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spk06: Greetings and welcome to the Mariners Pharmaceuticals second quarter 2021 business update call. At this time, all participants on 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 will need to press star 1 on your telephone. If you require any further assistance, please press star 0. And now it is my pleasure to introduce your host, Sasha Dimoni Ellis, Vice President of Corporate Affairs and Investor Relations. You may begin, Ms. DeMonellis.
spk02: Thank you. With me from Marinus are Dr. Scott Bronstein, Chief Executive Officer, Dr. Joe Houlihan, Chief Medical Officer, Steve Sandsill, Chief Financial Officer, and Kimberly McCormick, Senior Vice President of Regulatory Affairs. Also on the call is Christy Schaefer, Chief Commercial Officer, who will be available during Q&A. Before we begin, I would like to remind everyone that some of the statements made today are forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance, or achievements to differ significantly from those expressed or implied by such forward-looking statements. These risks and uncertainties and risks associated with our business are described in the company's report filed with the Securities and Exchange Commission, including Form 10-K, 10-Q, and 8-K. I will now turn the call over to our CEO, Scott Braunstein. Scott?
spk12: Thank you, Sasha, and welcome to our second quarter 2021 business and financial update. Building on our busy first quarter, we've continued to make significant progress across our oral and IV clinical programs. Just last week, we made two important announcements. First, we entered into an exclusive collaboration with Orion Corporation for European commercialization of Ganaxalone in CDKL5 deficiency disorder, tuberous sclerosis complex, and refractory status epilepticus. We believe that the Orion team will be an excellent strategic partner for the Ganaxalone franchise. We also announced that we have submitted a new drug application to the FDA for Ganaxalone for the treatment of seizures associated with CDD. Within 60 days of the submission, we expect to receive a filing notification letter from the FDA. That communication should occur prior to the end of the third quarter. Not only are these two events meaningful accomplishments, but they represent important milestones in the evolution of our business. The European collaboration provides significant capital to continue advancing the development of Ganax Loan across Europe, and the FDA acceptance of the NDA for filing provides an opportunity to draw on the Oak Tree Credit facility, extending our cash runway and allowing us to continue to expand our pre-commercial activities. In addition, the organization is executing on a number of regulatory milestones. During Q2, we submitted our Phase III TSC trial design to the FDA, and the agency indicated that they were in overall alignment with our clinical development plan. I will leave the details to Kim. We continue to prepare for the TSC Phase III trial that we have named Trust TSC with an expected first patient enrolled in the fourth quarter of this year. I would like to thank the TSC Alliance whose support has been instrumental in driving this program forward. Let me move to an important update for the IV franchise. We received a notice of allowance for the patent application for the RSC IV dosing and method of treatment from the US Patent and Trademark Office. We anticipate the patent to be formally granted later in the third quarter. When granted, we expect the patent to run through 2040. The patent application highlights the dosing regimen and method of treatment for RFC and aligns with the phase three trial. We believe this patent has the potential to create meaningful shareholder value following the completion of our phase three US registrational study, the RAISE trial. The organization is continuing their work on other key initiatives. Plans for the CDD launch are progressing. we look towards an FDA action date on the Ganaxalone NDA by the end of the first quarter of 2022. As a reminder, FDA approval would result in a three-month period for DEA scheduling, followed by a mid-2022 launch. As mentioned, we have signed a European collaboration agreement with Finland-based Orion Corporation. After a diligent and competitive process, we believe that Orion checked all the boxes that we were looking for. A strong presence across Western Europe in rare neurological disorders, a desire to be a leader in orphan diseases and epilepsy, significant expertise in the hospital and the ICU, as well as an extensive European commercial infrastructure. Importantly, Orion offers a strong cultural fit to our organization, and we look forward to working together towards future milestones. Orion has been granted exclusive rights to commercialize the oral and IV formulations of Ganaxalone in the European Economic Area, the UK, and Switzerland, where they will be responsible for all reimbursement and pricing approvals. We've received approximately $30 million as an upfront payment and are eligible to achieve up to approximately $115 million in R&D reimbursement, development and commercialization payments, as well as tiered royalties on future net sales that could reach the high teens for the oral programs and low 20s for the IV program. We believe that this deal structure strikes the right balance on upfront payments and royalties, allowing Marinus and our shareholders to benefit from the long-term success of the Binaxalone franchise. Importantly, this agreement supports a mid-22 European launch of oral Ganaxalone for CDD and underscores our commitment to the CDD patient community. We are on track to file a European marketing authorization application for Ganaxalone in CDD by the end of Q3 2021. In the near term, we see this collaboration having the potential to provide an important new alternative for patients and families living with CDD throughout Europe. Both organizations are committed to improving the availability of Ganaxolone to refractory CDD patients, including the desire to support a geographically broader expanded access program. In keeping with our commitment to the CDD patient community, we plan to support a collaborative observational study in CDD sponsored by the Lulu Foundation, a nonprofit organization dedicated to advancing research to better the understanding and development of therapeutics for CDD. This observational study is designed to provide a high-quality natural history database on a variety of clinical outcomes to better describe disease severity, unmet need, and inform future trials. We are excited to be a part of this research consortium and are committed to contributing critically necessary resources to the CDD community. Moving to our TSC program, we remain on track to announce top line data from the open label phase two trial in the third quarter. As I noted earlier, we believe that we have reached overall alignment with the FDA on an appropriate regulatory path. We are also expecting to obtain scientific advice from the EMA and now expect that meeting to occur in the first quarter of 2022. We continue planning for phase three site initiations to begin in the third quarter with the first patient expected to be enrolled in the fourth quarter of 2021. We are currently targeting initial sites in the U.S. and will add EU sites following our regulatory interaction with the EMA. We plan on providing enrollment timelines for a trust TFC trial later this year. Turning to our IV programs, Due to COVID-19 priorities in several major academic medical centers participating in the RAISE trial, we've experienced