Good afternoon, everybody, and thank you for being back here at the third annual Healthcare Innovation Conference from Guggenheim. I am Delma Caiati, I am an analyst here at Guggenheim, and it is my pleasure to introduce our next company, Newron Pharmaceuticals, and the CEO here with us, Stefan. Stefan, do I pronounce it well? Stefan Weber. Welcome, Stefan.
Thank you, Delma.
Before going into the Q&A session, why don't you set the stage and tell us about the company? What should we look for over the next 12-24 months?
Yes. Thank you, Delma, and to the Guggenheim team for having us. Newron has 26 years of innovation, research, and development in diseases of the central nervous system. We are headquartered in Milan, Italy, with a 100% subsidiary in Morristown. We are listed on the Swiss Stock Exchange since 2006, one of the top three global IPOs at that year, and we have ambitions to uplist to NASDAQ, as per our PS Corona and the interest. We do already have a drug on the market, as you would expect after 26 years. It is an add-on treatment to levodopa in Parkinson's disease. The brand name is Xadago. It is on the market in Europe for 11 years, in the U.S. for nine years.
It has produced substantially more than $100 million of royalty stream so far, and that will go on for a few more years before the patents expire. But the next big thing that is evenamide, the treatment for treatment-resistant schizophrenia, this is really a completely different caliber. Even if it comes from the same class of compounds, we might come to that later. This is, I dare to say, the most advanced clinical development program in schizophrenia today. It is a drug for which we already have absolutely thrilling one-year results as an add-on to other antipsychotics in treatment-resistant schizophrenia. We already have highly statistically significant phase III results with that compound. And right now, we are running a global two pivotal studies program with 1,000 patients.
The first of those studies, called ENIGMA-TRS 1, is a now 618 patients study, a one-year double-blind placebo-controlled study as an add-on treatment in treatment-resistant schizophrenia. Never before has such a study been done, and we will have three readouts, after 12, 26, and 52 weeks. That study is expected to report 12 weeks results in Q1 of 2027. The second study, ENIGMA-TRS 2, is going to be 400 patients, has crossed 100 patients screening and 50 patients randomized, and is, as per status today, expected to produce 12 weeks results in Q3 of next year. TRS, treatment-resistant schizophrenia, is a major, I would say, the most relevant unmet medical need in schizophrenia today, because more than a third of all patients will qualify as treatment-resistant.
While today's treatments are all for monotherapy in acute schizophrenia, nobody has dared, since Lundbeck in 2018, who have failed, unfortunately, to take on treatment-resistant schizophrenia. That's what we are doing. If you look for the news to come, that's going to be a very exciting year, 2027, because we will have at least three readouts from our two pivotal studies, 12 weeks results from ENIGMA-TRS 1 in Q1, 26 weeks results from ENIGMA-TRS 1 in Q2, and most likely, 12 weeks results from ENIGMA-TRS 2 in Q3 of next year, plus some additional partnerings, ex-U.S., plus a potential NASDAQ uplisting. It will be a very exciting year for us.
Clearly a lot going on.
Yes.
But let's step back and look at the mechanism. Which is one of the most interesting features of this drug, because it's a sodium channel blocker that you wouldn't expect to work in schizophrenia. So how does that work without targeting How do you achieve efficacy in schizophrenia, treatment-resistant schizophrenia, without specifically targeting serotonergic or dopaminergic system?
Yes. So, 70 years of schizophrenia research have been dominated by dopamine. I would, to a certain extent, also say the latest cholinergic drugs might indirectly be seen as a dopaminergic mechanistic drug. This glutamatergic connection we have not invented. It is around for decades. We know for a long, long time that patients who do not respond to current medication, who are treatment-resistant, do no longer respond to dopamine.
And we know that these patients do have an excess release of glutamate. We also know that patients who are poor responders, and together, poor responders and treatment-resistant is the vast majority of schizophrenic patients, so that group is not benefiting from today's medication. All today's drugs are focusing on about 30%, 40% of patients who are doing well in acute schizophrenia. Nobody cares for the poor responders and treatment-resistant. Now, glutamate has been shown to work in those patients. And you mentioned that we have a sodium channel blocker. Yes, it's a voltage-gated sodium channel blocker. I call it a magic switch because glutamate has a major downside. It's one of the most prevalent neurotransmitters in the brain. If you play around with basal levels of glutamate, you might trigger substantial CNS side effects.
