Aptinyx Inc.
Q1 2020 Earnings Call Transcript

Published: 15 May 2020

[Operator:]

Hello, good afternoon and welcome to the Aptinyx First Quarter 2020 Financial Results Conference Call. At this time, all participants are on listen-only mode. Following the formal remarks, we will open up the call for your questions. Please be advised the call is being recorded at the company’s request.At this time, I’d like to turn the call over to Nick Smith, Senior Director of Corporate Development and Investor Relations at Aptinyx. Nick, please proceed.

[Nick Smith:]

Thank you, operator. Good morning, everyone and thanks for joining us on today’s conference call to discuss Aptinyx’s first quarter 2020 financial and operating results. Our press release describing financial results and recent highlights is now available on our website.Before we begin, I’d like to welcome two research analysts who recently initiated coverage on the company, Ram Selvaraju from H.C. Wainwright and Myles Minter from William Blair. We’re glad to have you both on the call. Today in our call, Norbert Riedel, our President and Chief Executive Officer will review our business and clinical progress, followed by Ashish Khanna, our Chief Financial Officer and Chief Business Officer who will review the financial results. In addition, Andy Kidd, our Chief Operating Officer and Catherine King, our Senior Vice President of Clinical Development are with us for the Q&A portion of the call.I’d like to remind everyone that statements made during this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially. Any forward-looking statements are made only as of today and we disclaim any obligation to update these forward-looking statements. Please see the forward-looking statements disclaimer in our financial results release issued this afternoon and the risk factors in the company’s current and subsequent filings with the SEC.It’s now my pleasure to turn the call over to Norbert.

[Norbert Riedel:]

Thank you, Nick and good afternoon everyone. We appreciate you taking the time to join us on our call today. And we hope you and your loved ones are all safe and in good health. As we discussed at length during our most recent calls only 45 days ago like so many others throughout the industry, our research and development efforts have been impacted by the COVID-19 pandemic.In addition to the temporary suspension of new patient environments in three of our four ongoing Phase 2 studies, we have made operational adjustments to ensure the health and safety of patient of the personnel involved in conducting our studies and of our employees. This type is necessary and responsible adjustments, I am very pleased with the adaptability of our team and importantly with the recent progress that we have made.Let's start with our Phase 2 exploratory study of NYX-783 in post-traumatic stress disorder. We’re pleased to have been able to continue new patient enrollment in this study, even during the escalation of the COVID-19 pandemic.As you may recall, we’re targeting enrollment of approximately 150 patients to evaluate the effects of NYX-783 across a wide range of symptoms experienced by people with PTSD.We have been working closely with our investigator sites since the outbreak of the pandemic to ensure patient continuity in the study and on necessary basis, we have made certain accommodations for site and patients such as virtual participant follow-up.Of course, we’re carefully monitoring and recording any deviations from the original protocol to be in a position to assess any impact the pandemic might have on the data from this study. We’re really encouraged by the continued enrollment and we have now achieved over 90% of our targets. Accordingly, we intend to complete enrollment in the coming weeks and anticipate reporting data in late 2020.I’m very proud of the terrific partners our team has made, especially in light of this given circumstance. We’re also very thankful to the site investigators and patients in this study for their persistence and commitment. Let's move on to NYX-2925 which is in Phase 2 clinical development in two chronic pain indications, painful diabetic peripheral neuropathy, and fibromyalgia. We initiated a Phase 2b study in each of these indications to validate the positive safety and efficacy signals that we observed in our prior Phase 2 studies.As you know, we made the decision in late March to temporarily suspend the enrollment of new patients in both of these ongoing studies. We continue to monitor the situation very closely and maintain active dialog with our sites and CROs to determine when it is appropriate to resume enrollment. As you can imagine, we’re eager to get these studies restarted efficiently as soon as we determine that it is responsible and in the best interest of patient safety and data quality to do so.We will provide more guidance on the resumption of these studies and the anticipated timing of data readouts at a future date. Finally, let's touch on NYX-458 for the treatment of cognitive impairment associated with Parkinson's disease. Due to the particular risk posed by COVID-19 to this patient population, we made the decision in late March to suspend the enrollment of new patients in this study as well. We’re very excited to evaluate the potential cognitive benefits of NYX-458 in patients based on the very compelling results in non-human primates.However, we’re keenly focused on patient safety in the current environment and recognize that the delay imposed on this study may be more extensive. We will provide updates on our plans and timelines for this program at a future date.Across our studies, we’re working through the necessary consideration to determine when and how best to efficiently restart enrollment with our top priorities being patient safety and data quality.The specific considerations vary across the studies based on the risk factors posed by COVID-19 to each patient population. We’re also evaluating study visits and procedure requirements to determine what is most appropriate for each indication and study. In addition to these factors that vary across our patient population, we’re taking into consideration the specific operating conditions at the site level, which vary depending on the type of site and regionand how these conditions may affect each site conduct of the study.We expected careful attention to all of these elements will enable us to resume enrollment responsibly. Overall, I'm very proud of the work our team has done to make the necessary adjustments to continue our forward momentum across all programs. And importantly, our strong financial position enables us to make these decisions without compromising our long-term strategic goals.With that, I will now turn the call over to Ashish to review our first quarter financial results.

