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

Okay. Good morning. Welcome to the first day of the Virtual Vegas Bank of America Health Care Conference. My name is Geoff Meacham. I'm the senior biopharma analyst here, and I have Gregory Harrison for my team. And we're thrilled to have for a fireside chat, BioXcel Therapeutics. And sitting with us today, we have CEO, Vimal Mehta; we also have Chief Commercial Officer, William Kane. Guys, good morning.

Good morning.

Good morning.

So well, Greg and I, will ask some questions here, but I guess I'll kick it off with kind of the bigger picture for either Will or Vimal. Just to talk about the 501 launch. Going into the launch here, maybe just help us with, as of now, how you guys would characterize the level of awareness for the drug, for the data among some of the prescribers? And just help us with what you can do to maximize that ahead of the formal approval?

So Geoff, let me give the just bigger picture, and then I will pass it on to Will. So BioXcel Therapeutic, good morning, everyone. Thanks for joining, and thanks for hosting us, Greg and Geoff. BioXcel Therapeutics is a clinical-stage company developing innovative medicines utilizing AI platform. Our lead product is BXCL501. That's what Geoff was referring about the commercial launch. And yesterday, we announced our first quarter earning, and the key updates are that we have breakthrough therapy designation received for 501 in dementia indication. We have filed our NDA, and we are expecting a decision on acceptance from FDA. This month, we are also getting ready to fight our MAA. We got the alignment with the EMA on filing of the market authorization application and also, we're getting ready for the commercial readiness. So that's a very high level picture. Also, we have another asset, BXCL701, which is in the space of immuno-oncology, and we provided some update there, and we'll discuss that. With that, I will pass it on to Will.

Sure, Thank you, Vimal. Good morning, Greg and Geoff. I think we're in a really good spot at the current time relative to building the awareness, not only behind agitation as a common symptom to schizophrenia, bipolar disorder but also about 501 as a potential treatment option. So we continue to do a lot of market research to inform our thinking and our planning. We recently deployed our medical science liaison and our medical managed care team to begin direct customer interaction. So we can get more direct insight and feedback from them overall. And that will really help us inform how we continue to build a level of awareness that will get us ready for a launch in potentially Q1 of 2022. The other thing we've done is we created a campaign, an educational campaign which we call Boiling Point. And it's about how to educate health care providers about the value of de-escalation as part of the overall process of engaging and treating someone with agitation when they present in an emergency room, et cetera, and eventually, potentially how medication can be an integral part of that process. So we launched up about a week ago, in sync with APA, the American Psychiatric Association meeting and also with Mental Health Awareness Month, which is the month of May. And so we're tracking access and impressions to the site, et cetera. With the website, it can be reached by going to www.partnersincalm.com. And so we're very excited about that as a foundational component of our overall strategy. And lastly, just let us -- let me mention that from a medical perspective, we continue to make presentations at major medical meetings. So we had a couple of poster presentations on the SERENITY data at APA. And later this week, as we announced this morning, we'll have 4 poster presentations at the International Society Bipolar Disorders, again, featuring data from SERENITY II, which was the study specifically conducted with bipolar disorder patients. So all in all, we're in a good spot, making very steady progress towards the launch.

Great. That makes a lot of sense. You mentioned the filings in Europe. Maybe you can talk about within the context of your launch preparation, how are you thinking about your commercial strategy ex U.S. as far as potential partnership or doing it yourselves?

Sure. Thanks, Greg. So as we said in the U.S., we're planning to build our own commercial infrastructure to actually use the launch on our own. Outside the U.S , though, our strategy is to partner 501 with priority markets being Europe and Japan. And so that's a process that is ongoing. Certainly, filing of the MAA in the second half of this year will be a key catalyst towards moving that process forward. We're very excited about that. Based on feedback from the regulators in Europe, the NDA data package appears sufficient for filing. So that's great news overall. Also, I'll just point out that as we consider the European and the Japanese markets, we have done some market research there as well, and there are a lot of similarities between the U.S. and those markets. The unmet need is very similar in terms of recognizing the potential for alternative treatment options, the rate of agitation, the persistence in the populations, both schizophrenia and bipolar as well as dementia, which is a market with unmet need across the globe, quite honestly, give us great confidence that an opportunity outside the U.S. is a viable one.

