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

Good morning, everyone, and thanks for coming to the UBS Global Healthcare Conference. I'm Colin Bristow, one of the biotech analysts here. And it's my pleasure to have the BioXcel team with us. On my right, I have Vimal Mehta, Founder and CEO of BioXcel. Also from the team, we have Matt Wiley and Vince O'Neill. Vimal, I know you have some opening statements, and congratulations on the recent approval launch. So I'll let you kick it off.

Thank you, Colin, good morning, everyone. BioXcel Therapeutics is a biopharmaceutical company, developing innovative medicines in neuroscience and immuno-oncology using AI-based approach. Our 2 lead products are BXCL501, which is for acute treatment of agitation and BXCL701, which is an innate immunity activator. So those are our 2 lead products. We are very excited that this has been a very transformative year for the company, considering that we got the FDA approval for our first product within a -- going from first-in-human all the way to NDA approval was 3.5 years approximately, and this is extremely exciting. We are getting ready to do the commercial launch. And we do believe IGALMI is the trade name for the product that it is a disruptive platform, and we had our national launch meeting last week and our sales team has been deployed, I'm very pleased to report this week. So it's extremely exciting and Matt is going to talk more about it. We have initiated the pivotal trial in a very large market opportunity, which is Alzheimer's related agitation, we have about approximately 100 million episodes there for schizophrenia bipolar I or II, it's about 25 million episodes per year. So these are big market opportunities. In addition, we are focused on developing 501 as a adjunctive treatment in MDD, major depressive disorders. As you know, there are more than 300 prescriptions filled every year for antidepressant. And the opportunity for 501 is to be deployed as an accelerant when first 4 to 6 weeks, the antidepressant don't show much effect or there is an anxious societal phase for these patients when they go on antidepressant. So that's where we are focusing with 501. So 501 single drug, which is a sublingual thin film is going to impact the lives of the schizophrenia and bipolar I or II with our IGALMI, that is getting launched. Alzheimer's agitation is in pivotal trial and MDD. So multiple neuropsychiatric conditions, obviously, there is a lot more potential. But these are low-hanging fruit that we have prioritized to focus on. In addition, we completed a strategic financing for $260 million, and that was with Oaktree and QIA, which is Qatar Investment Authority. So we were very pleased with that. The company already had as of March 31 $200 million in the bank. So we have a strong balance sheet to be able to execute on our clinical, regulatory and commercial milestones. Additionally, we announced formation of OnkosXcel. So that we can execute on our vision to be AI-enabled neurosci company under our BioXcel Therapeutics umbrella. So that's our vision. And we are super excited about 701's real potential in turning cold tumors to hot. The scarcity value, it's a completely novel mechanism. And we will be providing an update on OnkosXcel in the second half of this year. I will be making or my team will be making forward-looking statements. I just wanted to mention that, and I will then turn it back to Colin.

Super. Thank you. So maybe let's talk about the IGALMI pricing. You covered this a bit on the launch call, but I'd love to just discuss a bit more the rationale for the price point. And then just walk us through the additional measures you're taking to drive this -- to drive usage in the hospital setting and kind of get this through the P&T committees as fast as possible.

Sure. So the pricing decisions [ rated ] on 2 important factors. One is we wanted to have broad enough access with as few restrictions in the hospital as possible. And the second is what our mission is, is to help patients. So certainly as many patients as we can help who have agitation with bipolar and schizophrenia was top of mind. That is not necessarily the only driver for access. The key drivers for access are going to be getting P&T committees to meet on IGALMI and then having formulary approval. And that requires several steps. One is having a physician advocate, probably from the emergency department, but also potentially from psychiatry to advocate [ patients on all the ] formulary. So that's the first step, as far as our sales [indiscernible] there are couple of things in parallel [indiscernible]. A couple of things in parallel that have to take place as well as we're working on GPO contracts. So the hospitals can pull down contracted rates on IGALMI, that's important. And then also ensuring that as the product is shipped in, once the formulary approval happens, that is loaded into the [ HR ] system and ultimately into the automated dispensing systems in the hospital. So there's a lot to do and the process will start to finish in 6 to 9 months.

