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Business Update
SERENITY III Trial to Initiate 2H22
BioXcel Therapeutics, Inc. (NASDAQ:BTAI) will be initiating the SERENITY III trial of BXCL501 for the treatment of agitation associated with bipolar disorder and schizophrenia, with a focus on its at-home use. The SERENITY III trial will be a pivotal, double blind, placebo controlled single study of BXCL501 60 μg and will consist of two parts. Part I will be very similar to the SERENITY I and II trials and will test BXCL501 in an institutional setting with the primary outcome of change in PEC score from baseline at two hours compared to placebo. Part II of the trial will assess the safety of BXCL501 compared to placebo when administered at home. The company chose the 60 μg dose because that dose separated from placebo at two hours and a large proportion of patients responded, thus the number of patients estimated to need a second dose is very small. The at-home treatment setting is potentially quite large, with an estimated 1/3rd of the 25 million episodes of agitation in schizophrenia and bipolar patients per year occurring outside an institutional setting.
Update on IGALMI™ Launch
During the second quarter conference call, management provided an update on the status of the IGALMI™ launch. The company has initiated contracting talks with group purchasing organizations (GPOs), a process that typically take six to twelve months. There are three national GPOs that represent >90% of the beds in the approximately 1,700 targeted hospitals, and negotiations are currently in various stages with each of those organizations. In addition to the national GPOs, negotiations are also underway with integrated delivery network hospitals (IDNs) and the CMS contract and federal supply schedule submissions have been completed in order to access the state and veteran's administration (VA) hospitals, respectively.
The first phase of the commercial build out has been completed and sales personnel have been deployed to the highest priority targets. The majority of target hospitals have been successfully engaged and multiple hospital systems and IDNs have indicated their interest in IGALMI™.
The early response to the awareness activities and sales messaging has been very positive. Following discussions with target hospitals, the company's understanding of the value proposition for IGALMI™ continues to strengthen. There are a number of challenges with administering an intramuscular injection to an agitated patient, including the use of physical restraints, that increase both the expense and safety risks for hospitals. Thus, an orally administered treatment like IGALMI™ could be an effective means to address those issues and is something that a number of stakeholders are quite interested in.
The company's marketing programs will be ramping up over the next two quarters in an effort to drive formulary adoption and demand. The IGALMI™ digital campaign has launched and has achieved over 100,000 visits to the healthcare practitioner's website. Lastly, the second phase of promotion and the full deployment of the sales team across 70 territories will take place over the next several months.
TRANQUILITY II Results in 1H23
The TRANQUILITY II trial of BXCL501 for the treatment of agitation associated with Alzheimer's disease is continuing to enroll and topline results are expected in the first half of 2023. This trial is focusing on patients in assisted living or residential facilities. The TRANQUILITY III trial is expected to commence in the second half of 2022 and will focus on patients in nursing homes. Both 40 and 60 μg doses are being tested in these trials, which is supported by positive efficacy, safety, and tolerability data in 100 patients in the Phase 1b/2 TRANQUILITY trial along with a recent study of BXCL501 40 μg dose.
Update on Phase 1 MDD Trial
BXCL501 is currently being investigated as an adjuvant treatment for major depressive disorder (MDD). The Phase 1 multiple ascending dose study in healthy volunteers is continuing to progress with the 30 and 60 μg dose cohorts complete. Each dosing cohort consists of 18 healthy volunteers and the 80 μg dose is currently underway. We anticipate data from this study in the first half of 2023. The results will be used to guide dose selection for proof-of-concept studies in MDD patients.
Financial Update
On August 9, 2022, BioXcel announced financial results for the second quarter of 2022. As expected, the company did not report any revenues in the second quarter of 2022. Net loss in the second quarter of 2022 was $37.7 million, compared to a net loss of $27.6 million in the second quarter of 2021. R&D expenses in the second quarter of 2022 were $17.9 million, compared to $13.5 million for the second quarter of 2021. The increase was primarily due to clinical trial costs related to the TRANQUILITY program. G&A expenses in the second quarter of 2022 were $18.4 million, compared to $14.1 million for the second quarter of 2021. The increase was primarily due to personnel related costs along with costs related to the commercial launch of IGALMI™ in the U.S.
As of June 30, 2022, BioXcel had approximately $233.5 million in cash and cash equivalents. We estimate the company has sufficient capital to fund operations into 2025. As of August 8, 2022, the company had approximately 28.0 million shares outstanding and when factoring in stock options a fully diluted share count of approximately 32.8 million.
Conclusion
We believe the company's decision to move forward with the SERENITY III trial is a smart strategic decision as it will help to capitalize on the full market potential in treating agitation associated with schizophrenia and bipolar disorder. In conjunction with that decision, BioXcel has decided not to move forward with an MAA filing in the EU and will instead direct its resources toward the U.S. market opportunity and hold off on the ex-U.S. opportunity until a later time. When the company initiates its ex-U.S. strategy, it will look for a partner that can cover multiple geographies, as opposed to just focusing on Europe, as Japan in particular is a potentially very attractive market in regards to agitation associated with Alzheimer's. We have made no changes to our model and our valuation remains at $90 per share.
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