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spk03: Marinus Pharmaceutical Second Quarter 2023 Financial Results and Business Update Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, again, press the star 1. And now, it is my pleasure to introduce you to your host, Sonia Wego, Senior Vice President, Investor Relations, Human Resources, and Corporate Affairs, You may now begin, Ms. Weigle.
spk01: Thank you and good morning. With me from Marinus are Dr. Scott Bronstein, Chairman and Chief Executive Officer, Christy Schaffer, Chief Commercial Officer, Dr. Joe Houlihan, Chief Medical Officer, and Steve Fanfield, Chief Financial Officer and Chief Operating Officer. Before we begin, I would like to remind everyone that some of the statements we are making 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 reports 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 Bronstein.
spk06: Thank you, Sonia, and welcome to our call. We've made strong progress this quarter on both the regulatory and commercial front, as well as advancing our oral and IV Ganaxolone clinical programs. positioning us well for the catalyst-rich year ahead. We are pleased to report Zetalme's second quarter sales of $4.2 million. The launch momentum has continued, and as a result, we are raising full-year 2023 Zetalme sales guidance to the range of $17 to $18.5 million. Christy Schaefer, our Chief Commercial Officer, will be reviewing some of the key initiatives for 2023 that we believe will support the continued long-term growth of the Zetalme franchise. Additionally, we see significant potential for Zitalmi following a successful outcome in seizures associated with tuberous sclerosis complex, an indication that would offer important commercial synergies. This will be one of the topics that we will be discussing in more detail during our Investor Day on September 19th. We are making meaningful progress expanding access to Ganaxalone for patients around the world. On July 31st, we announced that the European Commission approved our marketing authorization application for Zytalmy and CDKL5 deficiency disorder. This approval required a tremendous effort from the Mariners team to respond to the many technical and clinical questions raised by the EMA during the review process. To further support global access, we recently submitted the marketing authorization application in the UK. our ex-U.S. partnerships are a central part of our commitment to reach the global patient community. As previously reported, Marinus entered into an exclusive distribution agreement with Biologics in selected markets in the Middle East and Africa, and we hope to have Zotami available for patients in the MENA region in early 2024. In China, our partner Tenacia has made significant progress and we expect the submission of our CDD-NDA in the near term. Moving to our clinical pipeline, I want to start with an update on the Phase III RAISE trial in refractory status epilepticus, which I'm sure is top of mind for many of you. Total enrollment continued to move in the right direction. However, the summer months have been a time of turnover for many clinical site personnel, which we believe has resulted in a slowdown in recruitment. This phenomena has had a much bigger impact than previously anticipated, particularly while our team has continued to work hard and completed the majority of remaining site activations in the second quarter. As a result of this summer slowdown, which Joe will discuss in more detail, we have moved the interim analysis out three months to Q1 of next year. While we are disappointed in this delay, we believe it is critically important to continue to enroll the right patient population for a successful trial outcome. We are confident that the diligent screening efforts by our clinical team and RAISE study sites will drive a placebo rate well within our expectations, creating the opportunity for a meaningful clinical result and putting us in a position to demonstrate a benefit across multiple healthcare utilization measures. The organization is working towards an expected NDA filing and preparing our future commercial execution. Importantly, the one-quarter delay to our interim data review is not expected to impact the timing of our commercial launch and may allow us to submit our NDA filing with a valuable alternative bottle size, which Christy will discuss shortly. We look forward to providing an overview of upcoming milestones and next steps following the interim analysis, as well as an update on enrollment during our investor and analyst event next month. When the interim analysis is conducted, and if it meets the stopping criteria, we plan to begin transitioning the majority of RAISE sites to an open-label extension, and then to shortly transition a subset of these sites to the RAISE 2 study. This will help support a smooth and rapid completion to RAISE 2 with the goal of driving improved timelines for the European filing and a potential US label expansion. The trial is on track to begin enrollment later this year. Let me move to the oral franchise clinical development program and begin with a quick update on the TRUST TSC trial. We are actively enrolling refractory patients in this global study and continue to expect top-line data in mid-2024. Blinded discontinuation rates in the TRUST TSC trial have been low, which supports our belief that adjustments to dose titration made following the Phase II results can drive improvements in tolerability and deliver a clinically meaningful outcome. One of the elements that is critical to the success of the TRUST trial is working closely with our advocacy partners at the TSC Alliance. Next month, we will be attending the International TSC Research Conference, where the team and I will be meeting with a number of key opinion leaders, patients, and advocates. We believe that Zatomi has the potential to address a significant unmet need for TSC patients suffering from refractory seizures, and we are the only product currently in Phase III development for this indication. At the same time, we have spent considerable energy broadening our patent portfolio for the oral franchise, and are pleased that a new method of use patent has been granted by the USPTO for Ganaxalone for its use in treating seizures associated with TSC. This new method of use patent expires in 2040. Finally, and equally exciting, I'm happy to share that we've enrolled the first patient in the multiple ascending dose study using our second generation oral Ganaxalone formulation and are on track for preliminary data by year end. We believe this formulation has the potential to be the future of the oral franchise and will continue to target its use in patients suffering from LGS and other refractory epilepsies. We saw a meaningful improvement in pharmacokinetics in our single ascending dose trial and are hopeful that this MADS study will reinforce our belief that the second generation oral program will allow twice a day dosing and provide physicians the ability to dose titrate to higher serum concentrations of Ganaxalone than can be achieved today. Both of these attributes are critical to offering an enhanced solution to the broader refractory population. With that, I would like to turn the call over to our Chief Commercial Officer, Christy Schaefer.
