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

Welcome, everyone, to the 40th Annual JPMorgan Healthcare conference. My name is Tessa Romero. I'm one of the senior biotechnology analyst here at JPMorgan. I'm joined by [ Taylor Hanley ] from the team. Our next presenting company is BioXcel Therapeutics. And presenting on behalf of the company, we have CEO, Vimal Mehta. Before I hand it over, I'd like to just remind all of our listeners to please use the "Ask a question" button in the portal to ask any of your question, and I'm happy to get it in on your behalf. With that, I will hand it over to you.

Thank you, Tessa. Thank you to our host JPMorgan for the opportunity to present today. And good morning, all. We were eager to meet with you in person this year, but the unfortunate realities of the pandemic continue to force us into this virtual format. With that said, let's jump in and discuss the many exciting things that are happening at BioXcel Therapeutics. As we go along, I will be making forward-looking statements. BioXcel Therapeutics is a clinical-stage biopharmaceutical company discovering and developing transformative medicine using artificial intelligence approaches in neuroscience and immuno-oncology. Our lead assets are BXCL501, which is for acute treatment of agitation related to schizophrenia, bipolar, Alzheimer's disease. And also, we are developing now 501 as a adjunctive treatment in major depressive disorder. So we are targeting 4 different therapeutic areas, which are big mental illnesses, schizophrenia, bipolar disorder, Alzheimer's and major depressive disorder with 501. In addition, we have a pipeline candidate, BXCL502 that is targeting more. It's in our mechanism we had identified for chronic agitation in Alzheimer's. It will complement our portfolio, BXCL501's portfolio. 501 is a sublingual proprietary thin film for acute treatment of agitation. We have another lead asset BXCL701 which is in the space of innate immunity. And we are conducting 2 trials, one in aggressive form of prostate cancer, which are cold tumor and advanced solid tumor which are refractory or treatment-naive with checkpoint inhibitors. This outlines our approach. Our AI platform is the underlying foundation for our company. We use this 4-step process to go from identification of an asset or a drug concept to selecting the candidate, transition -- doing the translational work to validate the candidate, go all the way to human proof of concept and conduct registration trials and then [ file an NDA ]. We believe this approach offers lot of advantages, including optimizing the R&D economics, shortening the time of development as well as achieving higher probability of success. As we all know, success rate in the neuroscience are pretty low from a starting of a project to all the way to the approval of the drug. I'm proud to share a case study, our own case study, where we have gone in from first-in-human trial to acceptance of our NDA under 3 years. So we started our trial in December of 2018. We completed our pivotal trial mid-2020. We filed our NDA, and we got acceptance of our NDA in Q2 of 2021. Currently, our PDUFA date is April 5. We are very excited about it and getting ready to launch that product. In this journey, starting from here and all the way to the NDA, we have been able to receive from the FDA breakthrough therapy designation based on our TRANQUILITY trial, which was in dementia related agitation. And we have been able to now initiate a pivotal Phase III program for BXCL501 related to Alzheimer's related agitation. In addition to that, we already have a clinical proof of concept for our second lead asset, which is BXCL701 that serves as the additional validation of our approach. Why we'd been able to move to a select 2 assets, BXCL501 and 701 and move them through the clinics rapidly, one, all the way to the NDA, another one in a clinical proof of concept? Both are novel mechanism. It's because of access to our AI platform. We create dynamic connectivity map to identify potential candidates. Here, I'm showing you just one snapshot of universe of stress-related symptoms, targets and drugs. And that is our underlying substrate or the playground, I would say, where our scientists go in and try to identify things that can be transformative for the patient where there is a high unmet medical need. And it provides a very unique insight. That's part of the reason our both mechanisms are very novel, whether it's treatment for agitation or whether it's in immuno-oncology for as innate-immunity activator. Thanks to our AI platform and our drug discovery and development expertise that we have been able to build a very robust pipeline. This pipeline was generated in last 3 to 4 year since we became a public company, and we continue to now build and expand this strategy because we have laid a very strong foundation to build our company. Based on the success we had so far, this is our 5-year vision for growth for the business. We want to become the leading AI-enabled neuroscience company. While we had been becoming the neuroscience company, we are developing our strategy how to maximize the value from our 701 asset for our shareholders. We have a 3-pronged strategy. We will continue to advance integrated capability and encompassing AI, drug discovery development, and commercialization. To my knowledge, I'm very proud to say we are the only company that has capability from AI all the way to the commercialization. Once we get approval, we'll be ready to commercialize in next couple of months. In terms of the 501, it's a pipeline within a product. It has enormous potential. We are focusing right now on 4 major neuropsychiatric disorders, and we'll continue to build on that. In addition, we will continue to build a sustainable, innovative R&D pipeline and 502 is one example of that. Let me now turn attention