Newron Pharmaceuticals S.p.A. (NWRN) Earnings Call Transcript & Summary

Newron stands for 25 years of research and development of innovative treatments for CNS diseases. We have operations right around the corner in Morristown, New Jersey, and headquartered in Milan, Italy. Our shares are listed on the SIX with stock exchange since 2006 and also traded on the XETRA electronic exchange. And of course, as a publicly traded company, we direct your attention to that legal disclaimer on the screen. But the focus of today's discussion will be devoted to the vast majority of those patients suffering from schizophrenia. Who either respond inadequately or who are fully treatment resistant to current antipsychotics, the vast majority of schizophrenic patients. None of today's drugs, except clozapine, has been approved for TRS, treatment-resistant schizophrenia, despite numerous well-designed and executed trials. And as a result, there is a critical unmet medical need for a new, safe and efficacious treatment for treatment-resistant patients. Today, we want to introduce you to evenamide, a novel, voltage-gated sodium channel blocker, born from our successful more than 20 years history of this class of compounds. Importantly, evenamide modulates the excessive release of glutamate, a key abnormality in patients with schizophrenia. In January this year, we disclosed highly promising unprecedented results from an uncontrolled 1-year Phase II study where evenamide was added to the current medication of TRS patients. In April and May this year, we released results from a new first ever pivotal study with evenamide. This Phase III study showed that the addition of evenamide to any antipsychotic in poorly responding patients with schizophrenia demonstrated highly significant and clinically relevant benefits. We have since been asked how voltage-gated sodium channel blocker could produce such a sustained and continuing improvement in patients with treatment resistance. And we did not have a validated scientific answer to that question until now. So it is today that we will leave the stage to some of the leading experts in the field to walk you through the results seen and the understanding of why evenamide could produce those unexpected and unprecedented results. Highly positive results and indeed the most difficult and intractable indication of schizophrenia and the one with the highest unmet medical need. We hope you will see and share our excitement and our confidence in the enormous potential we feel this compound has to help patients with chronic and treatment-resistant schizophrenia. We have a lot of important information to go through. And in the interest of time, may I ask you, please to hold your questions until the end of all sessions. After Ravi's presentation, on our path to registration, I'll be back to the stage to open the Q&A session and you will have the opportunity to interact directly with the presenters. So thank you for now, and Ravi, over to you.

Thank you, Stefan, and good morning to everybody out here, and good afternoon to those who are in Europe or elsewhere. So I'm going to very briefly talk about schizophrenia and evenamide, but I'll leave the bulk of the presentations to our 3 schizophrenia experts. So today, we are at a crossroad in the management of schizophrenia. There are approximately about 60 different antipsychotics that have been approved for the management of patients with schizophrenia worldwide. They're about 20 to 30, even up to 40 in any one country. Based upon that, I think we would expect that schizophrenia must be a disease that is very well managed. But what we find is that the majority of these drugs act to the same mechanisms, which is principally blockade of dopamine receptors, sometimes by modulation of serotoninergic pathways, sometimes through noradrenergic pathways, muscarinic pathway, trace amino acids, et cetera. There are some key issues in schizophrenia research that highlight the shortfall of the benefits of these drugs. We have patients who are inadequate responders, who become progressively worse and become treatment-resistant, deficits in cognition, negative symptoms, loss of functioning, which also then lead to the question are these patients being well served by the current medication. I'm going to present to you this one paper, which has not received the amount of attention, which I felt that it does deserve. This is a study done in the U.S. between 2008-2009. This study was done by the National Institute of Mental Health, as well as in collaboration with the Department of Health and Human Services. And what I looked at was the prognosis in patients who are having their first episode of schizophrenia, what we call as first episode psychosis. These are the patients, as you will hear, who have the best outcomes in their initial course of treatment with medications. 70%, 80% of them respond. The magnitude of improvement could be 70%, 80%. So these are the best patients to look at. In this study, over the course of one year, over 154,000 patients who had their first episode, got identified. And the study focused on those patients who received a diagnosis from a mental health professional, who had continuous commercial insurance, so they would get the best treatment. They took medication. Then they had a second follow-up. And the purpose of the study was to look at the -- what happened to these patients at the end of 1 year. And there were very simple crude measures they looked at, which was to look at mortality. So the mortality data was obtained from the DHHS multi-payer claims database, which identifies all that's -- many patients were not available for the follow-up, so they were excluded. So in the end, you have, out of the 154,000, about 5,400 patients available for this analysis. And this is principally focused on those patients who are in the younger age group. So let's see what happens. What is really troublesome here is that if you look at the data for mortality in this first episode psychosis patients compared to the U.S. general corporation standardized mortality rate per 100,000. You see all the numbers in the right-hand column, there are multiples and I've deliberately highlighted some in red. So we have a 24 full increase in the standardized mortality rate for the first episode psychosis patients. For the first time, we're also showing that females seem to be at higher risk. And if you look, the younger patients are at risk, but those who are in the last subgroup of about 35, 30 to 40 years, their risk climbs astronomically. Now once again, these are the patients who are getting the best medical care, they have commercial insurance, they were followed up, they took the medication in most cases. There are shortcomings of this study, no doubt about it. But overall, the message is very clear, that the management of these patients with the 5HT2/D2 blocking drugs was not adequate. Now these patients may be somewhat different, of course, compared to the vast majority of schizophrenia patients. But it's a very chilling message. One question remains. Could it be that there's a new mechanism that might help? And as you will hear later, there are mechanisms which target the primary source of the abnormality in schizophrenia that might be of help. Evenamide is a glutamate release inhibitor, which is a voltage-gated sodium channel inhibitor. What is unique about this drug is that it has no interaction with over 150 different CNS targets, whether it be neurotransmitters, receptors, enzymes, transporters, it does not interact with any of them. The only thing it does, it modulates excessive release of glutamate. Where we are in the development today, that basically now, it's in Phase III. One pivotal study has already been realized, and we intend to perform a landmark study in patients with treatment resistance that you will be hearing about a little later. Why are we so interested in this condition of treatment resistance or inadequate response is exemplified in this one slide. We focus on the phenomenon known as prepulse inhibition, which is a measure of information processing, which is felt to be the primary source of abnormality in cognition in schizophrenia. This can be modeled in animals. In this slide, what you're seeing is the prepulse inhibition in normal animals, that's the white bar. They are then treated with Ketamine, which is glutamate antagonist and you see the worsening. And then treated with clozapine, the most effective drug that we have for treatment resistance, and at this dose it does not work. We give a dose of evenamide, a low dose, it does not work. We give a higher dose of evenamide, it works. But more importantly, on the right-hand side, if you look at the cross-hatch bar, we combine the ineffective dose of clozapine and the ineffective dose of evenamide, and you see a significant reversal of the deficit. So when clozapine alone was not working, evenamide alone was not working, the combination does something to the animal that produces benefit. Similarly, we think that the same mechanism might be operated in patients with schizophrenia. Studies have been done with evenamide, in the U.S., in India, in Europe, Latin America, where overall about 8 studies that have been performed. And the key findings at the present moment are that there are no safety hazards. It is devoid of the usual side effects of antipsychotics. And we have demonstrated remarkable efficacy in a pilot study in patients with treatment resistance, but more importantly, in a placebo-controlled study in patients with inadequate response. So I'm going to stop here at this point and introduce our distinguished faculty. So first, we will be having Dr. Tony Grace from the University of Pittsburgh. Tony's work has been focused largely on the role of dopamine in schizophrenia, also on the way different drugs interact with this system. But more importantly, together with [indiscernible], he has worked on the primary source of the abnormality in schizophrenia, which is an identified hippocampal abnormality, which drives hyperdopaminergic activity. He has perfected the model, MAM model in which by the use of a DNA altering agent, you produce pumps, which have the exact same features phenotypically of patients with schizophrenia and the role of different agents in this model. He'll be followed by Dr. John Kane, I think Dr. Kane needs no introduction. He has been a distinguished psychiatrist for a very long period of time. He helped introduce the frame of scale for the abnormal involuntary movement scale, which is used to measure the [ involuntary ] movements. He's also been deeply involved in the first episode psychosis, long-term follow-up and the role of relapse on prognosis. But most importantly, he's also known for his pioneering work with clozapine. He helped design and author the clozapine Study 30, which led to the approval of clozapine worldwide. And he's been enrolled in many other landmark studies of this day. Last but not least, we have Dr. Steve Marder, who is joining us -- Steve is a native son of Queens, New York, but he defected to the West Coast, and he has decided to come back today. Steve is a professor of psychiatry in the UCLA. His work has been devoted to treatment-resistant schizophrenia, trying to improve the lives of those patients. He has been recognized for this work many times. He chaired the committee which tried -- which we developed the guidelines for the approval of a drug that could improve cognition in patients with schizophrenia and involve what we call as a matrix battery. Steve continues to be a thought leader and has graciously honored us by agreeing to be the lead investigator in the pivotal study for treatment-resistant schizophrenia, which we intend to perform the 1-year placebo-controlled study. With that, I turn it over to Tony for your presentation. Thank you.

