Aptinyx Inc.
Q3 2019 Earnings Call Transcript

Published: 13 Nov 2019

[Operator:]

Good afternoon and welcome to the Aptinyx Third Quarter 2019 Financial Results Conference Call. At this time, all participants are on a listen-only mode. Following the formal remarks, we will open up the call for your questions. Please be advised this call is being recorded at the company’s request. At this time, I would 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 welcome to Aptinyx’s third quarter 2019 financial and operating results conference call. Before we dive in, I would like to extend the warm welcome to the newest research analyst initiate coverage on the company, Laura Chico from Wedbush Securities who initiated coverage in the third quarter. I am glad to have you join us Laura.As you may have seen, this morning, we announced the initiation of two studies in chronic pain. In this afternoon, we issued a press release with our third quarter 2019 financial results along with business highlights and upcoming milestones. Both of these releases are available on our website under the Investors and Media section.Today on our call, Norbert Riedel, our President and Chief Executive Officer will review recent business and clinical highlights, including the study initiations we announced this morning and then Ashish Khanna, our Chief Financial Officer and Chief Business Officer 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.Before we begin, I would like to remind everyone that the statements made during the conference call will include forward-looking statements under the Safe Harbor provisions 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 today 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 our call today. I am proud of our achievement in the third quarter and the first few weeks of the fourth quarter. In particular on the clinical front, we have accomplished a lot. With the study initiations announced in the press release we issued this morning, we now have three Phase 2 studies underway across the developed pipeline and we plan to start one more very soon. Once we initiate our Phase 2 study of NYX-458 in the coming weeks, we will have accomplished one of our major goals for the year mainly to have 4 Phase 2 studies ongoing by year end, all in areas of significant patient needs. These studies are clinically important to the advantage of our pipeline. I am very proud of the execution by our team to get us to this point. On today’s call, I will focus my remarks on the study initiation and then Ashish will give the financial overview.Now, let’s jump into the details of the Phase 2 studies we announced earlier today. In painful diabetic peripheral neuropathy, we initiated a 200-patient study. We are conducting the study across approximately 20 sites, all of them in the United States. Based on the data from our prior study showing robust effect in advanced DPN patients, we are enrolling patients who have had a longer duration of painful DPN. We are evaluating daily dosing of 50 milligrams of NYX-2925 versus placebo in a parallel design. Importantly, we are not allowing patients to be taking a concomitant analgesic medication during the study as we saw greater separation from placebo in patients in the prior study who were not on a concomitant medication. Hence, we were able to readily recruit these patients suggesting it will not be a hindrance on study enrollments. The primary endpoint is the change from baseline in patient-reported average daily pain over a 12-week period using the 10-point numeric rating scale. And while this is a Phase 2 study, the primary endpoint is consistent with the typical endpoint registration studies for neuropathic pain. So the data from this study should be highly informative for late stage development. We are also evaluating other symptoms as secondary endpoints in the study. Other than extending from 4 weeks to 12 weeks, focusing on patients with advanced disease and not allowing concomitant analgesics, this study is very similar in design to our previous study in this indication. Based on our past enrollment experience, we expect a readout in late 2020 or early 2021.In fibromyalgia, we initiated a 300 patient study with the design that is comparable to the DPN study we just went through. We are using many of the same clinical study sites. The primary endpoint in the study is the change from baseline in average daily pain over a 12-week period on the NIS. We are also looking at several other symptoms of fibromyalgia as secondary endpoint. We are not allowing use of concomitant analgesic medications. The primary difference in this study compared to the DPN study is that the fibromyalgia study has three arms rather than two and therefore 100 additional patients. Given that our prior fibromyalgia study was designed to optimally evaluate neuro-imaging biomarker we did not do robust dose ranging in their study. Therefore, in this follow-up fibromyalgia study, we are evaluating daily dosing across two dose levels, 50 milligrams and 100 milligrams of NYX-2925 compared to placebo. With enrolling more patients in the study, we expect to readout in the first half of 2021, a bit later than DPN.Let’s now briefly discuss NYX-783, which is in development as the therapy for posttraumatic stress disorder, or PTSD. Enrollment of our first Phase 2 study in patients is ongoing and a project reporting data from the study in the second half of 2020, the studies evaluating NYX-783 versus placebo in approximately 150 patients with PTSD. The primary endpoint is the CAPS-5 which assesses multiple symptomatic domains with PTSD across its subscale. We are very interested in the effects in each of these symptomatic domains which will help us characterize the efficacy feature with NYX-783 and inform the next steps in clinical development.And now, let’s touch on NYX-458 which is in development for the treatment of cognitive impairment. We are on the cusp of initiating a Phase 2 study of NYX-458 that will evaluate its safety and efficacy in patients with mild cognitive impairment associated with Parkinson’s disease. We are excited about each of our programs and this one is no exception. Based on our outstanding preclinical data with this compound, we believe NYX-458 could represent a true paradigm shift in the treatment of the cognitive impairment associated with Parkinson’s disease. We look forward to providing further details on the study once it has been initiated.In addition to the progress across our pipeline, I want to mention few other important highlights since our last call. First, I am very pleased that Dr. Rachel Sherman joined our Board of Directors. Dr. Sherman served at the FDA for 30 years most recently as Principal Deputy Commissioner, the agency’s highest position not politically appointed. Second, we have multiple preclinical posters and publications that highlights the remarkable foundational times that underpins our platform. And I am very proud of the work our team accomplished leading to these publications. Third, the positive result from our Phase 2 fibromyalgia study evaluating the effects of NYX-2925 on imaging biomarkers and patient reported symptoms were accepted as a late-breaking presentation at the American College of Rheumatology Annual Meeting. The data was presented at the meeting in Atlanta today and is available on our website.With that, I will now turn the call over to Ashish.