site initiation and enrollment delays. We believe these delays are primarily caused by staff turnover due to COVID-19 fatigue and the need for clinical sites to devote significant resources to patients with COVID-19. These challenges most acutely impacted second quarter site enrollment. Fortunately, our clinical operations team believes that the majority of these issues are now behind us. Consequently, we expect to have the vast majority of our sites open by the end of third quarter 2021 with our top line rate trial data readout in the second half of 2022. We've already seen July site initiation numbers improving, giving us confidence in this timeline. We are actively engaged with our sites and will provide additional updates during our October R&D day. As a reminder, planning continues for the RAISE-2 trial to support European registration of IV Ganaxalone in RSE. This trial is on track to launch in the first half of 2022. The Phase II Reset Trial of Adjunctive Ganaxalone in Established Natus Epilepticus, or ESC, is planned to begin U.S. enrollment in the first half of next year. Before turning the call over to Kim, I wanted to share our thinking on Lennox-Gastaut Syndrome, or LGS. Of note, six CDD patients with an LGS phenotype were treated in the Marigold study. We have submitted that data for presentation at the annual American Epilepsy Society meeting. We have also reviewed the company's prior Phase II LGS study and noted that the majority of patients did not achieve an adequate serum blood concentration of Ganaxalone. We believe that our current TID dosing regimen, including an appropriate titration schedule, should lead to higher blood concentrations that were seen in that earlier study similar to those observed in the Marigold study. That said, the LGS development landscape is highly competitive, and patients and families suffering from LGS are looking for the best possible anti-epileptic therapy. Our team is committed to the right investment in LGS and that our clinical work should be closely tied to Marinus' next-generation oral program. We believe that these next-generation formulations, or novel pro-drugs, will deliver a solid drug candidate with improved bioavailability, more reliable steady-state plasma concentrations, and create the potential for incremental dose titration and higher efficacy. Further on the new formulation front, we continue to evaluate several platform technologies for oral and iVegan Absalom. We plan to evaluate these new formulations in Phase I studies in 2022 and ultimately additional refractory epilepsy indications. We expect to advance at least one of these formulations into the clinic next year and currently have reason to believe that it is more likely that we will advance two formulations in 2022. We are enthusiastic that our investments are the first step to a second-generation platform. More to come on our reformulations during Marinus' R&D day. I also want to welcome Dr. Santiago Arroyo to the Board of Directors. Dr. Arroyo brings a distinguished career in academic neurology and clinical research and development, including his leadership in the neurology department at the John Hopkins Hospital. In addition, he has extensive experience in epilepsy drug development, contributing to numerous new therapeutic alternatives. With that, I would like to now turn the call over to Senior Vice President of Regulatory Affairs, Kim McCormick, for an update on our regulatory interactions. Kim?
spk04: Thank you, Scott. We are pleased to have recently announced the submission of an NDA to the FDA for the treatment of seizures associated with CBD. Within 60 days of the submission, the FDA will notify Marinus whether the NDA is accepted for filing and is expected to notify us if prior review designation is granted during that 60-day period. The NDA also includes the request for a rare pediatric disease priority review voucher, or PRV. If a PRV is granted, it may be used to obtain prior review for a subsequent human drug or biologic application, or we could sell or transfer the PRV to a third party. The team is actively preparing for a potential advisor committee meeting. FDA has indicated they may let Marinus know if they plan to hold an advisory committee meeting as early as at the end of the 60-day filing period. If priority review is granted, the Purdue Action Date would be targeted for March 2022. If FDA approves the GNAX on NDA, DEA scheduling would then be expected within 90 days of the approval. Consistent with our data set, our recommendation in the NDA, as well as other benchmarks, we anticipate a Schedule IV designation. We look forward to working with the FDA and its review process, and remain focused in preparing for an anticipated launch. We've had several questions related to our M2 metabolite of Pinaxilone. As a reminder, Marinus identified the M2 metabolite in 2019, and we have had discussions with the FDA on how best to characterize it. As part of the pre-NDA interactions with FDA, agreement was reached on what was required in the NDA submission with respect to the metabolite. We recently completed an activity assay for the M2 metabolite and have included the results in the NDA submission as agreed with the FDA. We are planning to conduct an in-vivo micronuclear test with common analysis and anticipate that this testing will be complete in the first quarter of 2022. We expect that if any additional studies are required, such as a full toxicology package on the M2 metabolite, they can be conducted post-approval. As Scott mentioned, we are dedicated to advancing binoculins for CDD in markets outside the U.S. and remain on track to file a marketing authorization application with the European Medicines Agency by the end of the third quarter. We are pleased to share that we expect the EMA to grant accelerated assessment of Ginoxone for the treatment of seizures associated with CDD. If granted, accelerated assessment will reduce the target review time to 150 days from the standard 210. This could mean we could receive a CHMP recommendation by the second quarter of 2022. Applications are eligible for accelerated assessment if the CHMP determines that the product is of major interest for public health, particularly from the point of view of therapeutic innovation. With regard to THC, the update indicated overall alignment on our THC clinical development plan as part of the written responses to our request for a Type B meeting to review our proposed Phase III trial. Although it will be a matter of review, A single pivotal phase three study could be sufficient to support the approval of Ganaxilone and its indication following an approval of the CDD-NDA. We believe this paradigm of a single pivotal trial would be applicable for other rare orphan indications that we would pursue with oral Ganaxilone. In addition, a scientific advice meeting with EMA on the TSC program is targeted for the first quarter of 2022. EU enrollment in a phase three trial is likely to begin following that meeting. As a reminder, we have submitted orphan drug designation requests to FDA and EMA. We are expecting to receive responses by the end of the third quarter. Turning to our trial and established status epilepticus, or ESE, I'm pleased to share that we reached overall alignment with the FDA on the design for our ESE RESET trial. Additionally, we have recently received notification that our IND to support the RESET trial may proceed, and we continue to expect to begin U.S. enrollment in the first half of 2022. There will be further detail from Joe on this. Now, I would like to turn the call over to our Chief Medical Officer, Dr. Joe Houlihan. Joe?
