Definium Therapeutics, Inc. (DFTX) Earnings Call Transcript & Summary

Good morning, and welcome to the Mind Medicine Fourth Quarter and Year-End 2024 Financial Results Corporate Update Conference Call. [Operator Instructions] This call is being webcast live on the Investors and Media section of MindMed's website at mindmed.co and a recording will be available after the call. I would like to introduce Stephanie Fagan, Chief Corporate Affairs Officer of MindMed.

Thank you, operator, and good morning, everyone. Thank you for joining us for a discussion of MindMed's fourth quarter and year-end 2024 business highlights and financial results. Leading the call today will be Rob Barrow, our Chief Executive Officer; and he will be joined by Dr. Dan Karlin, our Chief Medical Officer. After our prepared remarks, we will open the call for Q&A. An audio recording and webcast replay for today's conference call will also be available online, as detailed in the press release announcement for this call. During today's call, we will be making certain forward-looking statements, including without limitation, statements about the potential safety, efficacy and regulatory and clinical progress of our product candidates, our anticipated cash runway and our future expectations, plans, partnerships and prospects. These statements are subject to various risks such as changes in market conditions and difficulties associated with research and development and regulatory approval processes. These and other risk factors are described in the filings made with the SEC and the applicable Canadian securities regulators, including our annual report on Form 10-K filed today. Forward-looking statements are based on the assumptions, opinions and estimates of management at the date the statements are made, including the non-occurrence of the risks and uncertainties that are described in the filings made with the SEC and the applicable Canadian securities regulators or other significant events occurring outside of MindMed's normal course of business. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of today, March 6, 2025. MindMed disclaims any obligation to update such statements even if management's views change, except as required by law. With that, let me turn the call over to Rob.

Thank you, Stephanie, and everyone for joining our call today. 2024 marked a year of unparalleled progress for MindMed, underscoring our leadership in advancing new treatments for brain health. We successfully achieved key milestones positioning us to potentially deliver multiple clinical readouts from our MM120 Phase III program in 2026. A year ago, we announced positive results from our Phase IIb study of MM120 in generalized anxiety disorder or GAD, which showed statistically significant and durable improvements in mean Hamilton Anxiety Scale or HAM-A and Clinical Global Impressions-Severity or CGI-S scores for 12 weeks after a single dose of MM120. We also announced the results of a pharmacokinetic bridging study of our orally dissolving tablet formulation of MM120, our intended commercial formulation, which we are also using in our Phase III studies. Additionally, in 2024, we secured a new formulation patent on MM120 ODT, extending our intellectual property protection through at least 2041. Based on the strength of our data and the seriousness of GAD, FDA granted our MM120 GAD program breakthrough therapy designation, indicating its potential to represent a substantial improvement over currently available therapies. Our development approach prioritizes designing clean studies that yield clear results and are efficient to operationalize. This is exemplified by our bold decision early in development to study MM120 as a stand-alone treatment and our streamlined Phase III clinical trial designs, which aim to replicate the rapid durable response observed in our Phase IIb study. Our pivotal program in GAD includes 2 Phase III studies, Voyage and Panorama. As we previously announced, we are very excited to have already successfully dosed patients in both studies and we have seen strong enthusiasm from clinical sites and patients as recruitment has continued to ramp up. These sites include some of the highest performing enrollers from our Phase IIb study and we are very encouraged by early enrollment trends. We are also on track to dose participants in the Emerge, our first Phase III study for the treatment of major depressive disorder or MDD in the first half of this year. This Phase III program closely aligns with our GAD program with a protocol that allows for streamlined and efficient patient enrollment. These 2 indications, GAD and MDD, affect approximately 51 million adults in the U.S. and represent 2 of the most significant unmet medical needs in psychiatry. We believe MM120 could offer a differentiated and compelling option in both GAD and MDD, potentially positioning it as a best-in-class and first-in-class treatment option. We aspire to deliver a truly transformative treatment that has the potential to change the trajectory of the ongoing brain health epidemic. In fact, in our research with providers, they have shared their belief that the availability of psychedelics will radically transform treatment for GAD and MDD. Over the past year, we have been dedicated to broadening the awareness and understanding of these disorders and sharing our findings in a number of key medical meetings such as the American Psychiatric Association's Annual Meeting, the International Society for Health Economics and Outcomes Research Annual Meeting and the American College of Neuropsychopharmacology's Annual Meeting. We continue to generate evidence that underscores the significant economic and social burden of GAD in the United States, including higher healthcare utilization and costs as well as reduced work productivity. These findings highlight the substantial impact of GAD, which has largely been under-appreciated. I couldn't be more thrilled with the progress we've made this past year. As we look forward, 2025 will be a year of execution focused on our Phase III programs in GAD and MDD and preparing for our 3 pivotal trial readouts in 2026. We have a strong dedicated team in place and continue to build a leading organization with best-in-class execution. Over the past year, we have also strengthened our financial position, having raised approximately $250 million in gross proceeds and gained the support of a number of top institutional investors. We expect our current cash and cash equivalents to provide sufficient funding into 2027 with a cash runway that extends at least 12 months beyond the first Phase III top-line data readout for MM120 in GAD. Now let me turn the call over to our Chief Medical Officer, Dr. Dan Karlin, to discuss our clinical development programs in more detail. Dan?

