Marinus Pharmaceuticals, Inc.
Q4 2020 Earnings Call Transcript

Published: 9 Mar 2021

[Operator:]

Ladies and gentlemen, thank you for standing by. And welcome to Marinus Pharmaceuticals Fourth Quarter 2020 Financial Results. At this time, all participant lines are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. I would now like to turn the call over to Sasha Damouni, Vice President of Investor Relations and Corporate Communications. Please go ahead.

[Sasha Damouni Ellis:]

Thank you, and good morning, everyone. With me from Marinus are Dr. Scott Braunstein, Chief Executive Officer; Dr. Joe Hulihan, Chief Medical Officer; Alex Aimetti, Vice President of Scientific Affairs; Ed Smith, Chief Financial Officer. Also on the call to participate in the Q&A is Christy Shafer, our Chief Commercial Officer; and Kimberly McCormick, Vice President of Regulatory Affairs. Before we begin, I would like to remind everyone that some of the statements made today could be termed as forward-looking under the securities laws. These forward-looking statements are subject to certain risks and uncertainties that are associated with our business and cover in part in the company’s Form 10-K and 10-Q as filed with the Securities and Exchange Commission. I will now turn the call over to Scott.

[Dr. Scott Braunstein:]

Thank you, Sasha. Good morning, everyone. And welcome to our fourth quarter and fiscal year end 2020 business and financial update. The fourth quarter was another period of tremendous progress, providing strong momentum for what is shaping up to be a very exciting 2021 for Marinus. Before I touch on this year, let me share with you some of the highlights from the fourth quarter, which included compelling clinical trial and research presentations at the American Epilepsy Society Annual meeting focused on the use of ganaxolone in treating both CDD and super-refractory status epilepticus, raising $70 million in a December equity offering and enhancing our investor base, as well as launching an Expanded Access Program in the United States for patients suffering from CDD who did not participate in our Phase 3 clinical trial. If we look at 2021, this year has already been incredibly exciting, as we have announced several important milestones. Firstly, we are enthusiastic to share promising topline data from the Phase 2 Violet trial in PCDH19-related epilepsy, which Alex will review following my opening remarks. Next, we are happy to report that enrollment will complete this week in the ongoing Phase II trial evaluating efficacy and safety of adjunctive ganaxolone treatment in patients with tuberous sclerosis complex or TSC. The topline study results are on track and expected in Q3 of this year. Importantly, after analyzing an interim evaluation of the CALM Study, the open-label Phase 2 trial in TSC, we are confident that the data supports moving to a global randomized double-blind placebo-controlled Phase 3 registration trial. Joe will review this in more detail, but our hope is to meet with the FDA to discuss the Phase 3 trial design by the middle of Q2.

[Alex Aimetti:]

Thank you, Scott. I’m very excited to share with you the topline clinical data from our Phase 2 placebo-controlled study in PCDH19-related epilepsy. As a reminder, in May of 2020, we announced the truncation of the study as a strategic business decision. As a result of this decision, the study was not adequately powered to demonstrate statistical significance between treatment arms. Nonetheless, we believe the results are very encouraging as they were generated from a well-controlled study and are directionally consistent with the results observed in CDD further validating the effects of 3 times a day ganaxolone dosing. First, I wanted to remind you of the study design. The study included an 8-week to 12-week baseline period in which patients track their baseline seizure frequency. Patients were then randomized to receive ganaxolone or placebo added to standard-of-care anti-seizure medications. Seizure frequency was then tracked for the 17-week treatment period. The primary efficacy endpoint was the percent change in primary endpoint seizure frequency during the treatment period relative to the baseline period in all patients randomized. 21 patients were randomized with 10 patients in the ganaxolone arm and 11 patients in the placebo arm. Patients in the ganaxolone arm experienced a median 61.5% reduction in primary endpoint seizure frequency, compared to a 24.0% reduction in the placebo arm. This directional improvement resulted in a p value of 0.17. This study was originally designed to further evaluate the hypothesis that baseline endogenous allopregnanolone-sulfate levels may predict ganaxolone response. Contrary to the hypothesis, the ganaxolone response observed in this study was independent of allopregnanolone-sulfate levels, providing preliminary evidence that ganaxolone effects may be observed across the broader PCDH19 patient population. This finding was consistent with our observation in CDD and provides further confidence that ganaxolone may have anti-seizure effects across broad treatment refractory epilepsy.