spk07: Christy Schaefer Thank you, Scott, and good morning. I'm pleased to present the progress we've made in the second quarter and the underlying drivers of our strong performance as we continue to grow the Zatomi brand. In Q2, net product revenues grew to 4.2 million with approximately 120 commercial patients active on therapy and continued positive payer coverage and access for Zatomi. 83% of U.S. commercial plans have extended labeled coverage to Zatomi with all state Medicaid plans extending coverage at the end of the second quarter. With the exceptional early performance of Zotami, we are thrilled to increase our revenue guidance for 2023 to a range of $17 to $18.5 million. I want to thank the entire commercial team who's worked tirelessly to ensure a successful launch of Zotami and for the passion they demonstrate day in and day out, bringing meaningful change to patients we serve. The International Foundation for CDKL5 Research has established two new centers of excellence at Vanderbilt and Montefiore, bringing a total of 10 CDD COEs to the U.S., which is a direct reflection of the need for more centers that provide multi-specialty care for CDD families. We continue to collaborate closely with the centers of excellence, helping connect them with their community and local HCPs to maximize access to care for patients they treat. As we look to the next phase of launch, our commercial team is focused on executing a comprehensive strategy that addresses each phase of the patient journey while building on the core capabilities needed to reach our full potential for current and future potential launches, including TSC. This strategy is anchored in four key areas, patient identification, activation of the caregiver community, establishing the TALMI as the standard of care for CDD seizure management, and continuously enhancing the patient experience. To start, we're continuing to invest in better and more informative third-party data and analytics. Insights are enabling increased identification in two ways. First, we've gained visibility into nearly two times the number of ICD-10-coded CDD patients than we could see at this time last year. And second, we're beginning to identify patients in lookalike cohorts who've not yet been diagnosed with CDD or coded with the appropriate ICD-10 code. In both cases, we're expanding our call targets to meet patients where they are in the continuum of therapy and care. The insights driving us to these call points are enabling continuous improvement in our message delivery to ensure reps are focusing education on Zytomi as a treatment option for providers with known CDD patients and for providers with suspected CDD patients on disease state, genetic testing, and coding. This includes dispelling cost and access misperceptions of genetic testing, which is widely accessible and reimbursed under Moche's terms plan. Appreciating the integral role of the caregiver, we're pleased to announce the kickoff of our Patient Engager program, Shining Moments, later this month. We have three dedicated HCPs on the Speaker's Bureau and one caregiver family that will perform five webinars in the back half of 2023. Strong recruitment efforts are ongoing in conjunction with the IFCR, our target HCPs, and a significant media outreach plan. We're confident that by sharing the experiences of those who have initiated treatment, CDD families will be inspired by the potential for more good days with the TALMI. To round out our strategy, we plan to continuously refine the TALMI-1 patient support program to meet the evolving needs of the CDD community and enhance the patient experience. Finally, planning is underway for our second American Epilepsy Society annual meeting as a commercial organization, where we look forward to showcasing these initiatives. For our acute care franchise, we continue to prepare for a potential commercial launch with the quarter ahead focused on leveraging insights from the real-world data project I introduced on our Q1 earnings call. You may remember this project is a first-of-its-kind approach, leveraging data across four distinct claims providers to generate patient progression through distinct status episodes. Now complete, this refined collection of insights has yielded three fundamental areas of finding that will guide our subsequent steps towards launch preparedness. The data provided an updated, detailed view of the overall refractory status epilepticus population through transitions across settings in the hospital and the treatment provided as patients move through both the SE continuum and hospital departments, informing our stakeholder mapping and highlighting specific areas of unmet need along the patient journey. Second, Utilizing the data, we tackled the heterogeneity of RSE patients by creating archetypes within the diagnosis and two clear cohorts emerged. RSE patients who progressed to IV anesthesia and those who progressed through a cycle of ASM. Third, we were able to overlay SE patient episodes across the broader spectrum of community and academic hospitals to identify accounts that are involved in RSE patient care. including patient referral pathways and especially high-volume receiving centers. In essence, the data reinforced our significant market potential and gave us a clear roadmap for the acute care franchise's commercial debut. I look forward to providing more details on September 19th during our Investor Day. As Scott mentioned, we're also making important manufacturing investments to ensure iBeacon Excellence is optimized for physician use and can be seamlessly integrated into the hospital setting. We are developing a smaller 250 ml bottle compared to the existing 500 ml bottle for increased storage flexibility in the hospital setting. This will allow iVegan X-Loan to be stored in a wider variety of locked cabinets on the unit for ready access and was preferred for controlled substance distribution, tracking, and waste recording. The smaller volume is also expected to reduce barriers in initiating treatment with less cost impact if a bottle is punctured and not used or not used in its entirety. We were originally planning on filing the RSE NDA with the 500 mL bottle and then filing a supplemental NDA with the 250 mL bottle. But the additional three months may allow us to file with the new, smaller bottle. With the early successes of the TALMI launch as our foundation, I look forward to building on our commitment to deliver innovative new treatment options to patients suffering from rare genetic epilepsies and refractory seizure disorders. I'll now hand the call over to our Chief Medical Officer, Joe Houlihan, to discuss our ongoing development program.