Thank you, Ravi. What I'm going to be talking about is some of the work that we've been doing, looking at evenamide and looking at mechanism of action. Now we know that there's a long history of involvement of dopamine in schizophrenia. We know that there's all of the antipsychotic drugs that are currently in use today are primarily dopamine antagonists even those that work on serotonin, muscarinic receptors are given the doses that block D2 receptors between 60% to 80%. We also know the drugs that release dopamine, such as amphetamine and L-DOPA will worsen psychosis in schizophrenia patients. And if given a high enough doses to normals, can cause the psychotic experience. And imaging studies have shown that schizophrenia patients show an abnormal increase in dopamine release. This is done using a radioligand raclopride, that's a low-affinity dopamine antagonist. Because it's low affinity, it can be displaced by endogenously release dopamine. And what was found is that amphetamine causes more dopamine release in schizophrenia and moreover, the amplitude of the dopamine release correlates with the worsening of the psychosis. And studies done in England looking at Fluorodopa uptake. Fluorodopa is a dopamine precursor because it's fluorinated. It doesn't go on to the next step. But what it gives you is an active measure of dopamine synthesis capacity or the number of active dopamine terminals. And what's seen is there's an increase in both Fluorodopa uptake and amphetamine-induced dopamine release in the associate of stratum of schizophrenia patients that correlates with psychosis. But despite decades of investigation, there hasn't been a lot of evidence for a primary abnormality in the dopamine system itself. Instead, what we think is that the dopamine system is normal, but is being disregulated by other structures. And in particular, there's been a lot of focus on the hippocampus. Metabolic imaging studies have shown that there's hyperactivity in the limbic hippocampus of humans that correlates with psychosis and also correlates with disruption of the dopamine system. So how can we model this preclinically in order to look for new targets? Well, as Ravi mentioned, we used a compound, MAM, it's methylazoxymethanol acetate. Now we know that schizophrenia is genetically related if not genetically driven, implying a deficit in DNA. We also know that the second trimester is a risk factor for schizophrenia, women who have severe influenza infections during the second trimester, have a higher incidence of schizophrenic births, there's a higher incidence of schizophrenic births in the spring, which correlates to the second trimester being during the winter months. So what we do is to give this DNA alkylating agent to pregnant rats at gestational day 17, which is functionally equivalent to the human second trimester. And then when we look at the animals as adults, we see a lot of correlates with what you would expect for schizophrenia. So of course, we're not going to see the kind of complex changes that you see with human behavior. But what we do find is changes at the cellular and the circuitry level that do correlate quite well with what's been seen in human imaging and postmortem studies. First, with respect to anatomy, we see a thinning of limbic cortical structures. The same limbic cortical structures that you see thin in the schizophrenia patients. When you look at it at the cellular level, you'd see that there are -- it's not a large loss of neurons but instead there's a loss of neuropil. The neurons are packed closer together. This loss of complexity is seen in patients and also seen in the animals. But one neuron that is lost is a specific type of inhibitory neuron containing the peptide parvalbumin that shows significant loss in frontal cortex and hippocampus in schizophrenia patients in human subjects. We also see a lot of behavioral data. For example, sensory gating like the prepulse inhibition of startle that Ravi talked about, deficits in executive functions, things having to do with higher cognitive processes like reversal learning or extra dimensional shift, which is a rodent equivalent of the Wisconsin card sort where once someone is trained on recognizing one dimension of an object like shape, whenever the dimension has changed, for example, a number of objects normal people can make this change, schizophrenics can't, and we see the same thing in the animal models. And also negative symptoms, things related to problems with affect and emotional regulation, such as latent inhibition and social interaction. We also see changes in the way they respond to drugs. For example, PCP is known to cause a very strong exacerbation of schizophrenia. In fact, it tends to cause the same symptom classes that the schizophrenia patient is normally showing. And also an increased response to amphetamine, amphetamine we know the worsened psychosis. But of course, it only worsened psychosis when psychosis is present. Just like in humans, amphetamine given before the onset of psychosis doesn't have an effect. And finally, the changes in the activity, especially in the limbic hippocampus. Now as the hippocampus hyperactive in our animal model as has been seen in metabolic imaging studies of schizophrenia. But what we find when we look at firing rate of the principal neurons is that they're firing significantly faster. But the hippocampus is a complex structure that depends more than just on how fast the neurons are firing. Rhythmicity plays a big role in how it coordinates activity in postsynaptic structures. And what we find in the MAM animals is a loss of the low-frequency rhythms that are so important for gating information flow in postsynaptic structures, but an increase in higher frequency rhythms, where the gated output is replaced by a high-frequency noise, if you will, coming out of the system. Now does this impact dopaminergic neuron activity. Well, in order to study this, we wanted to get a picture of what's happening across the dopaminergic system. We know that some of the neurons at baseline are firing and some aren't firing. The ones that are firing or firing at different rates and different patterns. In order to study this, what we do is we pass an electrode through the ventral tegmental area, dopaminergic system in a preset pattern and count the number of neurons that are spontaneously active. This gives us a measure of population activity or the proportion of neurons that are active. Then we see how fast they're firing and their firing pattern. We do this because each of these parameters control different behaviors and also are controlled by different circuits. When we look at the MAM animal, what we find when we look across these parameters is that nearly every dopaminergic neuron is firing all the time without really a change in average rate or pattern. Now this increased number of dopaminergic neuron firing, is actually consistent with what's been seen clinically, studies by Oliver Howes and Phil McGuire in England have shown that there's an increased fluorodopa uptake in the stratum of schizophrenia patients, which corresponds to an increased number of active terminals. We see an increase in the number of neurons driving those active terminals. So when the hippocampus is hyperactive, by overdriving the stratum, it inhibits the ventral pallidum. This removes the inhibition from the dopaminergic neurons and causes the mall to start firing. Now what's the impact of this increase in number of neurons firing? Well, this seems to really regulate the responsivity of the system, the ventral pallidum by controlling the number of -- controls the number firing, but a different input is activated by sensory stimuli that causes these neurons to burst fire. Burst fire is really the behaviorally salient output of the dopamine system. But in order to burst fire, the neuron has to be firing. So the burst firing is the signal. But whether the neuron is firing or not is the gain, more neurons are firing, the bigger the signal. And this is modulated depending on context and need of the system. So for example, if you're in a benign context, you're in a safe environment, the hippocampus doesn't have the dopamine system toned up very high, not a lot of neurons firing. Then let's say you hear a noise, well, that will activate this glutamatergic input, but because there aren't a lot of neurons firing, you're not going to get a big dopamine signal. You may get up to see what the noise was but not with any kind of urgency. But let's say you're in an activating context in a very dangerous neighborhood or very negative conditions. Now this -- you have the hippocampus being more active, having more neurons firing, the same noise is going to cause a much larger dopamine release so that you can act with urgency in order to act on this system. But what about the schizophrenia patient? In this case, the hippocampus is hyperactive all the time, independent of context. All of the neurons are firing. So any stimulus that comes in, whether it's salient or not is going to cause a massive activation of the dopamine system. There's a really interesting book by Elyn Saks, called The Center Cannot Hold: My Journey Through Madness, where she talks about her psychosis as the filter that everybody else has that tells them what they can pay attention to and what they can ignore is broken down so that all stimuli come in competing with equal urgency. And we think that this is the neurochemical basis of this kind of condition. So when the hippocampus is hyperactive, the dopamine systems hyperresponsive to stimuli and results in this overinterpretation of events. Therefore, there is no pathology in the dopamine system itself. Instead, the dopamine system is normal, but it's being disregulated by upstream systems, specifically an overactive hippocampus. How did D2 antagonist treat