BioXcel Therapeutics, Inc. (BTAI) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the 39th Annual JPMorgan Healthcare Conference. My name is [ Badi Shadler ]. I'm a member of the JPMorgan healthcare investment banking team. Thank you for joining our next session this morning on BioXcel. I'm going to hand it over to our next presenter, Vimal Mehta, CEO and Chairman of BioXcel. But before we start, I'd just like to remind everyone that we will have a Q&A session after prepared remarks. And you'll be able to submit a question to Vimal and the team through the blue submit a question button. And with that, I'll hand it over to Vimal.

Thanks, [ Badi ]. Good morning, everyone. I'm Vimal Mehta, I'm CEO of BioXcel Therapeutics, a clinical-stage company utilizing artificial intelligence platform to develop innovative and transformative medicines in neuroscience and immuno-oncology. Can you please put the first slide, please? Can we go to the next slide? Before I begin, as a reminder, I will be making forward-looking statements regarding our financial outlook, in addition to our regulatory product development. Next slide, please. Our mission is to use AI platform to develop [ transformative ] medicines. We are focusing on 2 therapeutic areas, neuroscience and immuno-oncology. In neuroscience, we are focusing on symptom-based approaches, which are resulting from stress-related behaviors. Our lead product, BXCL501, we are targeting 5 different indications, as you see on the slide. Agitation is very pervasive across all these neuropsychiatric conditions, so we are focusing on schizophrenia-related agitation, bipolar disorder-related agitation, dementia-related agitation and delirium-related agitation. Beside that, we see the application of this drug in controlling the opioid withdrawal symptoms, so we are testing that. And the data readout from that trial will be coming in this quarter. In addition to the Neuroscience program, we have immuno-oncology program, which is innate immunity activator. We believe we have the most advanced orally active innate immunity activator in the clinic, and we are testing it in cold tumor, aggressive form of prostate cancer as well as in advanced solid tumors. Next slide, please. What does AI platform do for BioXcel Therapeutics? It gives us a very different approach to identification of the -- our medicines as well as a different path, which is a 4- to 5-year path, to get to the NDA submission. 501, which is our lead product and the most advanced product, it was identified using AI platform, then we did the translational work, then we moved into the human proof of concept and registration trial. So first in human. The pivotal data was a 20-month journey for 501. So that was pretty rapid from the time we collected the data, first in human, with 501. And 701 is in 2 Phase II trials currently. Besides 501 and 701, we -- our AI platform is allowing us to build a sustainable R&D pipeline in addition to these assays. So there will be a sustainable pipeline. AI platform gives us huge advantage in terms of greater predictability and efficiency of drug development, as you will see throughout the presentation. Next slide, please. Our pipeline has both depth and the breadth. As you can see, 501, we are developing, and we had positive Phase III trials in SERENITY I and II, and we're in the process of filing an NDA that is on track to be filed in Q1 of 2021. In addition, we have a positive human proof of concept in dementia trial that we announced last week. And then we are expecting our data readout from the opioid withdrawal symptoms in this quarter in next couple of months. And we are in the process of initiating a delirium trial Phase II that will initiate in this quarter, and we'll provide an update on that. In addition, to our NDA and 3 sNDAs, the company has developed a strategy to move into the chronic agitation. So we are retesting 501 for chronic agitation for treatment of dementia. Also, we are developing a combination strategy which is in formulation for 501 with another mechanism for testing in chronic agitation in dementia. And also, we are doing the testing of the wearable devices, which is Apple Watch, in combination with 501, for prevention or arresting the agitation in the earlier stages. And that is in the clinical [ stage as we speak ]. So you can see we want to be striving to be a leader in treatment of agitation, and we have a broad pipeline to be able to achieve that. Next slide, please. So I wanted to give a glimpse of what to expect in terms of our launch strategy, anticipated launch timing. We plan to launch upon approval of our first NDA, which we are filing this quarter, early 2022 for our first NDA, which is in bipolar disorders and schizophrenia. Then we expect, as we move along, between now and 2023, that we -- if we get approval on our follow-on sNDAs with dementia and opioid withdrawal, we will plan to launch that in 2023. And delirium will follow that in 2024. There are about 50 million patients across these disease indication that are listed on this slide where agitation is pervasive, and it happens in all of these neuropsychiatric condition. And as I will show you, our mechanism is central for treating the agitation. And so far, we have proven that drug is working in 3 of these indication, and we continue to test