Good day, welcome to the BioXcel Therapeutics third quarter 2018 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lee Roth. Please go ahead.
Thanks, Leanne, good morning, once again, welcome to the BioXcel Therapeutics third quarter 2018 financial results conference call. Just to remind everyone, certain matters discussed on today's call or answers that may be given to questions asked include forward-looking statements that are subject to risks and uncertainties relating to future events and/or the future financial performance of the company. Our actual results could differ materially from those anticipated in such forward-looking statements. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, which can be found on our website, bioxceltherapeutics.com, or on www.sec.gov. Please note, the company is under no obligation to update any forward-looking statements discussed today, investors are cautioned not to place undue reliance on such statements.
Joining me today for management are Vimal Mehta, Chief Executive Officer of BioXcel Therapeutics, Richard Steinhart, Chief Financial Officer, Vince O'Neill, Chief Medical Officer, Frank Yocca, Chief Scientific Officer. With that said, it's my pleasure to turn the call over to the company's Chief Executive Officer, Dr. Vimal Mehta. Vimal?
Thanks, Lee. Good morning, everyone, thank you for joining our conference call to discuss BioXcel Therapeutics' financial results for the third quarter of 2018. Over the past several months, we have made significant progress in developing both our clinical assets, BXCL501 and BXCL701, our emerging pipeline candidates, establishing clinical partnerships, and strengthening our operational capabilities. I would like to start by highlighting the progress we have made in our neuroscience program with BXCL501. BXCL501 is a potential first-in-class drug that directly targets the causal mechanism of agitation and is under development for acute treatment of mild to moderate acute agitation resulting from schizophrenia, bipolar, and Alzheimer's disease. The sublingual thin film formulation of BXCL501 is believed to have a rapid onset of action and provide ease of administration in agitated patients.
Along with its robust safety and pharmacokinetic profile established through use in millions of patients and in over 130 clinical trials. Dex is the most selective alpha-2A adrenergic agonist available. It produces an arousable sedation and has a calming effect on agitated patients. In the U.S., we believe as many as 5 million patients with Alzheimer's disease, schizophrenia, and bipolar disorder experience agitation. Approximately 1.2 million of these patients experience mild to moderate agitation and represent a potential patient population for treatment with BXCL501. With ADASUVE, the first approved inhaled antipsychotic treatment for acute agitation as a reference drug, we believe we have a well-characterized regulatory pathway for BXCL501 via FDA's 505(b)(2) pathway, along with potential favorable reimbursement. We recently held our pre-investigation new drug, IND meeting with the FDA and received valuable guidance on the development of BXCL501.
Following the approval of our IND, we plan to initiate a first-in-human pharmacokinetic bioavailability and safety study of the sublingual thin film formulation of that prior to year-end. The aim of this trial is to define the optimal dose of the sublingual film and collect relevant data to move it into phase II/III registration trial. The data from this trial is expected to be available in the first half of 2019. We are pleased to report that we have completed manufacturing of our proprietary sublingual thin film formulation of dexmedetomidine, and it is available for clinical study. Additionally, we appointed a clinical research organization to support the company in conducting and managing the pharmacokinetic and safety clinical study. Previously, we announced positive results from our phase Ib trial evaluating intravenously administered dex in June.
Findings from this study demonstrated that the selected dose and exposure levels of IV dex had a calming effect in healthy subjects without clinically meaningful changes in blood pressure or heart rate, and the drug was well-tolerated. Through this trial, we were able to develop a dosing strategy for the sublingual thin film formulation of BXCL501. As an extension of this phase Ib study, we are evaluating the dose and exposure levels in schizophrenia and senile dementia of the Alzheimer's type, SDAT patients to support the further development of BXCL501 in relevant disease pathologies. We expect to report data from these studies of IV dex before the end of this year. Additionally, in order to support the global clinical development of our neuroscience program, especially BXCL501, we formed a world-class neuroscience clinical advisory board.
The founding members of the CAB include Professor Sheldon Preskorn, Professor Stephen Marder, Dr. George Grossberg, and Professor Alan Breier. We are looking forward to working with the CAB and receiving their valuable guidance on clinical development, regulatory and medical affairs, as well as the commercialization strategy for BXCL501 and other emerging neuroscience programs. To our second clinical program, BXCL701. BXCL701 is an orally available systemic innate immune activator with dual mechanism of action. It has demonstrated single activity in melanoma with an established safety profile from 700 healthy subjects and cancer patients. Designed to directly stimulate innate immune systems, BXCL701 works by inhibiting dipeptidyl peptidase, DPP8 and DPP9. Additionally, BXCL701 targets fibroblast activation protein, FAP, and acts as an immunoevasion inhibitor. Preclinical combination data evaluating BXCL701, a checkpoint, and other immuno-oncology agents has demonstrated encouraging anti-tumor activity in multiple tumor types and formation of functional immunological memory.