and -- to our neuroscience franchise, which is primarily focused on acute treatment of agitation. Agitation is a very debilitating for patients and threatening for health care's providers. And there are millions of patient across the globe and in U.S. who are in need for a innovative treatment. There has been no innovation in last decade, and there has never been any drug approved for Alzheimer's related agitation. So it's a enormous opportunity. Using our AI platform within a short window of 4 year, we've been able to move the drug all the way to the NDA process. The choices that are there currently are very suboptimal. They require restraining. They require over-sedating, and some of these antipsychotics and benzodiazepine drug are -- use their black box for warning for elderly. Our drug 501 offers a completely novel mechanism in a very differentiated approach. It's a proprietary, orally dissolving thin film formulation of formulation of dexmedetomidine. Commercial opportunity is really large. There are millions of patients, almost 7 million between schizophrenia and bipolar and about 25 million agitation episodes we estimate per year. And for Alzheimer, there are 5.8 million patient, and this is going to double by 2040. And we have estimated about 100 million agitation episodes per in the U.S. As you can see, mental disorder drugs market size opportunity is large. It's expected to be about $60 billion by 2031. For 501, we will continue to expand opportunity for our franchise and this is our strategy. Initially, for our indication development, we have chosen 4 indications: schizophrenia, bipolar, Alzheimer's disease and major depressive disorder. A single asset is catering to very major set of neuropsychiatric disorders. Our second strategy is to go in the medical settings in institutional first because a lot of patient come in the institution and then expand into the community in home setting. We have a plan laid out how we're going to make that happen. Additionally, we'll continue to expand the geographic expansion. As you know, we are planning to launch the drug ourselves in U.S. upon approval of BXCL501 related to schizophrenia and bipolar-related agitation. And we will look for a -- we will file an MAA this year expected in first half of 2022 and seek a partner for commercialization in Europe. The underlying mechanism of 501 is well established now with multiple positive result from numerous trials. The way the drug works is it calms the patient by reducing a chemical, which is a norepinephrine in the brain and reducing the release of the norepinephrine. So mechanism science is established, and we have clinical evidence both in proof of concept as well as in registration trials. The product is designed for easy-to-administer thin film, under the sublingual or buccal delivery. It's non-invasive. It's non-traumatic experience, and patient can self-administer it. So this meets or as close to the guideline that have been [ developed ] for treatment of these patient, the profile of our products. We continue to expand our patent portfolio. Our patent in U.S. has a expiry up to 2039, and we are building patent portfolio across the globe. This will provide us market exclusivity in 2039, '40 and beyond. And that's part of the strategy to build value for this franchise. To date, we have conducted 2 Phase III trials, SERENITY I and II. SERENITY I was schizophrenia patient and SERENITY II bipolar disorder patients. I'm just showing you the data from one of the trial. We saw in each trial clinically meaningful rapid and durable reduction in agitation. As you can see, the data is very robust. We had already received from the FDA Fast Track designation for our top 3 indication. Using this data package, we file for the NDA that was accepted in Q2 of 2021 and now our PDUFA date is April 5. We are very excited about approval of this drug and getting this drug to the patient and caregivers who are in strong need for a treatment option. There's literally nothing optimally available for these patients. In addition to schizophrenia bipolar success in the pivotal Phase III program, we did a proof-of-concept study in dementia-related agitation with 501. And you can see the data is very convincing. We got statistically significant reductions in agitation using PEC as the primary endpoint. We use all of this data to go to FDA, and FDA granted us a breakthrough therapy designation because there is no treatment approved by the FDA in this indication. All of this data package and getting the breakthrough therapy designation gave us the confidence now to build our pivotal Phase III program. I'm very pleased to share that now we have alignment with the FDA on our Phase III program. There we will be conducting 2 Phase III trials, TRANQUILITY II and III. They are very mirror images of each other. The only difference is they will be conducted in different medical setting. So TRANQUILITY II will be in assisted living center and residential facilities, which is as close to the at-home community setting. And TRANQUILITY III will be in the nursing homes where patients are cared or they have more medical supervision and care. It will be a 3-arm study, 40 and 60 microgram are the 2 doses we have chosen. Patient number is 150 in total in each trial, and it's a 3-arm study for both TRANQUILITY II and TRANQUILITY III. In addition, we will be doing a rollover safety study, open label for 1 year for dosing as needed to build our safety database. And all of this package will allow us to file our sNDAs. That's what we believe is needed to get to the next step for approval. For Alzheimer's program, we have a very comprehensive strategy. As you can see, 501 will cater to the PRN use, acute treatment, also in the intermittent chronic agitation. As many times, people have agitation, whether once a week or rather 3x a week. And then we are developing 