Okay. That's helpful. And then as part of the launch preparations, what color can you give us on your discussions with payers that you've had so far and their level of receptivity as far as reimbursing 501 over other options that are currently available?

Well, we have had ongoing conversations from a market research perspective, not only with payers such as pharmacy benefit managers and health plans, et cetera, but also more importantly, with individuals who have a role in pharmacy and therapeutics committees at hospitals. Obviously, our initial starting point with 501 is the hospital setting, and so we continue to gain insights from them. Whether we talk to clinicians within the hospital setting or to pharmacy, pharmacy directors in the same setting, there's a commonality in their feedback. One, they too recognize the unmet need. And the potential option for alternative treatments being a good one, they also responded favorably and positively to the profile of 501 that we shared with them based on the top line data, et cetera. So they see value there. They like that it's an orally deliverable product, right, because they rely very heavily today on the injectables. And that, according to guidelines, et cetera, is not the preferred way to go. An oral therapy would be more conducive to a positive clinician patient interaction when they're presenting in ER with agitated symptoms. The other thing we'll pursue, and we are advancing is health economics platform, if you will, that will help to inform and quantify what potential impact 501 could have on the pharmacy budget, not just as a drug acquisition component but overall, right? So when patients present in emergency room, for one example, if they do receive medications that sedate them for long periods of time, that's a bed, that's in use and not available for another patient who presents. So pharmacy directors, in particular, have raised that as a potential opportunity. So all in all, the feedback has been positive. The need is there, and we'll continue to have those conversations as we move closer and closer to understanding the level of price that will enable us to have the broad formulary access that we think will be integral to launch an adoption.

Yes, just with respect to the agitation indication, there's a lot that you guys have going on from a development perspective. Maybe just help us with -- for investors that aren't as familiar with the story, what are the events to look out for the next 6 to 9 months that could further expand the 501 indication base? I know you guys have things like Alzheimer's dementia-related agitation. There's a lot going on with respect to opioid withdrawal, et cetera, et cetera. That would be helpful, I think.

Sure. Thanks, Geoff. As you mentioned that we have multiple indications that we are pursuing for 501. Just to remind everyone, our first 2 indications are agitation associated with schizophrenia and bipolar, for which we filed a NDA, and we are expecting to hear from the FDA this month. So that's exactly what Will was referring that we are getting ready for commercial launch for those indications if drug is approved by the FDA. So we're looking forward to that. The second -- third indication is dementia, which include Alzheimer's patient. It's a very large market opportunity. We had positive data in our TRANQUILITY program and using that data, we got breakthrough therapy designation from the FDA. Now we are planning a Phase II meeting with the FDA, which is planned for this quarter, Q2. And we hope that after having the conversations with the FDA, we'll be in a position to initiate our Phase III trial in second half of 2021. So that's a key milestone for the program. In terms of the company resources, those are our 3 priority indications that's where we are focused. In addition, last quarter, we announced data from our RELEASE trial, which is opioid withdrawal. And we met the primary endpoint that was like -- for the first time, we were able to do subchronic dosing 2 times a day over a week. So that was very different than just dosing in the acute setting. Also, we saw that we have a dose range where we saw retention of these patients. In opioid withdrawal, retention is very key. If patients are not going to stay in the treatment, you can never achieve the efficacy, which is normally measured by COWS and SOWS. In our trial, we have a lot of patients which are fentanyl patients, the majority of the patients. And fentanyl stayed very long, even after the morphine stabilization phase. And morphine, even high doses did not result in stabilizing these patients. So we could not achieve the baseline to be able to measure COWS and SOWS. So as a next step, we are planning, working with our advisers, continue to understand the data and then market evolution because market, as I've mentioned, is evolving, even in the last 12 months, we saw that there was an increase of mortality, fatalities by 55% since -- up to September 2020, and fentanyl is becoming a national crisis. So it's a very important unmet need, and we have the dose range and we have the data that we will use to identify a path that will allow us to get to the sNDA in that indication. So those are our -- for indication where we have collected data. And as you mentioned, Geoff, to date, we have done more than 7 trials, and we have 800 patient database that has been built for 501 over the last 2.5 years. So it's -- we have laid a very solid foundation for -- clinical foundation to continue to build on it. And the other thing that was discussed today was expansion into the Europe. So that's part of the strategy to develop our global footprint, and we have started executing on that front.