[Dr. Scott Braunstein:]

Thank you, Alex. We are very pleased with the results of the Violet study. The data are highly consistent with our expectations and support our belief in ganaxolone as an anti-epileptic compound with broad applicability. I would like to thank the Marinus team, our physician investigators, patients suffering from PCDH19 and their families for supporting us through this journey. With the help of Alex and his team, we would expect to present data at a scientific meeting later this year, as well as seek a medical journal for publication. As a reminder, this is the first double-blind placebo controlled trial in patients suffering from PCDH19-related epilepsy. I would like to turn back to the other important events for Marinus, as we look forward to the rest of 2021 and beyond, we remain guided by our basic principles that the organization’s work should be both scientifically sound and fill a meaningful unmet medical need. We believe that our NDA submission for the use of ganaxolone in the treatment of CDD-related epilepsy is the next step in developing a sustainable oral franchise to address the meaningful opportunities that we envision over the long-term. While we intend to intensify our commercialization planning efforts in front of a potential midyear 2022 CDD launch, we continue to progress our oral reformulation and pro drug endeavors, maintain a focus on our intravenous RSE Phase 3 registrational trial and evaluate other opportunities for ganaxolone in additional orphan epilepsy indications. Based on our progress to-date, we believe that ganaxolone success in CDD, PCDH19 and our early interim analysis in TSC may pave the path for additional future indications. Our investment decisions will be driven by the scientific rationale of using ganaxolone in other rare epilepsies, the commercial opportunities, our growing clinical data set focused on TID dosing and a thorough evaluation of previous Marinus studies, examining trial design, PK data, as well as patient dosing paradigms. We believe that ganaxolone has the potential to become an important drug in a range of rare seizure disorders. To support these efforts, we continue to build the team and strengthen the organization. We bolstered our commercial, clinical, legal, regulatory and other operations personnel.

[Dr. Joe Hulihan:]

Thank you, Scott, and good morning, everyone. Marinus is focused on a well defined and strategically targeted program in the treatment of rare epilepsies, where there’s high unmet need and where we believe ganaxolone has true potential to significantly improve patient outcomes. This year, we expect several key data readouts and regulatory meetings and filings, including submission of an NDA for CDKL5 deficiency disorder or CDD. These activities will further advance ganaxolone formulations for the treatment of rare and orphan devastating epilepsies. Turning first to our oral ganaxolone franchise. In tuberous sclerosis complex or TSE, we are conducting a Phase 2 open-label study called the CALM Study, where we had targeted enrollment at at least 25 patients at eight sites. I’m pleased to report that we expect to reach enrollment goal within the next few days. Based on current enrollment, we’ve conducted an interim analysis that showed that the study has achieved our efficacy and safety targets for proceeding to Phase 3. In addition to overall safety and efficacy, the interim analysis provided support for efficacy of ganaxolone across seizure types, as well as when used as adjunctive treatment with currently available medications, including newer AEDDs, such as Afinitor and EPIDIOLEX. Topline data from the study is on track to be available in Q3 2021. Based on the interim results, we are planning an end of Phase 2 meeting with the FDA in the second quarter and a meeting with EMEA in the third quarter of this year, and plan to have the first patient enrolled in a Phase 3 trial in the fourth quarter. We are proposing to the FDA that the study will be a double-blind placebo-controlled multicenter trial, with a planned enrollment of 160 patients from one year to 65 years of age with genetically confirmed tuberous sclerosis complex. After obtaining baseline data on seizure frequency, study participants will be randomized to ganaxolone or placebo and enter a 16-week double-blind phase. After a titration period lasting four weeks to six weeks, they will receive ganaxolone at a dose of up to 1,800 milligrams per day in three divided doses or matching placebo. Then enter a maintenance period lasting for the remainder of the double-blind phase. Following this, they will have the opportunity to enter an open-label extension in which all participants will receive ganaxolone. Our positive data in CDD, the encouraging interim Phase 2 data in TSC and the PCDH19 data that Alex presented are all supportive of what we believe to be ganaxolone broad spectrum efficacy across different seizure types, both focal and generalized. Returning to CDD, I’m pleased to report that we’ve had fruitful and encouraging discussions with the FDA in advance of our NDA filing. We appreciated the concern of the FDA that the robustly positive results of the Marigold Study in CDD follow older studies that failed to demonstrate efficacy. In particular, a Phase 3 study of focal seizures in adults, that was discontinued in 2016. A key insight from our review of the data from that and other studies was the importance of 3 times a day dosing as we use in the Marigold Study versus the twice daily dosing in the focal onset seizures trial. We believe that this information and the consistent results of the Marigold Study satisfied the agency that the data from a single study in CDD could support the NDA filing. We plan to follow filing of the NDA very quickly with our EU submission. The open-label extension of the Medical Study is ongoing and we’re planning analysis of long-term data to evaluate the durability of effective ganaxolone in CBD, a disorder that’s characterized by a loss of effective AEDD treatment over time. The data from the open-label extension will be included in our NDA submission. The Marigold Study demonstrated the efficacy of the ganaxolone 3 times a day regimen in CDD. Analysis of the PK/PD profile from this and other studies gives us great confidence in the ability of ganaxolone to demonstrate anti-convulsive efficacy in other refractory epilepsies. In our IV franchise, we announced that we have enrolled our first patient in the RAISE trial in refractory status epilepticus and we continue to screen and enroll additional patients. In the early phase of study startup, the COVID-19 pandemic diverted hospital resources and slowed site activation. However, the pace of hospitals coming back online for study enrollment has accelerated and we expect to have most sites activated by the end of the second quarter. We’re getting positive feedback and investigators are excited about the study and eager to begin enrolling patients. We clearly see momentum building. Based on this and the early signals about the pace of enrollment, we remain on track for a topline data readout in the first half of 2022. As we mentioned last quarter, we’re initiating a trial evaluating ganaxolone earlier in the treatment continuum of status epilepticus. In the stage known as established status epilepticus or ESE, where patients have failed the first line of treatment with benzodiazepines. It’s estimated that approximately 50,000 to 75,000 cases of ESE per year in the U.S. The trial is targeting patients presenting to the emergency room, with convulsive status epilepticus, with the study design and patient population, the parallel those of the ESETT trial published last year in the New England Journal of Medicine. We believe one of the keys to a successful trial in ESE is engagement of centers with experience and obtaining community consent and in conducting studies involving the urgent care of patients with status epilepticus. That’s why we’re enlisting many of the same centers that participated in the ESETT study. We anticipate that patients seen in emergency departments in this earlier stage of status and who have convulsive rather than non-convulsive status, maybe more treatment responsive compared to patients enrolling in the RAISE study, who will have refractory primarily non-convulsive seizures. This means that the dose of ganaxolone necessary for status control will likely be lower than that in the RAISE study. So we are thinking carefully about dosing and the duration of therapy that will be required. The study design we plan to propose to the FDA involves the initiation of IV ganaxolone at the same time as the first AED following benzodiazepine failure. The trial utilizes a novel sequential design to assess the safety and efficacy of several doses and infusion durations of ganaxolone, with the optimal dose progressing to a double-blind Phase 2 study versus placebo. We plan to initiate the ESE study in early 2022 after we’ve completed the process of exception from informed consent. It’s important to note that patients who qualify for this trial have a condition distinct from those with refractory status epilepticus, who would enter the RAISE trial. So we can consider the same sites for our established status trial without compromising enrollment in the RAISE study. Quickly following up on Scott’s comments about the emergency use of ganaxolone in super-refractory status epilepticus, we continue to supply medications in response to emergency IND requests, though this condition is not on the immediate horizon for a formal trial. We’re learning a lot about the dosing paradigm for ganaxolone in this very serious condition, which is informing our knowledge about its dosing and potential efficacy throughout the treatment continuum of status epilepticus. Once, again, I’d like to thank the patients and their families who participate in these trials. Through your support, we’re making significant progress in our efforts to improve the lives of all patients and families suffering from these orphan debilitating neurologic disorders. With that, I’ll turn the call over to Dr. Alex Aimetti. Alex?