Thanks, Rob. As Rob just mentioned, we have already dosed participants in both of our pivotal Phase III clinical studies for GAD, Voyage and Panorama. We are highly encouraged by the early enrollment trends and continue to expect top-line readouts from Voyage in the first half of 2026 and Panorama in the second half of 2026. Each study consists of 2 parts; Part A, a 12-week randomized, double-blind, placebo-controlled parallel group study assessing the efficacy and safety of MM120 versus placebo; and Part B, a 40-week extension period with opportunities for open-label treatment designed to provide important long-term data on the durability and response patterns with MM120. In Voyage, we expect to enroll approximately 200 participants who will be randomized 1:1 to receive MM120 100 micrograms or placebo, while in Panorama, we expect to enroll approximately 250 participants who will be randomized 2:1:2 to receive MM120 100 micrograms, 50 micrograms or placebo. As Rob mentioned, we have taken an intentional and thoughtful approach to our development strategy which has been informed by our team's deep experience in developing novel psychiatric therapies and through close collaboration with FDA. Our protocols are designed with operational input from sites and participants and specific attention to enabling enrollment so that we are able to rapidly recruit a representative sample of participants. Our Phase III studies in GAD closely resembled the design and execution used in our Phase IIb study. In both Voyage and Panorama, the primary endpoint is the change from baseline to week 12 in the HAM-A, which was the outcome measure used for the approval of the currently available GAD therapies. These trials incorporate important methods such as the use of central raters who are blinded to both treatment assignment and visit number, questionnaires to assess potential expectancy bias, and in the case of Panorama, multiple control arms, including a lower dose control that is perceivable and was previously tested. This approach builds on our Phase IIb data where we demonstrated that despite functional unblinding of participants at all tested doses, the lower doses, including 50 micrograms, did not demonstrate a meaningful clinical response. We believe this evidence strongly supports our view that the anxiolytic effect of MM120 cannot be attributable to functional unblinding and thus the measured effect reliably represents a true drug effect. These trials were designed to have 90% power to detect a 5-point improvement over placebo based on certain statistical assumptions, where in the Phase IIb trial, we observed an almost 8-point improvement for MM120 over placebo at week 12. We are using an adaptive design in our Phase III studies that includes an interim blinded sample size re-estimation, which allows for increased enrollment of up to 50% in each trial. This approach helps to adjust for any unexpected variability in nuisance parameters, specifically dropout rates and pooled variance of HAM-A response, maintaining statistical power and enhancing the interpretability of our results if needed. Key elements such as inclusion and exclusion criteria will largely mirror our successful Phase IIb study of MM120 in GAD, incorporating exclusion criteria around the recency or total use of psychedelics to ensure a representative sample is recruited. We also conduct comprehensive safety assessments in labs before and after the administration of MM120 and ensure the collection of all adverse events. Turning to our MDD program with MM120. We remain on track to dose our first participant in the first half of 2025 with data expected in the second half of 2026. Just like in our GAD program, we anticipate that our MDD program will consist of 2 pivotal clinical studies. Our first study, Emerge, will be comprised of 2 parts; Part A, a 12-week randomized, double-blind, placebo-controlled parallel group study assessing the efficacy and safety of a single dose of MM120 versus placebo; and Part B, a 40-week extension period during which participants will be eligible for open-label treatment with MM120, subject to meeting eligibility requirements. In Emerge, we plan to enroll at least 140 participants with a primary diagnosis of MDD randomized 1:1 to receive MM120 100 micrograms or placebo. The primary endpoint in Emerge is the change from baseline in Montgomery Asberg Depression Rating Scale score or MADRS at week 6 between MM120 100 micrograms and placebo. The design and timing of the second MDD trial will be informed by the progress from Emerge and additional regulatory discussions. With that, I'll turn the call back over to Rob to discuss our fourth quarter and year-end financial results. Rob?