Great. That's helpful. There's a couple of things along the lines of what you said that I'd like to follow up on. But maybe first, the opioid withdrawal indication, what -- you kind of mentioned the path forward there, but how do you see the role of fentanyl users? I think you had over 80% in your trial we're using fentanyl that stays in the system much longer. So is there a way that you think you can kind of tease out that impact from those patients to get a clear signal as to the efficacy of everyone in that group?

So I think the opioid market is a -- one is a prescription market, another one is the street drugs like normorphine, which are laced with fentanyl. And that's kind of more complex and it's evolving like over a period of time. Fentanyl became more prevalent. In our trial, we tried to stabilize the patient who are coming in all the patients because we're doing a sending dose study, and we were trying to stabilize them with morphine so that we can get a clear base line. Going forward, we don't need to stabilize. We can take all-comers and see the impact of the 501. And those are the exactly kind of thing analysis we are doing currently that what doses and what kind of impact we want to see and could we do a trial without any stabilization by having all-comers come in and see the impact that we can help them go through the opioid withdrawal process, which is like 7 days a very critical period for these patients.

Okay. That makes sense. Maybe we can switch gears to 701. How do you see 701 fitting into the treatment landscape eventually? And what data could we see this year as far as an update that could serve to derisk that program?

Great question. 701 is a novel mechanism, DPP8 and 9 that we are developing in immunotherapy as an immune activator, and we believe we have the most advanced orally available immune activator. As you know, a lot of these immune activators are used for intra tumor injections. So we have been able to already derisk this program by combining 701 with KEYTRUDA, and it took us a while to get to the doses that were tolerable -- safe and tolerable to go to the efficacy phase. So now currently, with 701, we are in the efficacy phase where we have our own company-sponsored trial in aggressive form of prostate cancer, which is adenocarcinoma. These patients are already on chemotherapy and 2 other therapies like androgen therapy, and these are late stage patients, that's what we are testing. So recently, we announced that we -- our trial, which is a Simon 2-stage trial, it has moved from Stage 1 to the Stage 2. And we expect the data readout from this trial sometime this year. And that will derisk 701 from an efficacy perspective. So safety, we achieved it. And now we are working on demonstrating that the potential of 701 that it can convert these cold tumors to hot and provide the responses that normally you don't achieve with a checkpoint therapy. Second strategy that we have adopted with MD Anderson is look at hot and luke warm tumors, and they've been on the KEYTRUDA or checkpoint therapy, but patients become refractory. And we are testing 701 in combination with KEYTRUDA to see if you can change the responses in those patients. So that's our strategy. Cold tumor in the prostate cancer, and in the hot tumor focus on the refractory patient that has already been treated or their treatment naive patient that checked -- they don't have the marker for checkpoint therapies or they have not been treated. So that's our strategy, and we believe this year with the efficacy data, we will be at the point where we have the safety and the efficacy signals to show that this mechanism is working what we were set out to do.

Okay. And when you provide your update, do you have a kind of data hurdle in mind or some level of response that you would like to see to be confident in the efficacy of 701? And given that they're later stage patients, just being able to characterize the relative contributions between 701 and KEYTRUDA, given that there'll be late stage patients and you wouldn't necessarily expect a real high response rate in this population.

So response rate of 20%, that's what we are looking at in the combination of 701 with KEYTRUDA. What we know from already where these checkpoint inhibitors have been studied, responsive rate is in single digits, only the checkpoint. So our bar, what we are looking is around 20%.

Okay. That makes sense. And then maybe if we move beyond 701 how do you balance your level of investment and efforts between developing your commercial organization as you're doing now and then also continuing to innovate within the pipeline?