it in additional indication. I'd just like to focus little bit what is upcoming in terms of the life cycle management. There are other indications like depression-related agitation. We had some patients in our bipolar study in which some of the bipolar patient were depressed -- had the depression and [ drug was meant ] for those patient in treating their agitation. So we wanted to test it in depression-related agitation, some of the anxiety disorders like social anxiety and general anxiety, it does have anxiolytic property. PTSD, we have a POD grant. We have an ongoing trial with Yale -- in collaboration with Yale in traumatic brain injury. These are some of the indications we have listed where mechanism will work, and we are laying out what our commercialization strategy will be in terms of our launch plan timing. There are about, for the 5 indication listed, 200 million agitation episodes per year in the U.S. The key value driver for this franchise will be treatment settings, moving from institutional to community setting, and then treating the broad spectrum of agitation, acute to chronic. And as you saw in our pipeline, we are striving to do that. Next slide, please. We are building. In addition to our success with the clinical program, we are building our commercial strategy to launch first-to-indication with our NDA filing, expected in a couple of months, schizophrenia- and bipolar-related agitation. We have hired the leadership team, Will Kane and Reina Benabou. We already have the MSL team in place, which will be deployed in March. And we are developing deeper market insight as well as market access -- toward market access. And in terms of the sales team, we're building the sales team, based on the standard review, 75 to 100 representative sales force that's expected to be ready in Q4 of 2021. Outside U.S., we intend to partner, Europe and Japan. That is the company current strategy for commercialization of BXCL501. Next slide, please. BXCL501 is a proprietary orally dissolving thin-film formulation of dexmedetomidine. I will be referring this as dex. There's a picture shown, how it is given to the patient. In all our trials, patients self-administered [ themself ]. Next slide, please. Agitation, as you can see, is debilitating for patients and very threatening for health care provider. It's a very common occurrence in multiple neuropsychiatric disorders. And there are multiple episodes for these patients that require treatment. Our estimate -- company estimate there are about 150 million people globally who are suffering from the indications that are listed there and we are focusing. Out of that, about 13 million patients are only in U.S. who experience agitation. As I indicated, there are about 200 million agitation episodes per year in U.S. for the indication we have listed. It results in a multibillion-dollar health care burden. So the current treatments are suboptimal. We believe our BXCL501 novel mechanism provides a highly differentiated approach. Next slide, please. This is the mechanism action for 501. It works, we believe, through a central mechanism. It's a very strong alpha-2 agonist and results in blocking the release of norepinephrine, which is the chemical in the brain, and one that is [ start ], it results in calming of the patient. Mechanism has been -- with 3 positive trials in distinct indication, we have the confirmation or we have the support for this mechanism that we are using to expand our indication. Product is as, on the right side, meets all the consensus guideline with the physician for overall therapy, and we are building a very strong patent portfolio. One patent product patent was issued for 501 in last quarter, and we have multiple patent applications pending. Next slide, please. This is a highlight of our 2 positive Phase III trials that we announced in July last year, SERENITY I and II, clinically meaningful rapid and durable reduction in agitation. Onset of action was as early as 10 minutes and statistically separated at 20 minutes, durable responses that lasted more than 4 hours after treatment. And as you can see, we saw very high response rate, almost 85% across both population. 501 was well tolerated with no severe or serious adverse event. We are using all this information and started submission of our NDA application. We will complete this NDA application with a rolling submission by Q1 of 2021, and we are on track to file completion of our NDA in Q1. Next slide, please. This gives you a very high-level overview of the data. As you can see, high statistical significance, clinically meaningful and rapid onset of action and durable responses in both the patient populations with both the doses, 120 microgram as well as 180 microgram. And high responder rates, as you can see, 87% and 85%. So we were very pleased with the data we got from the SERENITY I and II trial, and now we are moving towards NDA submission so that we can move one step closer to approval and providing this treatment to the patients. Next slide. This is our recent trial, TRANQUILITY, which is dementia-related agitation. We saw positive responses with 60-microgram dose using 5 different measures of efficacy, different scales. And we saw numerical separation as early as 30 and started to get separation up to 60 minutes. We measure this with multiple scales, with 2 scales listed. We saw the effect lasted almost 8 hours. So it's a durable response. 