Egetis Therapeutics AB (publ) (EGTX) Earnings Call Transcript & Summary

Welcome to Egetis Therapeutics Analyst Call. [Operator Instructions] Now I will hand the conference over to CEO, Nicklas Westerholm. Please go ahead.

Thank you, operator, and welcome to Egetis Conference Call. Please notice that our presentation from today could be found on our website in the Investors Section under Presentations. Please also notice our disclaimer on Slide 2 in our presentation. The agenda for today is shown on Slide 3. We issued a press release last night. We would like to take this opportunity to give you some more color to our press release and give you the opportunity to ask questions after our prepared remarks. We will start by reviewing the key messages from our press release and then explain the regulatory pathway for Emcitate in Europe and the U.S. And this will follow by a recap of the design of the ReTRIACt trial, the trial length and the updated U.S. submission time lines. The participants on our call today are depicted on Slide 4. With me are Christian Sonesson, Vice President Product Strategy and Development; Kristina Sjöblom Nygren, Chief Medical Officer; and Karl Hård, Head of Investor Relations. Slide 5 shows the press release we issued last night, in which we announced that the first site has been activated in the pivotal ReTRIACt trial conducted for the U.S. submission of Emcitate, which is being developed for the treatment of MCT8 deficiency. We have also updated the time line for the result for the ReTRIACt trial to the first half of 2024 and the U.S. submission to mid-2024. In addition, in-house development of Aladote will be parked until Emcitate submissions in U.S. and Europe have been completed. Slide 6 depicts the regulatory pathway for Emcitate to submissions in Europe and U.S. For the submission in Europe, we are well -- we have all clinical data at hand and plan to submit the marketing authorization application in early autumn this year. The clinical package of our dossier will contain data from Trial I. The real-world cohort study conducted by the Erasmus Medical Center and the natural history data also from the Erasmus Medical Center. For the U.S., we have agreed with the FDA to carry out an additional placebo-controlled study in 16 patients called ReTRIACt. Also, we have the ongoing and fully recruited Triac Trial II, which is not required to be included in the European or the U.S. submission. Going to Slide 7. I very much look forward to the start of the ReTRIACt trial for Emcitate but fully recognize that it has taken a long time to initiate the trial; caused by multiple administrative delays over the past 6 months. So the updated time lines around -- announced last night with a study completion in the first half of 2024 are due to; one, the substantial delay in the study start; 2, an anticipated higher number of treatment-naive patients expected to be recruited in the trial compared to the original assumptions; and 3, lower-than-expected recruitment capacities per month at the participating sites. Please let me explain this more in detail. Regarding the first reason, the substantial delay in study started as previously communicated in our full year report for 2022. The initial delay of the ReTRIACt trial was due to COVID-related administrative backlog at the hospital participating in the study. In our First Quarter Report 2023, we announced a further delay, which was due to regulatory feedback on the documentation for the ReTRIACt study. Therefore, we had to update certain clinical trial documentation, which necessitated renewed approvals from the ethics committee at the participating hospitals and in some cases, also regulatory authorities. However, please note, no changes to the design of the study have been made. Regarding the second reason, the higher number of treatment-naive patients expected to be recruited in the trial. Our original assumption was based on primarily recruiting patients from our managed access program. However, when new treatment-naive patients are found, they are obviously in need of treatment and regulations stipulate that clinical trials are to be prioritized over managed access programs such as our Expanded Access Program in the U.S. Regarding the third reason, the capacity at participating sites, we have also noticed previously unforeseen resource constraints with some sites being severely understaffed when it comes to nurses and clinical staff, which leads to lower-than-expected recruitment capacities per month at the participating site. Moving to Slide 8 then, I want to elaborate more on how these new treatment-naive patients are being found. As many of you know, over the last 6 months, we have conducted several disease awareness initiatives, which are quickly bearing fruit. On the right-hand side of the slide, you can see the various initiatives and in total, over 40 treatment-naive Emcitate patients have been identified in the U.S., of which many satisfy the inclusion criteria for the ReTRIACt trial. While positive long term, of course, both for the patients and for the company, in the shorter perspective, this implies a longer trial duration per patient when including treatment-naive patients; which extends the time line to completion on the study. I will now hand over to Christian to further explain the details of the ReTRIACt study design.

