meds given the number of people in the trial. And so if this thing launches in the timeframe, we're now thinking we should get mostly people who have not started symptomatic meds and some who have, which will help us learn whether people on symptomatic medications tolerate the addition of risodetanib well. And what additional benefit that it might have can't be gleaned because there's no control group. But nonetheless, we'll be able to see if there's any effect one way or another on the benefit of symptomatic therapy itself. So it could be ultimately informative.

Thank you. And so when you think about the phase three program, would that entail two studies? And would you be looking to go out beyond three months to 12 to 18 months? targeting, avoidance of use of symptomatic treatments? Is that the goal?

Right. So, you know, Parkinson's disease, so even though we're evaluating untreated Parkinson's disease, that's not a subgroup of patients. We're evaluating untreated Parkinson's disease because we believe risvodetinib is monotherapy and disease-modifying. although we have not proven yet that it's disease-modifying of the disease. That's what all of our preclinical and animal model data informs us about. So we want to evaluate rizodetanib in Parkinson's without any confounding components of other symptomatic therapies. We've developed patient recruitment tools that are just, in our view, spectacular. We don't think we'll have any trouble recruiting the patient population. We'll need 300 or so patients, rough guess, for a pair of phase three studies. And it would have to be a pair of studies unless some miracle happens because you must do that for such a large market opportunity. There's just too many patients out there. It's not a rare disease or an open disease. So there will be two phase three trials. They will be dosed for up to 12 months. Historically, people in every other trial that has been run in the space, medications that were intended to alter the course of disease have failed. with virtually no exceptions. The one possible exception was a GLP-1-related molecule last year that was reported earlier this year, the early part of this year, that seemed to slow motor dysfunction in the absence of anything else, but people were on symptomatic therapy even in that trial. So in our case, we're going to be enrolling a significant number of people. That'll be a 12-month OC trial. There'll be two trials running at the same time. It'll be global.

Got it. And you said you had or were near alignment with FDA on the phase to be for PAH. Can you provide us any details on the size and scope of that study, or is that forthcoming still?

No, I think it's probably okay to give you just a rough idea. So we initially imagined this to have an initial safety run-in so that we could confirm that with ProDrug at the appropriate doses in a properly enrolled trial where we're really looking carefully at the patient enrollment and the degree of disability the individual patients have, that we could have people in the trial that have a real unmet medical need and could actually do all the tasks that the trial would require and run a phase three right on the back end. But as we thought through the process, it makes more sense to have a de-risking trial first So that's formally a phase 2B. It's roughly 100 patients of two doses and a placebo, placebo controlled. We're going to do a 12-week, or at least we plan to do a 12-week safety review when half the patients have been enrolled and completed 12 weeks of dosing. And then we'll do a futility analysis when half the people have completed 24 weeks, which is the length of measurement duration. So the trial itself is designed to look carefully at safety to make sure that with a fresh view and a fresh approach and pro-drug that has the potential to really change the tolerability and safety profile of imatinib itself, that we'll be able to overcome the very unfortunate side effect profile that disqualified imatinib from approval 15 years ago. And at that point, it's a rare disease. If we see the efficacy that was previously proven for imatinib combined with safety, that could be adequate in principle to seek approval on a conditional basis to support going into phase three if approval cannot be sought on a basis depending on the overall benefit and safety profile we observe, et cetera. So the IND has been filed. Of course, this trial design has already been reviewed by the FDA, and that wasn't part of their concerns in terms of designing a trial and bringing this drug forward again. And so we're pretty confident that the IND is going to clear naturally. Of course, ProDrug has been in people. It was reviewed by a cancer division. We've already had pre-NDA discussions in one of the cancer divisions. So it seems unlikely that there would be any issues that arise in the review by the cardiology division about letting the study go forward.

Great. Thank you, Milton. Mm-hmm. Our next question comes from Ed White with HC Wainwright. Please proceed with your question.

Good morning. Thanks for taking my question. So just wanted to get a little bit more clarification on RSFO. Milton, what do you want to see from the top line data that you're going to get in November to proceed to the phase three? And then just can you clarify, is it 300 patients for both trials, so 150 each, or is it 300 patients per trial that you're thinking of for the phase three?