[Ashish Khanna:]

Thank you, Norbert. Starting with the balance sheet, we ended the third quarter with $114.2 million in cash and cash equivalents compared to $150.6 million at the end of 2018. We are in a strong financial position to execute on our pipeline programs and we expect our cash balance to be sufficient to fund our anticipated operations into 2021. On our income statement, revenues for the third quarter were $0.9 million unchanged relative to the same period in 2018. These revenues are related to our research collaboration agreement with Allergan and importantly, we are not reliant on these revenues to fund our operations.As we seek to advance our compounds in development for underserved CNS conditions, the bulk of our spend is directly attributed to research and development. R&D expenses were $11.8 million for the third quarter. This was in line with the $12 million in R&D expenses for the same period in 2018. We expect R&D expenses to increase over the next few quarters with the initiations of the three additional Phase 2 studies Norbert discussed. We reported G&A expenses of $4.5 million for the third quarter compared to $3.8 million for the same period in 2018. The increase was primarily driven by costs related to employee compensation and professional fees to support ongoing business operations. Finally, we reported a net loss of $14.8 million for the third quarter compared to a net loss of $14.2 million for the same period in 2018.With that, I will turn the call back over to Norbert.

[Norbert Riedel:]

Thanks, Ashish. Before we open for Q&A, I would like to summarize where we are in advancing our pipeline of novel CNS product candidate. With NYX-2925, we now have two Phase 2 studies underway, one in painful DPN reading out in late 2020 or early 2021 and the other in fibromyalgia reading out in the first half of 2021. With NYX-783, we are on track to report data from the ongoing Phase 2 PTSD study in the second half of 2020. For NYX-458, the initiation of the Phase 2 study in patients with Parkinson’s cognitive impairment is imminent. We are executing well across our programs. We still have four Phase 2 studies ongoing and expect to have data from these studies over the next 12 to 24 months. Operator, we are now ready for questions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Marc Goodman from SVB Leerink. Your line is open.

[Marc Goodman:]

Yes, good afternoon. Just a few questions about the DPN trial that you are getting going here. So first of all, you talked about advanced patients, can you give us a sense of how advanced I know in the past you have talked about the data was pretty linear with respect to the longer you go the better off the data was in the post-hoc analysis. I would be curious how long that was? And then you mentioned some secondary endpoints you have been looking at, but could you just be a little more specific on which ones you are looking at? And then the third question, you are doing the 50 milligram dose, can you just remind us why you are comfortable with the 50 milligram dose, why not do a little dose-ranging here just given the post-hoc analysis was in small numbers of patients? Thanks.