spk10: Thank you, Kim, and good morning, everyone. As you've heard, the first half of this year has been extremely productive, putting us on course for a busy next 12 months and beyond. I'd like to start by highlighting progress on our IV franchise. In the RAISE trial, as Scott mentioned, We expect to have the vast majority of sites open by the end of the third quarter. Although top line data is now expected a little later than originally planned. Rates of screening at study sites are high with only those patients appropriate for the study being enrolled. That is those who meet protocol requirements. We believe we have the right study design and carefully considered response rates in the control arm as I detailed last quarter. Our clinical team is driving outreach to study centers and has expressed confidence in the outlook for site initiations and patient enrollment over the next few months. Our clinical operations and medical teams continue to have strong interactions with our sites, including regularly scheduled training, case studies, and interactive educational sessions. The RSC Pivotal Trial for European Registration, RAISE 2, remains on target for launch in the first half of 2022. As I discussed on the call last quarter, the RAISE-2 trial differs from the RAISE trial in the U.S. in that, most notably, Ginexalone can be initiated earlier in the course of RSE in RAISE-2. If successful, this study will provide complementary data to the RAISE trial in the U.S., such that RAISE-2 could not only serve as a pivotal registration trial in Europe, but it also may have an important clinical implication for the global markets. Since one of our goals is establishing leadership in the treatment of status epilepticus, we were pleased to hear that our approach to studying RSE could potentially influence the next version of EMA epilepsy treatment guidelines. As Kim mentioned, we gained alignment from the FDA and plan to initiate a Phase II trial of adjuncted danaxilone in established status epilepticus. The RESET trial, which stands for Researching Established Status Epilepticus Treatment, is expected to begin U.S. enrollment in the first quarter of 2022 after we've completed the process of exception from informed consent. ESE is earlier than RSE in the treatment continuum of status epilepticus, and it's defined as status continues if first-line treatment with benzodiazepines fails. The reset trial will examine a shorter dosing regimen in which Ganaxolone will be initiated in conjunction with the initial second-line AED. The study will specifically target patients with convulsive rather than non-convulsive status epilepticus enrolled from emergency departments. Because patients who qualify for the RESET trial have a type of status distinct from those who would enter the RAISE trial, we can consider the same sites for our established status trial without compromising enrollment in the RAISE trial. In the RESET trial, Ginexalone is intended to act as an adjuvant to the initial second-line standard of care AED. The established status epilepticus treatment trial, known as ESET, showed that response rates to standard of care AEDs are less than 50% within the first hour. We believe that Canaxalone has the potential to increase response rates, including reducing the time to response and increasing the durability of effect compared with standard of care AEDs alone. Our goal in this study is to find an effective, safe, and well-tolerated dosing regimen for Canaxalone and ESE. The trial utilizes a novel sequential design to assess the safety and effectiveness of several doses and infusion durations of Ganaxolone with the optimal dose regimen progressing to a double-blind phase two study versus placebo. In addition, we continue to field requests from investigators for IV Ganaxolone for patients with super refractory status epilepticus under emergency investigational new drug applications. We're optimistic that an additional case report will be presented at an upcoming medical meeting. Now I'd like to provide more color on our oral programs. As Scott and Kim discussed, we recently submitted an NDA for CDD. We're diligently focused on advancing Ginexilin's clinical development for patients suffering from CDD, and this submission is a very important milestone in those efforts. The NDA is supported by data from the Phase III Marigold Trial, a double-blind, placebo-controlled trial that enrolled 101 patients. Those treated with Ganaxilone showed a 30.7% median reduction in 28-day major motor seizure frequency, compared to a 6.9% reduction for those receiving placebo, achieving the trial's primary endpoint with a p-value of 0.0036. We plan to submit a series of abstracts for the December AES meeting, including the one-year open-label extension data from the Marigold study. So far, with preliminary data on 48 patients who reached one year of open-label treatment, we're seeing a median percent reduction from baseline of 49.6%. We continue to work with several centers across the U.S. who have shown interest in the CDD expanded access program. and we're committed to making it actionable and available to patients prior to a potential U.S. approval through this program. We're also committed to identifying opportunities throughout the rest of the world to help improve the lives of more patients, including through additional collaborations and compassionate use programs. With regard to TSC, we're expecting to present the top-line data from the patients who participated in our Phase II open-label trial, the CALM study, in the third quarter. This trial is evaluating the effectiveness, safety, and tolerability of adjunctive canaxalone treatment in patients with TSC. It consists of a four-week baseline period followed by a 12-week treatment period and a 24-week extension. We're expecting to initiate a global phase three double-blind placebo-controlled trial in TSC later this year. which will enroll approximately 160 patients who've had inadequate seizure control and have been treated with at least two prior AEDs. We expect that 50% of our patients will have been treated with the most recently approved AED for TSC, Epidiolex. Unlike the Epidiolex TSC study, our trial will allow enrollment of patients taking a full range of concomitant medications. We expect to enroll the first patient during the fourth quarter of 2021. We're also reviewing our clinical development options for Lennox-Gastaut syndrome, which we believe would complement our work in other pediatric epilepsies, as we've had several patients in our CDD and TSC studies who carried the diagnosis of LGS. Rather than representing a clinical phenotype due to a single genetic mutation, LGS is a clinical syndrome that can have several underlying etiologies. Since LGS seizure types are much like those occurring in CDD, we expect that Ganaxolone would be a good candidate for development in LGS regardless of the tediology. Our plans are to pursue an LGS trial with one of our new formulations to provide a greater and more consistent exposure to Ganaxolone. As always, in closing, I would like to thank the patients, families, medical professionals, and advocacy groups who've been so supportive of our efforts. Now, I would like to turn the call over to our CFO, Steve Fanstiel, for a financial update.