Thanks, Dan. Turning to our financial results for the year ended December 31, 2024. We ended the year with cash and cash equivalents totaling $273.7 million compared to $99.7 million as of December 31, 2023. Overall, we believe that our cash and cash equivalents as of December 31, 2024 will be sufficient to fund our operations into 2027 and at least 12 months beyond the top-line data readout for our first Phase III trial of MM120 in GAD. Research and development expenses were $21.8 million for the 3 months ended December 31, 2024 compared to $11.5 million for the 3 months ended December 31, 2023, an increase of $10.3 million. R&D expenses were $65.3 million for the year ended December 31, 2024 compared to $52.1 million for the year ended December 31, 2023, an increase of $13.2 million. The increase was primarily due to expenses related to our pivotal MM120 programs, Phase I MM402 program and an increase of internal personnel costs, partially offset by a decrease in expenses related to preclinical activities. We anticipate R&D expenses to ramp up in 2025 due to the costs associated with running 3 pivotal Phase III studies. General and administrative expenses were $10.7 million for the 3 months ended December 31, 2024 and were the same for the 3 months ended December 31, 2023. G&A expenses were $38.6 million for the year ended December 31, 2024 compared to $41.7 million for the year ended December 31, 2023, a decrease of $3.1 million. The decrease was primarily attributable to reduced professional services fees and expenses, partially offset by increased stock-based compensation expense and costs associated with pre-commercial activities. The company's net loss for the 3 months ended December 31, 2024 was $34.7 million compared to $23.8 million for the same period in 2023, an increase of $10.9 million. The company's net loss for the year ended December 31, 2024 was $108.6 million compared to $95.7 million for the same period in 2023, an increase of $12.9 million. The increase was primarily attributed to research and development expenses associated with our MM120 and MM402 programs. In closing, I'm incredibly proud of the progress we have made over the past year at MindMed. We believe MM120 is uniquely positioned to potentially offer a novel and highly differentiated treatment option for people living with brain health disorders. None of our progress would have been possible without the dedication of our exceptional team. I want to thank them for their continued efforts and commitment to our mission. With that, I'd like to thank you all again for joining us today, and the team and I are happy to take your questions.

[Operator Instructions] Our first question comes from Marc Goodman with Leerink.

This is Madhu on the line for Marc. I think some people we speak with are trying to get a better understanding of which GAD patients would be likely to want to use MM120 over other available options once it could be eventually approved. And so just curious, would this be for patients who strictly don't respond to other available therapies or patients past a certain severity level? If you could share any insights that you have on that maybe from market research or just in terms of the patients that are looking to enroll in these studies, that would be great.

Yes. And I'll turn it over to Dan in just a second. I think at a very high level, certainly, the indication we're pursuing, which is a broad label for all generalized anxiety disorder patients would enable access much more broadly than if we had a severely restricted criteria on the label. Certainly, there are payer dynamics that come into play and we've had really encouraging signs in that research just based on the relative lack of treatment for GAD and the long time since any new treatments have been introduced and the overall severity of that population. But maybe, Dan, if you want to add some clarity there as well.