psychosis and schizophrenia? Well, D2 antagonists were actually discovered by serendipity. They weren't looking for an antipsychotic drug. What we find whenever you give a D2 antagonist to normal rats, when you first give it, it excites the dopaminergic neurons. It block dopamine receptors, there's a feedback excitation of the neurons, which causes them to start firing faster. But the drugs are administered over a period of weeks, what we find is there is so much over excitation that it causes the polarization block. They're so excited they actually stop firing. This, the polarization block does decrease the number of neurons firing. This, the polarization block actually correlates with therapeutic efficacy and extrapyramidal side effects. So first-generation drugs that caused the polarization block in the eventual tegmental area have antipsychotic efficacy, second-generation drugs, the same. But the first-generation drugs also caused the polarization block in the substantia nigra, the motor-related system. This correlates with extrapyramidal side effects. So we have this identity between inactivating the limbic ventral tegmental area dopaminergic neurons and efficacy of the D2 antagonist. However, in the MAM rat, we have a different condition. In this case, the neurons are already active. So in a normal animal, where we might be giving a dopamine antagonist that first activates the dopamine system then over a period of weeks brings it back down below baseline. In the MAM animal, because they're already activated, whenever we give the antipsychotic drug, we get a very rapid reversal of the depolarization block. So in control rats, antipsychotic drugs first activate dopaminergic neuron firing, the increased population activity to compensate, but it takes weeks of treatment. In the MAM rats, because the population activity is already activated, there's a rapid induction of the polarization block. The rapid induction of this partial depolarization block decreases the abnormal increase in the number of dopaminergic neurons firing that we think underlies psychosis. And this correlates well with the clinical picture because we know that the more psychotic the patient, the more effective and rapid the antipsychotic drug acts. But if the dopamine system is not in an activated state, and in fact, Oliver Howes and several others have shown that in treatment-resistant schizophrenia, you don't have this elevated fluorodopa uptake. If you don't have the elevated fluorodopa uptake, the dopamine system is not hyperactive. If it's not hyperactive, a D2 antagonist drug is not going to be sufficient to cause the polarization block. And this is why we think we have treatment-resistant schizophrenia when you don't have a strong overdrive of the dopamine system. So it's important to note that this induction of depolarization block does not normalize the system. It doesn't bring it back to normal. Instead, it acts by inducing an offsetting deficit with associated negative consequences. In addition, while addressing the hyperdopaminergic state can help with psychosis, they don't act at the cytopathology in the hippocampus. And as a consequence, they don't attack negative and cognitive deficits. So we currently think that the problem is the hippocampus hyperactivity, probably because of a loss of inhibition and a disruption of excitatory/inhibitory balance. But where we treat schizophrenia now is by blocking dopamine receptors, which as you note, is 1, 2, 3, 4, 5 synapses downstream from where we think the primary deficit is. Because we're not treating it the hippocampus, it's not effective in the frontal cortical cognition. It's not effective in the amygdala, treating negative symptoms, all of which are disrupted by hippocampal overdrive. And it's not even effective at blocking dopamine receptors if there's not elevated dopaminergic activity. A better approach would be to treat at the cytopathology. Now what we think is, as I mentioned, there's this inhibitory excitatory imbalance, where parvalbumin neurons show a massive loss. And in fact, this is probably where PCP works to exacerbate schizophrenia. What we need is something to overcome this loss of inhibition that leads to hippocampal overdrive and disruption of rhythmicity. So a more direct approach would be to limit hippocampal hyperactivity, and this is where evenamide comes into play. Evenamide has the unique property that it doesn't seem to impact hippocampal neurons that are firing at normal rates. But what it does is it decreases the hyperactive neurons. So it's not going to just work as a sledgehammer to decrease all hippocampal activity. It seems to be selective for hyperactivity within the hippocampus. When we look at our MAM animals, we know that there's hyperactivity in the hippocampus. Evenamide brings this hyperactivity right back down to normal. When we look at dopaminergic neuron population activity, we find the evenamide at 3 milligrams per kilogram, causes a normalization in the number of dopaminergic neurons firing that we think underlies psychosis. And interestingly, it seems to do this by working selectively in the lateral VTA. Now why is it important that it works in the lateral VTA? Well, the lateral VTA is the VTA that projects to the associate of stratum. And the associate of stratum is where you see the hyperdopaminergic change in schizophrenia subjects. It doesn't impact the medial stratum -- or the medial VTA that projects the eventual medial stratum that's more involved in affective regulation, which is why normal antipsychotic drugs that block dopamine in both conditions tend to have negative symptoms as a consequence, but this doesn't. Also interesting is the duration of action. An IP dose of evenamide in the rat has a half-life of only about an hour or slightly longer than an hour. But what we find is when we look at over a 3-hour period, which is quite a long time in a rat, not only do we get a diminution of activity, it actually becomes more effective. So we don't think it's actually the acute actions that are having the important effect, we think that it's probably inducing some kind of a long-term plasticity, which is why in the clinical studies you seem to get increasing action over longer periods of time. Also, unlike other antipsychotic drugs, it also seems to impact cognition. The standard cognitive test is this novel object recognition where we expose the rat to 2 identical objects, then after a period of time, replace one of the objects with a novel object. Normal rats will explore the novel object. But what we find those MAM rats can tell the difference between the novel object and the familiar object. They really don't have the working memory to keep this in mind. But evenamide reverses this. It does this not by affecting exploration. They're normally walking around. They're normally exploring, but what you find is that they can now tell the difference between the novel object and the familiar object. We also find that it affects negative symptoms, the so-called emotional deficit. In this, we have a 3-chamber condition. We have a chamber with a toy rat and a chamber with a live rat. Normal rates will tend to explore the chamber with the live animal. What we find in the MAM animals is that they don't really explore the -- they don't really interact with the live rat. When we look at sniff time, there's a big decrease in the amount of sniffing, which is the way that animal -- rats socially interact. Evenamide restores this. But if you notice, there's no difference in whether they enter the social chamber, number of times they enter the social chamber, the difference is in the amount of time they interact with their con-specific and evenamide selectively improves this. So in conclusion, evenamide exerts a unique action that doesn't depend on dopamine receptor blockade. First- and second-generation antipsychotic drugs block dopamine actions. This compensates for dopamine overactivity but is working 5 connections downstream from the site of dysfunction. And this would lead to significant side effects, which underlie the extreme noncompliance and also treatment resistance. And this class of drugs is also ineffective in the negative and cognitive symptoms, as well as in treatment-resistant schizophrenia. And as we know, the negative and cognitive symptoms are usually the things that impact the patients the worse. It's the thing that keeps them from interacting well, it keeps them from holding down jobs, it keeps them from normal social interactions. Now by normalizing only hyperactive hippocampal neurons, evenamide does act at the site of dysfunction. By selectively impacting only hyperactive neurons, it normalizes activity without inducing significant side effects. By acting in the hippocampus, they can also normalize dysfunction not only with respect to hippocampal overdrive of the dopamine system that we think underlies psychosis. But by normalizing other hippocampal outputs, it can normalize negative symptoms as well as cognitive symptoms. With respect to the glutamate system, they can also alleviate symptoms in patients that are treatment-resistant to dopamine acting drugs, rather than having to depend on an overactive dopamine system to act. And evenamide actions outlast its presence in the brain, suggesting that it impacts long-term plasticity in its extended therapeutic actions. I should mention that these are all things that we've looked at as in rats that have not been given other drugs. Evenamide by working in the hippocampus works on treatment-resistant schizophrenic that are already being given antipsychotic drugs. But what I would pause it is that I would predict that evenamide would also be a very effective monotherapy since it seems to attack the site of dysfunction without the need for directly modulating the dopamine system. And thank you for your attention.