30, even the lower dose, was shown numerical separation, and this was a small number of patients. With more number of patients, it could separate. 501 was very tolerated with no severe adverse events. One of the key findings was higher exposure levels were observed in elderly patients that enabled the efficacy at lower doses, which is very useful for moving this drug from an institutional setting to the community setting. So we will be working towards that as a part of our Phase III [ program]. So it gave us a clear path to initiate a Phase III program. Next slide, please. Here is the data using the 2 scales. One is the neuropsychiatric scale, [ back ]. Another one is a dementia scale for agitation pass score. And you can see the drug was very active in -- with both doses. 60-microgram was statistically significant, which we'll plan to use in our Phase III, and using PK/PD modeling, we will decide our second dose, what that dose will be. Next slide, please. Here is our plan for moving towards the registration studies. TRANQUILITY data was announced in January. Now we are planning an end of Phase II meeting with the FDA in first half of 2021. And the key element for this program will be study is expected to be of similar insight like SERENITY I, one for schizophrenia, one for bipolar, 300 to 400 patients, 100 to 125 patients per dose cohort and a placebo. Two doses which we'll plan to evaluate. And the endpoint efficacy we saw across all the endpoints, so we will choose the endpoint with FDA as our registration endpoint. Clinical site will include assisted living center, nursing homes and hospitals. And we are aiming, after our meeting with the FDA, to initiate this registration study in second half of [ 2021 ]. Next slide, please. For dementia, we have a broader strategy. As neurological disorder progresses, agitation is in pre-agitation state, then it moves to more acute or episodic agitation, and then it becomes almost subchronic. What I mean by that? Acute and episodic could be you have 3 episodes per month. But subchronic could be that you are having now 2 episodes per week, but our drug will fit in into that regimen. Once neurological disease is progressive, then it becomes a chronic agitation. And we have a plan to test 501 as a single agent or in combination with other agents for chronic agitation. But current focus is on the episodic agitation, and we will be targeting the hospital emergency departments, assisted living center, nursing homes and the community patients at home. They reside in those communities. Our estimate is that they will be something like 60% in the institution where they get treated and maybe about 40% at home. Next slide, please. I'd like to spend a minute on our second asset, which is BXCL701. As I indicated, it is our -- we believe it is the most-advanced orally available activator of innate immunity, that's where we are focusing on. Next slide. The clinical development strategy for testing 701 has been to test it in cold tumors like castrate-resistant prostate cancer, adeno and tNEPC and combine it with KEYTRUDA. And in solid tumors, like hot tumors, which are either naïve or resistant -- treatment-resistant tumors that we are conducting with MD Anderson. We saw encouraging results of activity in difficult-to-treat tumors in both trials that we presented last year, last quarter, at SITC meeting. And we expect to present data from these 2 Phase II trials in Q2 of 2021 around the escrow time frame. So that's the plan for the 701. Next slide, please. As all of you can see, that 2021 is a transformative year for the company. Next slide, please. We have multiple milestones to achieve in 2021, both on the clinical, regulatory and commercial. So I will just quickly go over about the 501, as I indicated, NDA submission in Q1 is on track. Dementia end of Phase II meeting followed by initiating a registration trial in 2021. Opioid withdrawal, RELEASE data is on track for Q1 2021. And initiating the delirium study is on track for initiating in Q1. So Q1 is a busy time for the company. Multiple, either data readout, milestones or key regulatory milestone to achieve. While we are doing that, continue our quest for the innovation to bring this drug to the multiple patients across these disease indication, we are building our commercial infrastructure. As I already outlined, that we're making a tremendous progress, and we'll be ready to launch the product when we have approval of our first NDA. For immuno-oncology, the data readouts are expected to be by midyear. So we will have the clear efficacy readout as well as safety for the 701 program by the middle of the year. To achieve these milestones, we do have a strong cash position. We have currently $213 million as of December 31 to fund these key activities. So we are very excited to -- for 2021 and looking forward to continue to provide update throughout the year. Thank you for joining me today. Next slide, please. Thank you for joining me today. As you can see, it's a very exciting year ahead of us across all programs, and we look forward to providing you update throughout the year. And this session, this presentation, will be now followed by a Q&A, so I will pass it back to the moderator.

