This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Ladies and gentlemen, greetings and welcome to Marinus Pharmaceuticals' fourth quarter and full year 2023 financial results and business update call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and it is my pleasure to introduce your host, Sonia Weigel, Senior Vice President of Investor Relations, Human Resources, and Corporate Affairs. Ms. Weigel, you may begin.
spk04: Thank you, and good afternoon. With me from Marinus are Dr. Scott Bronte, Chairman and Chief Executive Officer, Christy Schaefer, 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 program, 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, Dr. Scott Bronstein.
spk12: Thank you, Sonia. Marinus concluded 2023 with a strong finish across all fronts, commercial, clinical, and operational. On today's call, I'll provide a brief overview of some of the key areas before turning it over to our leadership team. Starting with an update on ZTALME, we finished 2023 with another strong quarter of enrollment and robust quarterly growth. As a result of the progress made by our commercial team, we expect to achieve profitability on our ZTALME commercial investment by the second quarter of 2024, ahead of our previous two-year target. Christy will provide a summary of our revenue results in her remarks, as well as an update on our investments to continue to grow the CDD business and our launch plans as we prepare for two critical phase three data readouts in the second and fourth quarters of this year. Our commercial partners in the EU, China, and MENA regions continue to make important progress to support Zotomi launches around the globe. In China, the Tenacia team has been granted priority review of the NDA submission in PDD, as well as contributing to the enrollment of the TRUST-TSC trial. In Europe, Orion continues to plan for the launch of the TALMI in select European countries in 2024. Finally, in the MENA region, we are targeting that our partner biologics will begin their distribution strategy in the second half of this year. Concurrently, we are expanding our manufacturing investments to ensure that we can adequately supply not only our global partners, but the broader market opportunities for Zetalme over the coming years. Turning to our clinical pipeline, I'll first share an update on our Phase III RAISE trial of ibuprofen and refractory status epilepticus. As we announced in our press release this afternoon, we are pleased to report that we have met the enrollment criteria for the interim analysis and now have more than 90 patients enrolled in the trial. We expect to deliver the interim results to the data monitoring committee over the coming weeks and plan to announce the outcome within the first half of the second quarter. Based on continued strong enrollment seen over the past six months, we project approximately 100 patients to be included in the secondary endpoint analyses. This growing data set should drive a robust package for both the FDA filing and our health economic outcomes. We expect to have the comprehensive trial results over the summer and to present this data at a series of medical meetings in the fourth quarter. We are currently planning for an NDA submission in the first quarter of 2025, and are expecting a priority review. We see the recent uptick in enrollment as a strong reflection of the potential market opportunity for the IV franchise. Domestically, we believe the addressable market for RSE is approximately 35,000 patients per year, and we have the unique opportunity to bring a novel therapy to physicians. We plan to build our leadership in the hospital by continuing to invest in future status epilepticus research while making the appropriate commercial investment with the goal of ascertaining value-based pricing and broad physician adoption. Let me move to an update on our oral pipeline. Approximately 85% of the patients have been enrolled in our Trust TSC trial, and the discontinuation rate is below 7%. Due to some minor delays in screening, we expect to complete enrollment in the Trust TSC trial during the first half of the second quarter. As a result, we now anticipate our top-line Phase 3 results in the first half of the fourth quarter of this year, rather than the end of Q3. We could not be more pleased with the baseline demographics of the patients enrolled, the high percentage of patients rolling over to the open-label portion of the study, and the low overall discontinuation rates, which are substantially different than what we saw in Phase 2. We believe the quality of this dataset will support a compelling pricing strategy consistent with what we've seen to date for Zytalmy. The commercial team continues to make the appropriate investments to prepare for a potential launch in 2025, and we are eager to offer patients suffering from refractory TSC a novel anti-seizure therapy. Based on our market analysis, the addressable patient population in refractory TSC is projected to be about 10,000 patients in the United States. By leveraging our current commercial organization, we believe successful expansion of this opportunity will require a modest incremental investment. As a result, our goal is to drive profitability for the entire Zatomi franchise within six to 12 months of the 2025 TSC launch. 2024 will be a pivotal year for the company as we have built a solid foundation that has us well-positioned to drive future growth. Together, the CDD, RSD, and TSC markets represent a multibillion-dollar opportunity where we believe we can take a firm leadership position for these disease states and other refractory epilepsies. With an established commercial and clinical track record, we look forward to building our momentum for Zetalny while also reporting on these key data milestones later this year. I'll now turn the call over to our Chief Commercial Officer, Christy Schaefer.