Well, let's deal with the second question first. It's somewhere between, I believe, I'm just taking this off the top of my head because we're still refining the trial design. It's about 300 to 300, between 300 and 400 patients to cover both trials. That depends on the effect size that we'll ultimately shoot for in the trial. We need to see the unblinded data in November to finalize our view of effect size. But we believe between 300 and 400 should cover the needs for both trials, at least at current thinking. In terms of what we might expect to see in November, when the trial was originally established, no one would have thought that 12 weeks of treatment would be adequate to see a very substantial impact on the course of a patient's disease. We worked very hard with the design of the 201 trial to make sure that we have a fairly uniform population of people enrolled who have not taken symptomatic medications, who have very significant disability measured by a set of Parkinson's disease assessments, the same type we're using in our secondary endpoints, and try to have that group to be roughly the same level of disability across most people. We've previously presented at Parkinson's disease-related meetings that our baseline scores were very substantial. Part 3s were in the mid-20s. Part 2 scores of the UPDRS were in the mid-10s. That's a very substantial disability, and that would allow us to see whether 12 weeks of treatment could show any effect on motor or non-motor features of disease by a variety of measures, including measures in the gastrointestinal tract, one of the primary organs of disease. As the data has evolved, we've remained very encouraged as we see what the measurements in patients have been like. Of course, it's blinded data. We don't know what that means. We've done the same with biomarker measurements. which have further made us feel encouraged by what could be coming. Again, that's just hypothetical stuff. You don't know what you're going to see until it's unblinded. But that combination of seeing trends across one or more assessments coupled with the potential of seeing an effect on the underlying protein pathology itself through our biomarker studies inside and outside of the central nervous system, I think will give us a very robust support, even though it's only 12 weeks, has the potential of giving us very robust support to go directly into Phase 3 without further studies. The open-label extension study, which we hope to be fully launched perhaps in a couple of months' more time because of the aspects of getting the whole thing fully functional across 32 sites in the U.S., will remain an important aspect of this. as we continue to gain safety and patient-safe tolerability experience at different doses, now using our tablet dosage form, which we made public about a year ago, which has a better delivery profile compared to the current profile using the 201 trial. And so we'll be very well positioned for phase three, hoping that between the FDA meeting and our other efforts, sometime in the latter half of next year that those trials could launch, which would just be, with the assumption that you'd do something by the fourth quarter of next year, just hypothetically speaking, that's roughly four years from ground zero. It's a pretty fast development program and a very large market opportunity. I think that just reflects the smoothness with which risvodetamib has continued to show a good patient safety and tolerability profile. And in November, we'll learn whether we also see the indication that it's having an impact on disease. Even if that impact is small, as one might expect for a 12-week dosing study, seeing anything at all in 12 weeks would be very surprising. But we're encouraged by what we're seeing emerging in the trial overall.

Okay, thanks, Milton.

And then just on 001 Pro, what are your expectations for, you know, IND clearance? Are there any gating factors to start the trial or, you know, for locating sites, manufacturing of drug, any gating factors at all that could, you know, delay the start of that trial? And, you know, when do you expect to see it start?

So the patient population for pulmonary arterial hypertension is a really delicate patient population. They're literally dying as they're being enrolled. It's a rapidly fatal disease. And as a consequence, you really have to be mindful of all of those factors. In addition, because these patients are dying and we're working with a medication that's already proven to be effective, once you start dosing them, you have to be able to roll every patient into an extension study for as long as it takes to get to approval. So you're never losing a patient along that path. That creates a lot of infrastructure challenges to build up. We think it's going to take approximately 9 to 12 months to gear up the whole trial, rough guess. as we start to think through this process and put in the elements of the execution of that trial in place. And we know all the sites. Fortunately, their recent study of the approved drug Cetatriceps, which was developed by Acceleron and then approved by Merck following their acquisition of Acceleron in 2021, gives us a lot of insight into sites worldwide that should be used for the study, that have a good flow of patients, the right patient characteristics. And one of the big advantages we have is that just as we've done in Parkinson's disease, where rather than have an internal medical team that has some experience in a disease area, we build a relationship with the leading clinical and scientific investigators worldwide. And they work intimately in company in Parkinson's disease. We've now done the same thing in pulmonary arterial hypertension with the two leading investigators worldwide, very closely associated with the company now. for clinical studies that allows us to also pick sites that are well understood, led by proper clinical investigators who both can do trial work and understand the patient population well. And there are a whole bunch of other features that in the future we'll have an opportunity to discuss that we think will also make the trial run efficiently. Of course, the biggest factor is capital. You know, we have reported yesterday, we have about nine, eight million in cash at the moment. not adequate to do trials of this kind, obviously. And that's another aspect that we'll have to improve on if we're going to execute this trial at all. But we believe that as we work towards building up the trial aspects, we'll see opportunities to have the trial properly funded and support that work. Because one of the real advantages, what's gotten us excited about this opportunity, having created the ProDrug, is that imatinib has already been shown to work. We have a number of data points both in the preclinical toxicology setting as well as some information from the clinical studies we've done with PRO that supports our belief that PRO drug may be a better tolerated form of imatinib. We understand the dosing from the bioequivalent studies we've previously discussed in settings like this and in our press releases, et cetera, and that combination gives you a high chance, a high probability you're going to be successful overall and overcome the safety concerns that existed with the amount of therapy 15 years ago. And so when all those pieces come together, the trial will find its natural home and a natural source of capital to fund it.

Okay, Milton, thank you for taking my questions. You're welcome. We've reached the end of the question and answer session.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.