Status Update

Sep 25, 2020

Press Release

Ladies and gentlemen, thank you for standing by, and welcome to the Aquestive Therapeutics Conference Call. At this time, all participants are in a listen only mode. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to your first presenter, Ms. Stephanie Carrington, Westpac Investor Relations. Please go ahead, ma'am. Thank you, operator. Good evening, and welcome to today's conference call. On today's call, I am joined by Keith Kendall, Chief Executive Officer Dan Barber, Chief Operating Officer and John Maxwell, Chief Financial Officer, who are going to provide an overview of the recent business developments. In addition, additional members of the Aquestive team will be available for Q and A. In total, we expect today's call to last approximately sixty minutes. As a reminder, the company's remarks today correspond with the press release that we issued after market close today and a Form eight ks that was filed with the Securities and Exchange Commission containing prepared responses to anticipated questions during this call and relevant charts to the business developments we will be discussing tonight. In addition, a recording of today's call will be made available on Aquestive Therapeutics' website within the Investor Relations section shortly following the conclusion of this call. Before we begin, let me remind you that today's call will include forward looking statements based on the company's current expectations. Such statements represent our judgment as of today only and are subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. We undertake no obligation to revise or update these forward looking statements in light of new information or future events, except as required by law. For information concerning risk factors that could affect the company, please refer to the Risk Factors section in the company's annual report on Form 10 ks filed with the SEC on 03/11/2020, and in its quarterly reports on Form 10 Q. With that, I'll now turn the line over to Ken. Thank you, Keith. Thank you, Stephanie, and thank you, everyone, for reacting quickly and your flexibility in joining us this evening. Disappointingly, today, we received a complete response letter from the FDA on our new drug application for our product candidate Libervant, a diazepam buccal film for the management of seizure clusters. As we outlined in our press release, the FDA issues a CRL to indicate that the review cycle for an application is complete, but the application cannot be approved in its current form. In the CRL, the FDA limited its comments to only one of the nine studies performed via Questiv and included in our Libervant NDA. Importantly, other than procedural observations concerning a small number of blood draws, the FDA did not identify deficiencies on any other issues beyond their comments on this one particular study. The study commented on by the FDA was Study 180,323, which was a crossover study comparing the pharmacokinetic or PK profiles of Libervant and Diastat, the reference listed drug to Libervant in subjects diagnosed with epilepsy and actively taking antiepileptic drugs or AEDs. As far as we are aware, this is the first pharmacokinetic study ever performed using Diastat in subjects with epilepsy. Study 180,323 contained 28 subjects and from Aquestive's perspective had solid results. As many of you know, PK studies generally focus on three measures total exposure referred to as area under the curve or AUC, the highest concentration of a drug at a known time point or Cmax and the time to reach the highest concentration of drug or Tmax. In Study 180,323, Libervant exceeded the AUC measure when compared to Diastat, was within normal comparability ranges for Cmax and had a Tmax within the published Diastat label. We were quite pleased with these results. However, the FDA noted in its CRL that in Study 180,323, there were two weight groups where the Cmax ratio comparing Libervant to Diastat were not as close to comparability as the FDA would like to see. In addition, the FDA noted that there were five subjects out of 28 who when grouped together had a Cmax ratio closer to fifty percent of diastat. Importantly, four of these five individuals were within the same weight groups I mentioned before. The FDA had no further comments on the study or in any of the other weight groups. We had extensive and collaborative discussions with the agency about this question right up until and through Monday of this week. From a Questiv standpoint, this CRL is heartbreaking. We have put a robust package together that thoroughly characterizes Libervant as well as Diastat. We have over 1,300 dose things in our safety study with promising results. This is an important product for patients and we're very disappointed that our application was not approved for immediate distribution. In the short term, we believe this is a detriment to the epilepsy community, especially patients and caregivers. However, in our discussions with the FDA to date, we believe there is a logical path forward that will not require additional clinical studies. Using the robustness of the data from our nine studies, we believe we can utilize modeling to adjust regimen for the weight groups noted in the FDA CRL. In all of our studies, Libervant has proven to have excellent linearity, which is a basis for predictability when modeling dose and exposure levels. Over the coming weeks, we will update our dosing model and request a Type A meeting with the FDA. A Type A meeting is a meeting that occurs typically within thirty days discuss the development program to proceed to a path for approval. At this meeting, we intend to share the results of our modeling as well as our new dosing regimen and propose the immediate resubmission of our NDA. If the FDA agrees with our proposal, then we plan on resubmitting the NDA before the end of the year. The review cycle for a resubmission of this kind is typically six months. However, given the narrowness of the resubmission, we will request a shorter review cycle as is our right. This decision will be completely at the discretion of the