BioXcel Therapeutics, Inc. (NASDAQ:BTAI) Q1 2024 Earnings Call Transcript May 9, 2024

BioXcel Therapeutics, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. And welcome to the BioXcel Therapeutics First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. Just to remind everyone, certain matters discussed in today's conference call and/or answers that may be given to questions asked are forward-looking statements subject to risks and uncertainties related to future events and/or the future financial or business performance of the company. Actual results could differ materially from those anticipated in those forward-looking statements. Risk factors that may affect future results are detailed in the company's annual report on Form 10-K for the year ended December 31, 2024 (sic) [2023], which can be found at www.bioxceltherapeutics.com or on www.sec.gov, and which will be updated in its quarterly report on Form 10-Q for the quarterly period ended March 31, 2024.

As a reminder, today's call is being recorded. Speaking on today's call are Dr. Vimal Mehta, Chief Executive Officer; Dr. Vince O'Neill, Chief of Product Development and Medical Officer; and Richard Steinhart, Chief Financial Officer. They will be joined in the Q&A session by Dr. Frank Yocca, Chief Scientific Officer; Matt Wiley, Chief Commercial Officer; and Dr. Rob Risinger, Chief Medical Officer of Neuroscience. It's now my pleasure to turn the call over to Dr. Mehta. Please go ahead.

Vimal Mehta: Good morning. And thank you for joining us. 2024 has been an important period of progress for BioXcel Therapeutics, both at the program and corporate level. Starting with our neuroscience program, our journey with BXCL501 is well underway to expand the market potential for our agitation portfolio into the retail setting. We are focused on potentially bringing this novel treatment option for bipolar and schizophrenia-related agitation into the home setting. We are also dedicated to expanding into a much larger indication, Alzheimer's-related agitation, both in the in-care and home setting. We believe these two opportunities are unique, with no known FDA-approved therapies, and represent transformative value drivers for the company and our shareholders.

We are pleased to be advancing the plans for both late stage TRANQUILITY and SERENITY programs. While Vince will discuss the details of these programs shortly, I want to point out that we believe serenity at home may provide us with a nearer term opportunity to create shareholder value through a potential label expansion for the previously approved 120 microgram dose. The TRANQUILITY In-Care trial is similar in design to our positive Phase 3 TRANQUILITY II Trial. We see a larger long-term growth potential with this program. We believe there is a significant upside to be the first to enter this untapped market. In addition to progressing our clinical development program, we have further expanded intellectual property for our neuroscience franchise.

We were recently granted two new patents in US and Japan. We believe this provides long-term protection for our assets and gives us a solid foundation from which to pursue further development of BXCL501 and potential partnerships in key international markets. Our IP portfolio is substantial. As of April 2024, we have 30 granted or allowed patents and more than 140 additional patent applications in prosecution. We also have eight US patents for our approved drug, IGALMI, listed in the FDA's Orange Book with two additional recently allowed patents eligible for listing once issued by the US Patent and Trademark Office. Turning to IGALMI commercialization direction, our revised and focused strategy is yielding results as we increased net revenue in the Q1 2024 by 55% over the Q4 2023.

This growth is being primarily driven by volume contracting, new customer acquisitions, increased utilization from existing customers, and the recently implemented permanent J code for IGALMI. We are seeing this momentum carrying forward into the second quarter, with carton volume already exceeding that of the first quarter this year. We are pleased that IGALMI is reaching a greater number of patients and healthcare providers and expect this momentum to continue. Both institutional and home setting markets for bipolar and schizophrenia-related agitation are symbiotic and commercially strategic. We are excited about achieving an uptick in IGALMI utilization and having a clear development path for the home setting. Turning now to the corporate front, we are pleased to have completed the $25 million registered direct offering we recently announced.

This transaction provides an important bridge to continue advancing our business strategy and clinical trial plans. We remain focused on further strengthening our balance sheet and exploring multiple financing options, including potential partnerships, to extend our cash run. We also continue to optimize operational efficiencies. To wrap up, we believe our business fundamentals are strong. We are advancing two late stage clinical programs, strengthening intellectual property, and seeing progress with commercialization of IGALMI. These accomplishments are underpinned by a compelling value proposition for driving future growth for the company. With that, I will turn it over to Vince.