Thank you, Nicklas. The ReTRIACt study is a randomized, placebo-controlled withdrawal study, which we have designed in collaboration with the FDA, and as Nicklas previously mentioned, there has been no changes to the design compared to what has been previously communicated. The schematic design is shown here on Slide 9. Note that the patient entering the study completes 3 periods: first, a running period targeting to stabilize the patient's T3 levels within target range. After the patient is stabilized, the patient is randomized to either continue to receive Emcitate or to receive placebo during the 30-day double-blind randomized treatment period. The primary endpoint of the trial is the proportion of patients who meet the rescue criterion during the randomized treatment period, which is set as the T3 level above the upper limit of normal. After the randomized treatment period is complete, all patients receive Emcitate in the follow-up period. As per the approved study protocol, the patient can enter either as a treatment-naive patient or a patient already on treatment. If a patient is already on Emcitate treatment, the running period is expected to be relatively short, up to 6 weeks. However, for those patients who are treatment-naive, the running period includes titrating the dose over a longer period of time to reach the target range and to ensure stable baseline T3 levels. Therefore, it will take longer time for treatment-naive patients to enter the randomized treatment period and hence, to complete the study. When it comes to the term -- to the likelihood of success of the study, the Triac Trial I and the EMC cohort study have both shown the consistent and significant effect of Emcitate on T3 levels. In addition, we also have data from patients who have been on-and-off treatment for various reasons. In totality, there is a clear evidence to support the T3 levels will increase rapidly when Emcitate treatment is withdrawn, and this leads us to believe there is a high probability of success in the pivotal ReTRIACt trial. On the next slide, Slide 10, we focus the attention on the availability of patients at the various study sites. The 3 study sites participating in the ReTRIACt trial have all been part of either the Triac Trial I or the ongoing Triac Trial II. As shown in the right part of the slide, more than 30 eligible patients have been identified for the study. And it's important to note, as Nicklas previously mentioned, that even if this is an ultra-rare disease, there is no lack of patients for the study, quite the opposite as we are identifying new patients all the time. However, we are limited in our recruitment by the resources available at the participating sites, which is not unique for our situation and it's something we've heard also from some of our peers. With the first site now activated, we are targeting the first patient in as soon as possible, although the exact date will depend on the availability of site staff and the family's ability to travel to the site for the first visit, among other things. I will now hand back to Nicklas.

Thank you very much, Christian. We now move to Slide 11 to review the implications of the updated time lines. Very clear is that our resources will be focused on the Emcitate ReTRIACt study and the upcoming European submission. We remain focused on working diligently with the 3 trial sites, as Christian mentioned, to now facilitate a smooth and efficient execution of the trial. Furthermore, the buildup of the commercial infrastructure in the U.S. will be aligned with updated submission time lines, and in addition, in-house development of Aladote will be parked until Emcitate submissions have been completed. We have taken these decisions to focus the company resources on the near-term value-driving milestones for the company. Please let me take an opportunity to conclude. On Slide 12, we have summarized our upcoming and updated Emcitate milestones. We see a transformative period ahead of us. Most importantly, in the short term, we have the upcoming submission to the EMA in early autumn; then, we expect the results from the pivotal trial ReTRIACt in first half 2024; followed by a U.S. NDA submission in mid-2024. It's also worth recognizing that this delay will not shorten our market exclusivity period since the exclusivity for an orphan drug on 7 years in the U.S. and 10 years in Europe starts upon market approval. We have now come to an end of our prepared remarks, and I would like to hand open for questions and answers. And hence, operator, if you would, please.

[Operator Instructions] The next question comes from Gonzalo Artiach from ABG Sundal Collier.

First one is regarding your Triac Trial II, the one that is ongoing now. So now the results will potentially come around the same time of the NDA filing in the U.S. So I was wondering if you could give us some color on the implications of having the [ new cognitive ] data coming around that time. Will it have an implication for the approval in the U.S., let's say, in a scenario where you show no significant effects in that parameter because the way I understand it is that EMA has already agreed with you to consider the small U.S. study, the ReTRIACt trial as pivotal, but I do not know if they could potentially change their requirements.

Thank you, Gonzalo, and good afternoon, excellent question. So as mentioned we will pick up as well that the Triac Trial II is ongoing, it's fully recruited, and we are expecting results in mid-2024. It's very important to recognize there that the discussions and agreement we have had both with the EMA and the US FDA is that the submission and the related data we will provide in the dossier will be based on normalization of T3 levels as well as the effects seen on clinical manifestations of thyrotoxicosis. So hence, the Triac Trial II is not necessary for the approval as such. Will the authorities ask to look at it and especially view the safety data? That will be a question at the NDA meeting with the FDA, for example.

All right. Very clear. And my second question, it's about the inclusion of patients that are treatment-naive. I would assume that most of these patients, if not all, will be American patients, U.S. subjects. So my question is, was there any specific requirement from the FDA in terms of a minimum number of U.S. patients? And among these 30 patients that you have identified that can be candidates for the trial, how many are in the U.S.?