And that is possibly the reason why today we only have one relevant glutamatergic drug on the market, which happens to be esketamine from Lilly. Now, evenamide is magic in that sense that it does not touch basal levels of glutamate. It's like a magic switch. It only turns itself on if there's need, if there's excessive release of glutamate. It turns itself off when there's no such need. That means we don't touch basal levels of glutamate. That's why the drug is safe. And the drug works in modulating glutamate release. Now, we did have those exciting phase II results and phase III results we will probably talk about, but we couldn't explain why we saw that ever-increasing efficacy up to one year, which is completely atypical of antipsychotics, which have their peak at four to six weeks, and then it's over.
That's why FDA says, "Study four weeks, study six weeks," but never says, "Study one year." We couldn't explain those benefits. We saw 25% of treatment-resistant patients being in remission with no symptoms for six months. Then came the University of Pittsburgh, and they created a model, a MAM model it is called, and they have shown that schizophrenia starts at the hippocampus by excessively firing neurons, which are releasing excessive levels of glutamate.
Today's drugs work four levels down on the dopaminergic pathway. They don't work retroactively up to the center and the origin of the disease, and that's why they don't work on negative symptoms, they don't work on cognition, and they only partially cover positive symptoms. The only drug that hit the hippocampus by reducing excessive firing, by reducing excessive release of glutamate, was evenamide. That is what Dr. Grace from University of Pittsburgh showed, two peer-reviewed publications by now. The most important finding which they had was that they could show that evenamide has a half-life of about 20-30 minutes. So it's gone after half an hour.
What they could show is that long after the drug was gone, the benefits kept increasing. Not just staying, but they kept increasing, and that's possibly one of the explanations we have why we see that ever-increasing benefits up to one year.
That's really interesting. Basically, you are targeting the upstream circuits
Yes
Compared to the classical positive symptoms circuit. Did that translate into benefits also on the cognitive and negative side domains?
Yes. What we saw in our phase III study was that all the sub-arms, we have the PANSS total, which is the integrative of positive, negative, and other symptoms, did improve. Statistically significant, yes.
How are you leveraging those findings now in the phase III programs? Can you give us an overview of the full programs? As you said, you are running two parallel studies, TRS 1 and 2. Where do you stand today with each of them, and what shall we expect next?
Yes. Let me remind you that this phase II study that we did, one-year study, that came with two caveats. It was open label, and it was mostly done in India. But what we saw—those effects were so fascinating that KOL said, "If we could ever replicate that in a double-blind, placebo-controlled global international study." That is exactly what ENIGMA-TRS 1 is.
The first-ever one-year double-blind placebo-controlled study in which we add evenamide to any given antipsychotic of relevance, including clozapine. Because in our previous phase III, we could show that evenamide is the first drug ever to improve clozapine patients. We could also show that evenamide was the first drug in a head-to-head comparison to beat olanzapine. That finding in that subgroup was even statistically significant. What we do in that phase III study is a number of things, and I will say that also in the phase III study that we did already, we had the lowest placebo rate in more than a decade, a 7% placebo response. What we do is we take patients which are strictly chosen by the TRRIP criteria, which is the background for treatment-resistant medication.
We do the training of the investigators. We do education of the investigators, but we also test them, and they have to qualify for participating. Then we do something never been done before. During a 42-day screening period, we make sure that each and every patient is compliant. Imagine what we found in our phase III study, in our previous phase III study. We found that one-third of patients who claimed to be treatment-resistant didn't take their medication. Even if the doctor said, "I prescribed it," even if the family said, "We see the package," the patient was just not taking the medication. We are the first ones proving that by taking blood samples in the screening. What we did is, aiming at 600 patients to be randomized, we did screen 996 patients. In the end, 618 patients were randomized in October 2022.
Finally, we have an international independent selection committee which chooses every patient, goes through the dossier worldwide, each patient, it doesn't matter, headed by Dr. Kane in New York, and they take the final decision if that patient will be enrolled. That is a very strict regimen on how we choose our patients, which is one of the guaranteeing factors for the quality of the data. After the 42 days, the patients will be randomized, and they will then be given either 15 or 30 milligram or standard of care. Remember, it is always an add-on therapy.
After 12 weeks, we will get the first readout. Because we want to go on to 26 and 52 weeks, we do not want to unblind. So the results that we will disclose in Q1 of next year will be limited to the 30 milligram dose did show statistically significant benefit, and the drug was safe and well-tolerated. That is the press release in my mind. But in order to go on double-blind placebo control without a penalty
on the P value, that is all we can say. But then, 14 weeks later, 26 weeks, we will have the readout after 26 weeks, which will be the maintenance effect. This is important because that is long-term efficacy, and it is also important because the European Medicines Agency will allow us to waive a relapse prevention study, which otherwise we would have to do. After 26 weeks, so Q2 next year, we will disclose the full set of data.