The FDA is requiring a post-approval safety study. Could you just -- presuming this as expected from your discussions with the FDA, could you just talk about some of the rationale behind that? And what you need to satisfy to ultimately give FDA comfort at the end of that trial?

I think that's a great question. FDA is -- the reason they're asking for the study is they're thinking of multiple repeat uses for the products. So they want to see some additional tolerance, like tachyphylaxis and some of the other things, which has been in our discussion with our current indications, like Alzheimer's related agitation, MDD that we need to be able to show that. So FDA is seeking for a post-marketing study. Our team, as we speak is engaged in discussions with them to come up with what their rationale is, what would they like to see, what population should we use, but those we should use to demonstrate that. Because there are so many agitation episodes. So these studies can be completed very rapidly. It's a matter of aligning what FDA is seeking and seeing what the value it brings to the program. So those are the discussions we will initiate with FDA now, label it in place.

Super. In terms of -- it's a process to get to your P&T committees. And typically, from our seat, we think it's around sort of 6 to 12 month time frame. Does that seem reasonable from your point of view? And as you think about just clearing that sort of process hurdle, when -- is providing revenue guidance something you would expect to eventually do? And can you broadly give us a time line when this could occur? Could it be a '23 event?

I'll let Vimal talk to the guidance for the question. I think that your assessment is right, it is a long process to get through. Now some formularies will -- some P&Ts we'll meet earlier, and so we can begin driving demand earlier than 12 months. And some will take place over time, and it depends also on when we can get on the P&T agenda and things can get pushed from quarter-to-quarter, et cetera. So there are a lot of moving factors that will contribute to when we actually have formulary access. So I think as we think about demand generation, we have to think of it in that context that we're going to be ramping up as demand [indiscernible] access improve. And I'll let Vimal handle the guidance part of your question.

That's the easy one. So it basically -- there is no commercial precedence for IGALMI currently. People can put us in any bucket, it's a hospital-based product, it's used in the hospital, it's not really a hospital-based product, it needs to be given under the medical supervision, because that's how we test it in the clinic. We have a schizophrenia and bipolar I, bipolar II indications, we have 2 doses approved. We have repeated those can be used like after 2 hours. So there are a lot of positive things that FDA granted us where the trial was conducted. In terms of the guidance, I'm going to rely on the data that comes in first few quarters as we launch, which started today and understand what are the critical success factors, including getting on the P&T committees, getting the GPO contracts, non-formulary use. All those parameters that tells us that how the launch is progressing, which we will share with all of you. And once we are very comfortable that we can provide a guidance, we'll provide that guidance. Give us some time because we have just started the launch, and then we will be in a position to provide you a metrics that you can use as well as provide you the guidance.

Can you talk about the commercial infrastructure. And so if there's a process that's going to take 6 to 12 months, are you going to titrate the size of the sales force to match that? Is everyone in place now and just ready to go? How should we think about that? And then down the line -- and if you -- the more numbers you can give, the better, obviously, and then down the line, what's the incremental build you would need for agitation in Alzheimer's?

So I will answer the first portion of the question. 70 people are needed, that's in the budget for Matt to deploy. And he is using a very intelligent approach to making sure that drug can get on the formulary, and demand can be created and scaling it up to that level, and that's what he plans to do. With that, I will pass it on to him what he is planning to do for the additional indications.

Sure. So for the additional indications, obviously, these are in an outpatient setting would require a different call point than the hospitals we're currently in. So a lot of the work that needs to be done or is being done to rightsize the deployment for outpatient bipolar and schizophrenia. That work is being done. We're also trying to understand the true level of agitation, not just that's treated in the outpatient setting, but also what may occur at home. So we have to understand that dynamic, so we can better deploy against it. For Alzheimer's dementia, there is a lot of work that still needs to be done to understand the dynamic of the patient where their initial diagnosis takes place, where they might go for therapeutic changes to their current regimen, et cetera. We are collecting the data today to help answer that question, which will feed into the deployment we're going to need, when we -- if we should be successful in getting that indication.