So I want to continue the discussion now focusing on the clinical context and some of the clinical results that have been seen with evenamide. First, my disclosures. So this slide illustrates some of the points that Tony made. When we treat people with schizophrenia, we're looking for a good response. And even in the first episode, about 20% of patients do not experience a good response from antipsychotic drugs. We're ultimately looking for people to be in remission from their psychotic signs and symptoms. And what we see is that as the illness progresses, a substantial proportion of patients are not in remission. We have high relapse rates, largely due to noncompliance and some of the adverse effects that Tony talked about, with the traditional antipsychotic drugs contribute to high rates of noncompliance. If we have a drug that's better tolerated, that will go a long way to improving outcome. What we also see on this slide is that rates of recovery are very low, and we're talking about functional recovery, working, going to school, doing many of the things that we all take for granted. With the current treatment that's available, we're not able to address some of the cognitive dysfunction and the negative symptoms that contribute enormously to functional outcomes. So the prevalence of treatment-resistant schizophrenia is very high. And there's an even higher proportion of people who achieve inadequate response who have residual psychotic symptoms. And Tony has talked about some of the biological changes in patients who experienced schizophrenia and those who do not derive adequate benefit from the available antipsychotic drugs. One of the concerns that we have, and this is another major issue when we treat patients with schizophrenia. When they experience a relapse, usually due to discontinuing antipsychotic medication, their response to the same drug that they responded to previously is significantly worse. So if we see patients relapsing over time and they're treated with the medications that we currently have available, we're seeing a decrement in response over time. As you've heard, there are many, many antipsychotic drugs available around the world. And when we look at a meta-analysis of these drugs, they're largely similar in terms of efficacy where they differ is adverse effects. The only drug that might be an exception to that is clozapine. So the differences in side effects are much more marked. And if we can identify medications that are better tolerated, that also goes a long way to improving outcome. The importance of medication in preventing relapse can't be emphasized enough. This is a seminal meta-analysis looking at 24 studies comparing drug to placebo in the prevention of relapse and we see a number needed to treat of 3, that is a very powerful effect. But as we saw, we still see some patients not responding adequately to antipsychotic drugs and many patients discontinuing their medication. One of the controversies in recent years has been do patients really need to continue to take antipsychotic drugs indefinitely, particularly after their very first episode of psychosis. This is a study that was done in Finland, a 20-year nationwide follow-up study of first episode patients being treated with antipsychotic drugs. The 2 outcome measures that the investigators looked at here were rehospitalization and death. Ravi has already talked about the inordinately high mortality rates among first episode schizophrenia patients. And this study, which followed almost 9,000 patients just shows the consequences of discontinuing medication even after just a single episode of schizophrenia. So patients need to stay on these medications on an indefinite basis. And one of the challenges to the dopamine hypothesis is also the fact that even when we guarantee adherence by giving medication in a long-acting injectable formulation, about 15% to 20% of patients still relapse. They still break through the antipsychotic medication. So that dopamine receptor blockade is not being sufficiently effective in preventing relapse. So let's talk about the evenamide study that Ravi alluded to earlier. And this is based on the observation that -- as we've said, many patients don't derive adequate response. Some are, in fact, treatment resistant, but an even larger number of patients have residual positive psychotic symptoms that interfere with functioning. Clinicians use different strategies to treat these patients. Sometimes they'll raise the dose of the medication. Sometimes they'll add a second drug. Sometimes they'll switch from one drug to another. And with the exception of clozapine, these strategies are not very effective. So this study, potentially pivotal Phase II, Phase III, 4-week, randomized, double-blind, placebo-controlled study, was intended to evaluate the efficacy, safety and tolerability of evenamide 3 milligrams BID for 29 days. So these were outpatients with chronic schizophrenia who were judged to be inadequate responders to the second-generation antipsychotic medications that they were taking. The primary efficacy measure was PANSS total score as is typical for such studies. There were safety and tolerability measures. Key secondary efficacy was the clinical global impression of severity scale. There were 291 patients randomized in a 1:1 ratio to evenamide or placebo, 45 sites, numerous countries, and then there's an open-label extension study that's ongoing. So one of the key methodologic advantages of this study was during the screening period, patients had antipsychotic plasma levels obtained to confirm that they were actually taking the medication that they had been prescribed. And the reason that this is so important is that in many studies when patients are identified as poor responders or treatment resistant and the investigators do plasma levels, it's found and one of the largest studies that 1/3 of the patients did not have therapeutic blood levels. So this was, I think, a very important methodologic strategy to ensure that these patients were, in fact, not responding to medications they were actually taking. So here, we see the design of the study, a 21-day screening period with obtaining antipsychotic plasma levels and then patients were randomly assigned to evenamide or placebo and followed for 29 days. And you see at the bottom of the slide that there were a number of different antipsychotic medications that these patients were taking, including some patients were receiving clozapine and the experimental compound was added to these drugs. So patients had to be over 18. As we said, outpatients currently receiving a stable dose of the medication with proven adherence, very important, current symptoms present for at least 1 month. And PANSS scores, PANSS total scores, and again, this is the instrument that we typically use in clinical trials, had to range between 70 and 85. So there was an upper limit, and that may potentially limit response because we see that the more severe the PANSS scores at baseline often the better response in studies like this. Patients had to have 2 or more core symptoms of psychosis rated moderately, severe or higher. So let's look at the enrollment, the demographics, et cetera. The average age was 40, which is typical in studies like this. And because of the many countries that participated in the study, we see a good representation of Asian patients as well as white and Caucasian patients. In general, they were a bit overweight, but not as overweight as we see in many of the studies done in the U.S. The duration of illness average about 12 years. So patients had been ill for many years as is typically the case in these studies. The current episode had lasted on average for 10 months. They've been on the current medication for 2 years, which suggests that clinicians in many cases had sort of given up. They felt there was nothing else that they could really do to help these patients. And that's why, these results are so encouraging and seeing further response. So these are the medications that the patients were taking. They're sort of baseline medication and the blood levels that were required. So these are the therapeutic reference ranges to ensure that the patients were actually getting an adequate dose of the prior medication. These are the proportion of patients receiving different drugs. The most common drugs were Risperidone and Olanzapine followed by clozapine. And what's impressive about the failed antipsychotic medications that these patients have been taking is that 70% of these patients had had 2 or more antipsychotic failures. So they're on their way to being treatment resistant or they're already treatment resistant. And this is a kind of -- there's a subtle boundary between poor and partial responders and treatment-resistant patients. So let's look at some of the key efficacy endpoints and patient disposition. So what I would emphasize from this slide is the very high completion rate. So 96% of these patients completed the study, that's very unusual. And when we look at withdrawal of consent or discontinuation due to adverse effects, which I think is particularly important, these results are very, very unusual in seeing so few patients discontinued due to adverse events and so few patients discontinued in general. So looking at the PANSS total score, which was the primary outcome measure, we see a significant advantage for the patients taking evenamide after 29 days. And as you'll see in a couple of minutes, the trajectory that was observed is very encouraging and suggesting that if the trial had lasted longer, we might have even seen more improvement. And also if patients with higher PANSS scores had been allowed into the study, we also might have seen more improvement. But both the PANSS total score and the CGI severity score showed significant advantages for the evenamide group in comparison to placebo. So the inadequate response to antipsychotics, in general, this is -- these are patients who are out of the hospital. So they're not in an acute episode. And here the baseline PANSS score, as I said, was restricted between 70 and 85. And these are outpatients. So if we had enrolled patients who are more severely ill, we might have seen even more impressive results. So sensitivity analyses. There are a variety of ways of looking at these data and this summarizes many of them. And what's striking here is that regardless of the sensitivity analysis strategy we're seeing very, very similar effects, very, very similar results, both with the PANSS total score and also with the CGI severity score. And this is what I was referring to earlier in terms of the trajectory. So this is only a 29-day study. And if you look at the patients receiving evenamide, 30 milligrams BID, you see continued improvement starting between week 1 and week 2, but continuing through day 29. And of course, the question is what would have happened if we -- the study went longer than 29 days. And as Tony said, one of the interesting things about this drug is that it may work even better over time. If we look at the PANSS responder analysis, which is also a classic way of comparing outcomes, improvement of 20% from baseline is a meaningful improvement in patients who have been poor or partial responders. And we see, again, significant difference at Day 29, favoring the evenamide group. And here, we're looking at a CGI responder analysis. And this is focusing on patients who are at least much improved. So from a clinical standpoint, that's a very important categorization. And at 29 days, again, we see a significant difference favoring evenamide. Let's look at the overall safety data. So as we saw earlier, very few patients discontinued due to adverse effects. I think that's particularly important. And the discontinuation rate overall was very, very low. And looking specifically at the most common treatment emergent adverse effects, we're not seeing what we usually see with second-generation antipsychotic drugs like weight gain and metabolic disturbances. We're not seeing significant sedation. We're not seeing extrapyramidal side effects. So this drug appears to be very, very well tolerated. So the key findings from this study, the primary and secondary end points where med showed significant superiority compared with placebo and the benefit that was seen with evenamide appeared to be distributed evenly among the 7 second-generation antipsychotic drugs that were allowed in the trial. Results from the secondary measures are consistent with those from the primary measures. The side effect profile is similar to placebo, as I said, with no increase in EPS, weight gain, blood glucose, sexual dysfunction, cardiac effects or laboratory abnormalities. So it will be very exciting to see another pivotal study in patients with treatment-resistant schizophrenia. So in conclusion, we've tried to emphasize that a substantial proportion of patients with schizophrenia do not respond well to the medications that we have available. And this is true even at the very onset of the illness and becomes more and more prevalent as time passes. Clozapine after 30 years, remains the only medication with regulatory approval for treatment-resistant patients, yet it is grossly underutilized. It's a drug with a large array of adverse effects. It's a challenge for some clinicians to manage those adverse effects. It does require monitoring for agranulocytosis and utilization rates of clozapine are quite low, about 6% in the United States. So there's tremendous need for alternative treatments. And this is a compound with a unique mechanism of action. It's shown, I think, very promising results as a medication that can reduce the severity of psychotic symptoms that have not responded adequately to other among the most widely used medications. So it's very exciting to see the emergence of a new compound with a novel mechanism of action and which can provide new hope to patients with this illness. Thanks very much.