FDA. In summary, while we did receive a CRL from the FDA for our Libervant application, today is an important step forward for Aquestive and the patients who benefit from having access to Libervant. The FDA's comments are limited to one study. The comments on the study are limited to two weight groups. We can use our modeling to update the dosing regimen for these two weight groups, and we believe that this solution presents a promising path forward to approval, and we're hopeful the FDA will agree in the soon to be scheduled Type A meeting. This concludes my prepared remarks. And I'll now open the line for questions. Your first question comes from the line of Randall Stanicky from RBC. Your line is open. Hi, you there? Yes. Sorry, this is Dan Busby on for Randall. Hey, Dan. Hey, Keith. So first question, I know that you've talked about the linear relationship in weight based dosing before. So just to be clear, do you intend to change the way you model that relationship itself? And would that have an impact on any of the other eight studies? Thanks, Dan. This is Dan Barber. Good to hear your voice. So from a if you think about the modeling we use, the linearity is driven by all of those eight studies. So it's actually the other way around. The studies created the linearity, which is what we can use to adjust our dosing regimen. So to make it a practical example, in one of our weight groups, we are using twelve point five milligrams against the Diastat level of fifteen milligrams. We will up our twelve point five milligrams to fifteen milligrams and we will then put that in the model to recast what those dosing regimen at that level would produce. So the robustness of the model we have is actually what will benefit us now rather than it being something that goes backwards and creates a problem for us in our past studies. Okay, got it. That's helpful. And then, I mean, if it sounds if FDA's concerns could be addressed with what sounds like a fairly straightforward adjustment, does it surprise you that FDA didn't simply ask for that information during the review, even if it meant potentially extending the PDUFA date by a few months? As I said, we've been working with the FDA intensively for the last couple of weeks. The question came up very late and we addressed it with them. We actually we've actually had two meetings with them in the last two point five weeks to talk through it. And I just don't think based on when the question came up and the work that had to be done with the model that there was time left. Got it. Understood. Just one more question from me. It sounds like your base case assumption is a six month review. But can you talk about the factors that FDA might consider when deciding whether to grant a two month versus six month review? Well, as you I'm sure now, a six month review a two month review is usually for minor adjustments, right? If you had an excipient that you were switching out the vendor, that would be a two month review. When you get into clinical changes, that is typically the six month review cycle. What we will argue in this case though is because we are using modeling and we are submitting no new clinical data and our modeling changes in our dosing regimen are isolated to two weight groups that the review cycle can be supported in a faster time. But as Keith said, that is completely at the discretion of the FDA. Your next question comes from the line of Jason Buckner from JMP Securities. Your line is open. I just wanted to clarify, did you in discussions with FDA over the last couple of weeks proposed the modeling solution? And did they give you any feedback into that potential route to a solution? Jason, nice to hear your voice. This is Dan. Yes, we did talk to the FDA about modeling as a solution. We found their comments to be helpful. The FDA, of course, would never say on any program for any reason it absolutes. But we do, from our discussions, we do feel it's an appropriate and reasonable path forward that we'll have a very robust and positive conversation with the FDA. Okay. And then I guess I'm looking at Slide four here, where you're showing the PK levels. And it looks like your PK profile is more consistent across the different weight groups versus Diastat, which has a higher Cmax in lighter patients, a lower Cmax in heavier patients. Do you get the have you had feedback from FDA that acknowledges that the PK profile may be more predictive and the product appears more consistent across a range of weight groups? Yes. And thank you, Jason. That's a very good observation. We have the FDA has acknowledged to us that at the study level in particular, we have results that are within comparability and that our variability is better when compared to Diastat. You're absolutely also right that when you look at the weight bins across those weight bins on Slide four, you can see the tightness of our error bars and the tightness of our range when compared to Diastat, where at the low level, patients are getting a very high level, an unnecessarily high level in some cases. And at the high weight group, they're getting a very low level and a level that perhaps is problematic for them. So one of the things we did struggle with, with the FDA is what level exactly are they looking for across all weight groups. And that's why on this slide, we included the overall Diastat Cmax level of two eleven. We do think that when we update our dosing regimen, we will be well within the range the FDA is looking for. And one helpful way we have approached that in understanding that is there is public information out there on other programs. Obviously, we can't compare ourselves to other programs such as diazepam nasal spray. There's a product called VELTOCO. But we have noted that in their public information, their patient data has a Cmax level in patients with epilepsy of one hundred and forty five nanograms per milliliter. So for us, we get a lot of confidence when we see the VELTOCO level at 145, the Diastat level at two eleven, and we know we're already at the two eleven. And when we put our new dosing regimen in, we'll be well above that. So