502, which is our new pipeline candidate, completely novel mechanism for chronic agitation, so that we can capture and provide treatment options for these patients. And some of the medical setting that are outlined, that's part of our strategy. So we are extremely excited. It's a very large market opportunity. There are no current treatment options, and any drug that gets approved will have millions of patients in U.S. and globally, as Alzheimer's is a huge-huge issue for these patients. And agitation is one of the biggest symptom that drive these patients to the nursing homes or that drive them from the home because care givers cannot take care of their patients. Having talked about our innovation strategy, our pipeline, our schizophrenia, bipolar, Alzheimer's strategy, we have had a peak clinical meeting, pre-IND meeting with the FDA for MDD program. We will talk more about it. But considering the focus around the NDA, I will give you updates on our commercial and launch readiness. 501 is a game changer for the patients. Considering, as I mentioned, there has been no innovation in last decade, we need to do lot of education for these patients. So last year, we deployed our MSL and medical managed care teams. They've been actively engaging with the health care professionals. We fully launched our unbranded campaign about the disease awareness. In addition, we are participating in multiple conferences to increase the awareness of agitation. Our unbranded campaign is intervened before agitation reached its boiling point. And we have submitted pivotal study manuscript for publication, and we are involved in multiple expert speaker program. So there is a very comprehensive strategy working for last 12 months to cause awareness for this disease and also medical-to-medical interactions between the MSLs and the health care providers. Here, I'm going to share with you one data set that we very recently received this month. We conducted a HCP health care provider survey of 150 as their provider to look for their overall impression about the 501 product. 83% of health care providers had a positive impression. That's very encouraging, and we are very pleased with that outcome. At the same time, about the stated utilization, 40% of them said they will consider prescribing this drug to their patients, schizophrenia and bipolar patient who needs help for the agitation. So this overall data, which is just I'm showing you the snapshot is extremely encouraging. This is also a indicator that we will have champions when we launch the product in the institutional setting, who will be our champion to help us get the adoption in the formulary. So this is just one indicator, but it's extremely promising and it's complementary to everything else we have heard in our previous research. We are ready for launch as soon as we get approval from the FDA. You saw some of the insights we've been generating through quantitative research. We are optimizing our market access and pricing strategy. It's a evidence-based research, and we will be ready to come up with a strategy -- pricing strategy for it upon launch. We are finalizing our promotional materials as we speak. That is needed one piece to start the launch. In addition, we have expanded our sales leadership team, and we are building rest of the sales organization. Also, I will add that we are in the process of recruitment of Chief Commercial Officer, who will be joining shortly. Now turning the attention from neuroscience franchise to IO franchise. BXCL701 is a first-in-class oral innate immunity activator. We believe this is one of the most advanced agent in the clinic, and it's a completely novel mechanism. Now we have a clinical proof of efficacy established. We recently published it in Journal of ImmunoTherapy of Cancer with Georgetown with our partner. The mechanism has been published, and we have received multiple orphan drug designations from [ the FDA ]. There is a external validation for innate immunity. As you can see, multiple large pharma companies are interested in innate immunities based with recent acquisitions. Our data from our current prostate cancer trial is expected to come out in Q1 of 2022, which is almost 4 to 5 weeks away. ASCO-GU is in mid-February, and we will be presenting data from both the cohorts adenocarcinoma as well as small cell neuroendocrine carcinoma. These are cold tumors, and there's no current standard of care for small cell neuroendocrine carcinoma. This just gives you a snapshot of proof-of-concept data that was presented at ESMO. We saw 26% composite response rate and 701 was in combination with KEYTRUDA. KEYTRUDA does not have those kind of responses as a single agent. As you can see, we have a exciting year ahead of us. 2022 catalysts will be driven by a 3-pillar strategy. We will -- we are at the intersection of innovation and commercialization, and we will continue to innovate. We will continue to expand the full potential of 501 by adding additional indication. We are planning to submit MAA to EMA expected in first half of 2022, and we'll be seeking a partner to commercialize in U.S., we are planning ourselves. We'll continue to execute an Alzheimer's pivotal trial so that we can announce the data in addition to initiate the trial as a adjunctive treatment for major depressive disorder. As I mentioned that we are ready for launch as soon as we get approval from the FDA. And 701 franchise is extremely exciting, considering we are one of the most advanced innate immunity activator, and we'll continue to see best way of maximize our value for our shareholders. Before we jump into Q&A, I want to thank our investors for their support over the years. As you can see, we have an exciting year ahead, and we are confident with our current path we are on. In many ways, this is just the beginning for us. With that, we can open it for questions.