Excellent, excellent question. Again, Gonzalo, thank you very much. And I'll answer the first part of your question, you're absolutely right. Obviously, our disease awareness activities, which are bearing fruit already, which we are very pleased with, have resulted in us identifying quite a lot more patients, mainly in the U.S. So you're absolutely right that most of the patients that we have newly identified that our treatment, i.e., are based in the U.S. If you look at any requirements as such from the FDA, there are no requirements to have a certain proportion of patients coming from the U.S.

The next question comes from Chien-Hsun Lee from Pareto Securities.

So just a question from my side. It's still a bit unclear for me, why do you need to prioritize the treatment-naive patient because this seems to be not the same compared to what you have communicated earlier in November 21, which is primarily on the maintenance treatment. Is it not possible to just take the patients who are currently on drug? Is it because there are some difficulties to take this patient of drug? Yes.

Thank you very much, Chien Lee, and good afternoon to you as well. Again, a very good question. I think it's important to recognize, and I think I mentioned it before that treatment-naive patients in light of regulations, very important, should be prioritized for clinical trials over a managed access program. So that's a default in the U.S., but also everywhere else. Having said that though, as we also mentioned before, of course, our ambition is to have as many patients as possible being enrolled that are on treatment already because that will obviously reduce the overall study time line. So that's very important. The aspect that has changed in our assumption, again, where we are victim to a certain extent to our own success is that when we originally designed this study towards mid-last year, second half last year, we had very few treatment-naive patients that we were aware about in the U.S. And now suddenly, we are aware about quite a lot more. So it is a balance from our perspective, of course, we will encourage investigators as much as possible, even though it's not fully in our control, to enroll as many patients on treatment as a priority. But again, not in our control. I hope that answered your question, Chien.

Yes. Maybe a follow-up question. So in these 30 patients you have identified, could you tell a bit about how many patients are treatment-naive? And if they are treatment-naive, how long the running period do you expect to be like?

Yes. So when it comes to the patients that we have identified more than 30 patients identified already, more than half are actually patients on-treatment. Just to be very clear, more than half of our patients on-treatment. And when it comes to then the running period, as Christian mentioned, for patients on-treatment, we see a running period on -- of roughly up to 6 weeks. When it comes to treatment-naïve patients, it's difficult to calibrate, but it is longer. That's what I can say.

The next question comes from Arvid Necander from Carnegie.

On the back of this, I sort of just wanted to ask you about your level of confidence ahead of the EU and the U.S. submissions. Is there anything that you believe could risk the EU submission at the next submission date? Or do you expect the file to be completed well ahead of the deadline in Q3? And I guess, secondly, if you could just give us a sense for how much conservatism you have baked into the mid-2024 U.S. submission target. I'll start there.

Thank you, Arvid, and good afternoon to you as well. As always, very educated questions. I think when it comes to starting off with a European submission early autumn; we are well according to plan, and we have confidence in that submission, which is very important and obviously, hence, recognized as a very important near-term value milestone for the company. When it comes to the U.S. submission, obviously, it's quite a few, many moving parts in that. And as both myself and Christian alluded to, there are a couple of swing factors that we have had to take into consideration when we now guided to mid-2024 for the submission as such in the U.S., and those swing factors are very clearly the recruitment space -- the recruitment pace -- capacity at their respective sites, which is difficult to influence and we're doing our outmost to do so. And the second part is really what we discussed already with the previous questionnaire is around the number of treatment-naive patients versus patients on treatment. From our perspective, the guidance we've given today, we are confident in delivering that.

Okay. Great. And my second question was with Aladote being passed, can you say anything about R&D spend at least directionally for the remainder of 2023 and 2024, assuming no additional investment in this asset?

Yes. No, again, a very good question. And I think I need to reiterate what I said at these calls previously that we don't give guidance on costs going forward. Obviously, the reason why we're parking Aladote is to make sure that we can utilize all our company resources to focus on, again, the really near-term value-driving milestones, which is the Emcitate study, and it's -- the upcoming European submission. So unfortunately, Arvid, I can't guide you more than that. But obviously, you can make your own assumptions with Aladote being part of the coming 12-months when it comes to investing in clinical trials.

The next question comes from Alex Cogut from Bryan Garnier.

Hello, Alex, we can't hear you at the moment.

Hi, sorry, can you hear me now?

Yes, we can. Good afternoon.

Yes. So I was just wondering in terms of -- given your plan to enroll more treatment-naive patients, and these are obviously have to be titrated. So it's a little bit unclear how quickly you can get them there. But the question I have is how many patients do you expect you need to enroll in the titration part of the trial to ensure that you have enough in the randomized period and kind of meet your time line?