That would also be the basis for the rolling NDA submission in the United States, and the same in Europe. We will still go on to 52 weeks because we want to show the pharmacoeconomic value. We want to repeat what we showed in that phase II study, ever-increasing efficacy, 50% patients no longer qualifying as treatment-resistant after one year, 25% of patients being in remission for at least six months, something never seen in any other study before. So that is the one study, gold standard study, call it, that would be a study for many years everybody would have to compare to if that was successful. Usually, one of those studies would be qualifying for approval of a drug if it was sufficiently positive.
But then we had that discussion, what does sufficiently positive mean? Which is not anywhere put in any rules or books. It is FDA's consideration. That is why we decided to go for a second study.
Got it.
So that in any case, two statistically significant positive studies would do for approval of the drug. The second study doesn't have to be one year, and that is why it's only 12 weeks. The second study doesn't need three arms, it needs two arms. One is placebos, standard of care, and one is standard of care plus a dose, and we chose the low dose. Otherwise, that 12-week study, ENIGMA-TRS 2, will have the same quality and levels under ICH guidelines. Both studies will be absolutely under ICH guidelines. That study is currently more than 100 patients in screening and screened, and about 50 patients being randomized, so that we expect by Q2 next year that we will also have completed that second study, and then results in Q3 next year.
Thank you for that level of detail. It's really helpful. Stepping back to the powering.
Yes.
Can you clarify how is each of the study powered, and for which delta, and what is the bar there for success that you were touching on already, but if you can give some numerical reference
Yes
That would be helpful.
What we showed in our phase III study, the previous study, 008A, we did a highly significant efficacy on the PANSS total, which is the regulatory endpoint. We also had a significant outcome on the CGI of severity, CGI-S. These are the two primary endpoints also in the pivotal studies. This was after four weeks, and already after four weeks, we had shown that we did have twice the responder rates on the PANSS total and twice the responder rates on the CGI-C. If we could repeat that in the pivotal study, that would be magic. The treatment effect size after four weeks was about 2.5 points on the PANSS total. We would hope and expect that this would be better after 12 weeks, because we do see that ever-increasing efficacy.
The design of the study is such that we have done the math that 200 patients per arm would be required. That is 600 for ENIGMA-TRS 1 and 400 ENIGMA-TRS 2 to reach the same power that we had in the previous study, which is a 95% probability. That is why ENIGMA-TRS 2 just has 400 patients, 200 per arms, and ENIGMA-TRS 1 has 600, three studies, or three arms per 200 patients each.
Got it. Now about ENIGMA-
Yes
TRS 2. So you received a clinical hold from the FDA.
Yes.
Is that study still running ex-U.S., and what is the situation with the FDA right now?
Yes. Importantly, what we saw in April of this year was that FDA reacted to a death that we had in Argentina and put our study, ENIGMA-TRS 2, on hold for the U.S. study centers.
This did not affect at all ENIGMA-TRS 1. That is why we could complete ENIGMA-TRS 1 enrollment and are now going towards results. That is in 19 countries and in more than 80 study centers. No effect at all. Also no delay or no hesitation, because all the other health authorities, 19 countries and all the other investigators, looked at what the FDA had seen and decided that we should go on because the death we saw was not related to treatment. ENIGMA-TRS 2, we had originally started last December in the four U.S. study centers, all first-class academic centers, no commercial centers at all. We then expanded it to other countries in Latin America and in Asia, four other countries. Then we were hit by that one death. Now, that one death, we have to say a few words on.
First of all, treatment-resistant schizophrenia, these are the poorest of the poor patients. These patients have been going through an odyssey of treatments over many, many years. They are not healthy at all. So these patients usually are substantially overweight, diabetic. They tend to be smokers. They usually would not have a very healthy lifestyle, and they would be mostly socially isolated. So these people have 20 years less of life expectancy compared to the standard people around in this room. Besides suicides, 50% of schizophrenic patients will try to commit suicide at least once in their life, 15% will succeed. Besides that, the most prevalent cause of death is sudden unexpected death. That is about 20% of all deaths. So, to be fair, if you run studies in that population, which nobody else dares to touch, you need to be frank. You will see people dying.
The simple question is twofold: Is it related to drug treatment? Question number two, do you have excess mortality? Now, this one death in Argentina is placative because that was a mid-40 years old patient, overweight, smoker, diabetic, treated against high levels of red blood cells. He was treated with clozapine for a number of years, which is one of the more dangerous treatments, as you know. He died of some unexpected death. He went to bed and he didn't wake up again. So the investigator went to the family, the lead investigator, and they spoke to the mother, and the mother said, "Look, his father died about same age of sudden unexpected death." The conclusion was not related to treatment, and that was it for all the rest of the world, not for FDA.