[Ashish Khanna:]

Thank you, Norbert. Despite the challenging environment, and impact to our business from COVID-19, we’re running the company efficiently and we’re fortunate to have a strong balance sheet bolstered by our financing in January, which brought in net proceeds of $33 million. We anticipate our current cash will support us to fund our operations into 2022 and to deliver readouts from multiple programs.For the Q1 numbers, starting with the balance sheet, we ended the first quarter with $121 million in cash and cash equivalents compared to $98.8 million at the end of 2019. Revenues for the first quarter were $0.8 million, compared to $0.9 million for the same period in 2018. These revenues are related to our research collaboration agreement with Allergan, which we expect to come to its contractual conclusion this year. Importantly, we’re not reliant on these revenues to fund our operations.With four programs in clinical development and a strong research pipeline, the majority of our spend was focused on research and development. R&D expenses were $11.1 million for the first quarter, slightly less than the $12.5 million in R&D expenses for the same period in 2019.We do expect R&D expenses to decrease during the enrollment suspension periods for our clinical studies and of course to ramp up again had a recommitment of enrollment. We reported G&A expenses of $4.9 million for the first quarter, compared to $5.7 million for the same period in 2019. The decrease of $0.8 million was primarily driven by a decrease in legal and patent related costs. Finally, our net loss for the first quarter was $14.7 million, compared to a net loss of $16.7 million for the same period in 2019. With that, I'll turn the call back over to Norbert.

[Norbert Riedel:]

Thanks, Ashish. Before we open the call up for questions, I would like to express our sincere gratitude to all those in our community who are working tirelessly to limit the spread of the Coronavirus and especially to those healthcare workers on the frontline. I would also like to express our appreciation to the patients enrolled in our studies as well as to be clinicians and clinical site partners assisting us with ensuring the safety of these patients.While we’re undoubtedly faced with challenges related to the COVID-19 pandemic, we’re confident in the steps we have taken to mitigate certain clinical study with and believe the cash we have on hand can enable multiple important clinical data readouts across our pipeline.We will be happy to begin taking your questions now.

[Operator:]

[Operator Instructions] Your first question comes from Ram Selvaraju from H.C. Wainwright. Your line is open.

[Ram Selvaraju:]

Thanks very much for taking the questions. Can you hear me?

[Norbert Riedel:]

Yes, Ram we can hear you well.

[Ram Selvaraju:]

Okay, great. I just wanted to first of all start off by asking a little bit for a little bit of additional contextual information around the PTSD trial outlook. I was wondering if you could walk us through some of the secondary efficacy outcome measures that are being used in this study, and maybe give us a little bit more color on which ones you consider to be most likely to be clinically meaningful, assuming you see an effect on them. So for example, and I know you're using the PCL5, the PSQI and a couple of others, but if you could maybe point us to the ones that you think are most likely to be important?

[Norbert Riedel:]

Okay, well, Ram first of all, it's a pleasure to hear you on the call. I appreciate the question. As Nick mentioned at the beginning, we have the benefit of having testing as well as educate on the call as well. So I'm going to engage the team here. I kick it off by reiterating what I said previously namely that the PTSD study, as you just alluded to is an exploratory signal finding study that guides further development. And therefore your question is a very relevant question as to what kind of signals are you looking for and expect to see. So I have that kicked off by Andy to give you a little bit of sense of how we look at that.

[Andy Kidd:]

Yes, thanks Norbert and thanks, Ram. It's an interesting question. I do think though, it's quite difficult to give you astraightforward prioritized list of the efficacy endpoints because any study like this, we've got very limited real estate to work with in terms of the patients, the sites, and what it's practical to measure. And so we don't include endpoints that we don't think are critically important. And so all of the efficacy and safety measures that we've included serve slightly different purpose. So whether as you mentioned, the PCL5 or the CAPS-5 which is our primary endpoint.The PSQI there's a whole range of different endpoints in there. I think perhaps the way we would look at it is a little different, which is that as we look across the different things that we're measuring, what we're looking for is a pattern of response to the drug. That makes logical sense. And so that doesn't mean there's any one endpoint. I would tell obviously as the primary endpoint, the CAPS-5 we think is particularly informative. That's why it's the primary endpoint. But I think your question was specific to secondary endpoints.It's more of helping to reinforce a pattern of activity that we see. And I think that's why clearly a number of domains are covered by those endpoints. Some of them are patient reports, and some of them are clinician reported. And that's more the way we're looking at it that there will be a pattern or a pathway if you like through those different measures that together kind of form a coherent story about what the drug can do.