spk05: Thank you, Christy, and hello, everyone. It's my pleasure to provide an overview of the substantial pipeline progress we've made since our first quarter call. Starting with our development programs in status epilepticus, as Scott mentioned, we now expect to conduct an interim analysis of the Phase III RAISE trial of iveganaxolone in refractory status in the first quarter of 2024. If the analysis meets its predefined stopping criteria, we plan to announce top-line results at that time. We continue to tackle industry headwinds affecting clinical trial recruitment and recognize that the summer is a busy time of year for many institutions with the transition of new residents and fellows and turnover among other research staff. We believe these factors have slowed RAISE study recruitment resulting in the delay of our top-line results to the first quarter of 2024. To address these challenges, Marinus is supporting new RAISE trial champions through onsite and virtual education at our study centers in the United States, Australia, and Canada. In June and July alone, we have successfully activated 13 new sites across these three countries and are pleased to share that we've already enrolled our first patient in Canada. We're encouraged by the enthusiasm, dedication and motivation of the site staff and look forward to continued collaboration to complete the RAISE study. We expect to complete final site activations for RAISE this month, at which point the team will be fully focused on completing the double-blind phase of the trial and initiating the open-label extension. While we're disappointed by the enrollment impact to the study this summer, We're optimistic about the volume of patients being screened, and we firmly believe that enrollment will return to its usual pace with the integration of new sites and the normalization of clinical personnel transitions. Now, I'd like to provide a few operational updates on the study. Ray sites are now being resupplied with the new citrate buffer formulation of IV denaxolone. This new formulation does not require refrigeration and is expected to have a 24-month shelf life. Also, the data monitoring committee met recently to review safety information and the integrity of trial conduct. Following this review, they recommended continuation of the study without modification. As a reminder, we plan to conduct an interim analysis at two-thirds enrollment or 82 patients. There are two co-primary endpoints and two key secondary endpoints that will be analyzed and reported at the interim. The co-primary endpoints are proportion of participants with status cessation within 30 minutes of study drug initiation and proportion of participants with no progression to IV anesthesia for 36 hours. To meet the stopping criteria, we need to achieve statistical significance on both endpoints. The two key secondary endpoints are time to SE cessation and no progression to IV anesthesia for 24 hours off study drug, where it's 72 hours. Other secondary endpoints include additional clinical measures, functional outcomes, and metrics on healthcare utilization, such as number of ICU days, length of hospital stay, and time on mechanical ventilation. We plan to present the results from the analysis of these additional secondary endpoints at upcoming medical meetings. The interim analysis with data on 82 patients is powered at over 90% to show a 40% difference between Ganaxolone and placebo. And in fact, the study could achieve statistical significance with treatment differences of less than 30%. We continue to closely monitor the baseline characteristics of patients entering the study and have seen that the patients are largely similar to those enrolled in phase two. This gives us optimism that the results from phase three will mirror those from phase two. We also know from review of characteristics of the patients who have failed screening that we are enrolling an appropriate study population. Between this and the similarity of the study populations in phases two and three, we continue to believe that we're enrolling the right patients in the RAISE study. Our August corporate deck now includes an update of the baseline characteristics of patients enrolled in the trial. One difference between the phase two patients and those entering the Phase III study is the baseline seizure burden. Based on feedback from our scientific advisors and to align with published guidelines for diagnosis of status epilepticus, we reduced the required seizure burden from 50% in Phase II to 20% in Phase III. So, as expected, the baseline seizure burden is somewhat lower in the Phase III study. Based on detailed review of the EEGs and patient outcomes from Phase II, We expect the difference in seizure burden to have no impact on resolution of status in either the placebo or Ganaxilone arms. In addition, we have an independent blinded central EEG reading group that reviews the EEGs from the study on an ongoing basis to validate patient eligibility. At our upcoming investor day, we'll provide you with information on patient demographics and baseline characteristics, as well as further detail on the interim analysis plan. Our other trials in status epilepticus continue to make meaningful progress. The study teams have done a great job navigating the new clinical trial regulations in Europe, and we expect to begin enrollment in our European registration study for refractory status, RAISE-2, later this year. By transitioning a portion of RAISE sites to RAISE-2 following successful interim analysis, we would expect a quick and seamless site activation process. In addition, we've initiated screening in our phase two reset trial in established status epilepticus and expect to complete the first study cohort by the end of the year. Also, as Scott mentioned, we're supplying Conaxilone to physicians upon request under emergency INDs for super refractory status epilepticus, or SRSE. Our clinical team has developed a new dosing paradigm designed specifically for these extremely difficult-to-treat cases. rather than recommending a 48-hour regimen like the one we are using in the RAISE study. So far, three patients have been treated with the new SRSE regimen, including a patient with new onset refractory status epilepticus, or NORS, a condition that's one of the most poorly responsive to treatment. I'm pleased to report that all three patients were weaned off IV anesthetics with resolution of their status. Moving to our oral franchise, I can report that we're actively enrolling patients in the global phase three TRUST TSC trial in tuberous sclerosis complex, and that we remain on track for data by the middle of next year. As we've previously discussed, to address the higher than expected rates of somnolence we saw in our phase two TSC study, we developed a new titration schedule for phase three. By using a slower initial titration, we believe that we can improve tolerability and potentially efficacy as well. Even though the study remains blinded, we have had few reports of somnolence and have seen low discontinuation rates to date, bolstering our confidence in the new titration schedule. We are pleased to report that we've also begun enrolling TSC patients in China, which is an important research region for us. I recently visited some of the clinical sites in China, And I'm encouraged by the high level of engagement from Tenacia, our collaboration partner, as well as the expertise and enthusiasm of their study investigators. Finally, turning to our second-generation product development efforts, we're pleased to have initiated enrollment in our multiple-ascending dose study. We expect that this study will confirm the feasibility of BID dosing with preliminary data anticipated by year-end. In parallel, we plan to finalize the clinical program design for Lennox-Gastaut syndrome in the first quarter of 2024, pending results of the MAD study. Development of a Ganexolone Pro drug also continues to advance, with submission of an IMD application targeted for the fourth quarter of 2024. We're pleased that so far, the profile of the Pro drug appears to support dosing once a day. We're also glad to share that we've submitted seven abstracts for presentation at the American Epilepsy Society annual meeting in December, including two-year data from the Marigold Open Label Extension. To conclude, we'll continue to focus our efforts on successfully executing our phase three programs throughout the remainder of the year. The next 12 months hold great promise with numerous data catalysts on the horizon, and I look forward to seeing the positive impact our work could have on patients and families suffering from refractory seizure disorders. I'd now like to turn the call over to our CFO and COO, Steve Fanstiel, who will provide you with a financial update.