BXCL701's primary mechanism action has been highlighted in multiple peer-reviewed journals, including Nature Medicine, providing an important validation of the scientific rationale behind BXCL701. We have specifically chosen treatment-emergent neuroendocrine prostate cancer, tNEPC, and pancreatic cancer as our lead target indication based on BioXcel's BXCL701 dual mechanism of action and a strong underlying biologic rationale. Additionally, based on results from pre-clinical studies, the combination of BXCL701 with IO agent produces a synergistic anti-cancer effect by elevating the infiltration of tumor-killing cells, NK cells, and neutrophils while blocking immune-suppressive cells. Thus, we believe BXCL701 potential to turn cold tumors into hot in combination with IO agent can make t-NEPC and pancreatic tumors more responsive, offering us a potentially viable therapeutic strategy. We recently received FDA acceptance of the IND application we submitted for BXCL701 in combination with pembrolizumab KEYTRUDA, for the treatment of t-NEPC.
The phase Ib/II study is expected to enroll up to 40 patients at multiple trial sites. The goal of this single-arm, Simon two-stage open-label study is to examine the safety, pharmacokinetics, anti-tumor activity of the combination of BXCL701 and pembrolizumab in tNEPC patients with efficacy endpoint of objective response rate. We also have completed the CMC development for BXCL701 with adequate drug supply to conduct the upcoming clinical trials as well as other studies with potential partners. We have also selected a leading clinical research organization to support the company in conducting and managing clinical studies. We anticipate initiation of this trial by year-end and expect to report data throughout 2019. In addition, we expanded our existing immuno-oncology research collaboration with Nektar Therapeutics into a clinical collaboration to further explore the potential of our BXCL701 in combination with Nektar's NKTR-214, a CD122-biased agonist and a checkpoint inhibitor.
The focus of this new clinical collaboration is on developing the triple combination of BXCL701, Nektar Therapeutics' NKTR-214, and a checkpoint inhibitor for the treatment of pancreatic cancer. Both companies will share the cost of clinical trial. The trial assessing the triple combination in pancreatic cancer is expected to be initiated in early 2019. Today, we are presenting promising pre-clinical data along with Nektar on the triple combination of BXCL701, NKTR-214, and a checkpoint inhibitor across multiple tumor types at the 2018 Society for Immunotherapy of Cancer annual meeting. Findings from this pre-clinical study have demonstrated robust anti-tumor activity, resulting in complete tumor regression in multiple tumor models and generation of functional immunological memory, highlighting the utility of the triple combination as a potential therapy for pancreatic cancer and other indications.
In the third quarter, we also established an industry-leading immuno-oncology Clinical Advisory Board to support the global development of BXCL701 and our emerging immuno-oncology program. The inaugural members of the immuno-oncology CAB were Dr. Louis Weiner, Dr. Daniel Von Hoff, Dr. Eric Small, and Dr. Emmanuel Antonarakis. These esteemed experts in the field of oncology will guide our team in advancing our IO program to clinical development to improve patient outcomes. I would also like to point out that we are employing approaches to de-risk clinical development of our lead candidates through patient selection optimization, translational research, and predictive biomarker discovery utilizing our artificial intelligence approaches and platform. Our exclusive AI partnership with BioXcel Corporation gives us the ability to continue to identify additional indication expansion opportunities for both BXCL501 and BXCL701 in terms of new indications and additional geographies for development.
Our goal is to establish a global footprint by filing IND and clinical trial applications for additional indications in multiple patients. Additionally, we are also utilizing our AI platform to prioritize and expand our emerging pipeline through the addition of novel candidates in neuroscience and immuno-oncology. We are excited about the potential of our lead program, and our emerging pipeline holds just as much promise. On the operational side, we centered our management team with the appointment of Dr. Chetan Lathia as Senior Vice President and Head of Translational Medicine, Clinical Pharmacology, and Regulatory Affairs, and David Hanley as Vice President and Head of Global Pharmaceutical Development and Operations. Dr. Lathia will be responsible for supporting the advancement of the company's pipeline programs from a clinical pharmacology and regulatory perspective, while Dr. Hanley will oversee the pharmaceutical development and global operation initiatives associated with our drug products.