[Ram Selvaraju:]

Okay, that's very helpful. I was wondering also, if you could comment on the development pathway for PTSD, assuming the Phase 2 data is sufficiently positive to contemplate moving the drug forward down that path. And in particular, what the outlook is for A, non-dilutive funding from sources that would potentially have an interest in seeing an effective drug for PTSD and B, if there might potentially be an accelerated route to regulatory submission in this indication, given the nature of the unmet medical need?

[Norbert Riedel:]

Okay, Ram. Great. So there are several aspects or several parts to your question. Look, I would say that what we have done in the past is to engage with the agent as we move compounds into clinical development Phase 1, Phase 2, Phase 2b. In the case of PTSD, our goal is to have the data set that MD describes, P1 that will be a logical discussion point with FDA as to how we can then build on the observations and findings we’re making with respect to informing a next clinical studies as follows the exploratory study that is currently in its final stages.So that will be very much a dialog with the agency, and one in which we hope to actually have a degree of flexibility because there has not been in the post-therapy and PTSD in more than 10 years, the available therapies are exercised to treat fundamentally, the depression symptoms of PTSD, so there is a tremendous need and hopefully this is a path forward with a mechanism of action that we believe is particularly relevant to PTSD sufferers.With respect to funding, Ashish has actually provided that perspective multiple times and us saying that we’re typically well funded to actually conduct the studies that we plan to do. In the space of PTSD and Parkinson's, we, I think have all the capabilities or can easily build the capabilities to take those all the way to commercialization as that would include PTSD in an indication like chronic pain, where ultimately we’re looking at it tremendous efforts to commercialize talk like that globally. I think we understand our limitations and are open minded at the right time with a high value proposition to consider how we can really expedite that to the finish line.But it depends on the compound and in PTSD, I think we’re very confident that we have the in-house skills and capabilities to proceed with clinical development on our own for quite some time.

[Operator:]

All right, so your next question comes from the line of Myles Minter from William Blair. Your line is open.

[Myles Minter:]

Hi, everyone. Good to hear everyone's voices and thanks for taking the questions. Just on 783, I'm wondering whether the proportion of patients that you expected to respond to placebo in stage one of that trial has actually been realized, now that you've gotten or over enrolled, and do you expect that placebo response to sort of change during COVID-19, I've just been hearing specifically in psychiatry that patients may even have rights or access to telemedicine and so patients might be actually having more physician contact and responding better throughout this period. Just curious on your thoughts there?

[Norbert Riedel:]

Great, Myles, a very warm welcome to you as well. It's great to hear your voice and welcome to all first call. I think I'm going to ask Catherine kick-off that answer and then follow it, maybe round it out a little more. Catherine, if you could maybe take the first stab at this?

[Catherine King:]

Sure. Thank you. So we’re carefully watching the impact of COVID-19 across both operations and results in the PTSD study. We remain blinded. So at this stage, I won't comment on the placebo response there. But I will say that I think we are making sure that we collect data that allows us at the time of analysis to be able to both investigate and perhaps describe differences that we might observe related to COVID-19 perhaps patients who are enrolled during this time versus others. So I think we're well positioned to be able to interpret this data taking into account the impact that COVID-19 might have. Andy?

[Andy Kidd:]

Yes, definitely agree. I think Myles you can argue lots of different ways what the impact of COVID-19 might be, and perhaps all of the above are true to some extent for different people in different environments. And so I think we're really focused on trying to complete the study as Norbert mentioned with the right focus on patient safety and doing what we can to ensure data quality and we will know eventually, if any of these theories turnout have an impact or not. But I think like Catherine said, we're just being very scrupulous about making sure that we collect all the relevant data so that we can interpret it correctly.

[Myles Minter:]

Okay, that's certainly fair. Then just curious on the 10 and the 50 milligram initial dose choices, that predicted in your effective range from your preclinical studies, particularly your few conditioning ones, and then or is it similar to something like the Phase 2a trial of 2925 in DPN where we actually saw the highest dose maybe fall outside of that therapeutic index? Just wondering what to expect there? Thanks.