spk15: Thanks, Joe, and good morning to everyone. I am pleased to be able to share our financial results for the second quarter of 2023. Prior to diving into the details of our financial performance, I'd like to provide a few key updates for the business. For the fiscal year 2023, I am pleased to provide an update to our revenue and operating expense guidance. For sodomy net revenue, we are increasing our guidance with net revenues now projected to be in the range of 17 to 18.5 million, which represents an increase of 2 million on the lower end and 1.5 million on the higher end of the prior guidance range. As Kristi mentioned, the increased guidance reflects the strong continued execution of our launch. For barter revenue, we are also increasing our guidance with revenues now projected to be in the range of $11 to $12 million, which represents an increase from the prior guidance range of $8 to $11 million. The increase is a result of continued progress of the API on-shoring activities and ongoing IV GINAX loan development. We now project our GAAP operating expenses, inclusive of SG&A and R&D expenses, to be in the range of $160 to $165 million, of which we expect approximately $15 million to be non-cash stock-based compensation. This is a reduction from our prior guidance of $165 to $175 million and is driven by ongoing efforts to drive prudent cost management and focus investments on Zotomi commercialization in our ongoing phase three trials. We expect that our current cash, cash equivalents, and short-term investments of $175.3 million will be sufficient to fund our operations into the second half of 2024 inclusive of maintaining the required minimum cash balance of 15 million under our credit agreement. The approval of Zotomi by the EU in July of this year marks a significant milestone for CDD patients throughout Europe. Our commercial partner, Orion, recently announced it has begun preparations for the launch of Zotomi there, including engaging in the required processes for obtaining pricing and reimbursement approval in the various European countries. While the reimbursement environment can be challenging in Europe, we believe that CITAMI brings a number of differentiated attributes for CDD patients, including the safety profile and meaningful durability of effect as evidenced by the two-year open label data. As a result of the EU approval, Marinus is also eligible to receive royalties and commercial and sales milestones under our collaboration agreement with Orion. As a reminder, royalty rates under the Ryan agreement range from the low double digits to the upper teens for Zotomi. I'll now move into our financial results. For the second quarter of 2023, we recognized product revenues of $4.2 million and $7.6 million for the three and six months ended June 30th, 2023. These revenues consist of Zotomi product sales, which was launched in the third quarter of 2022. Separately, we recognize barter revenues of $1.8 million and $8.9 million for the three and six months ended June 30, 2023, as compared to $1.8 million and $3.3 million for the same periods in the prior year. The increase is driven primarily by activity associated with startup of our API on-shoring initiative. Research and development expenses were $21.4 million and $49.3 million for the three and six months ended June 30, 2023, as compared to $21.5 million and $39.5 million for the same periods in the prior year. The year-to-date change was due to increased costs associated with our API onshoring effort, increased TSC and RSC clinical trial activity, and increased headcount. As a reminder, the API onshoring effort is approximately 70% funded by BARDA so that the increase in R&D expenses is partially offset by the increased BARDA revenues reflected in the first half of 2023. Selling general and administrative expenses were $15.7 million and $30.9 million for the three and six months ended June 30, 2023, as compared to $17.1 million and $28.8 million for the same periods in the prior year. The primary drivers of the change on a year-to-date basis were increased headcount related to the U.S. launch of Zotomi. Interest income was $2.1 million and $4.5 million for the three and six months ended June 30, 2023, as compared to less than $0.1 million for the same periods in the prior year. The increase in interest income was driven by the overall increase in cash, cash equivalents, and short-term investments, and increased yield on those balances. Interest expense was $4.2 million and $8.4 million for the three and six months ended June 30, 2023, as compared to $2.7 million and $4.3 million for the same periods in the prior year. The increase is driven by drawdown of an additional $30 million of credit under the Oak Tree Agreement in March 2022 upon FDA approval for SITAMI and non-cash interest expense related to our revenue interest financing with SIGGARD. The company reported a net loss before income taxes of $33.5 million and $68.2 million for the three and six months ended June 30, 2023, as compared to a net loss of $39.4 million and $58.8 million for the same periods in the prior year. As a note, the 2022 net loss includes the one-time gain of $12.7 million related to recognition of a portion of the upfront payment associated with our Orion partnership. These totals also include non-cash stock-based compensation expense of $3.9 million and $7.6 million for the three and six months ended June 30, 2023, as compared to $3.8 million and $7.2 million for the same periods in the prior year. Cash used in operating activities was $65.8 million for the six months ended June 30, 2023, as compared to cash used in operating activities of $61.3 million for the same period in the prior year. Now, I'll turn the call back to Scott, who will provide concluding remarks.