Yes, absolutely. And I think that there's a really interesting point there, which is that the sorts of patients who would be interested in accessing the drug is a really broad swath of the population. For folks with diagnosed GAD, tolerability and efficacy of existing drugs like SRIs is pretty unsatisfactory. SRIs have never been particularly effective against anxiety cluster symptoms, either in GAD or MDD. So what we see both in market research, but also who presents to enroll in our studies is that there are people with severe GAD. There are people with moderate GAD. There are people who have had prior treatments, including SRIs or psychotherapy. There are people who haven't had those treatments before either because they didn't want them or because their GAD wasn't recognized. So we see there being both broad appeal, and of course, based on the efficacy we've seen in Phase IIb, the ability to really help a broad swath of patients. Now the realistic nature of a payer-supported commercial market is that there are likely to be step therapy requirements. So what you see often with new treatments in the class, even new treatments that have a mechanism that's similar to existing treatments or the same as existing treatments is a requirement to have been failed by one or more existing treatments. But given the efficacy that we're seeing, given the appeal of having a single treatment with no lingering adverse events, we think that the demand side will be quite high.

Our next question comes from Gavin Clark-Gartner with Evercore ISI.

Congrats on the progress. First, I just wanted to ask, are you planning to give more granular enrollment updates for both of the GAD trials over the course of this year or is the next update that we should expect enrollment completion?

Yes. We haven't yet provided exact guidance, I think we would expect to follow a similar pattern as industry standards and as we did in our Phase II study where we -- as we approach the end of enrollment, we were able to announce that. But certainly, as we have any material updates, we would be disclosing those.

Got it. That makes sense. And separately, just on the sample size re-estimation analysis, I wanted to confirm that there's no alpha use, no futility criteria and also ask what you think the likelihood of the trial being upsized a little bit is and when this analysis roughly may occur?

Yes. Great question. The way the standard size re-estimation is designed is a no alpha spend blinded re-estimation. And as Dan mentioned, it's only based on the nuisance parameters, the dropout rate and the pooled variance of the standard or the pooled variance of HAM-A outcome. So we can't provide exact timing for when that would occur other than upon the completion of about half the patients, about 100 patients, you make it through week 12 is when we anticipate to run that analysis. But certainly no futility, no spend of alpha and it's really just to ensure that power is maintained if any of those nuisance parameters are outside of our estimates. Now the estimates we have, we feel quite confident in based on a long history of historical norms in this population and also analyzing the data from our Phase II clinical trial. So we feel quite confident in the assumptions we've made at baseline, but it just adds an additional layer of protection in the event there is some kind of surprise on either the variance or on dropout rate.

Our next question comes from Brian Abrahams with RBC Capital Markets.

This is Nevin on for Brian. So with the Voyage and Panorama studies underway, I was wondering if you could provide any more color on what you're seeing in the early rates of enrollment? Are they tracking in line with or better or worse than the prior Phase II trial? And then I guess, among those who -- just given that recent more enthusiasm for psychedelic clinical trials in general, are you seeing similar types of patients enrolling in the GAD trial -- in the pivotal trials as you did in the Phase II? And I'm wondering if perhaps the increased awareness of psychedelics among patient population could change or potentially impact the expectancy bias among that group?

Yes. So we can't provide specific numbers enrollment. As Dan mentioned, we've been really highly encouraged by the enthusiasm from providers, from patients, from the early enrollment trends and are quite confident as a result in the progress we're making in both of the studies. To your latter question, again, we wouldn't provide specifics on demographics, but the inclusion/exclusion criteria and the population we're pursuing are very, very close to -- identical almost to the Phase IIb trial. And so certainly, the expectation and all of the extensive screening that we do to ensure that we get the right patients in these studies, we feel quite confident that we're getting a similar population and a representative one. And the final point, while we certainly have seen growing interest, I think I don't know that we could say that, that has had a direct impact in any measurable way on expectancy. I mean, I think population level or group level trends certainly are one thing. But I think you have to remember, for an individual person, for a patient who's been suffering for GAD for, in many cases, years or decades, people enroll in late-stage trials with inevitable expectancy regardless of the treatment that is being studied simply for the reason that most of those patients either are unsatisfied or not getting the level of response from currently available therapies, and therefore, come into clinical trials with the hope that something new will potentially help them. And so while they may be randomized to get placebo or an inactive dose of drug in these studies, we certainly expect like with any clinical trial, there's going to be a degree of expectancy just by the nature of it being an experimental drug that we're studying.