[Norbert Riedel:]

Yes, so great. So we’re pretty, pretty methodical and follow in how we arrive at looking at the right stories in our first in-patient studies. And so, Myles in the case of 783, it is validated by doing extensive preclinical work and measure brain exposure in these various animal models that correlate with optimal effect sizes or efficacy in these models.And then we do of course, single and multiple ascending dose studies in healthy volunteers in clinical Phase 1 study.And in every single case with every compound we have, we measure CSF Cerebrospinal fluid as a surrogate for brain exposure. And then correlate the levels of brain presence of our compound with the behavioral models in which we saw the most optimal effect with respect to efficacy in these animal models and, and that's how we then bracket if you will, the doses we select. So the 10 and the 50 here were selected that way that is completely uncorrelated to the doses that we had in the DPN study as an example, where we measured 10, 50 and 200 because these are independent compounds and independent behavior models in different indications.So there is no, we're guessing from one compound to another. Each compound is thoroughly assessed in its own context, all the way from preclinical to Phase 1 to brain exposure and CSF. And even then we actually look at a range to be within a, I think pretty accurate assessment of where we should see human efficacy as well. So that have been the process for 295 and the process for 783 and 458 as well.

[Myles Minter:]

Okay, thanks for the color. I'll hop back in the queue.

[Norbert Riedel:]

Thank you, Myles.

[Operator:]

Next up, we have Marc Goodman from SVB Leerink. Your line is open sir.

[Marc Goodman:]

Hey guys, first question is on the PTSD study. If you're going to be finishing up in the coming weeks enrollment,why are you pointing to late in the year for the data, just given how long the study it was couple of months, I just would have figured we might be able to get it in the third quarter. And then second of all, can you remind us of the Allergan collaboration and just where we are and what's next, what we should be expecting? Thank you.

[Norbert Riedel:]

Yes, let me just kick it off or maybe, maybe I have Andy kick-off the PTSD question on why does it take, why are we providing the guidance providing and then I can touch on the Allergan or Ashish could touch on the Allergan.

[Andy Kidd:]

No, thanks Marc. So that’s a good question. So just to kind of in a high level go through the timing, it's a nine-week process in the study including over a week of follow-up. And then of course, we have to go through the process of cleaning up and checking the data before we can lock the database. And we're quite focused on making sure that that happens in a robust way. And some of that requires interaction websites and may take a little while in this environment to do that.We also then, of course, as you know with the study design and all the different endpoints once will allow enough time to fully analyze and make sense of the data. So I think end of the year is a reasonable timeline given all of that, when you sort of put all three of those steps together.

[Ashish Khanna:]

And then hi Marc, it’s Ashish. With regard to the Allergan collaboration. That's a collaboration that started when we first launched the company back in 2015 and it's a collaboration of a joint effort, jointly funded effort that has gone very well for both parties, and has been quite productive for both parties. It will come to its contractually predetermined conclusion this year and continues to go well on the pathway toward what we expect to be a straightforward conclusion. The close of the AbbVie acquisition of Allergan last week has not resulted in any deviation from that perspective or expectation on our part. We're happy to be partnered with the new AbbVie in the same way that we've been with Allergan on that collaboration front.

[Marc Goodman:]

Thanks.

[Operator:]

Next question comes from Charles Duncan from Cantor Fitzgerald. Your line is open.

[Charles Duncan:]

Thank you, Norbert and team probably too early for high fives but congrats on the progress and the PTSD trial. I had a couple of questions on the pipeline and then one for Ashish. First of all, regarding the 783 study in PTSD, you've done good job in addressing questions regarding call it the patient quality and what you're doing to keep track of the quality of that data. But have you seen any geographic changes in terms of enrollment and maybe going back to Myles question. Have you seen increased interest by investigative sites to enroll patients? Is it the case that PTSD may be on the rise? Or would you anticipate that maybe a longer-term impact of COVID-19?

[Norbert Riedel:]

Great question. Thanks Charles. I'm going to hand that to Catherine to reply.

[Catherine King:]

Yes, we do see some differences. Geographic is one factor, but I think we also see a difference in terms of the type of investigators that we’re working with. Certainly, major academic medical centers, large hospitals, they’re not able to persist doing clinical research in this setting because they have to shift their patients, their focus to patient care. On the other hand, community centers that are more focused on research are able to continue operations during this time.And those are the sites that we're seeing being able to effectively operate, effectively take precautions against COVID-19 exposure and again provide follow-up for patient visits and procedures as they're required by the protocol. So those are the sites that we see that are able to continue operating. With respect to interest, I think our inclusion, exclusion criteria are looking for folks who have PTSD in their medical history as opposed to new instances. And so I'm not sure that we're necessarily seeing a drive based on COVID.But we’re seeing again the ability of sites who are not encumbered by patient care to be able to continue to do the research at this time.