spk07: Thank you, Joe. I am pleased to be able to share our financial results for the first half of the year. For the second quarter of 2021, we recognized $1.9 million and $3.7 million in federal BARDA contract revenues for the three and six months ended June 30, 2021, respectively. As the BARDA contract was signed in September 2020, There are no revenues associated with this in the corresponding periods from the prior year. Research and development expenses increased to $18.6 million and $37.2 million for the three and six months ended June 30, 2021, respectively, as compared to $11.8 million and $26.8 million for the same period in the prior year. The change was due primarily to startup of the RSE Phase III trial, regulatory activities associated with the CDD submission, and increased R&D headcount. General and administrative expenses increased to $6.8 million and $17.2 million for the three and six months ended June 30, 2021, respectively, as compared to $4.1 million and $8 million for the same period in the prior year. The primary drivers of the change were increased support for scale-up of the company's operations as well as preparation for commercialization. The company reported net losses of $23.8 million and $51 million for the three and six months ended June 30, 2021, respectively, as compared to net losses of $15.7 million and $34.3 million for the same period in the prior year. These totals include non-cash stock-based compensation expense of $3 million and $8 million for the three and six months ended June 30, 2021, respectively, as compared to 1.8 million and 3.7 million for the same periods in the prior year. Cash used in operating activities increased to 23 million and 39.1 million for the three and six months ended June 30th, 2021, respectively, as compared to cash used in operating activities of 16 million and 30 million for the same periods in the prior year. As of June 30th, 2021, we had cash and cash equivalents of 112.5 million We believe this balance, combined with the net upfront proceeds of the recently signed European collaboration with Orion, is sufficient to fund our operations for at least 12 months while maintaining the minimum cash balance required under the debt facility. Additionally, as Scott mentioned, upon FDA acceptance for filing of the NDA, we have the opportunity to draw an additional $30 million of financing under our Oak Tree facilities. we have further opportunities to significantly strengthen our balance sheet upon an FDA approval, including a second $30 million tranche of funding from Oaktree, as well as the opportunity to monetize the PRV if awarded. For the fiscal year 2021, our gap operating expense estimate remains unchanged in the range of $113 million to $118 million, which includes approximately $16 million of non-cash stock-based compensation. Separately, for the fiscal year 2021, We are adjusting our guidance for BARDA revenues to be in a range of $7 million to $10 million compared to our prior guidance of $9 million to $12 million, which reflects updated timing of the contract activities. The total expected value of the BARDA contract revenue remains unchanged at $21 million. Now, I'll turn the call back to Scott, who will provide concluding remarks. Thanks, Steve.
spk12: It has been a highly productive first half of 2021. None of this would have been possible without the hard work of our dedicated Marinus employees and the support of our advocacy partners. We look forward to the exciting developments over the coming months, and we want to thank our shareholders for their support and encouragement. Operator, can you now open the call to questions?
spk06: Yes. Ladies and gentlemen, at this time, if you would like to ask an audio question, press star, then the number one. Once again, that is Star Vending Number 1 on your audio keypad, and what's your second question? We'll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Joseph Tomei with Cohen & Company.
spk14: Heather, good morning. Thank you for taking our questions and congratulations on the progress. Maybe just a first one on the new formulations. Because the CBD indication may potentially be approved with sort of the first generation and you'll already be in the clinic with TSC, how are you thinking about it? Is it possible to bridge, I guess, the new formulation back to these initial indications or will the new formulation essentially just be for kind of the next wave of epilepsy indications? And then second, maybe just a point of clarification, the in vivo nuclease activity assay that was mentioned in the prepared remark, is this necessary ahead of a decision on CDB-MDA?
