Concert Pharmaceuticals, Inc.
Q2 2021 Earnings Call Transcript

Published: 8 Aug 2021

[Justine Koenigsberg:]

Good morning and welcome to Concert Pharmaceuticals Second Quarter 2021 Investor Update. Like last quarter, our prepared comments today will be brief, so we can jump right into the Q&A portion of the call. Roger Tung, our CEO will provide the CTP-543 key highlights and then Marc Becker, our CFO will walk you through the second quarter financials. We will then be joined by Nancy Stuart, our Chief Operating Officer; and Jim Cassella, our Chief Development Officer for the Q&A portion of the call. As a reminder, today's discussion will include forward-looking statements about our future expectations, plans and prospects. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A description of these risks can be found in our most recent 10-Q filed with the SEC. Any forward-looking statements speak only as of today's date and we assume no obligation to update any forward-looking statements made on today's call. With that, I would now like to turn the call over to Roger.

[Roger Tung:]

Thank you, Justine. This past quarter, we continued to execute on the pivotal clinical development of CTP-543 for alopecia areata. We presented additional promising data from our long-term open-label study of CTP-543 and we strengthened our balance sheet. Importantly, we remain on track to file our CTP-543 NDA in the early part of 2023. In the second quarter, we initiated THRIVE-AA2, our second Phase III trial for CTP-543. As a reminder, this study has a similar design to the THRIVE-AA1 trial. Between the two THRIVE-AA studies, we expect to enroll more than 1,000 individuals with moderate-to-severe alopecia areata. These Phase III trials are long-term extension studies and other ongoing and completed trials will provide us with a sizable safety database, including a significant number of patients receiving treatment for longer than one year to support our NDA. We continue to engage with the treatment community about CTP-543 and to be a vocal advocate for the needed progress in the treatment of alopecia areata. For example, last month, we had the opportunity to present findings from the ongoing CTP-543 open-label extension study at the 2nd JAK Inhibitors Drug Development Summit. Currently, over 100 patients have been dosed with CTP-543 for at least 1.5 years. Importantly, a high percentage of eligible patients have elected to continue to participate in the extension study. Treatment with CTP-543 in the study continues to be generally well tolerated with adverse events consistent with those reported in the Phase II studies. Importantly SALT scores assessing hair regrowth were maintained or improved in the vast majority of alopecia areata patients who continued in the study. CTP-543 has the potential to be a best-in-class treatment for alopecia areata and remains the top priority for our business. Our team is focused on expeditiously executing the Phase III THRIVE-AA clinical program and is deep into planning for the regulatory pathway to NDA. There is an enormous need for an FDA-approved treatment for alopecia areata and we're proud that Concert was one of the first in the industry to take notice of this important disease by advancing CTP-543. Let me pause here and turn the call over to Marc.

[Marc Becker:]

Thank you, Roger. As I review our second quarter 2021 financial results, please reference the financial tables found in today's press release. Revenue was $32 million for the second quarter of 2021 due to the monetization of outstanding milestones under our 2017 asset sale to Vertex. We were happy to bring in this additional non-dilutive capital and strengthen our balance sheet as we continue to advance CTP-543 through its Phase III program. Research and development expenses were $20.2 million during the second quarter of 2021 compared to $14.8 million during the same period in 2020. The Q2 '21 increase was primarily related to the ongoing CTP-543 Phase III clinical program. General and administrative expenses were $5.6 million during Q2 '21 compared to $4.7 million for the same period in 2020. The Q2 '21 increase was primarily attributable to higher external professional service expenses and noncash stock-based compensation. Our net income for Q2 '21 was $5.4 million or $0.16 per share compared to a net loss of $13 million or $0.41 per share during the same period in 2020. We ended the second quarter of 2021 with $122.4 million in cash and cash equivalents. Under our current operating plan, we expect our cash and cash equivalents to fund the company into the second quarter of 2022. This concludes our prepared remarks and we would be happy to address any questions.

[Operator:]

And our first question comes from Jason Butler from JMP Securities. Your line is now open.