[Charles Duncan:]

Maybe not a drive, but I guess increased expression of the symptoms is what I was wondering maybe go to? Yes.

[Catherine King:]

So there is a process in the screening criteria, where we’re looking for sort of not a flare or not in a temporary increase in those symptoms. It's meant to sort of make sure that we've got a good baseline that we can measure from, so that we can be successful in the trial. And those procedures have been in place throughout the trial and continue to be relied on as we're enrolling patients now.

[Charles Duncan:]

Very helpful, Catherine. And then with regard to next steps, I know there might be a couple of different alternatives, but just driving on and assuming success in the trial, what kind of timeline could it be to turn around a Phase 3 protocol? Surely you've thought a lot about this, could you meet with the agency maybe in the first quarter? Could you see a next study be started by mid-year or next year? Do you think that's reasonable?

[Norbert Riedel:]

So Charles, I think it's probably premature to answer that question because what we typically do is we’re guided by the data we generate, as to our plans with respect to the next study and then how to engage the agency in discussing those plans. We have found it most helpful to do that truly based on data as opposed to speculation but when you say,do you have Phase 3 plans, just as a reminder, the study is an extraordinary finding study. And so I do not want to misguide in believing that the obvious next step is that we jump straight into a Phase 3 study because it is quite possible that we would do a more conventional Phase 2 or Phase 2b study to be determined. I just don't want to set expectations that might be extremely difficult to achieve.

[Charles Duncan:]

Yes, I get it. I'm just thinking about the unmet need and maybe the stresses we all feel.

[Norbert Riedel:]

Sorry, I don’t know, I look at you. And the unmet need is enormous. And so I look, I hope we can convey that but we are still operating in a highly regulated environment. So who knows?

[Charles Duncan:]

Sure.

[Operator:]

And your next question comes from Ritu Baral from Cowen. Your line is open.

[Ritu Baral:]

Good afternoon, guys. Thanks for taking the question. Obviously, I did follow-up on Charles question a little bit. I mean outside of the screening process, just looking at the CAPS-5, most of the items of course are related to what was for the PTSD trial. Obviously, there most of the items related to event in question, obviously referring to the triggering event for PTSD, but there are a fair number of items that seem to correspond to more anxiety driven questions, maybe depression driven questions, I'm thinking like Item 9, Item 11, et cetera, et cetera. Is there anything that you can do to address potential confounding or changes in the individual items to the CAPS-5 or you thinking about any sort of perspective subscale analysis or anything within there, that might mitigate any exaggerated stress responseas far as like prospectively?

[Andy Kidd:]

Hey Ritu, it’s Andy and thanks for the question. I think it does come back a little bit to the question that Ram asked at the start, which is kind of how do we piece together all the data from the study? Because, what you just pointed out, it may be one possible inquiry. There's lots of I think ways, the different patterns can manifest in the data is the nature of these scales and the CAPS-5 has the primary.So yes, we’re thinking through, what are some analyses that would make sense to pre-specify to do that might help us understand if there was an impact from this period of time. And if so, what that was and we do have the ability specifically with respect to depression, and anxiety of some other secondary endpoints that could help corroborate if there's an issue as opposed to relying on one or two individual items in a scale that's really validated as more of an overall set of subscales and overall scale than particular line item.So I think it goes back to that point of looking at the data in totality, and looking at the sort of interesting pathways or patterns that exist throughout the secondary endpoints to help us make sense of what's going on. In addition to that, I think as Catherine said we're collecting data, and also feedback from the sites to understand what are they seeing with patients on grand level. And so that'll help us interpret as well.

[Ritu Baral:]

How frequently are you making these assessments and also I wanted to follow-up on Norbert’s comments aboutvirtual participants follow-up and assessments. Are you talking about specific primary and secondary endpoint assessments done over telemedicine where before they were not?

[Norbert Riedel:]

Catherine, sorry yes, thank you Ritu. And on virtual here, that needs to sort of like delegate the question. So Catherine could you take that?

[Catherine King:]

Happy to do it, this is the revised operation, Norbert was talking about before, we are talking about virtual patient follow-up, that does mean that where components of a study visit could be done virtually in a way that gives us good quality data. So we aren't doing these things without sort of discussion about the validity of the data that's being gathered. We’re suggesting that it would be done with a video not just with a phone as possible. But ways to gather that data that allows us to do it with a telemedicine or a phone or a video has been made an option to the site into the patient. But we've also required in clinic follow-up for safety. Some of the other study procedures do require in-person presence. And so those two things together have allowed us to make some accommodations for the way that patients might visit the site.

[Ritu Baral:]

How are you accounting for? How are you accounting for compliance with study medicine more virtually?