Thanks, Vimal. That was great. Congratulations on a really spectacular year of execution on the clinical side and looking forward obviously to the upcoming news flow in 2021. Could you maybe elaborate a little bit more on the plans for 501 in the neuropsychiatric disorders in terms of commercialization? What are your plans in terms of sales force size, how you're targeting the physicians and sort of the places in which the patients are getting treated?

That's a great question. And I'm glad, Will Kane, who is our Chief Commercial Officer, he joined me for Q&A. Will Kane joined us some time in summer last here. And since then, he and his team have been building the commercial infrastructure. So if I will pass this question to Will. Will?

Thank you, Vimal, and good morning, everyone. I'm happy to talk about our planning for the launch of BXCL501 in Q1 of 2022. As Vimal mentioned earlier in the slides, we are well on our way to building, not only the commercial infrastructure, but the medical and medical affairs infrastructure in order to prepare ourselves to bring this new important product to market. Our plan over the course of this year is threefold. First, from a medical, medical affairs perspective, Reina Benabou and her team, they have hired the MSL team, they're in training, and they'll be deployed by the end of the first quarter in sync with the filing of our NDA. As well as in the middle of the year, we'll be adding our account management team that will begin dialogue with payers, insurers, managed care, et cetera, as well as hospital P&T committee members. They're particularly important given our first stop with BXCL501 will be in the institutional setting. And then at the end of the year, in the fourth quarter, we will bring on our hospital-based sales force. Our current estimates are that they will number 75 to 100. And we'll bring them on, train them up, so that upon approval, we will be ready to launch in Q1 2022 based on our assumption that the product receives a standard review. So everything is in place from a commercial infrastructure perspective, and we're looking forward to progressing throughout the year and getting ready to bring our first product and to launch our company and our brand with the market.

Great. Thanks for that. One more question from my side. Can you talk a little bit more about the read-through from -- you've now had 3 positive trials across neuropsychiatric and neurodegenerative conditions. Can you talk about how you're thinking about some of those other programs in the sub-chronic, sub-acute or chronic setting and what the read-through from these trials will be for those upcoming trials in those settings?

As you said, now we have a read -- like on a positive trial in the 2 neuropsychiatric condition, like schizophrenia and bipolar, but we are treating agitation, which is underlying condition we are treating, and in the neurological disorders in dementia-related agitation. So that gives us a lot of confidence in the mechanism. And as I showed, the mechanism is that alpha-2 agonist works by blocking the norepinephrine. So we are looking at all the indication, neuropsychiatric condition, where there is a hyperarousal and norepinephrine is one of the underlying cause for the agitation. So as I outlined, that we have 2 additional trials like for opioid withdrawal. The data readout will happen. That is also hyperarousal state. So we are testing the drug in that condition. And also delirium agitation resulting for the delirium patient, it's a pretty large market, both in the ICU and the hospital settings. And this market synergizes with the commercial infrastructure that Will talked about. So it will be synergistic with that sales force. They will be able to promote or sell the product in hospital setting or institutional setting for both the schizophrenia, bipolar disorder and dementia. Beyond that, there are other indications for life cycle management, which is depression-related agitation, anxiety disorder like social anxiety or general anxiety, in addition, PTSD and traumatic brain injury. So we'll be busy. There are multiple indications where this product can extend, and we continue to maintain that momentum of bringing new indications online.