Well, thanks so much for the presentation. The first question that I had, you talked a little bit about your launch preparedness activities. What's the anticipated size of the sales force? And how many prescribers will you be targeting? And then second part of the question is how are you thinking about a pricing strategy for the product?

Thank you, Tessa. So I will address the first question about the sales force. So we have done very detailed work on sales force sizing. The market initially, if our label is for the institutional setting, there are about 6,000 hospitals, and about 1,600, 700 hospitals covered the 80% of the market. So our sizing -- sales for sizing estimates are that somewhere between 70 to 75 people sales force will be sufficient to cover this market. Even in the like these hospital setting, their IDNs integrated delivery network, they are 57 of them, and those are about 67% of the market. So our strategy is very carefully crafted, how we deploy our sales team strategically to get a rapid adoption and then continue to expand and get the formulary adoption in the IDNs and other strategic institutions. Regarding the pricing, we are developing a strategy that will allow us to come up with a WAC price based on all the results that has been done, what the industry analogs are. There was a drug approved ADASUVE, which was at $150 per treatment, that was 8 years back. We will use all of that to come up with our pricing strategy. Our pricing strategy will have a WAC price and it discounts depending on the medical setting, whether it's institutional setting or it's a community setting. We want to preserve value for the both settings.

Okay. Okay. And we did have a portal question coming here. And the person is asking, if you could clarify what the reason was for the extension of the PDUFA? And do you envision the product becoming part of standard of care?

So the reason for the PDUFA was then we -- is same what as we indicated in early December that as a part of the information request, which is normal part for the FDA, they requested additional analysis that was provided. Before they came back, they said to do that -- for that, they need some additional time to review. And we spoke with them towards the end of November, and they expressed that they need little bit more time to be able to get to the approval process. So they gave us a new PDUFA date of April 5. They consider that as a major amendment. So that's part of the reason we experienced that delay. FDA has not -- we have not provided any new information and FDA has not asked for any additional information. This was all prior to we got the, like letter from the FDA about their extension by 3 months.

Okay. Okay. And just on the European side of things, you noted and as an MAA submission in the first half of this year, what are the gating factors at this point to the filing? And how have your partnership discussions been going for that geography?

So the gating factor is our like interaction with the FDA in the approval because we are using the same package to file for the -- our MAA. So once we get our approval, we are ready to be able to file. We have done all the process. Processes are different, whether you file with NDA or you file with EMA. We have conducted all the processes, and then we will be ready to file in first half of 2020. In terms of the partnerships, there have been a number of interests in 501 product from number of partners. So we continue to entertain those discussions. And we believe once we have a approval and then we have filed for our MAA, we will enter into the partnership so that our partner has sufficient time to prepare for approval that will happen in 2023 to commercialize the product.

Okay. Okay. And you -- moving now, you kind of talked about the program for acute treatment of agitation in Alzheimer's disease. Just curious, why split into 2 trials by facility? I think you noted it's just to living residents for a one trial and then nursing homes for the other.

That's a great question. The reason for doing the 2 trials, they are only split by the nature of the patient. There's not much difference between the 2 or where they are residing. The reason is when patients are at home or residential facility or assisted living, they may have mild forms of the Alzheimer's and their agitation episode may not be that frequent. So they may be getting 3 episodes in 1 [ facility ]. But when the patient's Alzheimer's have progressed, their agitation episodes can get lot more. So it just allows us to prove the value of 701 across the patient population when they have less number of episode or more frequent episode because that's what we're trying to bring a drug as when needed that they can take this medication to calm the patient. So it will cover the acute agitation spectrum as well as the intermittent chronic spectrum with this trial strategy. So it will help maximize the potential of 501.

I see. Okay. That's helpful. And I guess we could probably switch now to the 701 program, given the time constraints we have. You've talked about additional data coming up at ASCO-GU in a little bit here. What data will we be getting there? And what would be sort of a good outcome or a win for BioXcel in that update?