[Catherine King:]

Yes, so not much different than we had been in the trial already. We had a very careful compliance support and assessment process within the trial. That remains in effect and fully operational during this time as well. So there hasn't been much of a change in our ability to measure compliance in that trial.

[Ritu Baral:]

Got it. Great. Thanks for taking the questions.

[Norbert Riedel:]

Thank you, Ritu.

[Operator:]

All right. Your next question comes from the line of Laura Chico from Wedbush. Your line is open.

[Laura Chico:]

Hey, good afternoon. Thanks for fitting me in here. I just have two, so I guess continuing on that last line, do you have any sense in terms of how retention in the 783 study might have been impacted by the pandemic. And I guess that, specifically, I'm trying to understand how might this have changed relative to your original assumptions? And then I have one follow-up.

[Andy Kidd:]

Yes, thanks Laura. It’s Andy. I think that, first of all it is straightforward. We've not seen an impact on retention, on early termination in terms of before and after. I think, of course, there's one or two patients that have withdrawn from the study, citing the current COVID situation is a reason which is entirely I think to be expected, but at the higher level, there's always patients that withdraw from studies and at the higher level, we've not seen a difference pre-post. And I think across the whole study, that particular measure is tracking very much in line with what we were expecting to see.

[Laura Chico:]

Okay, great. And then maybe a more strategic question high level. I guess with 783 data on track then to arrive by year-end 2020. And you talked a good deal about kind of the criteria for restarting, I guess is there a possibility that we might only see one or two of the earlier efforts restart? And I guess the only reason I asked is given that COVID has perhaps changed recruitment feasibility in some therapeutic areas, would you reconsider reprioritizing some of your clinical efforts at this stage?

[Norbert Riedel:]

So I can tell you that at this point, we’re as ambitious and as eager to start the Fibromyalgia study as we’re starting the DPN study, because I assume that once clinical study sites are fully confident that they can provide the appropriate and safe environment, it should actually enable both those patient population to go back into the clinical trial, the one that perhaps concerns us a little more is the Parkinson’s study, because it is an elderly population that is particularly vulnerable to COVID-19 and patient safety is of course, the major concern there.So we have to monitor that carefully, right which is why I said in my written remarks that the delay may be a little more extensive. Look when I engage with my peers, when we engage with other physicians and Chief Medical Officers and so on. If there is a sense that I sometimes fear that that patient population might not be suitable for or willing to conduct the study, unless there is a vaccine that protects them, that could push us quite a way out. Now, I don't know if that's ultimately going to happen that way. But I clearly have more concerns about the elderly patient population in a Parkinson's environment as an example. Then I have about Fibromyalgia patient population, which is generally a completely different profile.

[Laura Chico:]

That's very helpful. Thank you.

[Operator:]

Your next question comes from Gary Nachman from BMO Capital Markets. Your line is open.

[Gary Nachman:]

Hi guys, good afternoon. Just following on the last question on 2925 specifically, describe the ongoing communications you're having with the sites and how quickly the DPN fibro studies could reinitiate, when things open up a bit?

[Norbert Riedel:]

Gary thanks for the question. I'm not going to comment on how quickly other than to say as quickly as possible would be my preference, but it's we did not, I don't know based on which I can give you better guidance, because it is still a little bit too uncertain at this stage. But to the first part of your question, Catherine can maybe comment on the earlier part of your question. Catherine, could you recall that and can you follow-up?

[Catherine King:]

Yes. So I guess the answer that I would give is similar to our experience with PTSD. We’re seeing sites that are able to operate if they are more community based and research focused as opposed to part of an academic medical center or part of the hospital. And so I think we will use what we've learned from the ongoing PTSD trial to consider how site operations play a factor in when we're able to restart. But we do have close communication with those sites and are able to see where they're able to operate.

[Gary Nachman:]

Okay, and I'm just curious like in terms of those communications, how competitive you think the environment is going to be when things open up from the pandemic because so many companies are going to want to reinitiate clinical studies. So do you have a sense of where you're going to fall relative to the competition with that?

[Norbert Riedel:]

So that's hard to answer sites because we have not, we don't really have visibility to that, but I will tell you that we have been really thoughtful in making sure that number one we remained and maintain regular dialog with the sites we see various groups we’re working with. We have clearly signal that we will be ready as soon as they’re ready. We have the means to conduct these studies. And so I think the relationships that we have nurtured over the years will be very, very helpful in making sure that we’re as high up on the totem pole as we need to be to actually find ourselves well placed in what will undoubtedly be a more competitive environment and also an environment where I think the throughput is going to be slower because of all the numerous precautionary measures that the site needs to take.And so I think that adds on to I think the concern you expressed that it might be difficult to basically go back to the previous level of speed and throughput, but I pretty, pretty confident that we’re well placed and are positioned to be ready to go as soon as we can.