spk06: Christy Schaefer Thank you, Scott, and good afternoon, everyone. In my remarks today, I will share an update on our Zotami launch, the progress we are making to grow our CDD franchise, and an update on our commercial readiness planning for potential launches into TSC and RSE. Starting with Zotami in our first full year of launch, we generated net product revenue of $19.6 million for the full year 2023. This solid performance is the result of our strategy to establish Zotami as a critical treatment in the comprehensive management of seizures associated with CDD and to ensure that patients have seamless access to Zotami from prescription through fulfillment. We ended 2023 with more than 165 patients active on therapy. We continue to see swift payer approval with time from enrollment to patient fill of approximately two weeks in the second half of 2023, representing a consistent improvement throughout the year and demonstrating payers' understanding of Zatomi's impact on patients in need. Additionally, payer approvals of CVD prescriptions remain at nearly 100%, indicating strong payer recognition of the value of Zotami for these patients. To date, discontinuation rates are still well within our anticipated expectations. Looking ahead, we continue to expect full-year 2024 U.S. Zotami net product revenues of between $32 and $34 million. The midpoint of this range represents growth of nearly 70% versus 2023. We are executing a number of strategies to maximize CDD market penetration. We are utilizing new data sources and analytics to better identify patients who are not billed with the CDD ICD-10 code in third-party claims and identify patients who may have CDD but have yet to have a confirmatory genetic test. Leveraging these data, we have also rolled out a genetic testing initiative, which will help accurately diagnose patients. And with the open label extension data published late last year, we are able to emphasize the TALMI's sustained efficacy and safety profile, supporting the use of the TALMI as a proven treatment for combating seizures associated with CDD. We are excited for the opportunity to bring Zytomi to more CVD patients in need and believe our commercial strategy has us well-positioned to realize the potential of this novel treatment. Our experience with Zytomi provides Marinus with a solid foundation for two potential commercial launches in 2025. These include Zytomi's expansion into TSC and the IV formulation of Ganaxilone for RFE. Launch planning is well underway for both TSC and RSC in anticipation of two key trial readouts later this year. Let me take a few minutes to summarize our commercial planning in support of each of these programs. Starting with TSC, our rare genetic epilepsy business is led by Senior Vice President Lisa Lejuan, a 30-year veteran in ultra-rare disease. We are planning to build on the strong foundation we have established with Satomi and CBD and expand our proven strategy to capture the larger TSC market. We believe there is a strong business rationale and market opportunity for the expansion of our Satomi business into TSC, where we know there is a significant unmet need in refractory patients. We plan to take advantage of synergies with CDD and TSC while leveraging market data that will further support an additional commercial launch. Research suggests that there is a potential strong overlap with CDD rare disease treaters, and unlike CDD, TSC patients may be easier to identify through a well-established ICD-10 code, which has been in use for more than 30 years, and the physical TSC attributes, which may be identified at birth. Our early plans to expand into the TSC market include disease state education for payers, engagement with very active and supportive advocacy partners, including the TSC Alliance, trust TSC data education with payers and formulary decision makers in the advance of an SMBA submission, and an enhancement of our patient services and specialty pharmacy model. Turning to RSE, with enrollment criteria now satisfied for the interim analysis and the RAISE trial and data anticipated in Q2, let me take a few moments to summarize our commercialization and launch plan. We have assembled a team with extensive commercial experience in the hospital setting under the leadership of industry veteran Kristin Rudisill, our vice president and business unit lead for the acute care franchise. In 2024, our acute care business is focusing on aligning development and execution with key milestones. Driving access post-approval is pivotal to our launch strategy, and this year we are aiming to complete key access strategies such as channel and distribution plans, NTAP filing, and pricing. In addition to strategic planning, we are preparing for execution with the build and deployment of a field access team entering the market as early as this summer. Activating this team under the FDAMA 114 guidelines is designed to address key access stakeholder and payer groups with information that addresses their key value drivers. These teams are permitted to disseminate healthcare economic information that is critically important to these financial decision makers who often control or influence formulary decisions for new therapies. With corporate and system-level financial decision makers, we believe engaging with these key stakeholders can accelerate access and awareness, leading to more favorable formulary placement, and will ultimately provide patients with earlier access to treatment. The combination of our team's leadership, the commercial plans we have outlined, and the success of Zotami gives us the confidence that Ganaxalone has the potential to become a blockbuster franchise across CBD, TSC, and RSC. I look forward to providing further updates on our progress and plans throughout the year. At this time, I would like to turn the call over to our Chief Medical Officer, Dr. Joe Houlihan, for an update on our clinical programs and development.