[Alex Aimetti:]

Thank you, Joe. I share Scott and Joe’s excitement about the progress that we have achieved across our entire clinical development pipeline, as well as the promise for what lies ahead. So let me provide some additional insight into each of those respects. First, in December, we presented additional clinical data from the Marigold Study in CDD at the Annual American Epilepsy Society meeting. There we communicated data indicating a consistent efficacy signal for ganaxolone across multiple patients’ subgroups, demonstrating the potential for ganaxolone across the broad CDD population. In addition, we provided evidence suggestive of ganaxolone anti-seizure durability in a preliminary analysis of the open-label data, which demonstrated that patients experienced a median 52.7% reduction in major motor seizure frequency went on ganaxolone for approximately one year. We believe this supports a durable effective ganaxolone, and as we have said before, durability of anti-seizure medication is of enormous need to the CDD community and see this as a potential key differentiator from existing therapies. We look forward to sharing additional open-label data demonstrating the longer term effects of ganaxolone at upcoming medical meetings. And lastly, we presented data suggesting higher average ganaxolone plasma concentrations correlated with improved seizure frequency reductions in CDD patients. These data provided additional evidence of ganaxolone drug effect and further support 3 times a day dosing. And as a reminder, the Marigold Study was the first Phase 3 study of ganaxolone that evaluated 3 times a day dosing, which aims to improve trough concentrations to levels that we believe are important to show a meaningful anti-seizure effect compared to 2 times a day dosing. Consequently, we feel confident that these findings demonstrate the broad anti-seizure effects of ganaxolone when dosed appropriately and can be extended to other chronic epilepsy patient populations, including TSC, as well as other future rare epilepsy indications with high unmet need, where 3 times a day dosing would be appropriate. In addition, these findings support our ongoing efforts to develop improved oral ganaxolone formulations, aim to deliver higher, more consistent ganaxolone levels, which could expand the opportunities to broader patient populations in need. Again, I’m very excited about our recent pipeline progress in the future scientific and clinical direction that Marinus has headed. With that, let me turn the call over to our CFO, Ed Smith, for a review of our financials.