[Gary Nachman:]

Okay, that perspective is helpful. And then lastly, Norbert, while number of these clinical studies are on hold, what else are you doing with your earlier stage pipeline? Can you spend more time trying to evaluate and accelerate earlier stage compounds doing some preclinical work?

[Norbert Riedel:]

So we actually don't often talk about that. And I'm glad to bring up the question. We’re literally in an ongoing process and have been for years now to basically clean and qualify compound. I think we've mentioned on occasion, we have synthesized in profiles and characterized altogether more than 1,000 compounds since we shifted to making small synthetic molecules, that effort is one that is very important to us because we are a pipeline company, not a one compound company. It is unfortunate, however that at least for the last several weeks, the laboratory has been shut down because we basically have to follow the same orders everybody else did. And that has of course, had an impact on how much we can do. But as a general answer, yes we’re profiling compound. It is actually also part of our research collaboration agreement with Allergan now AbbVie and if anything, we have been slowed down by the mandatory shutdown of the research facilities that we have here in Illinois.

[Gary Nachman:]

Okay, that's helpful. I mean you in the past you talk a lot about the library. So it's good to hear that that's still progressing. Okay, thanks guys.

[Norbert Riedel:]

Yes, thank you, Gary.

[Operator:]

And we also have a question from Jessica Fye from JPMorgan, your line is open.

[Yuko Oku:]

Hi, this is Yuko on the call for Jessica. Thank you for taking our questions. I have a couple of questions regarding the PTSD program. First question is on the baseline demographics. Do you think the enrolled population will be similar to the population enrolled in the SSRI studies, what characteristics could be different based on exclusion inclusion criteria and second, do you believe you need to run two controlled Phase 3 studies to support approval?

[Norbert Riedel:]

I’m going to have Andy kick it off.

[Andy Kidd:]

Yes, thanks, Yuko. So the baseline demographic versus the SSRI studies, I mean those studies were conducted quite a long time ago. So for example, back in those days when those studies were conducted, people talk about a military population, they talked about Vietnam Veterans or (inaudible) veterans. Now of course, in 2020 we talk about veterans of Afghanistan and Iraq.I think there's also an increasing awareness and diagnosis of PTSD for other sources of trauma, particularly sexual assault and things like that. So I think that that baseline demographics are difficult to compare with studies that took place not long ago, I think what we've always said is we’re trying to appropriately limit our patient population, but not limit it to large extent. So we do want to have a diversity of types of trauma, age group, time since trauma, et cetera. But introducing more complicated variables such as childhood trauma, complex PTSD things like that and coming to those conclusions, we've looked back not only at SSRI studies, but other studies conducted in PTSD more recently by other sponsors, and try to learn as much as we can, what lessons have been learned in those studies.

[Yuko Oku:]

Great, thank you. And then the second part of the question about the two controlled Phase 3 studies?

[Andy Kidd:]

Right. So again, as Norbert said earlier, the rest of that development program is something that will be driven by the data that we see and discussions with the agency whether it's two Phase 3 studies, two pivotal studies or a more expedited fast market. I think it's something that remains to be seen based on agency discussions. I do think the point that came out of the Q&A is important to remember that this is an area of very high unmet needs. And one that is certainly increasing in terms of incidence and prevalence. And I think in terms of the surrounding social and medical morbidity.

[Yuko Oku:]

Thank you so much.

[Operator:]

And we have another follow-up question from Ram Selvaraju from H.C. Wainwright. Your line is open sir.

[Ram Selvaraju:]

Thanks. Just very quickly, I was wondering we have to kind of prepare for all kinds of unexpected situations, given the nature of this pandemic. Assuming that there might potentially be future flare ups that could possibly causerestriction to be reimposed? Are you thinking about potential contingency plans, particularly with respect to possible additional studies that you would undertake in the future and potentially conducting those in countries that may have managed to control the Coronavirus pandemic significantly better than unfortunately seems to have been the case here in the U.S.?

[Norbert Riedel:]

This is a really great question, Ram. So, look first of all, I sincerely hope that we will not have a resurgence or a massive increase as some project as flu season comes back to us in the October, November timeframe. But look, I also believe that when we talk about sites becoming ready again to actually do studies, that they will not do that in a COVID-19 free environment right because COVID-19 will be with us for quite some time. And so whatever precautionary measures the sites are taking with respect to PPE, screening, testing, whatever that is are probably going to be helpful, even if there is a resurgence, unless it is a catastrophic resurgence that's actually literally pushes us all back in another unprecedented wave.So let's hope that that's not going to happen. With respect to conducting studies elsewhere, I hear you loud and clear that other countries seem to have gotten to a more normal or a more stable place much quicker than we’re struggling with here in the States. As an organization, we have not conducted clinical studies ex-U.S. up to this point. I would be perfectly open minded to do so. As long as I can believe that appropriate patient population that we are actually looking for readily available in other geographies, because that will be the driving force behind it. I have no geographic preference per se, and would certainly be open minded to looking at those alternatives like I'm sure other companies are doing as well.