spk10: Thank you, Christy, and good afternoon. I'm pleased to share an overview of our pipeline progress, which includes two key upcoming Phase III data readouts and initiatives to support our continued clinical and scientific understanding of RSE and TSC, starting with the RAISE trial of ibuprofen, axolotl, and refractory status. After a strong end to 2023, I'm excited to report that in January, we hit our enrollment requirement for the interim analysis. With this critical milestone achieved and dates scheduled for DMC review of the data, We continue to expect to report top-line results in the second quarter of 2024. Now that we've achieved the required enrollment target for the interim analysis, the clinical operations team has been hard at work ensuring the integrity and completeness of the study data to be provided to the DMC for their review. Here's what you can expect next in the process. Presently, the clinical operations team is focused on data cleaning in anticipation of generating the interim analysis data set. Once the preparatory steps are complete, the data will be provided to the DMC for a determination of whether the studies met the pre-specified efficacy stopping boundaries on the co-primary endpoints. If the study achieves these pre-specified stopping rules, the Mariners leadership team will then evaluate the data and share top line results publicly soon thereafter, including both the co-primary and key secondary endpoints. Successful results would serve as the basis for submission of a U.S. regulatory filing. While preparation of data for the upcoming DMC is ongoing, as Scott mentioned, we'll continue to enroll patients in the double-blind phase of the study. Data from these additional patients will be pooled with the interim analysis dataset and will serve as the basis for analysis of other secondary and healthcare utilization endpoints. If double-blind enrollment is stopped based on the interim analysis results, We will then enroll new patients in a planned open-label extension to collect additional safety data that will support upcoming regulatory filings and future discussions with payers and other key stakeholders. As a reminder, the interim analysis will include results of the co-primary and key secondary study endpoints, which measure both onset of action and durability of effect in controlling status epilepticus. The co-primary endpoints are status cessation within 30 minutes, and prevention of escalation to third-line treatment with IV anesthetics. For the key secondary endpoints, we are looking at another measure of onset of action, a time to status cessation analysis, and a further measure of treatment durability, lack of progression to IV anesthesia for 72 hours, which encompasses the 24-hour period following the end of the canaxolone infusion. Following release of the top-line data, analysis will continue and will yield results on other secondary endpoints and important healthcare utilization outcomes, including time on mechanical ventilation, days in the ICU and the hospital, and discharge destination. The results are anticipated by the fall, and we plan to present them at major medical meetings later this year. Turning to our second refractory status trial, RAISE-2 is a Phase III double-blind, placebo-controlled registration study targeting enrollment of 70 patients who have failed first-line benzodiazepine treatment and at least one second-line IV anti-seizure medication. In this study, we're evaluating IV Ganaxalone in a population that's earlier in the continuum of refractory status, in whom IV anesthesia is less likely to be an imminent next step in treatment. We believe this study, which is expected to complete enrollment by the end of 2025, will support a European approval and can be used to expand the U.S. label. Data presented at AES last December, as well as other published research, suggest that earlier treatment intervention in patients with status improves clinical outcomes. At that December meeting, we presented results from a five-year analysis of status epilepticus treatment dynamics in the U.S. This analysis showed that even in the absence of IV anesthesia, refractory status that was treated with three or more IV anesthesia medications had worse outcomes and longer lengths of stay. The RAISE-2 trial is designed in a way that will allow us to assess the impact of IV Dinaxolone on clinical outcomes and healthcare utilization in this subgroup of patients. Moving to super refractory status, or SRSE. We continue to supply IV Ganaxalone to physicians upon request under emergency INDs for these patients whose life-threatening condition has high rates of morbidity and mortality. To date, over 25 patients have been treated for SRSE with Ganaxalone under EINDs. Preliminary data on outcomes have been encouraging, particularly since we implemented a dosing regimen tailored to the treatment of SRSE. This regimen incorporates a higher daily dose of approximately 1,000 milligrams of Ganaxolone with 63 grams of Captisol. Based on the outcomes we've observed, we intend to conduct a proof-of-concept study by the Ganaxolone in approximately 50 patients with SRIC. We plan to go to the FDA in the second quarter of this year with this modified dosing regimen and begin the study before year-end. Turning towards the Ptolemy franchise, first with TSC. Seizures in TSC are often treatment-resistant, despite the availability of newer disease-specific anti-seizure medications. To address this unmet need, we're evaluating Ganaxalone in TSC patients with refractory seizures in our ongoing TRUST-TSC trial. This is a global phase three randomized double-blind placebo-controlled trial of adjunctive Ganaxalone. which will enroll approximately 128 patients with TSC-associated seizures. As Scott mentioned, we've achieved over 85% of the target enrollment and are confident that we'll complete full enrollment early in the second quarter of this year. As a reminder, the trial provides 90% power to detect a 25% difference in seizure reductions between denaxilone and placebo. As discussed previously, the titration schedule has been modified in consideration of the pharmacokinetics of Ganaxalone and the timing of side effect onset in prior studies. Currently, the discontinuation rate in the study is below 7%, giving us confidence in the potential benefit of the revised titration, not just on tolerability, but potentially on efficacy as well. In addition, we're seeing over 85% of patients who complete the study transition into the open-label extension, a rate as high or higher than observed in the Marigold study. We're targeting submission of a supplemental NDA in the first half of 2025, with a priority review expected. Additionally, we plan to expand our investments at TAMI to explore its potential in the treatment of other rare epilepsies. Planning is underway for a clinical trial that would assess oral Ganaxalone for the treatment of a broad range of epileptic encephalopathies. Many patients with seizures and neurodevelopmental disorders don't satisfy diagnostic criteria for Lennox-Gastaut syndrome or other well-defined developmental and epileptic encephalopathies, and we feel there's a substantial amendment in procedure treatment in these patients. We plan to initiate a proof-of-concept trial assessing Ganaxalone in approximately 100 patients in the fourth quarter of this year. In closing, helping patients and families suffering from severe refractory seizure disorders remains at the core of what we do. Our clinical team is motivated and focused on ensuring these lives are transformed with new, safe, and effective treatment options. I'd now like to turn the call over to our CFO and COO, Stephen Fanstiel, for a financial update.
