Our next fireside chat is with Lipocine, ticker LPCN, with a market cap of approximately $20 million. Lipocine is a biopharmaceutical company that is developing a new treatment for postpartum depression. We cover the company here at Alliance Global Partners with a buy rating and a price target of $6 per share. Trades around $2.35. Presenting for the company is Chief Executive Officer, Dr. Mahesh Patel. Mahesh, would you like to take a few minutes to tell our audience a bit about yourself and Lipocine? Thank you again for joining us.
Thanks, Scott. Thanks for A.G.P. for allowing me to participate. I'm Mahesh Patel, President, CEO, and co-founder of Lipocine. Lipocine is a specialty biopharmaceutical company that's focused on developing innovative products with large unmet needs, with our proprietary drug delivery technology that often enables, for the first time, effective oral delivery of highly water-insoluble drugs. I would like to share some few slides of exciting things happening at Lipocine lately.
Okay, great.
Okay.
If you just want to share those slides, we'll go from there. Perfect.
Perfect. Let me get some forward-looking statements get out through the business. Wait a few seconds. I would like to give a summary of the phase III results that we just announced a few weeks ago. On surface, we're disappointed because we didn't make the primary endpoint. We see some significant improvement in terms of efficacy, and I'll just walk you through all that. We saw a nominal statistical significance as early as 12 hours, and our safety profile was extraordinary. It was well-tolerated. It's differentiated from what's available out there, with no adverse events more than 5% of the LPCN 1154 treated participants. Strong efficacy signal in clinically relevant subgroups. That's the bright light at the end of the tunnel. The subgroups we're talking, first we look at the patient population.
We notice an outlier site, epidemiologic outlier site, that differed materially from the overall study population. This particular site was unrepresentative of real world PPD. It had 78% of patients that came from that site were de novo patients. That means they were first and only experience with the postpartum depression, with no history of any other psychiatric illness. The epidemiology of PPD suggests that de novo patients are typically less than 20%. Compared to what the other sites, the other 14 sites versus this outlier site, the other sites were in line with the epidemiology of 20% or less of de novo patients. The other thing to note is this site, seven of 11 patients on active had no drug levels at all, suggesting some kind of compliance issue, probably. 64% of the patients didn't have blood levels.
The other thing to note is that the placebo effect just from this site versus the other 14 good sites, 92% effective placebo response and 83% remission, which is unheard of. Obviously, this site is off. If you exclude that site, we get some extraordinary results. The HAM-D analysis support rapid and durable treatment effect in two subgroups. The one where we exclude the site and have a study population that's consistent with PPD epidemiology. Also, if we exclude any de novo patient that's PPD with history of psychiatric condition, we get fantastic results. That's also corroborated with consistent trend across all the other outcomes, HAM-D, remission response, et cetera. Now, let me share the response when we exclude this epidemiologic outlier site. The response is durable, it's rapid, and statistically significant at all time points.
With N of 60, a good subgroup size, we saw that the treatment effect is greater than minus five at all time points. This compares a lot higher to ZURZUVAE and ZULRESSO results that those are in the approved products. They all were around four, and ours, as early as 12 hours, is -7.1. The point to be noted is that if the subgroup results are verified, we believe that the results are very consistent and it all points toward the fastest relief for postpartum depression as early as 12 hours. You can look all across multiple endpoints, like HAM-D 17, even HAM-A qualifying score at 12, the results were -6.3. If you look at the response, it's 38.5% versus placebo 6% across both subgroups. If you take a subset of HAM-D 17, it's D6, that's a Bech subscale. Again, a very significant -2.8, and it's clinically meaningful.
Really, if all pans out, this would be the fastest antidepressant that could provide the relief, not to mention the safety. Let me compare the safety profile of ours versus the current standard of care, so to speak, ZURZUVAE. Somnolence and sedation, we saw 4%, ZURZUVAE in a couple of studies, it ranges from 19%-36%. This is quite important because sedation, the mother wants to preserve maternal functions in taking care of the baby. If you are sedated, it's really, you don't have quality time. Same thing, dizziness, 4% versus 18%-13%. Clearly differentiated tolerability profile. With regards to treatment discontinuation, zero versus four for ZURZUVAE. In terms of dose reduction due to sedation or somnolence, we had none.