And just as we think about the launch, 2 things. I think you talked about it would be difficult for us to track. But just if you could confirm that from the usual third-party datasets we get. And then as we think about how we model net pricing based on our anticipated demand, how should we think about that from a sampling, discounting early on in the launch phase?

So yes, so you're right on the first part of this is that there's not going to be an easy mechanism, there's not going to be syndicated data you can purchase to track our progress. But one thing to keep in mind is we will be direct shipping to hospitals. So as we're booking revenue, that would be a good reflection on how we -- how many cases have been demanded over the course of the quarter. As it relates to gross to net, the -- one of the decisions that factored into the WAC price is preservation of gross to net in the hospital. So the anticipation of having to discount deeply is not there. We believe that we can get pretty good access without staggering types of discounts that you might see in other models like the retail setting. So that's something that we are focused on preserving as much as possible to ensure that we have good gross to nets for this launch.

And then as we think about the geographic expansion, any major differences or challenges you anticipate from the EMA filing and regulatory point of view versus your experience with FDA?

No, we don't. We have already got the scientific advice. So we have a very good clarity what European agencies are expecting. So we don't see much difference there.

And if you could just remind us of those time lines, that would be helpful.

So we are planning to file that MA in this quarter. That's part of the plan. Our strategy we are evaluating now IGALMI is approved, we have the label from the FDA, where are the key markets. So all of you know, U.S., Europe and Japan. So we are also exploring our strategic options to enter into Japan. So it's all part of the strategy, how we're going to go about outside U.S. So it's kind of building up and developing. But good news is that we already had the scientific advise. We already had done quite a bit of work related to Europe. So we have a very good clarity what is needed to file MA.

On the EMA side, the dexmedetomidine, which is the active ingredient in IGALMI, the EMA recently updated that label in ICU use to just to know to higher mortality seen in certain age groups. Has that something that's come up at all in any discussions? And do you -- is there any index of concern on your part about that?

It hasn't come up in any of our conversations with them. And the reason it's not of concern is a patient that's getting treated are critically ill, that's the first piece of it. And they are already very thick. And the doses that are given of dexmedetomidine are very high. So as you know, in our IGALMI, we are using 5x to 10x lower doses than the therapeutic doses that are given as anesthetics. So we are not concerned, and it hasn't come up in any discussions.

Okay. Great. As we think about the path to expanding the label to remove the requirement for medical supervision, what does that look like from a process perspective?

That's a great question. And we are going to enter into conversation with the FDA, because we just received the label last month, that what the label is. And what we know, the reason medical supervision is there, and I asked my clinician, he said, "Vimal, we needed to keep these patients for 24 hours, if you did not keep them, we cannot get any vital, we cannot get the blood work done, because the vegetation patients treat it and goes home, after that, you can collect any of these parameters." So it was a requirement for the Phase III study to be success. So we did that now. Now we have to go back to the FDA and say, what would they like to see. Do they need to see anything in terms of the safety? Do they need to see anything in -- efficacy is really robust in both the doses, we have 80% and 90% responses. So we think efficacy-wise, we are in a good spot. We just need to understand from the FDA what would they like to see, so physicians can prescribe this drug in an outpatient setting or in a community setting. So also IGALMI is getting launched, and there will be a lot of experience developed for the use of this product with both patients as well as physicians. We'll take all of that holistic approach and then have a conversation -- meaningful conversations [ with them. ] Just to remind everyone, 2/3 of the patient, like there are 25 million episodes, about 17 million shows up in the ER room, and 1/3 either never make it or they get treated by something else outside. So there is a big opportunity in the communities I think. But if we get the approval to use it in the communities, I think there is an opportunity to change this dynamic. In reality, why hospitals should be clogged up with 2-thirds of the patients, 17 million episodes, if they can be treated at home, and then certain number who cannot be treated should go into the ER. So that's a very major shift that can happen once this drug can be used in the communities I think. But considering 17 million, the major part is in the year, we have focused our commercial efforts in targeting that right now.