Okay. And then a quick follow-up as well. I know you had mentioned that the inclusion/exclusion criteria were similar across both Panorama and Voyage, but looking at the clin trials listing for both of them I see that the exclusion criteria for Voyage specifically mentioned bipolar disorder, but Panorama does not. Is there any particular reason for that?

No, the inclusion criteria has been consistent across both studies in that respect.

Our next question comes from Charles Duncan with Cantor.

Congrats on the design and operationalizing these Phase IIIs. I had another question about enrollment criteria. I think Dan mentioned that he expected a broad swath of patients to be interested in the study. But I guess, I'm wondering, are you seeing any types of severity or treatment experience that are presenting? And then with regard to experience with LSD or psychedelics in the past, what is happening in terms of the enrollment for the patients in Voyage and Panorama?

I'll turn it over to Dan to answer both those.

Yes. Consistent with what we believe to be a representative sample of people who seek treatment for GAD in general, what we're seeing, again, while we can't really comment on live enrollment in Phase III, what we were able to see in the Phase II study, again, with like what Rob said, nearly identical inclusion/ exclusion was about 2/3 of patients with treatment experience who've been failed by prior treatments, about 1/3 who hadn't been treated, 10% to 15% with a fairly recent diagnosis of GAD. We know in the population that there are almost twice as many people walking around with symptoms of moderate to severe GAD who have never been diagnosed with it on a population level. So when new treatments become available or new studies are launched, additional attention is paid to a diagnosis. And obviously, that diagnosis gets made in folks who have had the disease for some time. You'll recall in Phase II, we saw a mean HAM-A of 30, just about 30. So that puts people well into the severe category and there's no reason to think that we would be particularly different in this study. So when we think about that, the breadth of the appeal of the treatment and the degree to which people aren't served by what's available, that's -- again, while we can't comment exactly on Phase III, there's no reason to think things would be looking all that different.

Okay. And then let me ask you a quick for a little bit of a nuance on Panorama. I like that you're using a dose that doesn't appear effective to remove expectation bias, but -- or unblinding, excuse me. Were you surprised at how sharp the dose response curve was 50 versus 100? And do you anticipate that 50 really to have a no effect and to remove the -- or reduce the functional unblinding?

Yes. Thanks so much for the question. I think there's 2 key features there, and I'll talk on the dose response aspect first, which is that certainly, the design in the Phase II study, the primary analysis was one that is aimed at defining a dose response where we pre-specified response curves and statistically showed that the data from the Phase II study matched multiple of those candidate dose response curves. So I'd say, the data certainly matched the potential -- the assumptions we made going into the Phase II study. I think it was quite stark, as you mentioned, the fact that in the primary in Phase II at week 4, there was less than a point improvement over placebo at the 50 microgram level and there was a 7.5, 7.6 unit improvement over placebo for the 100 microgram dose. So while we weren't surprised by the overall shape of the curve, it is in quite stark contrast with the difference in clinical response between 50 and 100 micrograms and the data that has been generated to date. And as you recall, really the only data in the field to look at a comprehensive dose response across a full range. Now on the second point, it's really important to stress, and we think that the field in many instances has conflated some of the issues that are at play with why we take these additional methodological steps. So we talked before about potential expectancy, which we certainly expect to be the case in any clinical trial. And with any treatment, universally the truth for psychiatric drugs. But for any treatment, where there is a clear discernible acute effect, there's the risk that, that functional activity could unblind the patients. And unblinding importantly is a binary variable. There's not a continuous degree. You can't be 20% unblinded or 80% unblinded, you're either blinded or not. And so what we saw in the Phase II data was that all patients across the dose levels effectively were unblinded, 88% or more across all dose levels were functionally unblinded, yet we saw that stark dose response between the 2 levels. And really, the intent of including a 50 microgram dose is 2-fold. It's really important that dose level is as close to the acute perceptual effects as the clinically active or the dose of interest that we're studying 100 micrograms. Otherwise, it doesn't have similar functional activity and it doesn't really aid in the functional blinding that we're pursuing. But really, what we're trying to do fundamentally is sever the tie between an expectancy bias and an impact on biasing the clinical outcomes. And we do that through many mechanisms, one of which is using blinded centralized raters. But by having that dose, that 50 microgram dose level, what we're able to do is effectively through the consent process, inform patients that whether or not they feel effect of the drug, acute perceptual effect on the day of dosing, they may be receiving a real dose of drug or they may be receiving a dose that previously has been shown not to be clinically active. So just because a patient assumes that -- just because they feel something on day of dosing, they can't assume that they're getting a dose of drug that's going to make them better. And really, that's as great of a length as any study has ever been asked to go in psychiatry to try to enhance the validity and minimize the bias of these outcomes, because like with other approved GAD therapies, like Xanax, for instance, there's a clear acute perceptual effect that just hasn't been looked at in the past. And so we feel even stronger about the validity of the data that we'll be able to generate in these studies because of these additional analyses and these additional design elements we've included in the Phase III program.