spk12: Thanks, Joe. Good morning. And let me just jump and take the second question. We've had good interactions with the agency over the plan on the M2, and we will very likely provide them the in vivo micronuclease test, but not necessary at the time of filing. So we'll get that year end, and we'll be happy to supplement it should the FDA require it. And we don't see that as a major amendment. We've had that discussion. It'll be a relatively brief report. On the new formulation work, it's a step-by-step process. I think first and foremost, we're really excited where we are today. We've seen some early preclinical data from at least two formulations that are showing substantially higher bioavailability than Ganaxolone. And we understand that we're going to start in humans with these new formulations. We're going to think about how to really maximize both peak and trough and to achieve steady state concentrations. And certainly right now, our thinking is to bring this formulation first into a new indication. And how we're thinking about prior indications like CDD, I would say TBA. I mean, my general feeling, Joe, is that if we know that 10 or 20% of patients don't respond to canaxilin and CDD, there's an obvious opportunity to go back and restudy a new formulation in those patients. given that we really believe that blood levels are tied to the lack of success in those patients and that a new formulation with bioavailability would certainly increase the odds of success. I think there are some real practical challenges with that, Joe. You know, can we enroll patients in a second CDD study? So I would say on a CDD front, TBA, we certainly are thinking about the opportunity and new indications first and foremost. and we're giving a lot of thought to TSC as well at this time. Most importantly, as I mentioned, I'm really excited about where we are and the opportunity to have several shots on goal next year. And I think we have a very good understanding from the Marigold data of exactly what we'd like to achieve with the new formulation. So I'll stop there. Thanks for the question, Joe. And, Operator, why don't we go to the next question?
spk06: Next question comes from the line of Jim Lee with Truist Securities.
spk11: Hi, thanks for the question. For the RSC trial, where are you now on enrollment and what gives you the confidence that you can complete enrollment by year end? And will the start of recent trial in ESC be contingent on RACE trial enrollment completion? And I have a follow-up.
spk12: Thanks, June. All of our timelines on the RSE trial, the RAISE trial, are based on, are expected per patient per site on a monthly basis initiations. And we're expecting, we've been very transparent about this, we expect that our active sites will enroll somewhere between three to six patients per year. We have seen that early on in the trial, the sites that we expected to be high enrollment sites have really increased. Thus far, their enrollment curves have been in line with our per-site enrollment expectations, where we've really hit a snag, particularly in Q2, getting some of our key new sites up and enrolling. As I mentioned, we already feel much better about July. I talked to the clinical team last night, and we continue to be very enthusiastic about new sites getting open in August and September. And then by the end of Q3, we expect to have the majority of our sites open. And then, of course, with the majority of those sites open, those key sites to enroll somewhere between three to four patients per year. And that is really how we align on our timing of second half 22. So the change is really driven by the site initiations, which had really started very nicely end of 21, early 22 through COVID. But as both Joe and I mentioned on the call, really took a turn for the worse in Q2 as personnel changes. We lost several site investigators and more than double-digit site coordinators. I think people change their life. They change their lifestyle. It caught us off guard, but those major academic centers are now really playing catch-up. Before we go to your second question, Joe, anything you want to add there? No, Scott. I think you covered it. Just a A quick follow-up, because I want to make sure we get to other questions.
spk11: Yes. So the question actually included, will the start of RISA trial be contingent upon completing the enrollment for RAISE?
spk12: Yeah, sorry about that. RAISE 2, which we've now got alignment with the European regulatory authorities, is a study that we're certainly going to talk to our partner, Orion, about. We see them as an important strategic partner. We have good alignment with the EMA on that study design. That being said, we'd love the opportunity to speak with Orion about the sites that we're using, CROs, sites that they've had experience in. And we've already, you know, requested through our alliance group to have those. discussions progress. And so my expectation is by the end of this quarter, we will have very strong alignment with Orion and have every intention of moving RAISE2 forward. RAISE2 will certainly start in some key European sites. We'll likely add potentially U.S. sites in 2022, but we're expecting RAISE-2 to be largely driven by European sites. We don't see that as a conflict at all. Remember, RAISE is in the U.S. For the ESE study, which, as we've talked about, will really initiate beginning in 2022, we certainly feel by the time that study is up and running from a U.S. perspective, Our U.S. RAISE trial will have our sites initiated and enrollment curves where they should be. And as Joe mentioned, we will have some overlap, just a handful of sites in the ESE study in the RESET trial. But remember, those patients are coming in through the emergency room, and we see them as very different patient populations. So there may be a chance of some overlap by Q2 of 22, but we certainly don't think that will impact RAISE timelines at all. And certainly there are going to be one or two sites that are just very active in the status epileptica space, and we feel fortunate that we may have the opportunity to work with them with more than one trial. I would not expect any sites from the RAISE trial to be active enrollers in RAISE2. That would create a potential overlap in terms of patients. So that's something we certainly would avoid between RAISE and RAISE2. Is that clear to you?
spk11: Yes, yes.
spk12: Thank you very much.
spk11: That's exactly what I wanted to understand. Thank you. Absolutely. Operator, next question?
spk06: Yes, your next question comes from Douglas Chow with HC Wainwright.
spk01: Hi, good morning. Thanks for taking the questions. Just maybe since you have Christy on the line, provide an update on the pre-commercialization activities for the company and what you've been able to accomplish so far and as you gear up ahead of the potential launch. Thank you.