Okay. Great. In terms of -- I guess, the next page of indication, Alzheimer's dementia. Before we just talk about the pathway there, can you just remind us why originally, I think you were pursuing the broader indication of just agitation in dementia and then you narrowed it down to Alzheimer's dementia. If you can just remind us of that.

We started initially our TRANQUILITY trial, which was Alzheimer's related agitation in broad dementia vision, FDA encouraged us to basically try this drug when we had initial meeting with them. When we recruited patients, we realized 85% of the patients are Alzheimer's patient, 15% was a small segment. Then we saw some industry approvals where they were trying to go for the whole dementia. And now FDA was asking for statistical significance in subgroups. So if we do a trial in which we have 85% of the patients have Alzheimer's, which is the main group. And then you have smaller sum group, it will be impossible to demonstrate a strategical significant. So it made sense, we knew FDA's position, what they are looking -- learning from the other. It made sense to have a conversation with them since our 85% of the patients are Alzheimer's related and that's the larger market. We should have a very tailored and focused effort to get the drug approved rather than in [ SMA, ] we get stuck because of any other reason. So that was the only reason that it can increase the probability of success with the FDA that we already knew these patients and that's the largest market. So there was no other reason behind it.

Perfect. And then can you walk us through the development pathway in Alzheimer's dementia and give us some of the time lines we should expect there?

Sure. So there are 2 trials, TRANQUILITY II and III. These are about 150 patient trials, 2 doses, 40 and 60 microgram and a placebo. So these are 3 arms trial. Number of patients, the reason they are small because in our TRANQUILITY, the affect size was really large. So we knew that like we can achieve the efficacy with that number of patients. In addition, both the doses were statistically significant in our analysis and even 30 was strategically significant. So you really get a dose-dependent response. So we were very comfortable in selecting 40 and 60 microgram. So that data readout is expected by the end of this year or early next year. We have accrual going really well. We had mentioned that we had the first patient dose. Now we have screened lots of patients and multiple patients have been dosed. So trial is progressing well, and we will be announcing that data. As I mentioned, there's a very major opportunity, 100 million episodes. TRANQUILITY II is done in the ALF assisted living facilities and residential center. So these are patients who may have a mild Alzheimer's and they may be getting infrequent episodes. What I mean by that is they may get 3 episodes a month. But when you go to nursing home and one of the reasons these patients end up in the nursing home, because they start getting more episode and they cannot be managed in an ALF or residential where you don't have too much medical, it's one person may be taking care of 60 patients basically. So we're conducting a second trial to show if there are more frequent episodes, and I will just put it out there, let's say, 3 episodes a week instead of 3 episodes a month, then nursing home, we will be showing the efficacy and that TRANQUILITY see dry. So what are we trying to cover? Alzheimer's is a spectrum, mild, moderate and severe. Agitation can be episodic in the beginning, then it could be multiple episodes and then it can become chronic intermittent. So we are trying to cover that with our drug with these 2 trials. TRANQUILITY III will start once we have this TRANQUILITY II enrollment in good control, and we know we can come up with a data readout. The only reason we staggered even though when we look at all the clinical records, we don't separate between TRANQUILITY II or III because clinical record, you are looking at all the patients. We're just bucketing them. And then in future, we will start the process of opening the sites, and it will be just done in with staggered fashion. We haven't given any specific line, but we think these data readouts are not going to be that much further away in terms of the 2 data readouts. So TRANQUILITY II by the end of the year, early next year, and then it will be followed in 2023 with our TRANQUILITY III. And once we have these 2 trials done and as you all know, we are also doing a 3 month follow-up in this, which was not part of the schizophrenia and bipolar. So we are capturing how many episode these patients are getting. And some of the parameters you were talking about tachyphylaxis and withdrawal and a tolerance, they will be covered as a part of the Alzheimer's strategy.