That's helpful, Rob. One quick last question then going back to an earlier question, I think the ISI person asked regarding the adaptive design. What is the dropout rate that you are assuming could happen so that we can kind of gauge how it's going over the course of the trial?

We've assumed the pooled standard deviation of 10 units and a dropout rate of about 15%.

Our next question comes from Francois Brisebois with Oppenheimer.

This is Dan on for Frank. Just a quick one from us. Given all this regulatory scrutiny in this space, is the upcoming PTSD AdComm, is this something you're looking to learn from to inform your own development or is this -- the indications are different? So anything here?

Yes. No, we're always looking at all the AdComms potentially neuropsychopharmacology advisory committees just to understand the dynamics of those. But given the difference in the population and our development plans, we certainly are focused on execution of our studies. And we'll certainly be watching and observing, but I don't know that we see a direct impact on our program.

Our next question comes from Joel Beatty with Baird.

Congrats on the progress. The question is on for the Phase III trials in GAD. How much of a risk is there that some of those patients during the 12-week randomized phase go on to take another therapy? And then if that does happen, that it might happen more so in the placebo patients than the treatment patients. And then if that situation were to occur, how does that get handled by the stats plan?

Yes. We certainly have a high degree of confidence in our sites and go to great lengths to ensure that all patients adhere to the trial protocol, which includes -- as a monotherapy, includes taking no other therapies during the 12-week randomized period and really throughout the duration of the study. So we monitor that very closely. And for patients who do violate that criteria, it is addressed the statistical analysis plan that we are prepared today to go through the specifics of that plan and have had great collaboration with FDA and development of our statistical analysis plan for both of the Phase III studies. So -- but we certainly monitor it very closely and try to ensure adherence to the protocol at every site and have had great success historically and our engagement with these sites so far.

Our next question comes from Rudy Li with Chardan.

I have a question regarding the MDD indication. Given the competitive landscape for psychedelics, how important is MDD indication for MM120 to compete with other psychedelic products? And when should we expect updates on the timing and the design of the second MDD study?

Yes. Overall, I think looking -- focusing on the overall development plan for MM120, we just see such a broad and massive market and opportunity to help potentially millions of patients and having the broadest label certainly enables us to, hopefully, if the drug is approved market to that broader population and hopefully gain access and ensure that we can help as many of those patients as possible. So when we think of psychiatry, I think of some of the major neurotic illness in psychiatry, having a label that covers both GAD and MDD effectively means that a patient coming in the door with either cluster of symptoms would be an on-label candidate for the product. And I think as we look around the landscape with many other therapies focused exclusively or primarily on treatment-resistant depression, it's just a strategic difference in how we've approached the opportunity and what we think of in terms of the expansiveness of both the market and patient opportunity, how broad of an impact we can have. And that's informed everything from the selection of GAD, where there's been so few therapies in the last 20 years. And overall, there's far fewer treatments available for generalized anxiety disorder than for MDD, but also in our plans to go after these 2 really significant and large populations that would, in our view, be able to set us apart and maximizing the patients we can help.

Our next question comes from Sumant Kulkarni with Canaccord Genuity.

Nice to see the progress. I have 2. The first one is, given you have breakthrough therapy designation for MM120 that potentially allows for more back and forth with the FDA, could you give us any details on when you had your last interaction with the agency? And if any of the changes that are currently affecting government agencies have impacted your interactions in any way?