spk06: Thanks, Steve. With a solid foundation for continued success and expansion, we are confident in our ability to execute against our near-term milestones to drive mariners into the next stage of growth as a leader in the development of innovative treatment options for patients with rare genetic epilepsies and refractory seizure disorders. As we've mentioned, we'll be hosting a hybrid investor and analyst day on September 19th in New York City for a deep dive into our pipeline and commercial launch preparations in RSC and TSC. We hope you will be able to join, and I look forward to seeing many of you there in person. Operator, can you now open the call for questions?
spk03: Yes, thank you. If you have a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, simply press star 1 again. We ask the participants limit their time to one question. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brian Abrahams of RBC Capital Markets. Your line is open.
spk14: Hey, guys. Good morning. Thanks for taking my question, and congrats on all the continued progress in the next quarter with the Talmud. I wanted to ask if you could expand a little bit more on the baseline characteristics that you're seeing in the RAISE study. It looked like the You mentioned the seizure burden being lower versus the phase two, and it looks like actually the seizure burden has gone down quite a bit since the last cut of the baseline characteristics. So I guess I'm wondering if there's any differences in the types of patients that you've enrolled more recently into the study, maybe how that dovetails with the stringency in the screening criteria. and what the potential impact could be to the placebo rate on the progression to IV anesthesia endpoint. And then maybe along those lines, also notice the proportion of patients with prominent motor features has actually come up quite a bit. So also wondering how that fits in as well. Thanks.
spk05: Brian, thanks for the question. This is Joe. I think, yeah, while we changed the inclusion criteria, as I mentioned in the remarks, for this baseline seizure burden to be 20% and that actually the American Clinical Neurophysiology Society has published that as a guideline for diagnosis of status. And the baseline seizure burden I don't believe is gonna influence either the placebo or drug response. The placebo response on either endpoint is driven mainly by status severity which is identical. in both from the phase two. So that was something that we saw may make a difference in outcome, but all the patients in the high-dose group, regardless of the severity of their status or the baseline seizure burden in the phase two study, had virtually complete resolution of status that persisted after the drug was stopped. the baseline seizure burden I don't think is going to have any effect, nor the motor features, the prominent motor features. That could be anything. That could be any type of motor activity, either focal motor status or nonconvulsive status with motor features. That shouldn't have any bearing on outcome either. So I think that regardless of those differences from the baseline characteristics. I don't think it's going to make any difference. And we have looked at whether there had been a change in the characteristics of the patients over time and haven't really been able to see anything there.
spk14: Got it.
spk06: That's really helpful. Go ahead. Yeah. Brian, the only thing I'd add, too, is I think we were surprised at the first cut of the data how high the seizure burden was, right, because it looked as though Very similar to the phase two where the seizure burden was 50%. So, we've expected that number to come down and overall we're really not surprised by it. That was our expectation going to the study that we'd be somewhere between 30 and 40%.
spk03: Thank you. Your next question comes from the line of Joseph Thome of TD Talent. Your line is open.
spk11: Hi there. Good morning and thank you for taking my question.
spk12: Maybe just on the Q1-24 interim timing, maybe what gives you confidence that this is going to be accurate and what you're seeing over the updated goal? And then in the updated patient metrics, under 50% of the patients are getting dosed. So what's the main reason why a patient is maybe a screening failure that you're seeing in the phase three? Thank you.
spk06: Let me take the first question on timelines, and then I'll pass it over to Joe for a little bit more color. As we met with investors, Joe, in the first half of the year, we were seeing very steady enrollment on a monthly basis for several months. That gave us a lot of confidence on the timelines and the completion of the study. And since the beginning of the year, we've almost doubled the number of sites that are now open and activated, actually more than doubled if we go back and look at our January numbers. So we feel very confident now that the study has all the right sites throughout the US, Canada, and Australia. And we were surprised that we saw a slowdown over the summer. We really expected to be in a different place. But as we've talked to our medical science liaison teams, our clinical ops teams, as Joe mentioned in his prepared remarks, we've had, you know, such a high degree of turnover in the hospital. I think we really underestimated that short term impact. So we're quite confident in terms of the sites that are now participating, their level of activity that we'll see back to normal levels of enrollment and and And we're using that normal baseline for our Q1 projections. And certainly if we see accelerated relative to the first half of the year, summer excluded, we would hope that we can move the timelines up. So we have a lot of reason to be enthusiastic. We've really doubled our resources in the last, gosh, six or nine months on this study. Disappointing to us about the summer, but from an overall study perspective, confident it's a short-term hit. Joe, I'll turn it over to you to talk a little bit more on Joe Tomei's second question.