I think if we look back at, again, the slide, Christian was presenting, that was Slide 9 for you, considering the webcast. You have really 3 components of the study. One is what we call the running period. I'll come back to that because that's what you're referring to your question. One is the randomized treatment period, which is up to 30 days, and you have a follow-up period where all patients are receiving tiratricol Emcitate again. So the running period where you have the titration then, as mentioned before, will be, of course, a lot shorter up to 6 weeks for the patients already on therapy. For the treatment-naive patients, the running period will be longer. It's no doubt about that, that it will be longer, but it's very difficult to predict exactly because it's tied at the individual patients are titrating with those -- to down to become within the normal range of T3 level. So it's very dependent. I think what we can refer to, and maybe you can pick this up offline is that you have some publications that refers to this for Triac Trial I as an example, where you have the average time around 2, 2.5 months and so on. But that's what we can guide for today. When it comes to the question how many patients we need, we don't expect that we need actually more than 16 patients to be entering into the running period. If you look at our other studies, both Triac I and also Triac Trial 2, that is fully recruited. We have very, very few dropouts. So our estimated plan is 16 patients. And then, of course, if for some unforeseen reason, we have one drop out. We don't see that we'll have more dropouts. Of course, we'll complement that.

The next question comes from Samir Devani from Rx Securities.

I guess I've got 2, Nicklas. I guess one, the first one you may not be that keen to answer but I'm going to ask it anyway. In light of obviously the changes to OpEx, what's your cash reach in light of this development? And then the second question was just on one of the bullets talks about capacity constraints at the centers. Is there any reason why you can't add in more centers?

Yes. Thank you, Samir. And I wouldn't expect anything else from you than asking around the OpEx and then the cash runway. You will -- I'm sure you know my answer, but taking a few steps back at the end of Quarter 1 with the report published on the 26th of April. We reported SEK 244 million cash at hand. Obviously, what we see with that is that will take us well into next year. We have also clearly said that we're already now working on alternative financing. So debt finance an example to making sure that we have funding available at some point in time when needed. So unfortunately, I can't say more than that Samir to that question. And then your second question was around -- do you mind repeating that, sorry, I think I actually missed that.

Yes, sure. You've mentioned one of the bullets that you've got capacity constraints at some of the centers due to lack of nurses, et cetera. I'm just wondering why you can't add more centers.

No. Fantastic question, Samir, and this is something that we are considering and have been considering. I think the challenge we have had is that this is a recent development. Actually, that's one of our key recruiting sites. The challenge with adding more sites now is that to have a site up and running, just looking at the experience we have in this study, which I alluded to when we talked about the study start and the substantial delay on the same is that we're probably envisaging depending on where, but more than 6 months to get the study up and running, regardless of where it is around the world.

Okay. That's insightful.

So, I think -- thank you. So also our efforts really working on sites we have, ensuring them, supporting them, having the right resources in place, facilitating the recruitment process, also an additional aspect, I think, worthwhile mentioning to actually relieve some of the pressure from the participating sites. We have now implemented home nursing for the patients, which means that they don't need to come to the site every time where they need to be tested. So we actually have employed home nursing in the U.S., for example, where we have the nurses travelling to the patient's home to do blood samples, ECG, et cetera, which is very important to relieve the pressure from the participating sites.

The last question on today's conference is from Fredrik Thor from Redeye.

Hello. Yes, I will have one question, and that is about Aladote. Could you please elaborate a bit on kind of how flexible you are in the timing of starting the pivotal trial? What kind of activities would need to get up and running, so to speak? Would you need to prepare in advance? Or yes, how -- basically how flexible are you to -- when you can start that trial depending on the submission timing?

No, it's a great question, Fredrik. And unfortunately, obviously, we have had some experience of being incredibly flexible when it comes to Aladote. Because Aladote, we were planning to start a few -- quite actually a few years back. And then we had the pandemic, the COVID-19 pandemic, and we actually have to put the study on hold already then due to that. So we know these patients will be studied in the intensive care units or the -- in the emergency setting. So I think we have managed to develop a very flexible system and processes both internally, but in collaboration with the sites and the CRO, where we have really taken the necessary steps to have study protocol finalized, et cetera, et cetera. Everything is finalized from that perspective. So it's really -- what's the word I'm looking for -- actually restarted will be very, very quick when the time is due.

Got it. Yes.

Thank you very much, Fredrik. And now we have come to the end of our update with the prepared remarks, and thank you to all the participants for the very enlightening and educated questions. And myself and the team wish you a very good afternoon. Thank you.