Thanks, John. I want to continue this discussion about treatment resistance. In the 1980s as a researcher and a clinician, I was involved in consulting at state hospitals around California as well as running a ward. And at that time, there was very little for treatment resistance. In 1988, this study that John was first author on, in that Ravi Anand was involved and found that clozapine was an effective drug for treatment-resistant schizophrenia. The importance of this study isn't just that clozapine was an effective drug, but also that treating treatment-resistant patients could become a target. After this study was public -- what -- accompanying this article, I wrote an editorial about who should receive clozapine. And I also received a humanitarian use IND from the FDA. And I was -- I believe I treated the first clinical patient in Southern California. This was a 34-year-old woman from a prominent Los Angeles family, who is going from state hospital to lock facilities, floridly psychotic. After treatment with clozapine, she showed an incredible improvement. Within a month, she was symptom-free. Within a few months, she was able to reenroll at UCLA. She got her masters in teaching, and she just completed a career as a teacher within the Los Angeles school system. And I say this not to say that clozapine is a perfect drug, but that finding a better treatment for treatment-resistant patients and administering in the right time can change lives in a very substantial way. What I'm going to do, I'm going to talk about the prevalence of treatment resistance, What clinicians currently do and then talk about how a new drug, which would be an add-on to an antipsychotic for treatment resistance, has the potential for altering the course of illness in a large number of patients and sort of what the plan is in the future to bring this drug to patients. So about 10% to 23% of people with schizophrenia seem to be treatment resistant from the very onset, from the very first episode. But if we look at patients who initially respond, about 30% to 60% are partially responsive and somewhat resistant to treatment. And finally, even clozapine, which is the most effective antipsychotic, patients will -- at least 50% of patients who are put on clozapine will show a substantial improvement. But that doesn't mean that they reached the kind of remission that we would hope for. And about 60% of clozapine treated patients still meet the criteria for treatment resistance. I say this because there's a substantial need for treatments for this population. So what do clinicians do when a patient is treatment-resistant? Well, these are the common approaches. First, clinicians tend to add another antipsychotic. This is the most common thing they do. They raise the dose. If you look at treatment-resistant patients, they're often at extremely high doses of antipsychotic even though their response is sort of marginal. They add things like mood stabilizers, antidepressants, anxiolytics, they're relatively ineffective. And then the thing that's least used is actually the only one that's effective, which is clozapine. And since the introduction of clozapine, I think John and I have been on a mission to increase the use of clozapine at which we've been relatively unsuccessful. Clozapine is probably the most difficult drug in psychiatry to administer. It's both the side effects and the kind of maintenance clinicians just don't use it enough, which is sad because it really has the potential to change lives. This is a systematic review of what of the most common thing that clinicians do, which is to add a second drug to an antipsychotic. So a patient who's not responding well to risperidone, may get an addition of olanzapine or even someone who's partially responsive to clozapine will sometimes add something like aripiprazole to see if that's effective. This large review shows that these strategies are seldom effective, the clinicians use them because the situation sometimes seems desperate. Using high doses, there's no convincing evidence that raising doses of antipsychotics above the usual limit will sort of be effective for treatment resistance. So in summary, what clinicians can do seldom work, the addition of one antipsychotic to another is seldom effective, switching from one drug to another. If somebody fails on an antipsychotic that is typical -- that is a non-clozapine dopamine antagonist, and you switch them to another one, it's seldom that it works. These drugs work by the same mechanism. And switching from one to another, sometimes the drug will be better tolerated. It's very rare that they'll actually change a nonresponder into a responder. And this was demonstrated in the large NIMH CATIE study. And drugs that have been introduced recently or studied, including bitopertin, D-cycloserine, and Organon compound and others, have been found to be. The promising drug was Lundbeck compound, AF3500 that John was involved in studying. This was what we have seen as a promising drug. There was a substantial investment in a large study that's compared it to either risperidone or olanzapine for treatment-resistant patients. And unfortunately and sadly, the drug proved no more effective than risperidone and olanzapine. If you look at the reduction in PANSS total, it was the same -- relatively similar on each of these compounds. The other thing, and this builds on the point that Tony Grace made was that, there's a need for a drug that treats schizophrenia by a nondopamine mechanism. This is from a group of studies that looked at both dopamine synthesis capacity and glutamate in treatment-resistant patients and responsive patients. If you look at the upper right figure, you'll see that patients who are responsive to D2 antagonists, have a higher dopamine synthesis capacity. They seem to have a dopamine illness, which differentiates them from treatment-resistant patients. On the other hand, people with treatment-resistant illness seem to have an illness, which is more related to glutamate. You'll see that they have higher glutamate concentrations in the anterior cingulate suggesting that the strategies which we use for -- the dopamine strategies for treatment-resistant patients are not going to work because this population is different. And as suggested by Tony Grace, we need to look at a different mechanism. So the current status of TRS is that we have a high proportion of patients, even those on clozapine who still meet treatment-resistant symptoms, could be estimated as high as 30% to 50%. I think it's higher than that. I think if you go to most clinics a great majority of patients are still suffering from some symptoms of their illness. People who may not meet the criteria of a treatment-resistant illness may still have symptoms that affect their functioning in the quality of their lives. When clozapine was first introduced, it was seen to be a relatively dangerous drug. So the threshold for calling something treatment-resistant was very high. These are kind of people on back wards of state hospitals. But if we look at patients who are living in their communities and seem to be drug responders, many of them live with a substantial burden of symptoms that need to be addressed. And again, this is an important unmet need. So let's go to the clinical studies with evenamide. And I'm going to focus on a study of the long-term effectiveness in TRS patients. I'll skip through this because of time because I think that Tony and John already indicated that this is a drug that reduces excessive glutamate release and works by a different mechanism. This is a study which gives sort of impact of a prolonged treatment over a year with evenamide. It started out as initially, patients were randomized to 1 of 3 doses of evenamide. They were -- after a 6-week trial, they were continued on that dose as they tolerated it for up to a year. I want to draw your attention to the fact that a very high proportion of patients, if you look at the top boxes, 95% of patients were able to complete the initial 6 weeks and entered the long-term phase at the end of the year, 75% have completed it. This is -- suggests that evenamide is a drug that's very well tolerated in schizophrenia populations. And as I think John emphasized, the adverse side effects of evenamide seem to be very mild and well tolerated, pointing to this very high completion rate. I want to draw your attention to the change in PANSS over the year. If you look at 6-week change in PANSS, you could see that there's a reasonable change. But look at 1 year where it seems that the number of patients that they continue to respond over a year. And this is extraordinarily unusual in schizophrenia trials. Usually, what happens is that the patients, they receive the drug, they improve during a particular amount of time. And then they seem to stabilize, but there's something that happens. And just for the sake of a metaphor, it seems to be almost a healing process that goes on over the 1-year period, which may relate to the mechanism of action. If you look at the responder analysis using a 20% improvement in baseline, which was actually used in the original clozapine trial, you could see that the responder rate at 6 weeks is about 15% and then it goes up to 43.6% in a year, which again is, I think, surprised, many people in Newron about this compound. If we look at CGI, improvement, responder analysis and improvement, you could see again this trajectory of improvement over a 1-year period. And just to put it, graphically, this shows the change in PANSS score over a 1-year period. And I think it supports the suggestion of Tony Grace, that there seems to be something that happens with this drug, a reparative process, perhaps due to increased plasticity that causes some substantial changes that sort of continue over time. So look at this more carefully in this study. One can look at the proportion of patients who meet criteria for treatment-resistant schizophrenia. And these are some of the criteria that have been used in different studies. And what you could see if we use PANSS less than 70, you could see that by a year -- well, by 6 weeks, it was about 47.3%, by a year, it was 70%. If you look at some of these other criteria, you could also see that it appears that a substantial proportion of patients even a majority by the end of the year, no longer meet criteria for treatment resistance. These are criteria for remission. This is a very high bar, which really goes beyond just being improved. And if you look at the criteria by Lieberman, and the criteria by Andreasen, which actually John and I participate in developing these criteria, you could see that by both criteria, a substantial proportion, 27.6% by the Lieberman criteria, 25% by the Andreasen criteria by 1 year meets the criteria for remission. Again, this is a severely ill population of treatment-resistant patients. So the key features of this study are: first, there was a very high retention rate with few clinically important side effects. There was a sustained improvement over time. The responder rates doubled and tripled between 6 weeks and a year. There were no psychotic relapses. And it suggested that patients -- many of them were able to meet remission criteria. This study is to point out some of its limitations, one, there was no placebo control, all of the patients received evenamide at different doses. And it was a study that was done entirely in India. So it's how reflective these results are in larger populations will need to be determined. Just to remind you of what John said was that using a double-blind placebo-controlled, randomized clinical trial, the highest standard suggests -- well, it doesn't suggest -- it's sort of -- it's evident that evenamide as an add-on drug is effective for treatment resistance. And this just reminds you of very substantial p-values [ to the ] 4-week trial. So I want to spend the rest of my time talking about the Phase III trial, something which is planned for 2025. This would be a Phase III trial of evenamide in treatment-resistant schizophrenia. It would be a double-blind, placebo-controlled trial. It will be done internationally. And as you could see in both -- well, really all parts of the world. The endpoints will be PANSS improvement, both at the initial 12-week phase, 26 weeks in a year. And this is a graphic representation. These patients will meet criteria for treatment resistance. The TRRIP criteria is a criteria that John and I were involved in. Trying to get back. Well, the primary efficacy objective will be change in PANSS total score at 12 weeks. The secondary will be CGI, the clinical global impression improvement as well as secondary measures which will focus on to the PSP with focus on overall functioning in the community as will the Q-LES-Q-SF. There'll be a long-term maintenance phase at 26 weeks, where change in PANSS total from baseline to endpoint criteria compared to placebo as well as longer term at 1 year. So just to summarize, there's a substantial problem with treatment resistance in schizophrenia. That a very large percentage of people with schizophrenia live with persistent symptoms of psychosis. Evenamide is a compound with a unique mechanism of action. It's shown promising results as a medication that can reduce the severity of psychotic symptoms that are resistant to treatment with current antipsychotics, including clozapine. A placebo-controlled trial, the one that John discussed in detail demonstrated that this is an effective drug for TRS. 1-year trial showed that evenamide is well tolerated. And the 1-year trial showed that evenamide has a unique property that is treatment-resistant symptoms continue to improve over a 1-year period, suggesting that this drug has sort of a unique effect on the course of schizophrenia. I also want to take a moment to talk about the advantages of an add-on drug to treatment with -- the potential advantages to treatment with clozapine. And one reason why I think many clinicians resist using clozapine, most patients with schizophrenia who take an antipsychotic even as they are treatment resistance, improved to a certain degree, there's reluctance to changing them entirely from one drug to another. I believe that clinicians will -- it will be much easier to convince them to take a drug which is already partially effective and to add a second medication, which could sort of further improve it. So I could see that in treatment algorithms of the future a world in which treatment-resistant patients will -- the first thing that clinicians will do will be the simplest thing, which will be to add a second antipsychotic to help that patient to restore their lives. Anyway the overall potential for evenamide is very high. Thanks so much for listening.