spk03: Thanks, Joe, and good afternoon, everyone. I am pleased to be able to provide a financial update as well as share our financial results for the fourth quarter and full year of 2023. First of all, I am proud of how we managed the business in 2023. We ensured that we remained focused on our critical investments in the RSC and TSC trials and on the commercialization of CDD. On the latter, we now project a breakeven on our CDD commercial investment in the first half of 2024, which is ahead of our projections and less than two years from the launch. We were also not afraid to make tough decisions, such as discontinuing the established status epilepticus trial and making other cost reductions to ensure adequate cash runway headed into two significant data readouts. As a result, we ended 2023 with cash, cash equivalents, and short-term investments of $150.3 million. This is expected to provide cash runway late into the fourth quarter of 2024, and importantly, we project a cash balance of greater than $100 million at the expected RSE readout. We announced early in the quarter that we project 2024 U.S. Satomi net product revenues of between $32 and $34 million. As Christy mentioned, this increase from 2023 represents continued strong and steady execution on the launch. Unlike 2023, we are not providing full-year 2024 operating expense guidance at this time, as the level of investment will depend on the outcome of the RSC and TSC Phase III trials. However, We expect operating expenses and cash burn in the near term to be consistent with the 2023 trends. I'll now take a few minutes to summarize our financial results for 2023. We recognize the TOME product revenues of $6.6 million and $19.6 million for the three and 12 months ended December 31st, 2023, as compared to $2.3 million and $2.9 million for the same periods in the prior year. The full year total of $19.6 million exceeded our revised autonomy revenue guidance range of between $18.5 and $19 million. Separately, we recognized barter revenues of $0.6 million and $11.4 million for the three and 12 months ended December 31, 2023, as compared to $1.8 million and $6.9 million for the same periods in the prior year. Our actual 2023 barter revenue of $11.4 million was within our guidance range of between $11 and $12 million. Research and development expenses were $26.4 million and $99.4 million for the three and 12 months ended December 31st, 2023, as compared to $21.4 million and $79.9 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 the increase in R&D expenses is partially offset by the increased BARDA revenue. Selling, general, and administrative expenses were $15.4 million and $61.2 million for the three and 12 months ended December 31, 2023, as compared to $14.7 million and $56.8 million for the same periods in the prior year. The primary drivers of the change on a year-to-date basis were annualization of the U.S. SOTOMI launch costs and increased headcount. Full-year 2023 GAAP operating expenses, consisting of both SG&A and R&D expense, was $160.5 million, which was within our revised guidance range of between $158 and $162 million. Interest income was $1.7 million and $8.1 million for the three and 12 months ended December 31, 2023, as compared to $1.7 million and $2.4 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 $4.3 million and $16.9 million for the three and 12 months ended December 31, 2023, as compared to $3.7 million and $10.7 million for the same periods in the prior year. The increase is driven by a drawdown of an additional $30 million of credit under the Oak Tree Agreement in March 2022 and non-cash interest expense related to our revenue interest financing list to guard. The company reported a net loss before income taxes of $41.8 million and $142.9 million for the three and 12 months ended December 31, 2023, as compared to a net loss before income taxes of $32.7 million and $16.4 million for the same periods in the prior year. As a reminder, the prior year's results included the one-time sale of our priority review voucher in the third quarter. These totals include non-cash stock-based compensation expense of 3.9 million and 15.6 million for the three and 12 months ended December 31st, 2023, as compared to 3.8 million and 14.9 million for the same periods in the prior year. Cash used in operating activities was 118 million for the 12 months ended December 31st, 2023, as compared to cash used in operating activities of $112.9 million in the prior year. Before we move to the Q&A, I will make a few concluding remarks. We are very pleased with our progress to date, all of which has led to a number of potentially transformational milestones in 2024. We have two key data readouts in RSC and TSC that is positive to drive significant growth for our Ganaxilin franchise, and we look forward to sharing these and other important updates in the months ahead. Thanks again for your continued interest in Marinus. Operator, you may now open the call to questions.
spk05: Thank you. And as a reminder, if you would like to ask a question, press star and then the number one on your telephone keypad. To be able to take as many questions as possible, we do ask that you please limit yourself to one question. We will pause for just a moment to compile the Q&A roster. And we will take our first question from Brian Abrahams with RBC Capital Markets. Your line is open.
spk02: Hi there. Good afternoon. Congrats on the enrollment completion of the interim cohort, and thanks for taking my question. I guess on TSC, as we think about the potential future commercial opportunity there, I'm curious how the reimbursement dynamics that you're seeing with Zytalmy, both for on and off-label use, are shaping your view of what the ultimate, what the future dynamics might look like commercially in the TSC indication. Thanks.
spk12: Thanks, Brian. I'll kick it off. This is Scott. Thanks for the congratulations. And then I'll kick it over to Christy. You know, we're incredibly proud of the job that Christy's team has done. Within six or so months of launch, we had every state Medicaid program reimbursing Zetalme. We currently have over 80% of commercial plans with relatively straight guidelines and we've yet to have a patient who's been denied a therapy. Equally interesting since launch, we've had a meaningful number, about 10% of our current sales are coming from spontaneous use refractory epilepsy or DE patients. And we're seeing overall about two thirds of those scripts, those prior authorization forms being reimbursed by the payers. So, I think we really understand that the payers recognize that there are not a lot of therapy for these refractory patients. We have a limited data set, and we're very pleased with the reimbursement dynamics as of today. And I think going into TSC, we will have a second randomized control study showing the value proposition. We'll have a patient population in TSC which in many ways mimics the CDD population. A highly refractory patient population that has failed multiple prior therapies. A patient population currently getting standard of care, either Epidiolex or Afinitor or mTOR inhibitors. And this will be the first add-on study ever with Afinitor that's randomized double-blind placebo control. So I think we're going to go into all of our discussions with a high level of, I would say, a high level and high expectations that what we will share with payers will be equally compelling to that of the data in CDKL5 for Zetalny. Chrissy, you want to add anything? I know I rambled on. I apologize. But anything you want to add?
spk06: Nothing additional that I want to add, but I think the most important thing is that we regularly are confirming assumptions that in the refractory patient population that payers have a very, very distinct appreciation for what these patients have gone through. It's a different disease state than CDD, yes, but I do think that data is suggesting that although these patients have gone through many, many different medications previously, they still are significantly in need in the refractory patient population. If CDD is an indicator of that success that we've had in the CDD population, we'll be thrilled to see that again in TSC.
spk12: Got it. Thank you. Thanks, Brian.
spk05: And we will take our next question from Peyton Bonsack with T.D. Cowan. Your line is open.
spk15: Hi, guys. Good afternoon, and thanks for taking our questions. I guess looking forward to potentially if the data is positive, What remains to be done for the NDA package? How quickly do you think, besides the guidance that you've given, and is there anything outstanding on either the safety database that needs to be completed or TMC? And that's it for me.