[Norbert Riedel:]

Okay, perfect. Thanks Marc. We have shared with the audience before that in our analysis of the previous DPN study as you mentioned, we saw a very linear progression in duration of disease and response to 458 which we believe mechanistically makes perfect sense in that over time at chronic disease stage, stage like DPN established a stronger and stronger central manifestation. And so consistent with that data, we will apply here that patients will adapt 4 years or longer of duration of DPN. To your second question, endpoints, the primary endpoint is consistent with what FDA is looking for in these kinds of studies namely average daily pain scores we have secondary pain scores very much aligned with what measured in the previous study. So those would be daily worst pain, pain on walking as the key measure of additional endpoints we are looking for. And then regarding those, just a reminder in our previous study we looked at a 24 store range it was actually a dose ranging study 10 milligrams 50 milligrams and 200 milligrams and consistent result preclinical data we observed that the 50 milligrams dose was the most effective dose it is therefore the dose that have been selected to conduct this study at the most effective dose and that again built on the learning’s from the previous study hence may be one additional point to mention again is that we are not allowing patients to take concomitant medications because based on our previous study we also noted that we see a better response in the absence of ConMed. And we know from the previous study that we can readily find and recruit those patients because of our house of our 300 patients in the previous study were not on ConMed so a really significant population. Mark does that answer your question.

[Marc Goodman:]

Thank you I appreciate it.

[Operator:]

Thank you and our next question comes from the line of Gary Nachman with BMO Capital Markets. Your line is open

[Rob Fay:]

Hi, good evening it’s Rob Fay on for Gary. On fibromyalgia, can you provide any thoughts generally on what kind of clinical profile and improvements on the interests that you would need to demonstrate with 295 to differentiate it from Lyrica?

[Norbert Riedel:]

So I can share with you that for both DPN study as well as fibromyalgia study we have taken a conservative approach in how we power these studies to be able to find in them in the studies what we consider to be specifically significant and clinically meaningful as well as differentiated profiles for the compound in both indications.

[Rob Fay:]

Okay thanks

[Norbert Riedel:]

And may be to just to primary end points here as I mentioned is also average daily pain but in fibromyalgia we havea number of other measures that have to do with fatigue, that have to do with promise out measures of overall quality of life of these patients so a bit more comprehensive than DPN And as you well know, we have established for both fibromyalgia and DPN that 295 is very safe in both patients population with no serious adverse events reported overall in AE profile nearly consistent what we saw in the placebo book.

[Rob Fay:]

Okay thanks and will there be any sort of interim analysis for either the advanced DPN or fibromyalgia trial and then this one is for Ashish how should we thinking about the ramp in R&D expenses now with multiple trials running.

[Ashish Khanna:]

Yes so there will be no interim analysis in either one of these two studies and then with regard to R&D expenditures so we expect that there should be a pick up in R&D expenditures over the next few quarter consistent with the initiation expenses associated with initiating three phase II studies and then it should level off and support our guidance interest and guidance that our current cash should fund our anticipated operations in execution of these programs into 2021.

[Rob Fay:]

Thank you.

[Operator:]

Thank you and our next question comes from the line of [indiscernible] Cowen. Your line is open.

[Unidentified analyst:]

Hello thank you for taking my question just a couple of questions on the phase II fibromyalgia trial that you initiated in terms of pace of enrollment how long do you think it will take finish enrolling that study and you had mentioned that it will take place in most of the same sites as the DPN study how many sites overall and will also be exclusively done U.S. thank you.

[Norbert Riedel:]

Great. I'm glad you asked that because I omitted to mention that. Yes. Fibromyalgia study will also be exclusively conducted in the U.S. we offered a timeline that says that we should be able to [indiscernible] out the study in the first half of 2021 that is our current projection if the enrollment we notice that that is not consistent with our projected time line of today we would of course make you aware of that in the course of the study but for now that is our working assumption based on all the parameters we have evaluated and for DPN I already mentioned to you it will be the end of 2020 or the beginning of 2021 because it is a smaller study but likewise a study exclusively done in the U.S.

[Unidentified analyst:]

Thank you

[Operator:]

Thank you and our next question comes from Laura Chico with Wedbush Securities. Your line is open.

[Laura Chico:]

Yes thanks good afternoon and thanks for taking my questions I have a couple on 793 of PTSD and I might have missed it so I apologize everyone here but could you give us an update on where you're at in terms of enrollment progress in 793 and just curious I think you talked about perhaps readout coming towards the earlier part of second half of 20 any updates on that front.

[Norbert Riedel:]

And so enrollment is going well, and it is going as anticipated and therefore we are achieving to the timeline that we offered as second half of 2020 at this time I cannot give you give you any sort of like further details as to when in that second half of 2020 lets get to the study and then on follow up calls we can follow up calls we can probably give little more color in precision but at this point lets say the time frame that we believe is most applicable.