Great. And how do you guys think about the dosing relative to the side effect profile in those settings? I know that the neuropsychiatric disorders had a higher dose, but the -- with the elderly patients in the neurodegenerative program, we lowered the dose and still saw significant efficacy. How are you thinking about dosing in some of these other trials in the chronic setting?

So I just want to remind everyone that this is a 505(b)(2) approval with the FDA. 501 is based on Precedex, which is an approved drug for almost 20 years. And if you look at the package insert, it says that for elderly patient, which is 65 year old, you should use half the dose. And as far as I know, there was no loss of efficacy. So when we chose our doses for dementia, we chose 90, which was half of 180 that we observed; in schizophrenia and bipolar then we chose half of 120, which was 60. And also, we chose 30 to start with to test it out, what is the minimum effective dose? So I think taking advantage of all the data that is out there related to this drug over a 20-year period, in addition to our own finding, which was IV Dex trial we did in Alzheimer's patient and looking at the exposure level, we were able to triangulate all that information, and we were able to see the higher exposures were observed in dementia-related agitation patient. So I think this drug hyperarousal state in different patients, different dosing requirement will be there. And -- which gives us a, in reality, advantage in terms of the intellectual property because now we have a different dose ranges to protect, depending on what disease condition in there. And we expect the similar kind of outcome in opioid withdrawals because this hyperarousal in these patients is much, much different. And there, we are doing the sub-chronic dosing. We are using 2 doses 12 hour apart for 7 days. So that is the journey for the drug to be able to go from acute to subchronic to the chronic doses.

Great. Thanks, Vimal. And just to remind the audience, that you can submit a question through the blue submit a question button. I'm just going to go through some of these questions now. So one question we have is, from the audience, is what makes your AI approach different from some of the other approaches in that space?

AI approach for BioXcel Therapeutics has been built over a decade. So AI platform came from the parent company, which is BioXcel Corporation. They identified these 2 assets and spin out BioXcel Therapeutic. Company BioXcel Corporation worked with over 200 biopharmaceutical companies across the industry over a decade, built proprietary algorithm. It has started as a data validates -- built with big data, and when tools became available, as the AI. What is unique about BioXcel Therapeutics approach is we have AI and machine learning and drug discovery and development expertise and commercial expertise under one umbrella. As you can see, at BioXcel Therapeutics, we have AI capability, and now we have the -- heading towards the commercialization. So integration of data scientist and drug discovery and development team is critical for success of any of the AI platform. And we believe that we will be the first one, once we get approval of our first drug, that will be a truly AI-driven drug that has got approval through the FDA process. Currently, we have a successful 3 trials in 3 different indications. Now we are moving towards the NDA submission this quarter and hopefully approval shortly thereafter.

Great. And just a follow-up to that. You mentioned it took 20 months to go from clinical candidate to proof of concept. How long did it take to get from target identification to clinical candidate through the AI platform?

So once we decide to focus on a therapeutic area, we always have about 3- to 6-month process. Let's say, we decided agitation or we decide another system, 3- to 6-month process for the machine and the data scientists to work. The way technology works, we put in 500 to 5,000 word queries in the machine that are designed by our experts who are choosing the therapeutic area. And then machine comes out with a metadata. Metadata is a relationship map between the disease, disease pathophysiology, underlying mechanism, target. And then we overlay the pharmacology on top of that. So in agitation, we were able to see agitation is associated with hyperarousal state and hyperarousal is caused by norepinephrine. And then we said, "What are the agents that can treat that?" And we identified Precedex. Precedex was an IV drug. It was impossible to use IV setting, and it was in the surgical unit only, it was never used for treatment of agitation. So we translated that into a sublingual thin-film which was easy to administer and met all the consensus guideline that were there for treatment of these patients. So I would say that's a kind of a journey. And so once we initiate a program, we can go, from 3 to 9 months area, into the clinic. So after identification of the candidate, we go through a preclinical validation or some translational work, which can take 3 to 6 month, and we can be in a clinic in a 9- to 12-month period. So that's the kind of a journey -- typical journey for a candidate that we identify. We don't work on anything which is initially targeted identification. We work on drug that are either in clinic or has safety [ it must ] or they were all the way into the marketed drug. So 501 is a drug that was a marketed drug. We found it. We call it as a drug re-innovation. We identified an alternate method or path for developing this drug, which is a huge market. And for 701, this drug was developed in Phase III by another biotech company. And it was sitting on the shelf. It was developed before the immunotherapy drug revolution. And as more understanding happened over a decade, we were able to use that information, combined with the properties of the drug. And then we were able to buy that drug from the company because it was sitting on the shelf, and we were able [ to bring in clinic ]. So I would say, 3 to 12 months is a good time period to identify a drug and being able to bring it back in the clinic because we have so much data and information available on that candidate.