Interesting. Okay. And actually, this brings me back on to the pricing, because I think on your -- on the call when you disclosed pricing, you said that you might revisit it when you come to expand the label, expand into other indications. Could you just talk about conceptually how you're thinking about that and how it could change?

Great questions. So when Matt joined us, one of the first thing we did is, we said, we don't want to price our first program IGALMI unless we develop some good understanding about the outpatient. So Matt and team did some work around it. So when we priced IGALMI, there were 2 critical factors, reserving the gross to net for the first launch in a hospital setting, and preserving the value for our future indication. So those are the 2 things we looked at. There are strategies our commercial team is thinking and developing that how they're going to try to capture. So Matt if you'd like to add anything to that?

Sure. I mean, a couple of things that we found in the market research outpatient is that there is significant unmet need, and that we have good flexibility in the future. Whenever you do market research with payers, it is a point in time. We know that the payer environment has changed substantially over the last 2 to 3 years. We would expect it to continue to evolve. And so what this research helped us do is frame our price today. We'll continue to do market research with the payers over time to ensure that we hit the right mark for patient access and also to preserve our gross to net in those future indications.

And provide broad access, there's going to be 100 million episodes. So it's a very large market opportunity. So you want to make sure that you have the access to the marketplace.

I wanted to talk a little bit about the AI platform. I think it feels like on the calls, you don't get asked a lot about it. But when we meet, I know it's something you're very excited about, and it's clearly led to the development of IGALMI. So maybe you could just talk us through the AI platform and maybe open up the common a little bit and just describe how that led to IGALMI and 701, it'd be great to just get a bit of a better understanding of that.

Thank you for asking that question. That's one of my favorite questions, because I like to talk about it, because we truly used it, AI to get here. If you think about BioXcel Therapeutics even like in our symbol BTAI, AI comes from artificial intelligence. So it's in our DNA. I know that in the -- investors or industry are still trying to catch up with the AI, we've been doing it for a long time. What is really unique about BioXcel Therapeutics? We are the only company on earth, I can say, I believe, which has the AI capability to commercialization. And the reason we are here and we are being able to do this and you can look at our history, how much money we have raised, and we are here is because of the AI. We selected 2 projects, 501, we selected when I hired our Chief Scientific Officer, he had 31 years of experience. Frank Yocca coming from BMS and AstraZeneca, he said, Vimal, we should focus on symptoms-based approach, because disease modifying approaches for a biotech can be very risky to start with, we said fine. So then we said, what are the symptoms. We looked at every symptoms, we prioritized all the symptoms and agitation showed up right on the top that it was a multi-billion dollar healthcare burden. Once we identified agitation, then the goal was what can treat it. So then you feed 100 to 500 word queries in the machine, and machine -- and these are designed by the expert. And then machine crunches millions of publication, which can happen over a few hours. Normally, a scientist can read one publication and they can make first degree connection. Machines don't care. They are help you make second and third degree connection, that's where the value happen. So in our 501 discovery, what was really unique, we identified hyperarousal is a key mechanism. And hyperarousal, we said, what causes that, then it's was norepinephrine release. And that said, what can really help us block the norepinephrine. So we made a connection between the agitation to the mechanism to the drug. There were multiple alpha-2 adrenergic agents. We chose dexmedetomidine because it was very selective. And this drug was given in a surgical unit, it's a IV drug. So we have -- we looked at what the patient need is, patient need was that oral treatment that is nonthreatening. With a syringe you cannot go in a unit unless you have 4 people that put the patient down and like through an injection. So we identified, we converted this into a sublingual film. It's very potent, so we had to come up with a different architecture for the film where we have done micro deposition on it. So what is our innovation? Our innovation is we identified that low-dose pharmacology of this drug can be used to treat agitation, and we converted that into the sublingual film, and there is such an enormous need in agitation, because these are the indication we are just discussing with you where we are focused because if you start thinking ahead, there are anxiety like disorder, there is a PTSD. There are so many other indications like substance, abuse like where agitation happens. We haven't even touched the surface there. So we have identified using AI, a central mechanism that allowing us to develop a drug which can work across agitation in multiple neuropsychiatric conditions. So that was the discovery. And then my CSO said, "I knew all the drug machine form, but I didn't know that." I said that's our win because you didn't -- if you knew everything, then machine is not doing anything more than a human intelligence. So I will say, we call this as a augmenting intelligence. You are augmenting the intelligence of your [ TRANQUILITY ] that's all [indiscernible]. Our data scientists, our neuroscientists, our all the people, translational scientists, clinical and now commercial and medical affairs, they sit under one roof, and they use the integrated approach. That one thing is different about BioXcel Therapeutics. Similarly, in 701, when Vince and team joined, one of the things was not today, in 2015, '16, what is going to be the issue with the marketplace with immunotherapy. So one of the things we identified was the cold tumors immunotherapy is not working. Just by definition, cold tumor is where immunotherapy doesn't work. So we said, what can we do to change that? And goal was to identify something that can turn the cold tumors so hot, and we identified 701 as a completely novel mechanism, this drug was developed by Point Therapeutics like in early 2000. And it has 700 patient data, 5 or 6 Phase II trials, a Phase III trial, and we looked at all of that, and we said this has all the characteristics of an innate immunity and it should not be combined with chemotherapy. Before the immunotherapy revolution, it was combined and where it failed. So we were able to take advantage of the new signs that happened and then identified that could be a very unique agent and it was orally available and systemic in nature. So 2 different areas, we chose one which was not -- had a high probability of success, 501, we chose 701, which was a very tough area in a very crowded space, being able to differentiate. I'm very pleased to say, without AI, this would not have been possible.