[Ram Selvaraju:]

Thank you.

[Operator:]

And another follow-up from Charles Duncan from Cantor Fitzgerald. Your line is open.

[Charles Duncan:]

Yes, thanks for taking the follow-up. Just one pipeline question and then one question for Ashish. Regarding the pipeline question 2925 in chronic pain, understanding that there's really two cohorts being enrolled in those studies before and after COVID-19. But I'm wondering if you could speculate on well, first of all tell us whether or not those patients remain on drug and if so, if you could speculate on the potential impact that longer administration period may have in terms of driving effect size with drug arm activity and perhaps reduced control arm or what do you think could happen out of that first cohort, if they remain on drug?

[Norbert Riedel:]

Okay, so Charles we mentioned on our last call that why we have suspended the studies, we are actually allowing patients in this study to actually complete a set of needs, say on studies work, study is a well defined 12-week study and the patients complete the study and then start. And we will see just like with PTSD, where the question is, is there a difference between those patients that completed the study before and after, if we refer to COVID-19, then we wouldapply the same criteria there and see what we did to, as you remember is to say look, let's stop these studies, being enrolled in these studies from now because they have a very different I would say goals that we’re pursuing because they are meant to be studies that validate our previous results in two studies, we did one in Fibromyalgia, one in DPN.They typically ideally can serve as registration trial. And therefore, with respect to data quality, I have a much, much higher level of sensitivity than I have in the PTSD study. I have the same sensitivity and knowledge for patient safety, but certainly for data quality, we actually very much looked at that, when we decided to suspended all meant in the study and so we will treat but the patients will not stay on once the study has completed its 12-week.

[Charles Duncan:]

Okay, that's helpful. And can you give us an estimate even broad in terms of the percent patients enrolled in each of those two studies in that first cohort before COVID-19?

[Norbert Riedel:]

No, actually, we have not done that as a matter of principle. The first time we actually have done it was this PTSD because that was so far along that we wanted to make sure that you understand the rationale as to why we say this far in, let's basically take it all the way. But generally speaking, we do not actually report on status of enrolment in any of our clinical trials.

[Charles Duncan:]

Okay, okay. And then quick question for Ashish…

[Norbert Riedel:]

Do you have a question for Ashish, yes okay good.

[Charles Duncan:]

Yes, quick question for Ashish understanding that cash spend on a quarterly basis is a function of enrollment in part. And I know it's hard to guess when enrollments going to start back up. But when you look at that $11 million R&D spend in the first quarter, was most of that before you stopped enrollment and can you give us some kind of guideposts in terms of what you'd anticipate that to be in the second quarter?

[Ashish Khanna:]

Sure. Yes, thanks for the question, Charles. Yes, the $11 million in R&D expenditure in the first quarter did reflect pre-COVID-19 escalation and pre-suspension activity. I think that it's fair to say that, as we have put three of the studies on pause, we should expect a decrease in R&D expenditure in the second quarter, I don't know how dramatic it will be and that it wasn't a full on, off switch, both with regard to certain activities and expenditures that still reflect activities associated with Q1, which still needs to be accounted for.But also, as we've discussed in other parts of the call in the Q&A, we have taken steps and measures to remain very closely engaged with our CROs, with our sites. So as to be in a favorable position, when we started as possible. And that means these are ongoing projects. They have ongoing project management costs. So this isn't entirely shut off. We’re very disciplined about our spending, I think as you see, and so I think in the second quarter, given the suspensions of these activities, we should see some decrease but hard to say how much that will be. In terms of looking ahead, our hope is that in the third quarter and the fourth quarter, we're ramping back up to begin enrollment again and while we can't give that guidance based on lack of clarity today, that's certainly our hope. And so I won't be able to give you guidance on those going forward.

[Charles Duncan:]

Okay, Erica, thanks for taking the follow-up.

[Operator:]

All right. I'm showing no further questions at this time. I would like to turn the call over back to Norbert for any closing remarks.

[Norbert Riedel:]

Thank you, operator and thank you all for your questions. It was really great to have as much of an engagement as we've had terrific. We appreciate your time and your attention. Please stay safe, be well and enjoy the rest of your day. Have a good afternoon and good evening.

[Operator:]

Thank you for joining us today. You may now disconnect.