Yes. As you mentioned, with the breakthrough therapy designation, we do have frequent interactions with the agency and on various topics, including the clinical Phase III program, but also clinical pharmacology and CMC and other aspects of the development program that are just as important to ensure the quality and adequacy of our data to support a submission, hopefully an approval. We think -- very highly look at FDA as strong partners with us from the outset of our program, but especially as we've received the breakthrough therapy designation over the past year and brought on an incredible regulatory team who's just successfully interacted with the division extensively in the approval of [indiscernible] Therapeutics. So we've been really encouraged by the level of engagement and the thoughtfulness and the thoroughness with which the division and the agency more broadly have engaged with our program and we feel a high degree of alignment and consistency in our approach with the expectations that we're hearing. So we've been really encouraged. And certainly, there's been a lot of coverage of the disruption in Washington and all that's happening there. Fortunately, at this stage, our interactions with FDA have not been changed in any way and we've continued to I think watching the Division of Psychiatry really go out of their way and go to great lengths to be constructive and highly engaged with us.

Got it. And if we also -- if we fast forward to a time when other psychedelic agents that involve shorter times in the clinic might become competitors at a time when MM120 is approved as well, what would the key point be in favor of MM120 versus a deuterated DMD, for example, with the knowledge that we haven't really seen Phase II data on that molecule just yet?

Look, with 50 million patients that we might be able to treat with both the indications we're going after, there are more than enough patients for many new treatment modalities. But some of the things we've been really encouraged by are both the magnitude and the durability in large, well-controlled, well-conducted studies where we are exceeding a robust placebo by more than double the standard of care. That's not something we've seen broadly with the field. And there's also in our market research, there's some site economics that play into this where a treatment that requires a high degree of patient throughput can be problematic for these sites of care. I mean, we look at clinics that deliver Spravato and many of these clinics have to turn over the room 4 or 5 times a day, which they're being reimbursed on an hourly rate in many instances, that becomes a huge administrative burden and quite inefficient economically for these sites. So while I think at face, there have been some assumptions made about the duration of various products, we have been at every time really encouraged and highly convicted about our approach and what that will mean for sites of care and for patient access.

[Operator Instructions] And our next question comes from Patrick Trucchio with H.C. Wainwright & Company.

A couple of follow-up questions from me. So clearly, with the Phase III trial in anxiety, primary endpoint is HAM-A. I'm just wondering which secondary endpoints, things like function or quality of life could be important from both a regulatory as well as a payer perspective. Secondly, I'm curious if you can discuss some of the HEOR, Health Economic Outcome Research, that's being conducted and what further research that you plan to conduct in order to further support MM120 after it's potentially approved? And then just lastly, I think the Phase IIb trial I think showed an 8 point improvement on the HAM-A relative to placebo. I'm just curious how the learnings from that trial kind of led to the powering for the Phase III studies in GAD. But as well, I'm wondering, I know that data was collected on the MADRS and how the learnings from the Phase IIb trial are influencing the Phase III trial in MDD?