I know that was long winded, Jason, but hopefully that helped with your question. That's really helpful, Dan. And then just one more question, Keith. And I get that you're going to have a limited amount to say here. But can you just comment as to in terms of Kymobi, the Apomorphine royalty monetization, whether anything has changed in your plans or your broad timelines in securing that transaction? Jason, you know how much I hate disappointing all of you. We're not going to make any comment about that. We'll provide an update of that in our earnings call in November. Okay, great. Thanks for taking the questions. Your next question comes from the line of Liana Moussatos from Wedbush. Your line is open. Hi, this is Shweta for Liana. Thank you for taking my questions. Hi, Shweta. Hi, Keith. Can you remind us of the different weight growth in the Libervant study? And then on the call, you mentioned four of the five patients were in the same group. Can you talk about which group they belong to? Sure. I'll let Dan walk you through that. Shweta, I think where Jason had pointed Slide four in the documents we sent around, that's a good slide to get an understanding of what was in the study. And if you look at that slide, there are yellow and blue bars. The yellow bars are Diastat, the blue bars are Libervant, and they're divided into four buckets. And those four buckets represent the four weight groups that were in this study. So if you see 51 to 62 and then add up all the way to fifty eight kilos and higher. So inside of those four weight groups, you also have the n at the top of of the chart here. So you can, you can see the degree of, subjects we had in each of the weight groups. And then the four of the five patients, are they in the higher weight group? The two weight groups that the FDA has issue with are the fifty one to sixty two kilo, and you can see that our Cmax is lower in that group compared to Diastat, and the seventy six to eighty seven kilo group, where you can see that relationship as well. The four of the five subjects are in those two buckets. Got it. Okay. Can you talk about like the protocol deviations in blood draw? And then what aspects of the study gives you confidence that you can adequately address the concerns without any additional studies? Yes. That the protocol deviations were for blood draws that were well out three days and out in terms of time points. And it was a very limited number of blood draws. We while it was noted in the CRL, we don't anticipate that being a major issue. Okay. And do you now anticipate the orphan decision to happen after potential approval in '1 for Libervant? Well, all exclusivity matters for any drug only happen after the approvability package comes from CEDAR, the review division. So exclusivity of any sort would wait until that time period. So we would anticipate when our next PDUFA date comes around, that's when the FDA would review the exclusivity provisions. Got it. Okay. And then my last question is about the Type A meeting. When would you provide us with minutes or updates on discussions on the Type A meeting? Once we have the meeting and we know the path forward, it would be our intent to update everybody on what happens next. All right. So those are all my questions. Thank you. And your next question comes from the line of Ram Selvaraju from H. C. Wainwright. Your line is open. Thanks so much for taking my questions. So just to clarify, the FDA has not provided any commentary on the orphan drug status or the approvability of the NDA as it pertains specifically to the orphan drug status held by Valtoco. Is that correct? The FDA provided no commentary whatsoever on the orphan drug issue. That's correct. And then secondly, can you comment on what the implications are for commercial planning as that pertains to Libervant of the potential delays in the approval to potentially end of the 2021. Does that potentially impact any of the initiatives that you had originally planned to institute in order to prepare the market for the introduction of Libervant? Or will all of that pretty much stay on track since you already have an existing sales force in the field and there wasn't any significant additional sales and market infrastructure that you were envisaging putting in place? Sure. Other than there'll be certain actions that will push out like building out the Libervant portion of the sales force. Obviously, there's no point in doing that today. But the rest of the activities to continue to support SYMPAZAN as the precursor footprint or prepare the market with literature and other types of things in support of a Libervant launch will continue on. Nothing has changed about our confidence in the strength and value of this market for epilepsy patients. And then with respect to the Type A meeting, it is your view just to confirm that once that Type A meeting has been held, you'll have definitive clarity on what the requirements are and the FDA will make it very clear at that juncture that no additional clinical studies are needed, right? Ram, this is Dan. I wish there was an FDA meeting that was that clear. I think you know how that meeting will go. We will put our position forward. We will get comments from the FDA. Typically, the comments from the FDA are very helpful in understanding the position that the FDA views your packaging, and we will resubmit from there. We do not anticipate any need for additional clinical studies, and we are confident that the population PK modeling approach will help with the deficiencies the FDA has outlined. Operator, are there any more questions? And if there are no further questions at this time, I will now turn it back to Mr. Keith Kendall for closing remarks. Well, again, thank you everyone for taking the time to adjust your schedules on a Friday night before you start your weekend. We appreciate you doing that and your flexibility. And as this continues to unfold, we will keep everyone up to date on what's going on with this program. Again, thank you, and have a good night. And this concludes today's conference call. Thank you for participating. You may now disconnect.