Sorry. Was having some trouble there with the mute button. One question, just beyond 501 and 701, what direction do you see sort of yourself taking the company in terms of other sort of therapeutic areas? Or are you going to double down in those 2 areas specifically? Kind of give us a flavor for how you're thinking about the next generation of development candidates coming through the pipeline from the AI platform.

Great question. I think 501 become a very massive success because that became a pipeline within a product. And we are a small company, so we have limited resources and bandwidth, so we focused in moving 5 indications to the clinic. For now all of that is progressing well, and we are obviously expanding our bandwidth. We will bring 502 and 503, that we have identified already using our AI platform, to the clinic. And this year, in 2021, we'll provide an update, what our 502 and 503 candidates will look like. The only reason we haven't brought them to the clinic is not that we have not identified them, but that we did not have the clinical bandwidth to be able to move these along. So 2021 and '22 will be a good time to launch our next program outside 501 and 702. And similarly, in immuno-oncology, we are doing the same thing. But at a strategic level, we are becoming a neuroscience company. As you saw, we are building a Neuroscience franchise. And we are focusing deep in building the expertise in Neuroscience as well as building our commercial capability.

Great. And one more question. You mentioned your plans for partnership for the EU and rest of world for 501. Can you give us an update on where you stand with that dialogue? And what sort of partner are you looking at in terms of that collaboration?

So strategically, we will be looking for a partner with capability to launch this drug at least for our first NDA, schizophrenia, bipolar and for dementia, where we already have positive clinical data. I will pass it on to Will so he can, a little bit, describe more what kind of a profile of a partner we are locking.

Sure. So as you've seen, 501 has broad applications across numerous neuropsychiatric conditions. And so obviously, when we look for a partner, we're looking for a partner that not only has geographic reach, but also the clinical development capabilities that can support development of 501 outside the U.S., in markets, across these span of indications that we're pursuing, and potentially more beyond that. And so we look for companies that have both the geographic reach and the clinical development capabilities and expertise in order to support us as we expand the opportunities that 501 offers.

Great. Sorry for the background noise. So on one of your slides, you mentioned 200, I believe, agitation episodes annually. Can you give us a sense of how much of that is in the acute setting versus in the sort of chronic setting that you're sort of going after later on?

Sure. Why don't I take that? So the episodes that we've quantified are all acute episodes of agitation. So we did a comprehensive market research study to understand how many episodes may present on an annual basis in patients across the spectrum of indications that we are initially pursuing. So schizophrenia, bipolar disorder, dementia, opioid withdrawal symptoms, and delirium as well. And so we focus just on the acute opportunity. We haven't focused yet on the chronic markets and characterizing those. And needless to say, but I'll reinforce it, the driver of that overall number of agitation episodes is the dementia market and also the bipolar disorder market because those are the largest prevalent populations and they have a high rate of agitation. And the Alzheimer's dementia population, for example, up to 70% of patients can actually experience agitation. And that, on average, can occur approximately 3 times a month. So it's very prevalent. And there are acute opportunities to intervene there and help those patients.

Great. Well, I think we can wrap up. So thank you very much to the team. We really appreciate you walking through the presentation. And obviously, congratulations on what really has been a phenomenal year for BioXcel with 3 positive readouts. And we look forward to 2021 and on what's on the come. So thank you very much.

Thank you very much for hosting us today.

Thanks.