Vincent O'Neill : Thank you, Vimal. I appreciate the opportunity to review the progress we've made with our late stage clinical development programs for 501. So since speaking with you in March, we've received the minutes from our meetings with FDA regarding the development plans for the TRANQUILITY and SERENITY programs. Based on that feedback, we have developed and announced the designs of both pivotal Phase 3 trials. We're pleased to have clarity on development path which may lead to two potential sNDA submissions, both for Alzheimer's-related agitation and bipolar and schizophrenia-related agitation. As a reminder, in the TRANQUILITY program, we're evaluating 501 as an acute treatment for agitation associated with Alzheimer's dementia.

Our TRANQUILITY In-Care trial is designed as a double-blind placebo-controlled multi-center study to evaluate the efficacy and safety of a 60 microgram dose of 501 over a 12-week period. The primary endpoint is change in PEC score at two hours post first dose. It's important to note that this is the same endpoint used in previous positive TRANQUILITY trials and in studies that supported the FDA approval of IGALMI. In the SERENITY program, we're evaluating the potential at-home use of 501 for agitation associated with bipolar disorders or schizophrenia. Our SERENITY At-Home trial is designed to be a double-blind placebo-controlled multicenter study to evaluate the safety and efficacy of a 120 microgram dose of 501 over a 12-week period. The primary objective is safety with efficacy measures as exploratory endpoints.

Again, we've taken a thoughtful and deliberate approach to our trial designs with the ultimate goal of accessing the retail setting in mind, and we look forward to advancing our plans. The trial protocols have now been finalized. and are being shared with the FDA and our CROs for clinical site selection. In our PMR study, we recently completed the enrollment of 22 patients with frequent episodes of agitation for bipolar disorders or schizophrenia in that open label study. It's designed to evaluate whether tolerance, tachyphylaxis or withdrawal occur following repeat dosing of the 180 microgram dose of IGALMI after seven days of repeated. These trial results can help address the language around limitations of use and warnings and precautions in IGALMI's current label.

We're performing data cleaning currently and look forward to announcing results from this PMR study shortly. I'd like to end my remarks with a few comments about our lead immunooncology asset, 701. Earlier this year, we announced the completion of patient enrollment in the safety portion of the Phase 2 trial of 701 in combination with KEYTRUDA in metastatic pancreatic ductal adenocarcinoma. The trial is being led by Georgetown Lombardi Comprehensive Cancer Center. We're pleased that a late breaking abstract was selected for presentation at the 2024 ASCO annual meeting and look forward to sharing the data on June 1 with you. We have formally initiated the process for monetization of this asset. I would now like to turn the call over to Rich, who will review our financial results for the first quarter of 2024.

Richard?

Richard Steinhart : Thank you, Vince. Net revenue from IGALMI was $582,000 for the first quarter of 2024 compared to $206,000 for the same period in 2023, a 182% year-over-year increase. Sequential quarterly revenue increased 55% in the first quarter of 2024 from the fourth quarter of 2023. The increased revenue for both periods was primarily attributable to increasing demand with our existing customer base, the addition of new customer orders, and volume-based contracting. Research and development expenses were $11.4 million for the first quarter of 2024, compared to $27.8 million for the same period in 2023. The decreased expenses were primarily attributable to the wind downs of the SERENITY III and the TRANQUILITY II and III trials, as well as decreased professional fees, personnel and related costs.

Selling, general, and administrative expenses were $13.3 million for the first quarter of 2024 compared to $23.6 million for the same period in 2023. The reduced expenses were primarily attributable to a decrease in personnel and costs associated with the commercialization of IGALMI compared to the first quarter of 2023. The reduced expenses were partially offset by increased professional fees during the first quarter of 2024. BioXcel Therapeutics had a net loss of $26.8 million for the first quarter of 2024 compared to a net loss of $52.8 million for the same period in 2023. The company used approximately $17.7 million in operating cash during the first quarter of 2024. Cash and cash equivalents totaled $74.1 million as of March 31st, 2024.

This includes the $25 million from the registered direct offering announced on March 25th, 2024. This investment extends our cash runway beyond our previous guidance of mid-2024 into the second half of 2024. Now I'd like to turn the call back to Vimal.

Vimal Mehta : Thank you, Rich. I'd like to add that, in the coming weeks, we plan to attend several upcoming investor healthcare conferences and look forward to continuing our discussions. We would now like to open the call for questions. Operator?

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