So we've been conducting a trial in aggressive form of the tumor, like in a aggressive form of the prostate cancer. There are 2 cohorts, adenocarcinoma and small cell endocrine tumors. And these are the 2 cohorts we are conducting. We presented the data from the adeno that I showed today, and we will be presenting the complete data set and the more time period by the time we have that durability of responses as much we have by that time. So it will be a complete set of 28 patient data set for the adenocarcinoma. And for our small cell neuroendocrine tumor cancer, we have completed again. The trial is 15 patients and 13. It's a Simon 2-stage. So we have completed. We'll be presenting the data from the first 15 patients. We already announced that trial has moved to the second phase. To get to the second phase, we need minimum of 3 composite responses. And this is a tumor where there's no standard of care. And checkpoint inhibitors are not active. The responses are less than 5% of these cases. So we are excited. So we'll be showing the 15 patient data from the small cell neuroendocrine tumors as well. So that will be the data set expected at ASCO-GU. And in terms of the -- we had 26% composite response rate in adenocarcinoma and we'll be showing the response rate we are observing in the small cell neuroendocrine tumors.

Okay. Okay. And I think you also have another update coming up in the -- let's see, I think the first half of this year in relapsed solid tumors. I guess similar question that I just asked what will constitute a win for that update.

So that's a trial that we are conducting with our partner, MD Anderson. It's a investigator-initiated trial. And we expect that they will be providing an update on that trial. We had provided some data at last ASCO, and we saw signals of efficacy. So they will be completing those trial and the cohort and presenting the data. That's what we are expecting in first half at ASCO from our partner MD Anderson. And these -- just to give these are advanced solid tumors, either checkpoint inhibitors, refractory or naive, the checkpoints don't work. So we are testing it in hot tumor, that's the hot tumor strategy and cold tumor strategies with the aggressive forms of the prostate cancer [ right now ].

Okay. Okay. And I did want to toggle back to 501 for a second. We did have a portal question, and I think the person is -- it's more of a clarifying question. What was the additional analysis requested by the FDA? I think you mentioned that alongside the PDUFA extension question.

As I mentioned that all the question came prior to we received the notification from the FDA that they are extending it. This was part from the acceptance of the NDA, which happened in May of 2021 to now, we've been answering the FDA question. We answered their position related to the clinical trial -- clinical data analysis, which is very routine. It happens in every NDA. We provided that, and FDA came back and said they need additional time to review our analysis. There was no other reason or no additional data was provided.

Okay. Okay. And I guess, a broader kind of next question from me. The -- your current pipeline has assets in both neuroscience and immuno-oncology. Are there plans to kind of enter into additional treatment areas? Like how do you kind of approach your pipeline from that perspective? What's the strategic vision for the pipeline over the next, I don't know, 1 to 5 years?

That's a great question, Tessa. So our 5-year vision is to build a leading neuroscience company, which is utilizing the AI platform. As you can see BTAI, AI is in our DNA. We try to use the AI in every form through the drug discovery to development process. And we'll continue to build as a neuroscience company. We have 501, which is a pipeline within a product. We have a 502. And as I showed AI connectivity map, we have a very good handle on all the stress related symptoms, the attack targets and the drug. So we'll come up constantly churning and coming up with a product concept. And then we select an agent and then we make a decision to invest in those area. So 5-year vision will be, we want to be recognized as a leading neuroscience company utilizing the AI to bring transformative medicine to the patient. Agitation is our first foray in that area. In terms of additional indication, it's very hard for a small biotech to build multiple therapeutic area within a company. So we want to build AI to commercialization capability in neuroscience. In immuno-oncology, we have very strong development capability, which we approved now, and we'll be seeing them more data at ASCO-GU. So that gives us an opportunity to figure out strategic options for the 501. That can include licensing, doing joint venture, doing co-development, co-commercialization or spin out. Whatever the strategy makes sense for that asset, we really believe in it. I think we have worked hard to prove that now we have a clinical proof of concept, and we want to make sure we can maximize and bring this drug to the patient what we are trying to do in the neuroscience.

Okay. Okay. Great. Well, I think that might be a good question to leave the presentation on. I'd like to thank BioXcel so much for participating in the conference. Really appreciate it and a nice discussion. And I hope all of our listeners have a great rest of the conference as well, great rest of the week, and thanks for joining.

Thank you very much for hosting us, and thank you for attending our session.