[RoyBuchanan:]

It's Roy in for Jason. Thanks for taking our questions. Just a couple of questions. One on the THRIVE-AA, one and two trials. It sounds like enrollment is going fine. The trials are blinded. Any feedback from the investigators or the patients that you can share just to characterize what they're seeing in the trial? And then, I just wondered if you have any comments on the recent results from Pfizer with their drug ritlecitinib their Phase 2b/3 results that were recently announced. Thanks.

[Roger Tung:]

Thanks for the question. Jim, could you start off on that and I may chime in afterwards.

[Jim Cassella:]

Sure. Yes. So the -- as you know, the trials are ongoing. So we really can't make any comments on anything regarding the details of the trial. But the trial -- both trials continue to progress nicely with enrollment and we are on track as we projected with our expected completion dates in the early next year for THRIVE-AA1 and second half for THRIVE-AA2. As far as the -- go ahead, Roger.

[Roger Tung:]

No. Go on.

[Jim Cassella:]

Okay. I think there wasn't really any data to speak of in the press release for ritlecitinib. So it's really hard to determine what they're seeing in that trial.

[Roger Tung:]

Yes. Thank you for that.

[Roy Buchanan:]

Fair enough. Thank you.

[Operator:]

Thank you. And our next question comes from Maury Raycroft from Jefferies. Your line is now open.

[Farzin Haque:]

Good morning everyone. This is Farzin on for Maury. Thank you for taking our question. Just to follow-up on the two Phase 3s. Since the focus is there, are you potentially thinking of any innovations to accelerate enrollment given the enthusiasm in the study?

[Roger Tung:]

Jim?

[Jim Cassella:]

I mean, yes. So we've implemented all the things that we need to do to keep enrollment going in the THRIVE program. So I think we are really pulling out all stops as we have been from the very beginning to make sure that we have patients enrolled in both studies on our time line. And I think we're tracking both trials towards the completion dates that we projected.

[Farzin Haque:]

Okay. Great. Thank you for taking question.

[Jim Cassella:]

Sure.

[Roger Tung:]

Thank you.

[Operator:]

And our next question comes from Difei Yang from Mizuho. Your line is now open.

[Alex Lim:]

Hi. Good morning. This is Alex on for Difei. Thanks for taking the question. So you recently presented some long-term data from CTP-543, where you showed from a safety standpoint stable hematology parameters over time. I was wondering if you could help contextualize this data relative to what we know from experience with other JAK inhibitors around hematology parameters, and then just how do you see the overall safety profile of 543 relative to other JAK inhibitors?

[Jim Cassella:]

Sure. Thanks Alex. Great question because we know that JAK inhibitors have a known pharmacology profile. I think what we've been seeing and what we reported in the JAK conference recently is that the key parameters that we continue to monitor in the hematology side of things neutrophils, platelets, et cetera, are all very stable as we look at longer-term dosing. I think this is a very important finding to be reported, but also for us to be continuing to look at, because I believe we have the longest term data out there for JAK inhibitor coming from controlled trials. So I think the fact that we're seeing stability of our hematology responses as we now go out in subjects over a year of continuous dosing is very good sign for this product and I think it's going to be very important in our submission package, as we have all these long-term studies -- this long-term data that we'll be able to put in there. So I think the profile we're seeing is not inconsistent with what was expected for JAK inhibition. But I think the important thing is that the data shows that we have good stability of these parameters as we continue to dose for a long period of time.

[Roger Tung:]

Hi. This is Roger. I just want to add in that, I agree with everything that Jim said. This is really with respect to alopecia areata patients. JAK inhibition, of course, has been studied in other disease states for substantial periods of time in clinical trials. But we know that the pharmacology of JAK inhibitors and their effects on patients both therapeutically and adverse effects are really associated with the underlying disease state of the patients. So we have studied CTP-543 in alopecia areata patients and have reported as Jim indicated, what we believe is the longest term data in that patient population, and are so far very pleased with what we see in terms of safety versus efficacy profile.

[Operator:]

Hey, and thank you. As I'm showing no further questions, I would now like to turn the call back to Justine Koenigsberg for closing remarks.

[Justine Koenigsberg:]

We'd like to thank everyone for joining us this morning, and we look forward to continuing to keep you updated on our progress. In the meantime for a list of upcoming investor conferences, please visit the Events page within the Investors section of our website. This concludes today's call. Thank you.

[Operator:]

This concludes today's conference call. Thank you for participating. You may now disconnect.