Thank you, Steve. I hope you gifted me this watch. Okay. I'm just going to talk for a couple of minutes about evenamide going forward. It's very unlikely -- it's very unusual for me to say use a headline like, a likely success. And I say it because I really, I think, in this case, I believe it. So let me just very quickly walk you through where we are and what's the plan going forward. We have decided that we're going to go for only one indication that is add-on to patients with treatment-resistant schizophrenia who are not benefiting, obviously, from their current medication. We've done the groundwork for this. We have basically talked about Study 017 with health authorities. There's agreement with the FDA, there's agreement with all the countries of Europe CHMP, that if that study were to be positive, alone, together with supportive data from another placebo-controlled study, it would be adequate for registration. And obviously, the supportive study we talked about was the [ 008A ], which you have seen actually is far more than supportive. The only study that we have not done preclinically is carcinogenicity. That requires only 1 study of 6 months duration in genetically modified mice, which we will initiate in parallel to the Phase III, so it will be done by the time of registration. And we expect that, that by the time of registration, we will have the 1,500 patients that are needed for approval. This is just a list of the planned therapeutic studies. Only the first one is of really critical importance. That's the pivotal study. The rest are just the numbers which we need to have for filling out the 1,500 patients on drug. I'm pretty confident this drug will work. But really ask -- let me ask you the question, why should you be confident that evenamide studies will meet their objectives and the drug will be approved. First is, the placebo-controlled study definitely settles the argument that for the first time ever, a glutamate release modulator has demonstrated significant efficacy in patients with schizophrenia. These are patients who were inadequate responders. And as John stated and there's some hints in the data that actually there were a lot of them who were treatment resistant. I point this out because one of the issues was that the study which Steve presented was not a placebo controlled. So the question was, are you seeing an effect which is due to other factors and not drug, but this study shows you that it is definitely superior to the previous treatment. I have to say that in 35, 40 years, I have not seen a study with so many p-values that are so, so low as you see in this study virtually for every measure. And it's not just showing the p-values for significance. Is there a clinically valid benefit? And then you look at this, whether if you look at the responders on the PANSS, the clinical global impression of change, the clinical global impression of severity, all of them seem to have astronomically low p-value. So clearly, the drug is different from placebo. Second question, I think you would ask is, well, is it going to work in treatment-resistant schizophrenia because those were patients who are inadequate responders. And for that, I've done a very simple analysis here, which looks at patients who had failed only 1 drug or patients who have failed more than 2 drugs. And you can see here that if you look at the patients who have failed more than 2 drugs, even though the number of patients is very small here, we will be having eventually in the 017 study about 250 patients per group. Here's a merely 1/3 of that. You still see a bottom line p-value, and this is a 4-week study, and that will be a long-term study. And as mentioned by John, if you look at the trajectory of the improvement and mentioned by Tony, it looks like the drug does better long term, which, believe me, nobody would have ever believed about treatment-resistant schizophrenia that the patients would continue to improve. So what is the likelihood of the last question that the drug will show benefit at 12 and 26 weeks, which is what the regulators want to see. So here, I'm showing you the data which Steve showed before, basically, again, as you can see, whether it be at 6 months or at 1 year, whether you look at mean change or you look at responder rates, there is a significant difference from the previous treatments the patients were getting or are continuing to get, and this is as an add-on treatment. Last, will there be significance? And the blue line here is the change that you saw in the 1-year study. And the 2 are the yellow and the green are the -- the red are the projections. So whichever way we look at it is a very great likelihood that we will see significance at 12 weeks and 26 weeks and the magnitude of change will be clinically valid. So with this, I think I'm fairly confident that the next study, which is all that we require to come out significant for approval, that objective will be met, and this drug will get to the market. Thank you.