And then as you think about using that platform on a go-forward basis, how often are you challenging the platform with new information, target identification? Do you have sort of a target number of new assets you want to come out of the platform on an annual basis? How are you utilizing it?

So when we selected these 2 projects 501 and 701, we had about 2 dozen product opportunities that we could have chosen. What it shows is, because we have a decision and a framework metric that it needs to change those boxes. So engine is always cranking. And we only select agent when it reaches certain threshold, so 501 reached that threshold, and we announced that. This is, again, a drug, which we are very complementary to our franchise 501. This is for chronic agitation in dementia, completely novel mechanism. The only reason we haven't disclosed the mechanism is, we don't want to give competition any advantage, because there are a number of drugs under development for chronic agitation. And we are currently in the formulation stage, we are doing translational work, once all of that is complete, and we are going in the clinic, we will describe the molecule and the opportunity and the mechanism. So for us, it's not about how many opportunities are there, it's about how many opportunities meet our threshold and how much resources we have, not only capital, in terms of the clinical execution and regulatory execution that we can execute upon. So things get identified additional thing, targets, opportunity. In future, we can look at bringing a partner, pharma partner who can take advantage of it, because we don't have therapeutic modality. If we identify a new target, you need somebody who has a therapeutic modality. So we haven't gone on that path, but that option is available to us.

Yes, that makes sense. So maybe let's use the remaining time on 701. You've talked about the formation of the OnkosXcel subsidiary. Walk us through the strategic rationale for that, when we can expect more details? What can you tell us now? That would be helpful.

So as we have stated publicly, we want to be a AI-enabled leading neurosci company over 5 years. So we are working towards that. We are building our platform, which is our AI platform. So I call it what discovered 501, 502 and 701 is version 0.1. Now we are developing our AI platform, which is version 2.0. In that, we are adding a lot more into the AI space in terms -- including even phenotypic analysis and others. Also, we are thinking strategically that symptom-based approach is great. We succeeded in it. Now we are commercializing, we have expansion of the indication, we are expanding geographic, we will be expanding the medical setting. So all of that is wonderful. And -- but if we want to bring a dedicated focus in oncology, we need to create a dedicated unit, because it was always -- even if you look at any presentation or any fire chat, it only gets 5 minutes pretty much. So Vince has to be very fast about it. So we want that it should get its own attention, it should have its own dedicated team and dedicated capital and partnerships or whatever is required. So it will allow us to execute on strategic option, and that's part of the reason OnkosXcel was created. And we did it when we got our strategic financing in place of $260 million in addition to our -- so Vince, do you want to add anything about the OnkosXcel?