spk12: Christy, why don't you jump right in? Christy, you want to jump right in? Did you hear that question? I think we're having some technical issues, Doug. So would you want me to take it? Let's see. You can take it. Sure. Christy's hired a great team. We now have leadership across sales, across marketing. a great commercial ops leader, and one of our first hires was on the reimbursement side. I'll add to that, I don't want to forget anyone, our clinical supply chain. So we have all the key leadership positions in place. We're actually now recruiting for our sales leadership for our two territories. Those leaders will be responsible for hiring our sales reps. our plan would be to make those offers early into 2022 contingent on approval. And from a sales team perspective, we're in great shape. Just on the flip side, on the medical science liaison side, we're almost complete with our MSLs across our five territories. Our MSLs are now interacting with KOLs. We're building those relationships and really understanding the who our key treaters are. What's been interesting, Doug, is we continue to do a little bit of market research on the side, and we are finding many physicians who have significant numbers of CDD patients in their practice, much more than I would have expected. So the commercial team is really working hard. We feel like we're in great shape. We'll have solid identification of the CDD patient base to a large degree. And we're really looking forward to the launch. We're certainly going to have a very busy AES. Our MSL team is working on a major program at AES. We'll have abstracts. We'll see if we're live. In fact, I talked to the team yesterday about, you know, preparing for a live meeting. I'm a little bit more suspicious come December. We're going to be inside in Chicago, given what's going on with Delta virus, but we will certainly be ready for all forms of communication if online education is necessary in that regard. So I couldn't be happier with where the commercial team is today. Christy's doing a great job. I'm not going to give her a lot of grief because her audio is down today. Christy, are you still out for the count?
spk05: I am not. I am now back on.
spk12: Okay. Well, I did my best rambling, Christy. I'm sorry about that. Anything you want to add to that, please do.
spk05: So, Doug, I'm sure that Scott hit on everything. I think some of the high-level things that we're really excited about first, we're really excited about the filing, obviously. But in anticipation of a priority review, we're looking at a mid-22 launch. And one of the largest pieces of work that we fully finalized is the integrated product launch strategy for all five functional departments. And then on the heels of that, we've now executed a full enterprise-wide launch readiness blueprint that will support all functional areas within Marinus as an organization to be on board with how this launch should look to the community. From a marketing perspective, we have our new marketing agency on board. We would like to have a very balanced approach with our caregiver and our physician strategy. I think I heard Scott talk just a little bit about the market research that we're doing. And it continues to inform how we will launch into CDKL5, but we continue to be really encouraged with the communication that we're getting back from our KOLs that will help support us from a one-on-one strategy from a marketing and sales perspective as we get out there and really have these interactions. And with that, our first-line leaders are being chosen for both access and sales. These access leads will be really important to get the insights from our payers early on so that we can continue with that strategy. So I hope that wasn't duplicative on what Scott gave you, but we're thrilled where we are. We're encouraged with having this filing in, and we are on track for next year.
spk01: Okay, great. Thank you so much.
spk06: Have a great day. Your next question comes from the line of Andrew Sy with Jefferies.
spk09: Great. Good morning and thanks for having me. I have another question on CDD. It's more like a housekeeping question. You mentioned in your prepared remarks how I guess your basic case expectation is a Schedule IV by the DEA. In general, can you kind of talk about why Schedule IV would be a non-issue as it relates to uptake? And I guess at what point does a stricter schedule, I guess, start to become an issue? And then for context, can you talk about what kinds of scheduling the other epilepsy drugs have received in the past, including some of the GABAs out there? Thanks.
spk12: Well, Andrew, thanks for the question. Kim, why don't you talk a little bit first about why you think we'll be scheduled for, and then we'll turn it over to Christy for the commercial side.
spk04: Sure, Scott. Thanks. So in regards to the scheduling, I think as required, we had to conduct some non-clinical and clinical abuse liability studies to support the NDA submission. And based on that data, and based on the fact we were comparable and saw similar effects as to Valium, That supported part of our recommendation to the FDA, as well as benchmarks, such as Brexanil. Brexanil has a Schedule IV similar to, and because of the mechanism of action similarity with Gynarfolone, that, in addition to our feasibility assessment data and some data we saw from our clinical studies that we conducted over the past several years, that led us to make the recommendation as part of our NDA submission to propose a Schedule IV. That's kind of how we landed on that recommendation. And now it'll go to the DEA for further endorsement.
spk12: Chris, do you want to talk about the commercial thinking about that?
spk05: Sure. To Kim's point, there's several analogs to help support the Schedule 4. We've anticipated this with our conversations with specialty pharmacy to understand what needs to be done from that perspective. And when we put drug into the channel, they're very well versed in Schedule 4 products. We don't anticipate any large hurdles. to get through from a specialty perspective. The only slight thing that we need to remember is that during that scheduling period, we do have 90 days from approval to when we actually can officially market drug, which means put drug into the channel. However, during that time, we're able to fully promote and have good communication with our physicians, understanding where the patients are, identification of the patients. Really, we have that 90-day period where we'll pause and wait for the scheduling to confirm that it will be a Schedule 4, which one then will update our PI and all necessary materials that are associated.
spk12: Great. Thank you. Do you want to remind folks about Epidiolex and their scheduling, just as a comparator?
spk04: Is that you, Scott? Yeah. Initially, it was Schedule 5. However, subsequently, the scheduling was removed from Epidavit, so it's currently not a scheduled drug. But I don't believe that the Schedule 4, I think, were fairly consistent with other anti-epileptic drugs, and I don't anticipate it will be a barrier. I know Christy can, as she just mentioned, I don't anticipate it being a barrier to our commercialization or uptake.
spk09: Makes sense. Thanks.
spk06: Our next question comes from the line of Mark Goodman with SBB, The Rink.