spk05: Yeah, yeah. Hi, Joe. So, yeah, I think one of the major reasons is the patients end up responding to another AED and then don't come into the study, which actually, you know, when we say looking at the screen failures gives us confidence we're enrolling the right patients, you know, that could have been a potential placebo responder. not necessarily on the first endpoint, but perhaps on the second endpoint, the intubation within 36 hours or IV anesthesia within 36 hours. And so, you know, the stringency of the criteria is greater than in phase two, and I think that, you know, by far that's the main reason patients are being screened out.
spk12: Very great. Thank you very much.
spk03: Your next question comes from the line of Andrew Tsai of Jefferies. Please go ahead.
spk02: Hey, good morning. Thanks for taking our questions. Appreciate the update. So just really quickly on the baseline reanalysis, what percentage of patients is this reanalysis based on? And then secondly, as we think about the interim top line release, what is your latest thinking on whether you will announce when the 82nd patient has been enrolled? Could it be an individual press release, or should the street have to wait for the top-line data itself in Q1? Thank you.
spk06: Yeah, thanks, Andrew. We've gotten the question a lot, and I would generally say my bias today is that we would top-line the 82nd patient. I think we owe it to the investor community, given that our timelines have shifted, and that was a disappointment to us. This baseline characteristic is really a recent cut. We've updated the data really through the last few weeks. We're not going to give you that absolute number, but we are going to talk a little bit more about the numbers in September. So stay tuned. Did I miss anything there, Andrew?
spk02: Nope. All set. Thank you. Very clear.
spk06: And I think importantly, you know, we've gotten the question from a lot of investors now with the protocol amendments that we made last summer and really took I would say really took effect at year end. As we talked about, it took a while for all those sites to get through their IRBs. We thought it was important to really show you this updated data set with a large number of patients that have been enrolled since the protocol amendment. So I think that's a critical piece there as well, Andrew, that this is really, I would call it a mixed population, although we would argue it's really the population that we initially intended to study in the phase three.
spk02: Right. Agreed. Thank you again.
spk03: Your next question comes from the line of Charles Duncan of Cantor Fitzgerald. Your line is open.
spk13: Yeah, good morning, Scott and team. Congrats on a good quarter, commercial quarter of progress and on the recent EU approval I had a two-part question that I wanted to ask you regarding, first of all, RAISE-1. You mentioned that the DMC recently met and recommended continued enrollment. Could you provide some color on the observations that were being assessed within that DMC assessment? And then the second part of the question is regarding the TRUST-TSC trial. You mentioned top line in mid-24, and you're seeing lower, you know, blinded basis, lower discontinuation rates. Could you give us some color on what those discontinuation rates are?
spk06: Thanks. Joe, you want to start on the DMC?
spk05: Sure. Yeah, the DMC was looking at safety. They look at unblinded safety data to see if there's an imbalance in adverse effects, you know, that indicates something going on with the drug. And so that's really all they look at when they convene to look at the interim analysis data. Obviously, they'll see efficacy, but for right now, they're just looking at safety. And in terms of the trust GSE study, could you repeat that one more time? I'm sorry.
spk13: Yeah, in terms of the discontinuation rate, what really are you seeing? I mean, it sounds great that you're reducing or the reduced titration rate is helping, but what is the discontinuation rate thus far, roughly?
spk05: Well, it's extremely low. I mean, it's in the single digits in terms of patients discontinuing. So, I mean, that's just you know, basic answer to the question in terms of the reasons for discontinuation, uh, not, but, um, uh, yeah, it's, um, very low discontinuation rate. And the other thing too, and we mentioned this is very few calls from physicians about, you know, adjusting titration or what to do with titration to manage side effects. So we're very optimistic about that titration schedule.
spk06: And, and, um, Charles, the one thing I would add to Scott, If you recall, Marigold, as our kind of benchmark, 80% of patients achieved standard dosing, and we had less than a 10% discontinuation rate. There was only one patient who discontinued because of tolerability in the double-blind phase three. In the phase two TSC study, we saw about a 25% discontinuation rate. Again, really surprised us with about 70% of patients who required aggressive dose adjustments. And that really persisted throughout the trial. So that dichotomy in two datasets, you know, was really the onus for us amending the dose titration. And I think we feel very confident now where we are, you know, with a meaningful number of patients enrolled in trust. we're seeing effectively baseline characteristics, discontinuation rates, and what appears to be blinded discontinuation rates and blinded dose titration adjustments, much more similar to the Marigold data set than the Phase II TSC data set. And I think that that's giving us a lot of confidence in both the efficacy and the safety signal.
spk13: Very good. Thanks for the anecdote, Scott.
spk03: Your next question comes from the line of June Lee of True Securities. Your line is open.
spk09: Hey, thanks for taking our question. Given how challenging it has been to enroll in phase three ways, what gives you confidence on the commercial opportunity of Benaxolone and RSC? I mean, is it that difficult to find patients to enroll in? Why would that differ in commercial situations? Thank you.