So at this time, let me thank the presenters. I think you share, possibly our reading that by now, we understand that evenamide is indeed a new treatment option for those patients, the vast majority of schizophrenics who need a safe and efficacious treatment. And that we now also know, thanks to Dr. Grace's presentation. Why a voltage-gated sodium channel blocker modulating excessive glutamate release can create those benefits. It really goes right to the target, which is the hippocampus, and it doesn't touch any 4 or 5 levels below that. This is the time now for you to raise your questions.

We will start with the people in the room right here. So I would ask you to please raise your hand as a sign that you want to raise a question, shortly mention your name and your position, wait for the microphone, please and then you should target your question straight to the person who has presented and who you want to listen to.

Okay. I'm right on here. Tom Shrader from BTIG. It's a question for Dr. Grace, and I have to admit I was holding on a little bit in some of the details of your talk. But I understand you've created a model that mimics the driver of schizophrenia. And the question is, how does clozapine do in that model given all the polypharmacy. Does it have any effect on that access? I think it would be highly interesting if it did.

Yes. We've tried haloperidol, clozapine, olanzapine and a number of others. And they're all effective. They all seem to cause the polarization block. The second-generation drugs and the clozapine drugs caused the polarization block selectively in the schizophrenia-related ventral tegmental area. So they all seem to have the same actions and the more overdrive there is in the dopamine system, the faster and the bigger the effect, which correlates with what's been seen clinically.

Is clozapine better than the others like it is in the clinical access?

So it's at least equivalent. We haven't tested whether it's better or not because we're certainly looking at the circuit level. And how that translates to the patient is another matter. So there may be other types of conditions that clozapine is going to be revealed in the patients that aren't going to be revealed in the rodent. And the thing about rodents is we have 100% compliance. They have no choice, which you don't have with the patients.

Soo Romanoff from Edison Group. Thank you for hosting this event. So the mechanism of action, it seems effective against positive symptoms of schizophrenia, but it's also effective against negative cognitive symptoms. And maybe you can help me understand that a little bit.

Who would you want to answer the question, Soo?

Yes. I think any of the KOLs, I mean, [indiscernible] can answer that.

Dr. Grace ?

So the thing about the standard of care, the 2 antagonist drugs, first and second generation is they're working on the dopamine system. And the dopamine system from all the studies that we know seems to be responsible for psychosis. But the hippocampus has projections to other areas, as projections to the frontal cortex that controls cognition. It has projections to the amygdala and the cingulate cortex that regulate negative symptoms. When you block dopamine, you're going to fix the positive symptoms and you're going to fix some of the negative symptoms that come from the positive symptoms but you're not going to hit the core negative symptoms and the core cognitive symptoms. By fixing the site of the deficit in the hippocampus, we seem to be able to not only fix the dopamine deficit, but also, if improve the way the hippocampus is regulating activity in the structures that impact negative symptoms and cognitive symptoms. Is that clear?

Yi Chen for H.C. Wainwright. A question for Dr. Anand. Are the enrollment criteria for Study 017, exactly the same as the enrollment criteria for Study 008.

Wait for the microphone, please.

I think Study 008, the primary criteria were to take patients who are inadequate responders but not treatment resistant. For Study 017, they have to meet the TRRIP, the international criteria for treatment resistance. In Study 008, basically 008A, we have put an upper limit on the severity for the PANSS, which was 85. In Study 017, there will be no such limit. They could be as severe as possible, and they would be eligible for the trial.

So in general, you consider the patient population for 017 is more server -- are more severe patients compared to Study 008, correct?

Definitely. I think in Study 008, we constrained the population somewhat because this was an outpatient study, and for the first time we are doing this. But in this Study 017, by now you're seeing the safety data. It looks like it's very innocuous. The drug is very innocuous, it's very well treated. So we would allow severe patients to go. And the other difference, I think -- the major difference, I would say, in that is that in Study 008A we only confirmed the adherence to the background medication during the screening period. But I think in the next study, we will be doing it 3x in the screening period and continuously at different time points doing the double-blind period to make sure patients are taking their drugs.

So eventually, I mean, assuming a successful development, eventually the drug gets on the market, do you expect the drug to be used as a second-line treatment after SGA or potentially as a first-line treatment as well.

I think if it was up to Tony Grace, and he told me this about 6 -- 5, 6 years ago, this should be the first drug to be used. But unfortunately, we don't have that data. I think, in my mind, basically, the first time a patient -- a first episode of psychosis patient will probably take a drug like a second-generation SGA kind of drug olanzapine, whatever. But the moment those patients fail, I think if you are a prudent investigator, probably you would start considering the use of evenamide. I think there's no reason to wait until patients have failed 3, 4 drugs, and they're already gone so far down the path to complete resistance to try evenamide. So I would expect that evenamide would be used as -- the first drug to be used after the first episode psychosis patient has not responded.

Just to clarify, when you use evenamide in patients, do you continue with those SGAs or you would stop them there?

No, I think at the present moment, basically, the plan is that you should continue with whatever you're getting. I think that Steve Marder once pointed out you have a patient on a drug you think is not -- he is doing terribly, you take the drug off and then you realize they are doing horribly. So you continue with whatever medication they are taking, and then you add this drug. Because of the fact that this drug's mechanism is purely through glutamate modulation, it does not interfere with the neuropharmacology of the other drugs. So you're not likely to see any side effects.

[indiscernible]

I think we're going to leave it to open, but if we look at the...

Could we repeat the question with the microphone, please?

I'm sorry. I was just following up on the other question about the PANSS score. Entry criteria, you're going to let more severe patients in. Do you think baseline will be at about 100? Or where do you think will be?

I think when I look at the data from the -- some of the other trials, which have been done, for instance, the Lundbeck trial, and also the data coming out from KarXT, basically, they're approaching 100. We're going to leave it up to the investigator. Now remember, these patients are on an antipsychotic. So without the antipsychotic, the current score, which was 78 probably would be around 85, 88. So my gut feeling is that patients who are, what we call as in CGI terms, clinical global impression terms, rather than PANSS terms as severe. Probably would be the ones and they probably would qualify for a PANSS score of about 95, 100.

Stefan after this, we have a lot of questions in the queue.

Stacy Ku from TD Cowen. So great presentation. Just curious, how should we interpret the data that's presented so far in terms of compliance, just thinking about it as a twice-a-day agent, but you talked about discontinuations [ sending in ] lows. So just how do we think about all that taken together?

I think the compliance issue is one of my biggest worries. Schizophrenic patients do not like to be compliant with their medication. That's why we are doing plasma levels because that's the only way you can -- we have investigators telling us the patient is taking medication, we have family members telling us. And then when you do the plasma levels, you find that's not the case. So we are ensuring. However, I have to say the fact that treatment-resistant patients, 75% stayed in the trial for 1 year. Can only mean one thing that there is somehow, a, if the drug is well tolerated, otherwise, they would have dropped out. Second, it must be doing something to them. Otherwise, they would never have stayed that long. But compliance remains a concern, but their feeling is that because of the fact that the drug is acting through a mechanism, which is not bothering the patient, they're more likely to be compliant then.

Thank you for those questions. I understand we have a number of questions from people joining by telephone. So can we please listen to the first one?

Thank you, our first questions are coming from the line of Samir Devani with Rx Securities.

I guess -- the first one, I just wanted to come back to, I guess, the mechanism of treatment-resistant schizophrenia and intrigued by the comment that TRS can occur at the initial outset of diagnosis as well as 2, 3, 4 years down the line after treatment. So I'm wondering if maybe the KOLs can comment on what they think the mechanism of resistance is. And perhaps Ravi can comment on whether they've -- whether the company has looked at the TRS patients in the study and whether there's any difference in terms of the onset of TRS? So that's the first question.