spk13: Yeah, as you've gotten into the research and really touching all the sites and everything and getting ready for this launch for CDB, can you just give us a sense of the patients you started to, I think it was Scott you mentioned that as you guys have done more work, you've found more patients. Give us a sense of the number of patients in the U.S., um that you thought you you had out there you know a year ago and how many you're thinking there are there now and how many you know you know where they are and you know just how much visibility we have on that and then second of all just on the orion just remind us um some of the products that orion has done a really good job with that impressed you um to make them a partner have they done epilepsy before is it really just you know kind of orphan thanks
spk12: Thanks, Mark. Let me take the second part on Orion, and then I'll flip it, and I'll give a little bit of background on patients, and then I'll flip it over to Christy. Orion, the really nice thing about the Orion team is that they have both neurology expertise, so one of their key products is in the area of Parkinson's disease, and second is they're in the ICU, and they have Presidex in Europe. They have recently branched into orphan products, and in fact, they have a leader on the commercial team who has tremendous experience with other companies, with global pharmaceutical and biotech companies on the rare orphan disease side of the commercial business. So they really had all three parts of the puzzle from our standpoint, and As a result, they've been really great to work with. We've had strong alignment in terms of how we think about approaching the European market, both from an access reimbursement data collection standpoint. So I think they've brought a lot of value to the table in our thinking already. And that's led to some discussions from members of Christie's team with some specific countries within Europe and how they're thinking about market access and reimbursement. So we already feel like we've had a nice jump in that regard, and we're very fortunate on the Orion side that they're bringing a lot of skill sets to the table. On the U.S. side of CDD, and by the way, we're already seeing a changing landscape in a good way in Europe around CDD. We just talked to a U.K. center that became a recent center of excellence, and they've gone from having two patients in our Phase III CDD trial to now 20 identified CDKL5 patients, and they believe that number is going to grow. So almost everything we talk about, I think, in the U.S., we're seeing that changing dynamic in Europe as well. On the U.S. side, quick and dirty, we believe about 100 kids are born in the U.S. every year with CDKL5. Almost all of them, given the severity of their illness, are going to be diagnosed within the first year of age or recommended for genetic testing. So there's a very high likelihood that that incidence number, we're capturing many of those patients. And as a reminder, our phase three data set and the largest global CDD data set, the average age of a patient is six years old, aligning with what's being done in the genetic testing world. And so we feel very confident, particularly that younger populations being identified, being referred to centers of excellence, And maybe I'll just stop there, Christy, and kind of turn the rest over to you.
spk05: Sure. So just as a quick reminder, there are eight CDD centers of excellence across the United States and 40 total really key epilepsy centers. We've continued to really, really focus on market research just to test our assumptions and findings. It's fun when I get to call Scott and say it's better than we thought, right? So we continue to have really deep KOL involvement that has a significant number of patients, excuse me, but what they're doing and what we're finding is they're working very closely with their key local pediatric neurologists and epileptologists to really best treat these patients. I think that COVID will give us an interesting perspective of how patients are being treated in the virtual environment, which is supportive of us. We will have a small sales team, so in order for us to get to these eight CDD centers and 40 overall large epilepsy centers, it will be much, much easier in how physicians are engaging with folks. So again, these patients are really concentrated in these large centers, potentially treated locally at some level as well, but we're getting really great feedback in where all of them are.
spk13: So in total in the U.S., do you think there are how many patients right now?
spk05: You know, it's really hard to say. I'll remind you that the ICD-10 code is only about, you know, 6 to 10 months old. Gosh, the time is, I think it was at the end of last summer. So we're not 100% sure, but we do believe it's in about 1 in 40,000. I'll remind you that we're just looking at the pediatric population right now. So really looking, you know, between 2,000 and 4,000 pediatric patients right now because we will not be looking at those adult, probably undiagnosed patients.
spk03: for for this time being thank you your next question comes to mind of alicia young what cancer is gerald hi uh good morning this is nina on for alicia uh thanks for taking our questions um we were wondering if you could just share more on the tsc phase three um proposed design and also for the top line update in the third quarter. Can you please share any details on what will be disclosed and how we should think about expectations? Thank you.
spk12: Good morning. Joe, why don't I turn the question over to you?
spk10: Sure. Yeah, the Phase III TSC study, it's a fairly standard design, very much like the CDD study. Patients have, in this case, they'll have a four-week baseline and then be treated for 16 weeks on an axonal placebo. Same titration schedule, four-week titration, 12 weeks of maintenance. And the endpoint is going to be the same endpoint as the percent reduction in major seizures. The seizure types are a little bit different here. The seizure types in TSC, most of the seizures are focal, which is not the case with CBD. So that's one thing we'll be interested in looking at in the phase two data when we see it. And again, it's 23, 22, 23 patients, single arm, open label, And so I think there are going to be a number of things we'll look at. We'll look at not just the magnitude of effect. Really, with that number of patients, there could be pretty wide confidence intervals around the effect we've seen, a lot of variability. So as long as within that variability we see a good chance for a response. And then response by seizure type. But the initial top-line results will be, you know, the first set of data, But we'll continue to explore the data and see if it has implications for the design of the Phase III. Yep, so does that answer your question, Nina?
spk03: Yeah, it does. Thank you.
spk12: Okay. Let me just add on to Joe. We certainly are going to be very keen on looking at response rates in young patients who are on Affinitor as well as the entire patient cohort that's previously on Epidiolex. So, you know, we're thinking about this Phase 3 as a refractory study, effectively a third-line study, and we want to make sure that we're seeing reasonable and real responses in those patients. That would be the only thing I'd add to Joe's commentary. And I'll add I'm really very happy we've done this Phase 2. We've learned a lot. We recently had an SAV board. We've gotten a lot of insights. If you go back and look at the two trial designs for both Novartis for the Affinitor study and the GW study, there are some differences in that study design. And I think we're trying to be extremely thoughtful about appropriate design and I'm thrilled to have Dr. Joe, our house epileptologist, Dr. Arroyo, who just joined our board with great epilepsy background. And so we'll be quite thoughtful if we need to make any tweaks to the study design, but certainly very happy that we're aligned with the agency and feel like we have a really nice paradigm going forward as well. I think it's really important to say if the agency and if we – move forward with CDD and the agency grants us approval. We now have a paradigm of a single study as a potential registration strategy across the board in some of these rare epilepsies. So that was very comforting. And again, you know, a lot of people ask us about our interactions with the FDA and Kim's done an awesome job, but you know, we continue to have very constructive dialogue. We're transparent, we're forward thinking with them and, uh, You know, in general, we've been really happy with their interactions with us. Operator, why don't we go to another question? We have time for one more.