Yes. So to your first question, we're certainly looking at a number of additional secondary outcome measures in the Phase III program. One that is of interest to us is CGI, which is overall disease severity and patient functioning score. And so that is one that we're quite interested in, the time points we're interested in for the HAM-A, the primary outcome measure. In terms of the HEOR research, we've done extensive research, several of those studies, which we've now presented posters and are advancing publications for. So that covers everything from -- I think when you look at GAD, there has been such a focus shift in the last 20 to 30 years away from anxiety, which for a long time was the predominant focus of psychiatry. There's been such a shift to major depressive disorder. We all remember the -- everyone worries, but depression is a chemical imbalance in your brain. These are commercials from the 1990s with the advent and introduction of SRIs that led to a pretty massive diagnostic drift and for tools for depression being rolled out pretty substantially. So over that time, the burden and the prevalence of GAD has grown substantially and now affects, as Dan mentioned, when we look at the broad epidemiological data and the research we've done, there's a significant portion of the population that is walking around with moderate or severe symptoms of generalized anxiety disorder that have never been diagnosed and presumably just think that's how life is. That's how human experience is. And so a lot of our work so far is focused on that prevalence and also on the impact on quality of life and on economic parameters like workplace productivity, absenteeism, presenteeism, the overall economic burden on these patients. And we have an incredible market access and HEOR team that is continuing this work and that allows us to ultimately try to make arguments for the value of a product. And we really see that value come through overwhelmingly when we look at the magnitude of remission that we can achieve after a single administration that is durable for many months. The math becomes really remarkably favorable in terms of the health economics for a treatment such as this. On your last point, so as you mentioned, 7.7 unit improvement over placebo for the 100 microgram dose in Phase II. And I think it's notable there that, that was an improvement over about a 14 point placebo response, which is around 40% larger than the historical average in GAD. So most SRI studies had a placebo response of about 10 units. Now we've assumed, as Dan mentioned, 90% power -- powering the study to have 90% power based on a 5 point improvement over placebo. I think that's a fairly conservative assumption, especially when you consider that the Phase II study included 5 arms, 4 of which were a dose of active drug. And in the Phase III studies, we are doing a head-to-head or a 3 arm study where based on a broad body of research in the clinical trial methodologies, we would expect that to potentially reduce the placebo response. So we've been quite conservative. And then we also have a sample size re-estimation to make sure we don't lose that power in the study conduct. But certainly, feel quite confident in the strength of that powering and the probability of a successful study if we see a clinically meaningful response over placebo.

Right. That's really helpful. And if I could, just one additional question. Just I'm wondering how you're measuring the long-term durability of MM120 in Part B of the studies? And do you need that data in order to be able to submit for approval or could you submit with the I think the 12-week data? Would that be sufficient?

Yes. Great question. I mean, we're not in a position today to speak to what would be acceptable for the application. But certainly, if you look back at the historical precedents for depression and anxiety drugs, the outside of durability that's been required for almost all products has been certainly an anxiety has been between 2, 4 and 12 weeks of activity. So that's quite encouraging that we have such a long and extensive precedence there. In terms of characterizing, the durability of response, we're looking at beyond the 12 weeks in the 9 month extension period with the opportunity for open-label treatment. And so a few things there. One is that until a patient -- and importantly, until a patient actually takes the open-label product in that extension period, they're still blinded, right? They aren't told at the end of 12 weeks what treatment assignment and we don't at any point in the trial until everything is completely done, will we be unblinding on a per patient basis. Now we can do importantly, group level unblinding and primary analysis once we get through 12 weeks because that has no impact on the study. But for patients who continue into the extension phase, until they take open-label drug, they remain blinded. And so we can look at things like a Kaplan-Meier curve for the durability of response after a single treatment at baseline. And presumably, there will be a higher rate of relapse or inefficacy for patients who never respond in the placebo arm. And there is likely that we would expect to be a longer period before an open-label treatment is administered for patients who receive MM120 first before they -- versus placebo at first dose. And so we're looking at a number of characteristics there, both to quantify durability beyond 12 weeks after a single treatment and then the use patterns and the durability and subsequent response if patients do administer an open-label treatment in the follow-up period.

Our next question comes from Michael Okunewitch with Maxim Group.

Congrats on all the progress you've made. So I guess, just one quick question here on runway and capital use. You guys have done a fantastic job managing your balance sheet so far. You do have 2 Phase IIIs ongoing and a third launching in major depression. And the conventional wisdom there would suggest you would need a confirmatory study in MDD as well. So would you expect the confirmatory in MDD to be launched concurrently with your other programs? And is this something you consider in your current runway projections?

Yes. We certainly consider all of our development plans across all of our programs and our financial projections and guidance for cash runway. Our approach in major depressive disorder is such that -- as we said, we're not in a position to comment on the exact precise timing or design of the second study in MDD today. We have had constructive progress in our overall planning for our program and our assets and certainly excited to share that data at a future point in time. And that will be informed by some of the progress in our ongoing Phase III studies and our regulatory interactions. Certainly, one of the attributes in our execution of our program is the ability to continue sites and efficiently keep them going in terms of screening and enrollment. So we're certainly mindful of the operational efficiencies of when we start studies, but also being financially prudent and responsible with how we're managing our cash and our expenses over the conduct of our Phase III program.

Thank you. This concludes the question-and-answer session, and you may now disconnect. Thank you for your participation. Everyone, have a great day.