spk06: Yeah, let me kick it off. And then, Christy, if you want to add any color, I'll be happy to pass it over to you. A few different things, June. I think, you know, like any clinical study, and particularly in the hospital setting, we really narrowed this population to a very small slice of the RSC population because we really wanted to show the value proposition versus IV anesthesia. And I think different in our phase two where we had several patients who fed multiple therapies, but a physician wasn't necessarily ready to give IV anesthesia, That allowed the patient to enroll in the phase two where we're really using the strict criteria of a physician. In a physician's mind, IV anesthesia needs to be the next therapy. I think as a result of that, we've kept this as a very, very narrow inclusion criteria. Now, the flip side of that... is we think that's the critical piece to driving low placebo rates. So I think in retrospect, we really are looking at a smaller subset of the status population that we'll ultimately look at. I mean, it's very interesting to me in the phase three study, the average time to enrollment is 24 hours as of today, which means physicians are really observing these patients, treating them with multiple AEDs, sometimes more than two AEDs in the phase three study. And I think what we really believe is the ultimate paradigm shift here, and one that shouldn't be difficult, is that, you know, would you want a family member in status epilepticus for 24 hours? No, who is quite ill. And so, you know, we'll start with the data set in RAISE, which is all about the avoidance of general anesthesia and those very severe complications. But we will move very quickly to this drug being used faster, showing faster response rates than other AEDs, and the importance of time is brain, which I do think makes the RAISE-II trial more and more important. I think it's critical. People ask me all the time, why did we choose to do the interim analysis on the RAISE trial? On one hand, I think we are more than sufficiently powered to get the answer, and on the other, To your question, June, as we look at the market, I think race two becomes a very critical part of the marketing story. Christy, let me pass it over to you.
spk07: Sure, Scott. Thanks. And June, thanks for the question. We've been thinking about the same sort of thing over here, but what I'd love to say that Scott touched on initially is that this election is really amazing for us on the commercial side, given the data that we expect to get out of this. Clinical trial efforts certainly differ from commercial promotional efforts, and what we have been very encouraged by, and I spoke to it a little bit in our prepared remarks, was the data that has come back about how these patients move through the hospital system, the cost of these patients as they progress through the hospital system, and the value that we think that Ginexalone can bring to them. Again, from a promotional perspective, it is wildly different, but we feel confident that the selection that the clinical team is working on will directly affect how we be able to present value in the hospital.
spk03: Thank you. Your next question comes from the line of Mark Goodman of Lyric Partners. Your line is open.
spk04: Yes, good morning. There was a comment earlier about the number of patients, number of CDD patients. I guess it was from the coding that you've been evaluating. Can you talk about what the number is that you believe that there are CDD patients in the U.S.? What was the old number? What's the new number? And maybe just give us a sense of how the revenues in the quarter, how we got there, gross to net, just where the pricing is these days. Thank you.
spk06: Mark, I'm going to flip it over to Christy to talk more on the ICD numbers. And just a reminder for you and everyone, both of our patient advocacy groups, the Lulu Foundation and IFCR, were really instrumental in creating that ICD-10 code. So we've only had that ICD code available to us and physicians for about three years. And we've actually changed our data sources to really try to be more sensitive. But Christy, feel free to share the numbers with Mark.
spk07: Sure. So all of our modeling has really dictated an addressable patient population of about 2,000 pediatric patients. And we stay firm on that number, and that's the number that is continuing to inform our forecast. However, when I... I spoke earlier about doubling our ICD-10 coded patients. We invested in a data set early on that tracks the ICD-10 code and the usage of it. We had really strong confidence that that would grow with our promotional efforts, and it certainly did. We saw a very nice increase in numbers. However, we decided as a team to invest in further amounts of data that is capturing even more coded patients. That number has actually doubled from the initial data set that we purchased. And so with that, we're getting unique patients, unique physicians treating these patients, which has then led us to increasing our target size of physicians across the United States. So we still stay firm on that 2,000 approachable patients that are pediatric. And this has now enabled us to find them a little bit easier.
spk03: Thank you. Your next question comes from the line of Douglas Tell.
spk06: Operator, I'm sorry. We didn't answer the second part of Mark's question. Steve?
spk03: Oh, my apologies.
spk15: Yeah, no problem, Mark. Yeah, happy to provide additional commentary on the launch. So revenues in the quarter were $4.2 million. I think, as you saw in the detail, we had about 120 patients on commercial therapy, actively on commercial therapy at the end of Q2. No big changes in assumptions. Our gross to net discounts have been around that 20%. Maybe a slight upside to that number could be projected for the year. From an average WAC basis, though, that's where we have seen some upside. We had indicated we thought our average age would be around 4 to 5 years old initially. We're actually seeing an average median age of around 9 years old. That takes our average WAC closer to $150,000 annually or a little more. I think what the quarter really gave us confidence in is what we've been saying all along is we have this steady, continued build of patients, and that build is driving us and giving us confidence that, again, we view this as a break-even kind of investment in the CDD commercial launch within about a two-year window. We're investing about $25 million annually between our reps, our market access, and this kind of small team going after these 2,000 patients. At an annualized sales run rate of 30 million, we get to break even. We still think that's very much on track to happen by the middle of 2024.
spk06: And, Mark, I just want to answer your question a little. I know you asked a direct question. So year one, when we looked at the ICD data, we were seeing somewhere between 200 and 300 patients. And now we're seeing well north of 700 patients coded for CDKL5. And that number is growing every year. Apologies that we didn't get that to you earlier. All right, operator.
spk03: Perfect. Douglas Tau, your line is open.