One that was based on rash, nothing to do with CNS depressant effects. ZURZUVAE alone had 14% of the patients that had dose reduction. No serious side effects. Serious adverse events, I should say. Yeah. Overall, extraordinary safety profile for a CNS drug with potential for rapid and sustained relief from depression symptoms. Now, let me compare efficacy for you head-to-head, although they are different studies, but ZURZUVAE per label. The earliest time point it showed a statistically significant and clinically meaningful relief was at day three, and the delta was - 3.4. At day 15, the end of study, it was still around four. If you look at ours, if you exclude the epidemiologic outlier site, I think it's robust across all time points and especially at hour 12, the -7.1. Yes, we need to confirm this with a validation study if needed. Yeah.
Great potential, very bright light at the end of the tunnel. I would say that given the differentiated target attributes as a rapid-acting PPD treatment, potential to meet FDA's rapid-acting antidepressant criteria. Efficacy demonstrated within one week. That was sort of typically what FDA looks for. We see as early as 12 hours. Median time to response is 2.6 days, compared to ZURZUVAE's three times longer, it's about nine days. Durability of effect, it lasts for one month. Superior tolerability. Ultra-short treatment duration, 48 hours. With easy access at home, so with no need of burdensome monitoring. A very differentiated profile. Lastly, I just want to talk about the next regulatory steps. It's a multi-pronged strategy. We have already applied based on the subgroup analysis for breakthrough and fast track designation.
That's not critical, but if we get designation, then it will help with the rolling submissions, et cetera. We've also have requested a guidance meeting to discuss our phase III data. One of the options that is going to be discussed is, would FDA concur that the site that is showing a lot of anomalies as an outlier, and can we assess the safety, I mean the efficacy of LPCN 1154 based on the other good 14 sites, especially in light of the bioequivalence that we have already demonstrated with the IV brexanolone. Also, parallelly, we are designing the protocol should we have to do a study. We're planning to submit the protocol with a de-risking strategy that with avoiding some of these, I would say, challenging sites. Yeah. Quite active on all three fronts on the regulatory next steps. Any questions?
Okay. That's a great primer, Mahesh. I was really looking forward to this conversation because I think it's somewhat unknown, and there's a lot of upside if an investor can get this right. This was a $10 or $11 stock before the data. Now it's at $2. Thinking of the runway to run this trial again. If it's in fact an anomaly and more likely to read out positive again, there could be substantial upside for investors. A couple things, and people should know that all these slides are available at Lipocine's website. There's a lot to take down. The first thing we always try to assess with a company is the goal of the company a worthwhile goal? Is LPCN 1154 as a treatment for postpartum depression? We want to make sure that that's a target, that's a riddle we want to solve.
The way we look at that is, what are the current sales levels of ZURZUVAE or ZURZUVAE, depending how one wants to pronounce it. What are those current levels, how does your product differentiate between that?
Perfect. Yeah. ZURZUVAE is the only approved product for postpartum depression that's on the market. IV brexanolone has been withdrawn for commercial reasons. I think based on the reports from Biogen, it's without factoring in future growth, it's doing about $250 million annualized run rate, which I think is quite significant. Given its early launch, I think the peak could be north of $1 billion. We feel quite excited thanks to the awareness that's being generated by Biogen as well as Supernus, and we might be seeing even direct-to-consumer ads for it.
We know that this is a good target. There's established sales, and I think what you said in regards to, I don't think you can drive for a certain amount of time, for like 12 hours, on ZURZUVAE. That's a big window. Even if you take it at night, you still have potentially taking the kids to school in the morning that obstructs it. Would you say that could be and I think the regimen is shorter as well, but you have some real advantages versus the current standard of care. Would you agree with that, Mahesh?
Yes. Especially if somebody's suffering from severe postpartum depression, rapid relief is needed, importantly as a rescue therapy, because quite a few of these women have suicide ideation, faster the better. Second thing we know is just a two-day treatment is our differentiator compared to two-week with the close competitor. The tolerability profile, it's just off the charts. Very low CNS depressant effects. Because of the low sedation. It's already known that very little of it pass through milk. I think the sedation risk to infant is almost non-existent. These are very clear differentiators. Besides the efficacy results, if we are able to duplicate the efficacy result, the treatment effect is going to be significantly better than what's out there, not to mention the tolerability, right?