We have thoughtfully utilized a portion of the capital from our IPO to advance the clinical development of our lead program, BXCL501 and BXCL701, as well as solidify our leadership team. We expect cash burn to increase through the remainder of the year and in 2019, based on the increase in the number of clinical studies in both our programs. As an organization, we believe we have made substantial progress over the last several months, and we are now well positioned to achieve our clinical and operational objectives in the coming quarters. BioXcel Therapeutics is committed to bringing transformative therapies to the market and helping patients who have few, if any, options. We strive every day to create significant value for our shareholders.
With that, I would like to turn the call over to Richard to discuss our financial results.
Thank you, Vimal. Once again, thank you for all joining us this morning, and welcome to our shareholders. The proceeds from our initial public offering from March of 2018 gave us the necessary capital to advance the clinical development of BXCL501 and BXCL701, including initiation of multiple studies in each program in the coming weeks. For the third quarter of 2018, we reported a net loss of approximately $4.9 million, compared to a net loss of $900,000 for the third quarter of 2017. Research and development expenses totaled $3.8 million for the third quarter of 2018, compared to approximately $600,000 for the same period in 2017. The increase in research and development expenses reflects increased development activities in both BXCL501 and BXCL701 programs, including increased personnel costs, professional fees, clinical trial costs, and manufacturing costs.
General and administrative expenses in the third quarter of 2018 were approximately $1.3 million, compared with approximately $300,000 for the third quarter of 2017. The increase was primarily due to additional payroll and payroll-related expenses, professional fees, and costs associated with operating as a public company. We had cash and cash equivalents of $47.1 million as of September 30, 2018, again, reflecting the proceeds from our IPO. We believe that our current cash position is sufficient to meet our needs for at least the next 18 months. That concludes the financial review.
Now I'd like to turn it back over to Vimal for any closing comments.
Thanks, Richard. I'd like to thank everyone for joining the call and would like to open it up for any questions.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question, and we'll take our first question from Geoff Meacham with Barclays.
Hey, guys. Thanks for the question, and congrats on all the pipeline progress.
Thanks, Geoff.
Vimal, I know you don't want to get specific, but for BXCL501, were there any surprises in your FDA meeting in terms of the feedback or the development path? For the PK study of BXCL501, what would you view as an ideal profile? I have one follow-up.
Our goal with the pre-IND meeting was very simple, to get FDA buy-in on our overall development plan. We focused on two areas, which is schizophrenia and bipolar and Alzheimer's. What we understood, and I can't be very specific, but in general, we understood that FDA was very encouraging for both indications because there is no systemic therapy currently available for this acute treatment of agitation. Overall, also, we saw the acceptance of the strategy that we have outlined, that we will do with the film, like now with multiple doses. We will do the pharmacokinetic bioavailability study and a safety study using different dose strengths of the film. Then using that data, we can proceed forward with phase II/phase III registration trial in 2019.
Okay. On the PK profile, what would you say for BXCL501 would be an ideal profile? I know you obviously have to run a bridging study at some point with the PK from the IV, but looking forward to the data coming up, what are your expectations?
I have Frank Yocca. I will pass this question to Frank. Frank?
Geoff , w e think we understand what plasma concentrations we need to get our effect. What we're looking for in terms of the PK profile is something that we can achieve, like a Cmax, around somewhere between 20 - 30 minutes, that we can get a rapid onset of effect and achieve those dose ranges where in these smaller IV studies, we're seeing the activity of the drug producing these RASS scores that would fit in terms of reducing agitation.
We'll take our next question from Carter Gould with UBS Financial.
Hi, this is [Andrew] on for Carter. Thanks for taking our questions. I've got a couple here on BXCL501. From the point when you have this BXCL501 PK data in hand, can you talk a little bit more about projected timelines and stage gates to the registrational studies approval? How should we be thinking about the duration of the BXCL501 studies relative to IV dexmedetomidine?
Let me address for the BXCL501 film trial plan. We are expecting to initiate our pharmacokinetic safety study this year upon approval of the IND. We already had the pre-IND meeting with FDA. We have the CMC for the film, multiple doses already prepared, available for clinical studies. We have a CRO who will be helping us conduct the study. All pieces are in place. It's a matter of just obtaining the IND approval from FDA, and the studies will start this year. These studies tend to be short studies. They are not that long because you can finish these studies in a short time. We expect the results to come out in first half of 2019.