spk12: Yeah, let me kick it off, Peyton, and then I'll pass it over to Joe. So, for everyone out there, as a reminder, this is the same API material that we have approved in ZTALME. So, a substantial proportion of the NDA package has already been effectively blessed by the FDA. Certainly, the process from API to an IV product will be new. We have, as many of you know, we made a formulation change over a year ago. We did that with guidance from the FDA. About half of the study will be actually in patients who have received that new formulation. And over the coming weeks after positive data, we will set up a meeting with the FDA, a pre-NDA CMC meeting, very similarly to what we did with the , and that was an incredibly successful strategy. For the filing, we will want to gather all of the data from roughly 100 patients to provide that to the FDA, although our expectation is the label will be driven from the interim and just to share with folks, we actually will have 83 patients in the interim. We had two patients enrolled in the same day to finish the study because we're a Marinist, nothing is ever simple. But so that interim will be based on efficacy on 83 patients, but we were expecting a label around those 83 patients, but certainly we'll provide all of the safety data and all of the double-blind data from all 100 patients as part of the filing. We will keep our sites open, and we will enroll patients should the interim be stopped for efficacy. We will continue to enroll patients in an open-label fashion to continue to allow physicians to experience using the drug, and we'll also file that additional open-label data with the FDA. Certainly, the regulatory team is expecting to have a pre-NDA meeting with the FDA soon after the top-line data with our current plan for filing the NDA in the first quarter of 25, early in the first quarter. And that's really aligned both with the data that we have to compile, but equally important with our commercial team's best thinking about the time of launch and when we're thinking about major reimbursement, including NTAP, in 2026. So the wheels are in place from our standpoint to be 100% prepared, and we'll walk you through as we go through these processes through 2024. Joe, anything that you want to add on the data sets?
spk10: No, I mean, as Scott mentioned, I mean, the pivotal data set for efficacy is going to be the 83 patients from the interim analysis, and then we'll be supplementing that, especially the secondary endpoints. We'll be looking at, we expect somewhere around, I don't know, we'll continue to enroll until the DMC meets, but that full data set of a hundred, who knows how many patients enrollment has picked up quite a bit. We'll analyze healthcare utilization endpoints and secondary endpoints on that larger data set. And so that'll give us more patients with those secondary endpoints and And we'll have a good size safety data set as well, as Scott said, especially with continuing to enroll open label if the DMC stops the study for efficacy.
spk15: Hey, thank you guys so much for taking our questions. Thank you. Thank you.
spk05: And we will take our next question from Andrew Tsai with Jefferies. Your line is open.
spk01: Hey, thanks. Good afternoon. Congrats on the enrollment completion as well as other updates. Maybe an open-ended question for you guys. If an investor were to ask you what are maybe one or two things that keep you up at night with the Phase 3 RSE study, what things could have been done better on an execution or a trial design standpoint, what would they be? And then really quickly, if the stopping criteria is not met, would you still provide some type of update right away to the street? Thank you.
spk12: Yeah, thanks, Andrew. I'll take the second one. We will unequivocally update you all on should the DSMB suggest that we continue the study. So you should expect some update from us in the first part of the second quarter. I think one of the things probably in the last few weeks that was keeping me awake, these are very complex patients. In our phase two, we had one patient who was on 100 different drugs and just collecting all of that data could create issues. I'm going to really give a shout out to our clinical team who several months ago started to create really computer generated checkpoints for the data to make sure that the individual data sets were aligning with our primary endpoints accordingly. and with what physicians were filling out and what was being filled out at the site, and we could do that in a way to really ensure a high quality of the data. I would say, you know, as Joe mentioned, his prepared remarks, you know, we finished enrolling the study at the end of January. We've now had several weeks to start cleaning the data, and so I feel, you know, what was keeping me awake at night was the integrity and the complexity, but I think the team is really worked hard to get us there. You know, and we're confident in delivering the data set as we talked about, and probably even more excited about sharing some of the secondaries in the fall as well, Andrew. So, the last few weeks, you know, the team's made great progress, and we are looking forward. You know, this has been a three-year project, a labor of love. I think our clinical team has done an amazing job at enrolling the right type of patients for this study. And I think we're going to unequivocally know that not only does this drug work, but can it have a material impact in the treatment of refractory status patients. And I was just at a meeting in Orlando this weekend. I met with five investigators. And there was a lot of excitement about the data set from the investigator team. And I think they're equally excited to see the results as well. Thanks for the question.
spk01: Yep. Fingers crossed. Thank you. Bye. Thanks.
spk05: We will take our next question from Charles Duncan with Cantor Fitzgerald. Your line is open.
spk14: Hey, good afternoon Scott and team. Congrats on completing that enrollment and commercial progress in the year. I had a question regarding RAISE 1. I can't recall if you've ever shared with us stopping rules and if you don't want to be all that granular, if you could just give us some guideposts and then Also, I didn't hear anything about second-generation Orokin Axalone. Do you have any color on the progress there? Thanks.
spk12: Thanks, Charles. I'm going to pass over the stopping criteria to Joe, but I'll just quickly say we didn't talk on this call. We were trying to keep the call brief, number one, so we kept it to 30 minutes. On the second-gen program, I would tell you all that we're really thinking about our ProDrug program now being our lead candidate. We are doing IND enabling work. We have a very high reason to believe that the ProDrug, both Ginexalone and the cleavage of the ProDrug structurally looks incredibly safe. We will have that data over the summer, which in my view is a de-risking event. For those of you who are not too familiar with what we talked about the ProDrug program, The data looks to have a one-to-day dosing regimen, a blunted C-max. We'll have new intellectual property. We'll have improved cost of goods. And there are some other important business issues that we will talk about over the coming months on the pro-drug program. And so, our hope would be that we will finish that IND-enabling work by year end and be able to take that program into the clinic next year. And I think, quite honestly, that's going to align great with TSC data and the additional study that we're going to start in the fourth quarter in other refractory epilepsies. Joe, you want to talk about the stopping criteria?