Okay. We know this is something, as investors, that there's a reason that this stock was trading so much higher in front of the data the first time around, because there is this reward if you can solve the problem. Let's get into the clinical trial, which worked a little bit, but it didn't reach statistical significance. There was this one site that I believe was about a third of the trial-
Yes.
Amount. First, if not for this site, would the data have been statistically significant?
Yeah, that's the one I just showed in one of my slides. If we exclude this site, which is clearly a epidemiologic misfit, in several reasons why. I think if you exclude that site, the results are extraordinary. Treatment effect more than minus five at each and every time point, like I said, as early as 12 hours. Of course, the safety profile. Yes, statistically significant. The Cohen's d values, when you account for standard deviation, are all greater than 0.5, all suggesting that it's clinically meaningful. Yeah, robust, clear signal if you exclude that site. That's why we're trying to make a case with the FDA that given the anomalies, and there are quite a few anomalies, that we should be able to exclude that, because it's masking. That site, because of demographic mismatch, is masking the true effect of the drug.
We know the drug works. We know IV brexanolone demonstrated good results, and we have bioequivalence to that product.
Yeah. I've been doing this for 30 years, and I would be the first to say that if someone tells me to exclude one site and look at a trial, nine out of 10x , I'm going the opposite direction. One out of 10x , it's worth a look. I happen to think this is a time when it is worth digging a little deeper. Let's just look at a couple of the red flags at that clinical site. I guess the reason it is such a large percentage of the trial, probably because it enrolled a lot faster. Can you talk about how fast this clinical site enrolled relative to others?
Yeah. Interestingly, relative to the other 14 sites, this site enrolled five times faster, and that is one of the anomalies. The other one, like I mentioned, the de novo patients who have never had postpartum depression or any psychiatric illness was just the opposite switch. 78% were de novo compared to other 14 sites, but it was the other way around, 74% or 78% had history of psychiatric disorder. It was just a complete flip. If you just take that site and look at the placebo effect, it's spectacular. A reduction of minus 22 points, that itself, that's never seen with any drug with placebo. Besides other reasons, and quite a few patients, like 64% of the patients, didn't even have blood levels. Yeah, there were quite a few anomalies at this site.
Yeah.
We can make some arguments. I have to concur with you that it's a low probability. It's a post hoc observation. It's worth a try. We're not wasting any time. We're also designing a trial and working out execution and design of the trial such that we minimize such things from happening again.
Yeah. In the interest of time, I'll just summarize it. They enrolled very fast. The patients didn't have the background in what we would expect. In fact, I believe seven of the patients didn't even have drug in their system in a case in which you should be able to see the drug in their system. I would categorize, you probably wouldn't call it that, but I would call it potentially a rogue clinical site. Next kind of final question, because we will be out of time, is do you have the balance sheet to run this trial again?
Yes, per our last public report, which earnings we just released, we have about $25 million. I think our burn rate, even with the new validation trial, should we have to do it, including that, would be about $1 million. Same burn rate as we had last year when we did the previous trial. With the design and we're trying to build in interim results. I think, at the time of the readout, if everything goes well, we believe that will be first quarter next year could be the interim results, and by that time, we still will have close to $14 million, $15 million. Yes, we have the resource to do the trial. We believe the drug works. The subgroup data are very powerful. We're just waiting, making all the preparations, and finalize if we have to do a trial.
We get lucky and FDA agrees with our exclusion of the outlier site, and then we don't have to do a study. We're planning if we have to do a study, we have the money. It won't hurt our burn rate at all. Could have the interim results sometime in late first quarter next year.
Okay. Mahesh, we are out of time, but kind of in summary, I would say, in my opinion, I expect you to have to do another trial, but it might be harder to run that trial to not work than it would be to have it work, based on everything we've seen. You can get the right clinical trial sites doing it correctly. Really interesting company, really interesting story. We invite investors to learn more about Lipocine. Mahesh, thank you very much for participating.
Yeah. Thanks for inviting me, and it's my pleasure. Thanks very much.