[Laura Chico:]

Okay, that’s helpful and I guess just two more so with data potentially arriving in mid 2020 or I am sorry second half of 2020 could you just remind us on the powering assumptions in the study I know you are using a rather unique design here that incorporates our re randomization but if we could just kind of revisit that criteria and how it impacts your interpretation.

[Norbert Riedel:]

Yes so the study is actually a study that is largely a study for us to do [indiscernible] 150 patients as I mentioned it has two doses of 783 it looks like [indiscernible] subscales of the capsules we use those data points to inform and design the next study we plan to do Andy anything else you want to add to that.

[Andy Kidd:]

Yes, Norbert I think really you are right it is a exploiter study we are looking at a range of different end points and sub scores as well as the total [indiscernible]. So, I think to think of this study is being kind of a binary outcome with a particular powering is not the right way to look at it I think we think its adequately power to provide a signal I think we will look at the totality of the data in examining that signal not only what we find in the cap 5 and sub scores but also safety and other data and proceed accordingly given that this is obviously a first in human study for the molecule and indication.

[Laura Chico:]

Very helpful I guess just wrapping PTSD we were looking back at some of the literature and some of the publications that discuss seasonal influences on PTSD admissions and once actually indicated hi9gher admissions are in the streaming summer I guess just kind of stepping back how at all might seasonality impact the study and how do you possibly account for that?

[Norbert Riedel:]

Andy you want to answer that too.

[Andy Kidd:]

Yes certainly so I think there is seasonality in quite a few different indications its seasonality to some degree and chronic pain as well I think with respect to this particular study it is a four week evaluation period. So I think with respect to the any individual patient we would not expect seasonality to make a difference with respect to whether or not symptoms fluctuates over the course of a year or so for the total population of patients I don’t think that really should have a significant impact on enrollment either I mean this is really a chronic condition and I think given the population that we are studying which is not just the military population, but the broader civilian population as well and the duration of the study. We don’t see that as having a significant impact.

[Laura Chico:]

Thanks very much.

[Operator:]

Thank you. Our next question comes from the line of Jessica Fye with JPMorgan. Your line is open.

[Unidentified Analyst:]

Hello. This is Yuko on the call for Jessica. Thank you for taking our questions. I know you touched on this a little bit in the prepared remarks, but could you walk us through the decision to evaluate the two doses that you are looking at in the Phase 2 fibromyalgia trial? And then following up on that is there any reason to think that a different dose with 2925 will show benefit between DPN and fibro studies?

[Norbert Riedel:]

Yes, good question. So I answer it by going back to the DPN study. So the DPN study as I mentioned Yuko, look 10, 50 and 200 from our preclinical work we anticipated that 200 would be a higher dose than necessary and would likely begin to show what we know to be an inverse U shape post deponents meaning when the dose gets up to a higher dose, we actually see a less pronounced treatment effect. That’s how we actually evaluated the DPN study and how the 50 confirmed very much what we anticipated pre-clinically. In the fibromyalgia study, it was a short study with only 2 weeks of exposure, we studied 20 and 200. The 20 milligram dose was not sufficient to separate from placebo in the patient reported outcome. The 200 was when we look at the DPN study, we extrapolate to believe that 200 milligrams is a higher dose than we would want to administer over a 12 or 14-week period of time for this particular study. And so that’s why we decided that 50 and 100 was the appropriate dose. To your second question in what is today approved therapies for DPN as well as fibromyalgia, the same dose is generally prescribed and used for these patients. So I do not make an assumption at this point that a different dosing regimen will be needed once we actually get to a commercial use of this therapy – of this molecule in these two indications, but TBD of course, which is also why we do the study. But at this point, to answer your question specifically, I can only refer to existing therapies and today I have noticed in the fibro and DPN after dosing.

[Unidentified Analyst:]

Okay, thank you. That was helpful. And then just one more question, in the prior imaging study, in fibromyalgia, would you remind us if the study allows subject to be on concomitant meds?

[Norbert Riedel:]

Yes, we did allow concomitant medication in that study.

[Unidentified Analyst:]

Okay, thank you.

[Operator:]

Thank you. And I am showing no further questions at this time. I would like to turn the call back over to Norbert for any closing remarks.

[Norbert Riedel:]

Thank you, operator and thank you all for your questions and for taking the time to join us this afternoon. I am hopeful this call today has given you strength of our positive outlook for the company and insight into the meaningful catalysts that lie ahead of us. We look forward to keeping you updated as we continue along the path of bringing novel therapy to patients in needs. Thank you again and please enjoy the rest of your day.

[Operator:]

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