spk10: Yeah, sure. I mean, we're glad to share what the details of that are. So, the stopping criteria are based on the co-primary endpoints, cessation within 30 minutes, and lack of progression to IV anesthesia within 36 hours. Each of their co-primary endpoints, so both of those need to hit on the statistical significance independently. And the way, you know, the power is based on an alpha spending function. The P value, required P value at the interim is 0.0293. And with that P value, we have over 90% power to detect a 40% treatment difference. You know, with that said, if we get delta's you know, 25, 30%, it will still be statistically significant. The analysis is very robust. And so we have a lot of power at the interim analysis based on the 83 patients. And then we'll also be looking at the key secondary endpoints at the interim, but the stopping rules depend on the co-primaries.
spk14: Very helpful. Thanks for the added comment.
spk10: Sure thing.
spk14: Thanks, Charles.
spk05: And we will take our next question from June Lee with Truist Securities. Your line is open.
spk11: Hey, congrats on the enrollment as well, and thanks for taking our question. You know, good to hear that you're already planning for the launch of Zupami and Ibogaine Axolotl next year. You know, as you do the market research in preparation for the launch, is there a specific efficacy profile that patients are looking for, the docs are looking for, and is that consistent with your pre-specified stopping criteria? Thank you.
spk12: So I just want to be clear, the market research on the IV form of Xanaxlone? Yeah. Or Zutomi for TSC? I wanted to be clear. IV Xanaxlone?
spk11: Both, actually. Both, actually, but IV Xanaxlone would be nice. Chrissy, I'm happy to pass it to you.
spk06: Yeah, as Scott mentioned, you know, one of the things that keeps him up at night is that these patients are quite sick. And I think what we've learned in our market research is, yes, these patients are quite sick. And the value that we believe that iVig and Axlo can bring is quite extensive because everything is confirmatory. Everything that has been done in RAISE-1 to identify these patients is really what we've seen in real-world evidence as well. So, They really mirror each other. And quite frankly, that's super supportive of the commercialization efforts that we're trying to build. Similarly, on the Zatomi side of the business, I think that it is really important that we realize that this is the refractory patient population. And in Trust TSC, it is exactly what they have been doing there as well. A little bit different from CBD, but again, it's super refractory patients. And so again, exactly who we'd be commercializing for.
spk12: Yeah, and the only thing I'll add to Christy's comments is that, you know, the literature is quite clear that IV anesthesia leads to increased morbidity and mortality. And I think we designed that phase three trial specifically to replace a treatment paradigm, which is antiquated and really deleterious to the patient's outcome. So that, in my mind, the study design in and of itself is exactly what physicians told us they wanted. And certainly, I think it's going to be critical for the IV launch. Thanks for the question, June.
spk11: Looking forward.
spk12: Thank you.
spk05: And we will take our next question from Mark Goodman with Lurink Partners. Your line is open.
spk00: Hi, good afternoon. This is Basma on for Mark. Thanks for taking our question. I have a question regarding RAISE. So if RAISE is successful and Ganexolin is approved in RSE, how much off-label use would you expect in the ESE and SRSE settings? And along the same lines, you mentioned that there are 10% of the Ptolemy sales are coming from off-label use. Would you expect this percentage to stabilize or to increase? Thank you.
spk12: Well, let me start with the second question, and then we'll work our way to the first. Look, I think we as a company will never predict nor give specific estimates about off-label use. It's, you know, our sales organization is hyper-focused on the CDD population, hyper-focused on educating physicians about the use of genetic testing, and we would be the same with TSC. That said, traditionally, I mean, you know the market better than us. When GW was an independent company, we saw epidiolex sales as high as 20% or 25% in the spontaneous use category. I think we will focus on doing additional studies, either with Zytomni or second generation, and drive for label expansion over the coming years. But I think it's pretty clear that there's a significant number of patients with with needs in the refractory epilepsy population. So, you know, I think it's great to see that physicians are asking payers to try Zytalmy. It's great that payers are reimbursing. And we're seeing about the same discontinuation rates in CDKL5 patients, low 20% range. So, that's also encouraging on the efficacy side. On the IV side, The commercial team will be hyper-focused on the refractory status population. I think that is our best strategy for reimbursement, for formulary acceptance. I think we really believe that there are three major parts of the refractory population, and we will start with the most difficult to treat and continue to focus on the importance of earlier intervention, where there is significant data in the literature that the later you treat status patients, the worse their outcomes, the longer status patients are in status, the worse their outcomes. And we have good justification for moving up the treatment paradigm, starting with RAISE-2, but other studies that we are considering today. I think we find equally compelling is the super refractory opportunity. We think there are about 5,000 patients in the U.S. today suffering from super refractory status. The typical EIND patients that we are seeing today are spending about 30 days in the ICU as physicians ask to use our drug on a compassionate use basis. We continue to get one to three requests a month. We've had two more requests this month as EINDs. And I think our critical goal for us is to go back to the FDA and align on a dosing strategy, which would change from the raised dosing of 830 milligrams and 50 grams of captozol to a daily dose of about a little over 1,000 milligrams of Ganaxolone and 63 grams of capsaicinol. We think there's adequate safety there, but we do want to go to the FDA, get their alignment, and Joe is working on that final clinical trial design. Christy, on the commercial side, do you want to add anything?
spk06: You know, honestly, Scott, I think you hit on all points wonderfully. Thanks. Good.