Using that data, we go back to the FDA with a fuller plan and a defined indication, whether it's schizophrenia and bipolar or Alzheimer's or both, and get their approval to initiate phase II, phase III studies. Those studies, from our previous experience, we know at least for schizophrenia and bipolar, they require about 9 - 12 months. If we have the approval from the FDA in first half of 2019, those studies will go up to early or first half of 2020, and then we'll be ready to file an NDA. Our goal and hope is that we should be able to file NDA, if possible, by 2020, and that's what we are targeting.
Great. Thank you.
We'll take our next question from Do Kim with BMO Capital Markets.
Hi there. This is Keith Tapper on for Do Kim. I had a few questions about BXCL701. The IND for BXCL701 is to treat tNEPC. Could you talk a little bit about the study design and what that might look like, being that it's a treatment-emergent disease, in terms of exclusion criteria for background treatment or anything like that, and how that might affect measuring the outcome?
Thanks for your question. I will pass it on to Vince, who is our Chief Medical Officer.
Sure. Thanks, Vimal. The study, as we previously had a combination approach with KEYTRUDA. We chose KEYTRUDA based really on the fact that we already had some data from the KEYNOTE-199 study on how KEYTRUDA works, or its efficacy, or indeed lack thereof, in this patient population. That's the combination approach. It's a two-stage Simon design, so 15 patients plus approximately 15. It'll be preceded by a safety run-in or escalation prior to that. Fundamentally, the primary endpoint is based on response rates. We can do that because tNEPC, unlike classic adenocarcinoma of prostate, typically results in measurable disease, typically results in visceral mets, for example. That's the general approach to this study. Does that answer your question?
It does. In terms of, I guess, any exclusion criteria, is there a certain line of treatment that, because it generally results from previous chemotherapy. Is there a certain standardization of lines of treatment prior to being involved in the study?
Sure. Clearly, by definition, as you've just said, this is a treatment-emergent disease. By definition, patients had to have received androgen deprivation therapy and in addition, one line of chemotherapy. Those are the inclusions.
Okay. That's very helpful. Thank you.
We'll take our next question from Sumant Kulkarni with Canaccord.
Fine. Thanks for taking my question. I have one. It's actually a big picture question, but has a very specific focus to it. We had the recent ESMO conference where we saw a lot of products coming out, or combo products in immuno-oncology not doing as well as people might have hoped. Given yours is an organization that relies on artificial intelligence, how quickly can you adapt if your product, which also involves a combo, you might find some new intelligence based off of your approach. Is that a valid way of looking at things? How nimble can you be?
Sumant, that's a great question. We always use our AI and machine learning platform whenever we are even going to any conference. We have done this for conference that's happening in Washington, D.C., Society of Immunotherapy. We use that to understand what the overall landscape looks like, and I call that as a machine-created report. Our scientists, our team that is at the [SITC] this week, they utilize that report to understand the overall landscape, to understand particularly the combination landscape, and then understanding and drilling it down to what other combinations are going on. At a very high level, if you look at the immuno-oncology, primarily it is combination of adaptive agents, which can change the microenvironment using adaptive immune approaches. I think where BioXcel Therapeutics separates itself is in the innate immunity.
I think, I'm not aware of, that we are the only company which has an orally available, systemic innate immunity activator, and we have for this agent, 700 patient data. Our belief right from the beginning has been that to be able to get responses, the kind of responses you are looking, and particularly in hard to treat tumors like neuroendocrine prostate cancer and pancreatic tumors, you need to combine an innate immunity agent, which is BXCL701, with other agents, and we have chosen, right now, NKTR-214. We continue to explore more IO checkpoint inhibitors. Combination of these three, basically innate immunity activator, does the early surveillance of the immune system. It kind of warns the adaptive immunity agent and the professional killer cells, which are the T cells, they are already pre-warned by the time you, using and activating the innate immunity.
Plus, PD-1 can take off the brake. I think overall, we strongly believe that going forward, you will see more and more innate immunity activation as a strategy employed by other companies as well. I think we are ahead, particularly in terms of the systemic agent, for innate immunity.
Thanks for that.
It appears that there are no further questions in the queue at this time. I'd like to turn things back over to Vimal Mehta for any additional or closing remarks.
I'd like to thank everyone for joining us today and also excellent questions. I think they are very relevant. We continue to feel very excited about what we have been able to accomplish and what is ahead of the company in Q4 2018 and throughout 2019. Thank you very much.
That does conclude today's conference. Thank you for your participation. You may now disconnect.