I think was the about mechanism of resistance. So there have been studies that came out of the Institute of psychiatry in London by Oliver Howes, Philip McGuire and others that showed that unlike the treatment response of patients when they look at fluorodopa uptake, which is a measure of active dopaminergic neurons, the treatment-resistant patients don't have an elevation in fluorodopa uptake compared to the other patients. Now this doesn't mean that they're not getting a dopamine psychosis. What it means is their baseline is very, very low, but they still have an abnormal activation. But with the antipsychotic drugs, not getting sufficient activation to overdrive the system to cause this depolarization block. So it's still a dopaminergic deficit, but it's starting from a much lower baseline. And that's why the D2 antagonists are not working on these conditions. And why we instead need to go back to where the site of the deficit is in the hippocampus to try to restore the system. So the D2 antagonists, the more psychotic the patient, the more active the dopamine system, the more effective the D2 antagonist drugs. When the dopamine system is not overdriven at baseline, these drugs are not effective and you get treatment resistance, and now we have to go back to the glutamate system in order to get efficacy. Does that answer your question?

So I think -- sorry, the second question you were asking is about what we -- could we comment about the patients. What I did is basically look at the patients we had in the 014/015 study, which was treatment-resistant patients. But again, it was done largely in India, versus the patients we have in the 008A Study, which is now from 11 countries and who were not fully treatment resistant. Some things come out, which are fairly consistent. These patients seem to have a later onset of their psychosis. I can't really explain why, but it seems like they have a later onset of their first episode generally in their 20s, which would be against somewhat what we have been learning about and talking about. Second, I think, is the fact that the treatment in these patients has been on there for a long time, even though they are called as inadequate responders. But what is really surprising for me at least was the fact that patients were not doing well on a medication for which they had been on for over 2 years. That suggests to me some degree of therapeutic nihilism, that, as John said, investigators or doctors have decided this patient isn't going to do any better, why do I care? Let him -- let me leave him on a dose which is not doing him any harm and he's not doing any harm to anybody else, which suggests that the number of patients who are treatment resistant really actually could be much, much larger. But it's going to be virtually impossible to define a phenotype of who's going to be a treatment-resistant patient and who is not. Maybe, John, if you have any comments on phenotype of TRS.

Yes. I agree completely. And I think the important message is, however, we define the subgroup, it's a very large proportion of the patient population. And the therapeutic nihilism that Ravi referred to is also common that clinicians don't see alternatives if we had a medicine that had proven efficacy in this patient population, I think it would go a long way to giving clinicians another option that would be easier to use than clozapine, for example.

There's one more question.

Yes. Thank you, Samir. Who is the next, please?

Our next question has come from the line of Leonildo Delgado with Baader Bank.

A few questions on the clinical side. The first one would be as an add-on therapy, do you expect evenamide to show more synergies with specific antipsychotics or mechanism of action?

Not sure, we got that, Leonildo. Could you repeat, please?

Just wondering for the -- since evenamide is supposed to be used as an add-on therapy, you expect it to have more synergies with specific mechanism of actions? So on top of which other antipsychotic should evenamide show better efficacy or safety?

That's always a very interesting question. In other words, does the combination with olanzapine or risperidone or something else produce better results? I mean our database is pretty small, so I can't generalize. But what we have seen is, generally speaking, you see the same pattern of change. Sometimes, this maybe a point more, a point less. But what was intriguing was that in the 8a Study where we allowed clozapine, patients on clozapine seemed to improve more on evenamide than on placebo, even though the overall improvement in the clozapine treated patients is less as predicted by the literature. But it seems like there is no differentiation between different mechanisms. And in the animal model data, where we have looked at drugs such as Haldol, they looked at risperidone, aripiprazole, they all seem to -- the animal model shows that the addition of evenamide rescues those drugs when they're not working. So it does not appear to be contingent on the pharmacology of the drug to which it is just being added. It seems to be an overall phenomenon. And I think what Tony showed really that this drug is acting at the hippocampal level. And that's where it's making the change, whereas the other drugs that are, I think, far downstream. So it doesn't really interact with any one specialty, it's producing its benefit at the level of modulation of hippocampal [ hypodopaminergic ] activity.

Any follow-up questions Leonildo?

Yes. I have one more question. So what do you think are the key risks for the upcoming pivotal trials?

The key? Sorry?

Risks or challenges.

Risks -- the key risks or challenges for the pivotal study coming?

Yes.

So the first key risk, of course, is that we shouldn't have another pandemic, because that really affected the previous studies. I think the risks for therapy are always the same, generally speaking, in late Phase III because by now, we have enough of a handle on side effects. I don't think we are expecting any new side effect to pop out. So that's less of a risk. The second issue always is in the conduct of the trial. You could have major upheavals somewhere or the other, a tornado or hurricane coming in and destroying records at the center. But now we're using electronic data sets, I don't think that should be an issue. So I think to me, at this stage, the risks of execution are far, far lower than they would have been about 2 to 3 years ago.

Thank you, Leonildo. There was your last question over there?

Just a follow-up. So in Study 017, you're going to dose patients BID for 12 weeks, then measure the efficacy at week 12, week 26 and week 52?

I'm sorry, maybe I didn't make that very clear. This will be a 1-year placebo-controlled study. All patients will receive treatment for 1 year. Throughout the year, the first efficacy assessment is at 12 weeks, which is for the acute effect, to say that the drug is working or not in patients with treatment resistant schizophrenia. The 26-week endpoint is really looking at the maintenance of efficacy. So that's the reason we have the 26 week. But there's continuous dosing, no changing of dose, no switching of dose.

Thank you. Any last question?

Do you believe this drug can be applied to other indications such as bipolar disorder?

I think absolutely. I think virtually every sodium channel modulator is effective in bipolar disorder. So I would expect it to be used, whether it be bipolar mania or bipolar depression, I would give. But in addition to that, there are many other uses for this kind of a drug. As you know, in patients with dementia, you cannot use a 5HT2 o D2 because of risk of increased mortality. But this drug does not affect, dopamine does not affect serotonin. So probably, it could be easily used as monotherapy in those patients. And that's one of the trials that we will be doing now to show that benefit. It probably also is an ideal candidate for an add-on drug in patients with ADHD. So there are multiple other users that need to be explored.

A question for Mr. Weber. Can you comment on the potential U.S. commercial strategy?

Yes. So the point is that we want to start a pivotal study as soon as possible because it will only need 1 pivotal study being successful to get this drug approved in the U.S. and Europe and around the world. We have started initiating the preparations for this study. We have spent quite a few million euros on getting all the reparatory work done. We are now looking forward to partnering this compound, and we have a number of alternative strategies. The simplest one would certainly be a global license transaction. With all the benefits, you give it to a partner who has all the money and kind of takes away the control of you, which is a good and a bad. The alternative strategy might be that we license some territories, which we call nonstrategic and which would only exclude the U.S. and potentially Japan. And simple thinking behind is that the largest upside for our shareholders would probably be if we gave away some rights now, but we would keep the most important rights means U.S. and Japan until the end of the upcoming pivotal study. And I would assume that the value of those rights would go up by a multiple by the time we get those results. So we are in discussions with plenty of parties. And, I guess, that today is probably the kickoff for those parties who have not made up their mind. Because we intend to execute a transaction in the months to come in order to initiate that study and get the drug to the market, which it deserves and which is our duty and obligation to get it to the market. So within the next few months, we will see what kind of offers are on the table and which transaction type we will take. And in the end, the market, the terms and the quality of the partner will speak our obligation, as I said, is this drug works, as we know after that pivotal study. This drug is extremely safe. There's an incredible unmet medical need. This drug must make it to the market as soon as possible. That's our key obligation. And the rest, we will see in the months to come. Thank you all for your questions, your participation. Special thanks to the presenters. I want to say an extra thank you for those who made the extra mile and joined us here, which is not self-understanding. We had more than 200 people joining by webcast and people joining by telephone. So the message was heard and that is very important. Thank you very much, gentlemen. And I also want to say that the webcast will be available on our website for the next [ 30 ] days. Thank you. We will see you again soon. Stay tuned. Have a good day.