spk12: Thanks so much. Thanks for the question.
spk05: Thank you. And we will take our next question from Douglas Sao with H.C. Wainwright. Your line is open.
spk13: Hi. Good afternoon. Thanks for taking the questions and congrats on all the progress. Maybe starting with Citalny, just given now we're entering our, I guess, our third year of commercialization, I'm just curious if we've seen a shift in where new patients are coming from and how that's evolved and and how you expect to see that sort of change over the next 12 to 24 months. And then I have a follow-up on the IV franchise.
spk12: Chris, do you want to jump in?
spk06: Absolutely. Thanks for the call, Doug. You know, over time, we launched this drug in September of 2022, and there were a couple of interesting things to start, but after we really leveled off patients are coming from a myriad of places we get an enormous amount of patients from our centers of excellence i'll remind you there's 10 of them across the united states but these patients also are being seen by their um their local or community physicians on a regular basis and so we tend to see great involvement from pediatric neurologists or pediatricians in some sort of function around these patients throughout so What we do know is that the targeting that we've done has been very, very good from 22 to now. We've now given that a little bit more of a kick, if you will, and it's a little bit more robust for 2024, and we've broadened our scope a little bit on who we're targeting. But I don't see us targeting differently, just a little bit more broad going into 2024, and there's not wild shifts on who's riding for the drug.
spk13: Okay, great. That's really helpful. And then just to understand a little bit what you're trying to do in SRSC, Joe, you spoke about, and Scott as well, about getting alignment with the FDA in terms of the higher dosing. My guess is you're not planning on sort of doing another sort of placebo-controlled study in SRSC. I'm just curious in terms of the language or sort of on the dosing, would it be sort of just because SRC, in theory, should be unlabeled to what your label will be in terms of RFC. Would it just be labeling to give specific guidance for that 1,000 milligrams dose for an SRC patient, or would it just be sort of providing looser language that you can dose up to 1,000 milligrams a day? Thank you.
spk12: Let me kick it off and then, Joe, I'll pass it to you. Yeah, Doug, I mean, you know, we're expecting our label is going to be the RAISE regimen, which is that 830 milligrams over 24 hours, which contains 50 grams of capsaicin. So, we want to unequivocally align with the agency that that higher dose can be studied safely. We don't think it'll be an issue. Almost all of these EID patients have gotten 63 grams of capsaicin. We have not seen a renal signal. We've never asked the agency because we've never had to go that high for RAISE. So we want to get their buy-in, and along with that buy-in, we will be doing what will be a single-arm study, and I'm going to pass it over to Joe. And, yeah, I don't think there's any reason that we need to do a double-blind placebo-controlled trial in this population. I think we need to show safety in this population, but all of those patients would have failed multiple therapies. And I think that's the way we're approaching it. I think we also want to really create a more robust data set for the drug outside of simply our RAISE and RAISE2 populations. Joe, you want to talk about what you're thinking about for a trial design?
spk10: Yeah, we've been working on this with Henry Bacavitas, you know, our former Brigham ICU doc who's been really leading the design on this. We're looking, as Scott mentioned, single-arm open-label trial. The dosing regimen is different. It's where it's raised as 48 hours. It's been several days. This dosing regimen we've implemented more recently for the emergency INDs. And without as much of a bolus up front, it's really a different approach. We start the drug while the patient's on IV anesthesia, continue it for a period of time, and then bring it down. And a dose of total, highest daily dose is 1,050 milligrams per day. And as Scott mentioned, it was 63 grams of captozol. And as I said, we've treated over 25 patients with this regimen, including children. And we haven't seen any safety signals from this higher regimen. And it looks like this higher dose regimen, it's hard to say based on the EINDs with 100% certainty, but it looks like it's having an effect beyond the regimen that we had used previously, which was basically the RAISE regimen. So we really want to make sure that, you know, if docs are going to use it, that they use it appropriately. It's not anything we promote, but I do think potentially they'd use it. And so the dosing regimen is different, and we want to get some data on that from a clinical trial.
spk13: And so, Joe, just as a final question, So would you anticipate having that new dosing regimen on the label itself, or would it just be to get the higher dosing limits sort of on the label?
spk10: I mean, this is a first step. It's a proof of concept study. So I think it depends on what we see there. But, I mean, we're just taking it a step at a time. We really need to see, you know, kind of safety and preliminary efficacy from a proof of concept study. And, Scott, I don't know if you have any more comments about the dosing.
spk12: No, I think you're right on target, Joe. I think, Doug, after we have this data, we'll go to the FDA, the team's ready to go, and we'll hear what they have to say. And we certainly see it as next steps. I mean, I think I'd love to see us get safety into the label, but we haven't had those discussions with the agency yet. But certainly that would be our goal, our hope, and our plan. Okay, great. Thank you so much. Thanks for the question.
spk05: And we'll take our next question from Jason Butler with Citizens JMP. Your line is open.
spk09: Hi, thanks for taking the question, and let me add my congrats on all the progress. Just one about the proof of concept study for oral Ganaxalone and Lennox-Gesto and the other rare epilepsies. Can you maybe just speak to the amount of data you would need to generate from that study before moving into a registration study in any specific patient population, and would there be any opportunity in that study to introduce the next-gen formulation, the prodrug formulation, or when would be the first time that you could bring that formulation into this patient population? Thank you.