spk10: Hi, good morning. Thanks for taking the question. Just one question for me. I'm curious, Scott, now that we see, you know, a lot of progress on the ProDrug, and it's not that far behind, you know, the second generation ProDrug, How are you thinking about the development of that asset in terms of the overall oral franchise?
spk06: It's a great question, Doug. I was keeping it in our back pockets to really look at the depression space. And we all know what happened this week, unfortunately, in the depression space. And to be very frank, given the fact that our second-gen formulations has really shown, at least early on, better characteristics than we initially expected. I think it was a little bit more of the reverse, where we always saw the pro drug being the once-a-day solution in the marketplace. I think, very honestly, the one with the strongest intellectual property, but given that the new formulation really looks to be twice a day, looks like we should be able to get the vast majority of patients up to blood levels of 150 to 175 nanograms very quickly. It was almost a no-brainer in our mind to make that investment and think about moving very aggressively into LGS. So, I think based on what we see in this healthy volunteer multiple sending dose data, as long as we continue to see good progress, you know, for us to take that compound into Phase 3, potentially into phase three, you know, in the second half of 24, to me is incredibly exciting for, and I think our team feels quite strongly that we only would require a single phase three efficacy study, which is also pretty unique in the seizure world from an FDA perspective. And we could really leverage the Ganax loan clinical package to accelerate that approval. So I look at it a little bit the other way that HMEs, I'm sorry, our second generation program is kind of staring us in the face as a new alternative. The pro drug is equally exciting to us. The once a day potential of that drug looks great. Thus far what we believe the preclinical safety profile looks very strong. And I think we're going to have to take a long look in a year or two from now where we are across the board and how exactly we slot Projarg in. I'm not sure at this point in time, and I think a lot of it's going to be dependent on the success of our second generation formulation. And it'll be a great problem to have. And, you know, I think as we move forward and really expand into broader refractory epilepsy, there may really be a role here for us to work with a strategic partner so we can accelerate development programs and I'm pretty open-minded to thinking about how the pro-drug will fit in. But right now, I would say we feel really good about this second-gen program, and we're going to take it from there. We should have had a better answer for you, Doug.
spk10: No, that's very helpful, Doug. I mean, that provides some clarity. Thank you.
spk03: Our last question comes from the line of Jay Olson of Oppenheimer. Your line is open.
spk08: Hey guys, thanks for taking the question. In the event that RAISE does meet the pre-specified stopping criteria in the first quarter next year, can you just walk us through the next steps and timing of commercialization in that scenario? And also, how important are the secondary in terms of commercialization?
spk06: Well, let's start with the timing, Jay, and then we can talk a little bit about the secondaries. You know, with the completion of the study in Q1, we certainly would expect to file the NDA in 24. We would expect, you know, we think our team can put the NDA together in a rapid fashion. And we'll talk about those timelines a little bit more in September. And certainly, we think that we would expect a priority review, not guaranteed. And in general, you know, our soft launch times are really looking at the middle of 25. And as Christy mentioned, With those type of timelines, we can incorporate this 250 ml bottle into the launch planning, into the NDA, and be ready for that at launch. We had thought historically that we would file with the 500, get approval, and then look for a supplemental approval with the 250, but we're now going to incorporate all of that. And I think, you know, when we talk in September, Kristen Rudisill, our lead on the IV program, will talk a lot about the NTAP program. And we think that launch, that roughly that launch timing in the middle of 25 will really set us up for strong NTAP reimbursement for three full years. And again, we'll lay out all those timelines in September for you. The secondary endpoints we think are critical. I mean, we've gotten the questions on how big is the market earlier, you know, the, you know, are we, is this a much smaller market than we originally thought? I think we truly believe the answer is no. And again, by us really narrowing the field here, the key secondaries are, the key primaries and key secondaries are critical for us getting this drug approved. But if we want proper reimbursement in the hospital, we really have to show the economic value of the drug. And I think we designed the study to do that. We're enrolling the right patients to do that. And so I think many of the exploratory secondaries are going to be the basis of our health economic arguments. And as a reminder to folks, we're very enthusiastic that we can use the larger data set to make those arguments as we put those exploratory secondaries into the public domain, into our publication strategies. So, you know, I think it's going to be a combination of the two. You know, we know that anesthesia in and of itself has high morbidity, high mortality, lots of costs from longer hospital stays, typically 10 to 17 days in a neuro ICU for these patients, high rates of of cardiac support, high rates of ventilatory complications, GI complications. So the bar is pretty low for us to really show some meaningful outcome benefits. Christy, anything that you wanted to add on that that I didn't hit on?
spk07: No, you really did, and I think what's important to note is that that work right now is being informed by the larger pieces of work that we just finished, and so cost of care and value is where we're spending the majority of our time right now, and to Scott's point, those secondaries are driving most of what is coming out of that work.
spk06: Great. Thanks, Operator. We're at time, and we're going to end the conference call. I want to thank everyone for dialing in. for your support and we look forward to seeing many of you live in September and we also look forward to really giving you a deep dive a little bit more on the RAISE trial. We'll do a deep dive on baseline characteristics as we've talked about. We'll go through the enrollment numbers. You'll really get to hear a deep dive on our commercial plans and we're going to spend quite a bit of time on the oral franchise as well. The team has been doing a great job to prepare for that, so we look forward to seeing you then. Thank you.
spk03: This concludes today's conference call. You may now disconnect.
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