spk06: Brian Scorny from Baird.
spk08: Hey, good morning, everyone. Thanks for fitting me in. I guess I was hoping to get a little more color on the second-generation formulations. I think I heard you say the word pro-drug in the prior remarks, so I was just wondering, are you looking at actual changes in chemical structure to the API or – you know, just sort of changes in acceptance that are more kind of standard formulations or, you know, maybe characterize that and also how we kind of think about that projecting to possible new chemical entity and new patents and also what, if any, sort of 505B2 pathway references can you utilize in the development of the novel formulations. Thanks.
spk12: Thanks, Brian. And we'll take one more question after you. I really appreciate the question. So we are pursuing both novel formulations from an excipient standpoint and prodrugs. There's been a little bit of work with prodrugs in the past. but we've made a much larger effort. We've made some fantastic progress. We've had, and we're certainly building an intellectual portfolio around that. We would expect, at least where we are today with the pro-drug, that it very well could take some additional preclinical work as we move to a final pro-drug formulation. So I would actually say I'm thinking today that our pro-drug technology will likely be a third-generation step in the process. We're hopeful that we could have a pro-drug in the clinic in 22. But as of today, the first program and very likely the second that we feel confident about is an excipient-based improved solubility set of formulations. And quite honestly, I think this is going to be – We have the opportunity to, in step one, improve bioavailability with TID dosing still being very much the first step. And I think our second step, where I'm really interested in utilizing the prodrug, would be in either BID or SR formulations that would really improve dosing, simplify dosing regimens for patients. We're going to work to that goal. It may be with an excipient-based formulation. I think we've already – I can also share with you we're building some early intellectual property around both of the formulation that we're moving into the clinic in 22. So I think right now all three programs – and we're working on a fourth program today – will have incrementally meaningful or has the potential for having incrementally meaningful intellectual property. But to your point, I think we're just planning that the pro-drug could take a bit longer to do all the necessary preclinical work if in fact we're able to pursue an NCE pathway. And right now that's my hope and expectation. There has been a lot of recent research changes to the way the FDA thinks about pro-drugs. We're very familiar with those recent decisions and FDA guidelines. And with that being said, I'm still quite enthusiastic that there is a potential path to NCE for us with what we're doing in the pro-drug space. Hope that was helpful.
spk06: Your next question will come from the line of Jay Olson with Oppenheimer.
spk00: Well, hey, congrats on all the progress, and thanks for taking our questions. Can you maybe talk about the prevalence of LGS in the U.S. and Europe, and what are some of the key unmet needs in that patient population, and what maybe some of the efficacy endpoints might look like in your Phase II trial? And then separately, it seems like Marinus would be eligible for a Rare Pediatric Disease Priority Review voucher, assuming you get approval next year in CDD. Can you just talk about your plans for that voucher? Thank you.
spk12: Joe, why don't we have Steve talk a little bit about the voucher, and then I'll flip it over to you for LGS.
spk10: Okay.
spk07: Yeah, good morning, Jay. Yes, so we would expect that as a part of the CDD approval from the FDA, we would receive a rare pediatric voucher. I think when we look at our pipeline and kind of the value to us of that, we would look at that more as something we would monetize and use to further strengthen the balance sheet. And that's something we think we could turn pretty quickly. So if we got approval early next year, we would probably quickly monetize that, strengthen the balance sheet, and use that to fund continued development. You know, when we look at kind of the value, there's a very good value out in the marketplace that's held pretty steady. So that's our thinking on the use of the pediatric voucher at this point.
spk10: So in terms of frequency of LGS, there are about 40,000 or 50,000 children and adults in the U.S. with Lennox-Gastaut syndrome. And the syndrome is a range of different seizure types, developmental disabilities, and a particular pattern on EEG called slow spike and wave. They have the same needs as a lot of other developmental epileptic encephalopathies. They require a lot of supportive care, sometimes institutional care. They're usually fairly significantly disabled. And like some of the other epileptic encephalopathies, they have drop seizures, which can cause injury. They have a range of behavioral problems. The unmet need in terms of seizure treatment, despite recent availability, I mean, there are several drugs approved for Lenox-Gesto. Unfortunately, there's still a considerable unmet need, and the majority of patients with Lenox-Gesto still have uncontrolled seizures. And so there's going to be a need there, and we think it could be a real complement to the other available therapies to have an actual available for those children and adults.
spk00: Great. Thank you for taking the questions.
spk12: Well, I think we're going to wrap, Operator. I want to thank everyone for jumping on the call this morning. I know it's a busy time in the earnings season, and thank you for all the questions. And I just want to finish how proud I am of the work that the team's doing. The regulatory team has had some great wins this quarter. Christy, as she mentioned, building her team and our clinical operations team, working through really difficult times out there. So I appreciate everyone's support and look forward to following up live.
spk06: have a good day everyone ladies and gentlemen thank you for participating in today's conference call you may now disconnect
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