spk12: John, let me kick it off, and then I'll pass it over to you for the trial design. Jason, what we're really thinking is that this will be a Zatomi study, and I think Quite honestly, five years ago, I would have felt crazy to run this study. But given now what we understand about Ptolemy, the PK, the PD, the blood levels, and what we've seen over the years, a consistent improvement in serum concentrations of the drug. And when we finish the TSC study, we'll be happy to share some of the, we haven't seen the blood levels in TSC, but we've seen them in other healthy volunteer studies, our SAD, MAD studies. And certainly, we're feeling good about the discontinuation rates in the real world. So, I have a heck of a lot more confidence today that in any study with Citalmi, we can get the vast majority of patients to a therapeutic blood level. And I think our goal in this study is to really show that proof of concept, and I'll let Joe talk about it. I think what we also want to walk away is where do we think Ginaxilone as a molecule is most effective if not only in LGS, but in other refractory DEEs. But I would not expect this study that we will kick off to really include that second gen. We'll use this study to help guide us on efficacy and where we want to go with the pivotal. And we'll take the next gen through the SAD, MAD studies. And hopefully, those will align in terms of what we want to do with the pro-drug program. And I think we have the luxury of a little time to get this right, to be thoughtful. We've got two launches that we'll be planning for in 25, so that will keep us pretty busy. But that being said, I think, you know, there are not a lot of folks who are really thinking about these patients, and it is a priority for us to get there. Joe, you want to talk a little bit more about the trial design?
spk10: Yeah, so again, this would be the initial trials, proof of concept, single arm, open label. We have not yet done the detailed discussions about what statistical signal we want to see to say the drug is particularly effective in condition X. I mean, I think there are a lot of things we can get out of such a study besides signal findings. I mean, we could look at signals based on the genetic etiology, a seizure phenotype, the type of seizure. We could also get information on non-seizure outcomes, some preliminary PK PD data, and also information to inform other pieces of a study design, selection of the clinical endpoints, even how we collect the data, how we do the measurements. and a basis for statistical, you know, more than statistics within the study itself, a basis for statistical powering on any subsequent study we would do. The general comment would be if everything, you know, if overall we get a good effect and every, you know, every subset seems to be trending in the same direction, you know, that'll tell us one thing. But if something happens to pop, you know, we may get patients in the study with specific disorders of GABAergic, transmission that may show a differential effect. All of those things will be informative. In terms of how much of a signal, I don't think, you know, we haven't done the statistical powering on that yet. A lot of the statistical descriptions in the study will be purely descriptive statistics without a priori statistical powering. Thanks, Joe.
spk12: Thanks for the question. Operator, we're going to take one more question from the call-in, and then we're going to have to cut the call.
spk05: Thank you. We will take our final question from Brian Scorny with Baird. Your line is open.
spk08: Hey, good afternoon, guys. I just wanted to ask a question also on RAID and sort of the powering assumptions there. It was originally powered for 40% delta, and I think you've been talking about as low as a 30% delta to reach that. So I'm just wondering how to kind of think about that. 30% delta. Is that based on blinded response rates overall in the study? Just kind of going through the powering analysis and how different results wind up hitting STATSIG at 83 patients. So I don't know, is that informed at all by a blinded analysis or is that consistent with the original analysis? And can you review any of the statistical assumptions underpinning the time cessation analysis? That's a secondary endpoint since it's not binary outcome. Just what sort of separation do you need to see there to be static? Thanks.
spk12: Joe, let me kick off, and then I'll turn it over to you. So, Brian, we have not looked at the blinded data. It's had no impact on our decision-making here. I think when we started the study, we really could not get a very comfortable handle on where placebo rates would be in the study. I think it was very clear to us that once we started the study and we added a protocol amendment and we had our physicians really screening every patient, our confidence continued to grow that we were seeing a highly refractory population that was very likely going to have a low placebo rate. You know, we've shared with you that blinded data. The average patient in this study is failing three and a half drugs, three and a half drugs. They're being observed for 24 hours compared to about eight hours for our phase two. And, you know, giving us a lot of confidence that physicians have run out of options. And our clinical team has pressed every enrollment, every physician on enrollment, making it crystal clear that if a patient was to be enrolled, the physician had to feel comfortable that IV anesthetic was the next drug of choice. Now, that being said, there are still going to be some placebo patients that probably, or drug patients that still are having epileptic form activity and are not getting IV anesthesia. Physicians are not perfect beasts, but we feel quite confident that the placebo rate will come in lower than our original assumption of 30% to 40%. I don't think we had any magical way to really think about that when the study started, given that the only publication suggested about a 9% response rate in third-line patients. So I think we have just seen this study progress. We feel very good about it. We feel that we're likely overpowered for a 40% delta where we were. And we think for the interim analysis, these 83 patients will be more than sufficient. Joe, you want to talk about the secondaries? And then we're going to wrap.
spk10: Yeah. Yeah, yeah. Just real quick about, I mean, the power calculation. The hardest data we had was from a survey of the investigators. you know, of the sites, when we presented them with the profile based on the inclusion criteria, they said that they would advance to IV anesthesia 70% of the time within two hours. And so 70%, you know, advance, that gives the 30% not advance. There would be basically what we would translate to the placebo rate, 30%, 35%. In terms of the secondaries, you know, the time to status cessation, We expect that actually to be, you know, it's a continuous variable, so even more robust than the responder analysis on the primary. And the way status would stop, you know, in the phase two, it was a median of five minutes in the Ganaxalone group. Patients in the placebo group aren't going to stop spontaneously. When they'll stop, it's when they're treated. And so that's going to be a period of, you know, hours probably in most cases. And so that continuous variable is extremely robust in terms of statistical power.
spk08: Great, thanks a lot.
spk05: And ladies and gentlemen, that is all the time we have for questions today. This will also conclude today's call. We thank you for your participation.
Disclaimer