That's a very relevant and interesting question for BioXcel Therapeutics. So the key is that we have built a very unique organization. I truly believe in the last 3 years, we have been able to build an organization which has AI capability, artificial intelligence platform, drug discovery development capability and now we have also added medical and commercial capabilities. So we are now from AI, all the way to commercialization organization. This transformation of commercialization, which is a new organization, had it happened in last 12 months. We have built a concept of business unit. We have our leaders for our neuroscience program and also for immuno-oncology program. And the commercial leadership, as you can see, Will is with me; and for medical affairs, it's Reina. So we have put in dedicated leaders who have -- comes with a lot of experience, and our teams are integrated under one roof. So we maximize the efficiency from our resources. In addition, we have built a network-based partner-based approach where we leverage and expertise from external resources wherever we need. So that is the key. So we have a laser focus currently on our launch for medical and commercial team, and our clinical development team continue to focus on advancing our 501 and 701, and R&D team, Discovery team is evolving our AI platform. We are not developing a second-generation AI platform. Originally, we started with how can we use all the information, identify these novel concepts like 501 and 701. Now we are also building into that other AI platform that can help generate some data, validate these are possible. So we are developing those as the next-generation AI platform. And hopefully, when we conduct our R&D Day sometime this year, which we plan to do face-to-face, if that's possible, then we'll be able to lay out our AI platform as well as our emerging pipeline. So that's the key that it's an integrated biotech organization, which is a very unique organization we have created here that is allowing us to achieve advancing our pipeline as well as focus on our commercialization.

Vimal, it's Geoff. Yes, I just wanted to follow-up on that on the AI platform. Clearly, this is a pretty unique platform in the biotech industry. If you think about strategically, you guys are in neuroscience and oncology. Would you expect the AI platform to continue to stay in those areas? Or would you use AI, that sort of therapeutic category agnostic, right? Could you go into other verticals across the therapeutic space?

In BioXcel Therapeutics, we will focus on neuroscience and immuno-oncology because that's what the expertise we have, and that's where we are building our core capability. So next candidate will be neuroscience. In neuroscience, our strategy is to focus on stress-related axis for symptoms-based approach. So we will focus on 502, 503, which are aligned with our strategy. In immuno-oncology, our strategy is in innate immunity, and we are focusing in that area. So Geoff, to answer your question, in BioXcel Therapeutics, we'll continue to focus on neuroscience and immuno-oncology, utilizing our AI platform. Because the key to success, what we have realized is integration of AI platform, which is basically augmentive intelligence. With the drug discovery and development expertise, and they work in hand in gloves, that results in the kind of development candidate that we have been able to bring forward, like 501 and 701 and keep executing on those 2 candidates to prove the value of our AI engine. So that's where -- to answer your question, it will be neuroscience and immuno-oncology.

Okay. And one follow-up, and then I'll hand it back over to Greg. Just will we know a little bit more about the next candidates and indications at the R&D Day? Or is it going to take a little bit longer to kind of play out with respect to pipeline visibility?

We continue to identify new opportunities and then we have a process, which it goes through in terms of the validation. Once hypothesis has been validated, we have done the translational, then we build the clinical plan. So we will start discussing and rolling out our next-generation candidate. Up till now, company has been very focused in moving the 501 because its indications were expanding in multiple areas and also executing on 701. So we will continue to bring our next clinical candidate this year and next year, which will be 502 and 503.

Great. And then I wanted to follow-up a little bit on 501. You've talked about dementia as being a core kind of target larger market. Can you talk about that a little bit and the impact to the commercial opportunity with respect to at-home administration?

Sure, Greg. I can handle that. So the dementia market is a large market today. So the Alzheimer's Association estimates are about 6 million adults in the U.S. with Alzheimer's dementia. And their projections are that, that number will double over the next 20 years. So going from 6 million to about 12 million. Agitation is a persistent and problematic symptom associated with the condition. The literature represents, we estimate about 2/3 of patients with Alzheimer's dementia experience agitation, and that agitation can build as the stages of the disease progress. So for mild Alzheimer is to moderate to severe, the agitation actually builds and becomes more problematic. And in many instances, it's what results in movement of a loved one to a nursing home or another institution where they can be cared for because of the burden on the family. So we have always indicated that our goal is to bring 501 potentially to patients across treatment settings, nursing homes, assisted living as well as the at-home setting. We'll learn a lot from interactions will have with the FDA in the coming weeks and months around the dementia program and how that's going to evolve. We'll also learn relative to 501's use and the community setting for bipolar disorder, for example, as we kind of continue the dialogue with them about NDA review, maybe we get an acceptance here very shortly. So we're very excited about the opportunity more broadly. The need is certainly there. The market is large and growing. And so the opportunity is fundamental to this business, and so that's an opportunity we intend to seize upon.

Great. Well, with that, that brings us to the end of our session. I'd like to thank you, Vimal and Will, for being here to help kick off the conference, and I think I know our investors really appreciated it. And thank you very much.

Thank you very much for hosting us.

Thank you.

Thanks, guys.

Thank you. Bye-bye.