No, I agree. I mean I think from my point of view, creating a team that's fully focused on execution of the studies can go up the reporting structure, if you will, those shared resources with the parent company, CMC would be a good example of back office [indiscernible] focus on the trials ongoing. So that's important.

And maybe just give us a quick refresh on 701 in terms of the development path. What are the next major readouts we should expect in the next 12 to 18 months? And then -- and we're still waiting on some of the primary details on OnkosXcel in terms of division of finances, division of human capital, human resources. So walk us through when we should expect those as well.

[indiscernible] So lead indication is obviously, prostate cancer. 2 flavors of that, obviously, adenocarcinoma, which is bulk standards prostate cancer. And then this newer variant much more aggressive, it looks like small cell lung -- actually, small cell neuroendocrine variations [indiscernible]. And we did present, we believe, proof-of-concept data earlier this year. The next case will be to complete the small cell neuroendocrine cohort. So we presented planned interim data back in February. The single-arm experience for the ADMIRAL cohort is now complete. The next phase fundamentally is to check to see whether 701 has single-agent activity, okay. And that's going to be a regulatory requirement. So FDA, other regulators will need to see or be convinced that it is the combination, not necessarily one drug or the other that is driving efficacy, if you will. So we know the answer to that vis-a-vis KEYTRUDA, all right. So KEYTRUDA has a sub-5% response rate in adenocarcinoma. And to my knowledge, there have been a couple of series only published in small cell in neuroendocrine for any checkpoint inhibitor. The only response is seen are those with strong predictors or benefit to checkpoints, namely to mutation dropping high or NSA [indiscernible]. So the next stage then is to really demonstrate yes or no activity for 701 alone. And to do that, we're heading into a randomization phase. So for adenocarcinoma we've already dosed the first patient in the randomized component. So 701 plus KEYTRUDA versus 701 alone. There's no need we feel, and we have discussed this internally and with our advisers to run an internal control of KEYTRUDA, because of KEYNOTE-199, that really demonstrates us very little activity. There probably would be ethical considerations.

Do you say FDA signed up on that, or that's just based on...

No, that's about external advisers, plus our internal team.

And the anticipated timeline for the readout of that trial is when?

So small cell should fully accrue at the end of this year. The randomized component for adenocarcinoma, you're looking at 18 months plus probably for that. So it's 60 patients. And once the small cell single-arm study is complete, we'll then go into randomization phase again.

And what's the efficacy followed threshold that you're looking to exceed this to be classified a success?

Yes. So probably differs small cell versus I don't know as we've discussed this before, it's probably a little bit more competitive. I think for small cell, I mean, one of the reasons -- probably the driving reason that we chose it, one, we know that DPP is probably relevant there in that disease. There's really no development activity ongoing in that indication. I mean, if we look at clinicaltrials.gov will demonstrate that. It is an absolute classic unmet medical need, therefore, lends itself to an accelerated development pathway. So I think if we stick with small cell, there are certainly precedents for the FDA granting an accelerated approval in solid tumors, but there is one [indiscernible], okay. And I think we're well above that at this point. Our interim data demonstrated a 30%-odd response rate. If that holds, I think we're in a good position to have those conversations. For adenocarcinoma, again, 20%-odd response rate in an end-stage group of patients, vast majority had double antigen blockers, for example, I think compelling in and of itself. What we haven't really spoken about a lot publicly, and we will present data on this subsequently, probably in the next 9 months or so is our biomarker strategy. I think overlaying a biomarker to the data that we have would be absolutely transformed. So we're working on that.

Great. I think we're actually at the end of time. So thank you very much. Congrats again on the IGALMI approval and ongoing launch. We're looking forward to the updates there. So Vimal, Matt and Vince. Thank you. It's been great.

Thank you, Colin.

Thanks so much.

Thank you.