FDA went then back and said, "We put you on hold. We want to unblind." They found it was the low dose, so 15 milligrams, and they said, "So, that's the hold." I will say that FDA has been on this drug for a number of years. So, five years ago, given that it is a sodium channel blocker, and you know sodium channel blockers have a tendency to create issues like seizures and arrhythmia. So they found an atrial fibrillation in a patient in the United States, and they found that in a 26 weeks tox, one animal died for unexplained reasons, and they asked us to do a lot of work. So we redid the safety work in animals, and it came out completely clean.
They also said that we should do a TQT study, which we did, and which showed that evenamide does not prolong at all QTc, so the drug is absolutely clean. In fact, we showed a very marginal few milliseconds only shortening of QTc, and we come back to that in a second. They also asked us to do thousands of seizure checklists and 10,000 ECGs, and all that came out completely clean, so clean that in the end, also the FDA approved the protocol for ENIGMA-TRS 2 until this death happened. Now, what they have come back with in the Type A meeting is this shortening of QTc, and they found a very rare indication called Brugada syndrome.
Yeah
which they say might have been a case or other channelopathies, as they said. Now, there is no evidence at all that evenamide has caused, that we had any Brugada patient in the study or that evenamide has caused any cardiac issues. There's no positive proof, but now FDA plays the ball to us and says, "Prove us that there's nothing." That is challenging, to be very honest with you, and we are working with FDA, because our objective is, if not to include 80 to 100 patients, because the second study is rolling and speeding up, we want to at least have 40 to 60 patients from the U.S. in that study.
What we are right now discussing with FDA is which are the genetic tests by which we can identify and exclude Brugada syndrome patients and other channelopathy patients from our study, perhaps even patients who, for other reason, have shortened QTc, and if we should, for the reason of risk-benefit, reduce the patient population in the U.S. to more severe patients. That is ongoing. If we should not succeed in convincing the FDA, then the one path that we will go, and we are doing that effectively preparing it, is that we will speed up ENIGMA-TRS 2 ex-U.S., and that we will come back with two pivotal study readouts next year in 1,000 patients. If we are right, we will have two positive pivotal studies.
We will have 600 patients on drug, 400 on placebo, and we will be able to show to FDA that there's a completely different risk-benefit relation by that point in time. So that's the scenarios, and given that this is a disease with a very high unmet medical need, and patient organizations and KOLs are desperately looking for an alternative treatment, I think that it is very possible to likely that we will find a solution to get this drug on the market in the U.S.
That's helpful. How confident overall are you in your ability to resolve this issue with the FDA, and how will your regulatory strategy take shape in the event where the clinical hold is resolved?
Yes. What we would do is we would present those phase III data from two pivotal studies to FDA. We would ask for a pre-NDA meeting. If there would still be reservations at FDA, we would propose an advisory committee, or they would propose so, and then we should find a path of how to get this drug approved in the U.S. as well.
Got it. Maybe in these last few minutes, can you give us a sense of the commercial opportunity there? As you said, there is no drug approved, so what's the target population and any indication of potential peak sales?
Yes. If I go back to 2018 and Lundbeck failing with their phase III program, there was an analyst consensus already for that drug, and that was definitively north of $1 billion. The worst analyst or the lowest analyst guess was $800 million, and the more optimist was $1.6 billion, and that was only TRS. You know that evenamide, we are also going for bipolar or depression, and importantly, we go for Alzheimer's with psychotic symptoms because today's antipsychotics should not be given in that population. So easily, if this drug succeeds and there's no competition at all, there's not a single glutamatergic drug under development, there's not a single drug on its way in treatment-resistant schizophrenia nor poorly responding patients. All the drugs are in monotherapy in acute schizophrenia.
This drug will have the same sales potential as analysts are giving it to Karuna's drug and Intra-Cellular's drug, now BMS and J&J's drugs. One of the outcomes could obviously be also that Newron would be acquired, even if that is not a strategy. Our strategy would be that we would initiate commercialization in the U.S. ourselves, and that would directly follow the Intra-Cellular strategy.
Thank you. Maybe one last question from me. What do you think is most underappreciated of Newron's story in general by investors?
Oh, that's easy. The resilience of our team to overcome hurdles.
That's a nice one.
Yes. This drug will make it. We are convinced of that, and we will fight its way because patients are desperately waiting for treatment. We have already plenty of requests to go into programs ahead of, very limited programs ahead of approval of the drug, individualized programs, and we are working on those. There is an urgent need for a new treatment for those patients, and I guess we have it.
Thank you very much, Stefan. I appreciated the conversation.
Thank you so much.
Thank you for being with us. Thank you.