[Ed Smith:]

Thank you, Alex, and good morning, everyone. Our results for fiscal 2020 reflect results from operations and capital initiatives in support of ganaxolone development and commercial preparedness activities. As a result of the BARDA contract, we recognize $1.5 million and $1.7 million in federal contract revenue for the three months and 12 months ended December 31, 2020, respectively. There were no like revenue a year ago. As a reminder, our base BARDA contract initially provides $21 million of non-dilutive funding over the approximately next 24 months, most of which will be directed towards our Phase 3 program in refractory status epilepticus. With options based on success milestones, their funding may increase to $51 million. Research and development expenses increased to $13 million and $51.1 million for the three month and 12 months ended December 31, 2020, respectively, as compared to $12.5 million and $43 million for the same periods in the prior year. The increase over the year-to-year period was due primarily to costs associated with enrolment in our CDD trial, expenses in the current year also reflect increased drug development activity, including preclinical studies and manufacturing activities in preparation for a potential NDA filing for CDD, as well as the recently initiated Phase 3 clinical trial in RSE. General and administrative expenses increased to $6 million and $18.6 million for the three month and 12 months ended December 31, 2020, respectively, compared to $3 million and $11.5 million for the same periods in the prior year. The primary drivers of the increase over fiscal 2019 were increased legal and consulting fees of $2.7 million, personnel costs also rose by $1.5 million from a year ago as we increase headcount to support the scaling up of the company’s operations and prepare for potential commercialization. Compared to a year ago, non-cash stock-based compensation was up $1.6 million. The company reported net losses of $17.5 million and $67.5 million for the three month and 12 months ended December 31, 2020, respectively, compared to $15.4 million and $54.1 million in the same period a year ago. Cash used in operating activities increased to $60.9 million for the year ended December 31, 2020, compared to $48.6 million for the same period a year ago. At December 31, 2020, we had cash, cash equivalents and investments of $140 million, which will enable us to fund the company’s current scale of operating expenses and capital expenditures into the second quarter of 2022. We project spend in the range of $18 million to $20 million per quarter, offset by approximately $2 million to $3 million per quarter in revenue from BARDA. This spend could tick up in the third quarter with the initiation of the TSC trial and ongoing expenses associated with the RSE trial. Keep in mind these projections do not include potential resources that could be realized through the monetization of the priority review voucher or through European partnership. Before handing the call back to Scott for some closing remarks, as Scott mentioned, I will be leaving Marinus. I would like to thank our investors for their continued support and confidence in our programs. While I’ve enjoyed and will miss working with many friends and colleagues at Marinus, I am excited for Marinus’ future and I’m proud of the finance organization that I now turn over to Steve, who will lead the next leg of what promises to be an exciting journey. I expect the smooth transition and will be from the sidelines as a Marinus shareholder, rooting for Scott and the rest of the Marinus team and what promises to be a bright future. I will now turn this call back to Sasha Damouni to highlight some of the efforts in advocacy and branding. Sasha.

[Sasha Damouni Ellis:]

Thanks, Ed. We recognize the value of meaningful partnerships and collaborations to patient organizations who serve communities that we are striving to bring beneficial change to. Recently, we’ve made considerable efforts to strengthen existing and build new relationships with key organizations within the CDD, tuberous sclerosis, PCDH19, status epilepticus and broader epilepsy communities. We aim to work alongside these groups to help increase disease awareness and education in an effort to improve the overall quality of care. We thank the organizations for their partnership and believe we can more efficiently progress the field by working together. As mentioned earlier, we have rolled out our Expanded Access Program, providing access to ganaxolone for patients who did not participate in the Marigold Study and we are working closely with the advocacy groups for awareness throughout the patient community. I’d also like to mention that Marinus has launched a new branding campaign and logo to highlight our guiding principles of commitment, innovation and community. We believe we are at an inflection point in our company’s history with the potential launch of our first treatment and believe that we should communicate broadly these principles to our important stakeholders, including patients, their families, the epilepsy community, the medical community and our investors. With that, I would like to turn the call back to Scott before we enter the Q&A portion of the call. Scott?

[Dr. Scott Braunstein:]

Thank you, Sasha. Once, again, on behalf of everyone here at Marinus, I want to wish Ed the best of success in his future endeavors. Before opening the call to questions, just let me conclude with a few final thoughts. Importantly, we are dedicating resources for future oral formulation development in the hopes of achieving improved PK properties that ultimately could lead to incremental clinical efficacy. We have recently filed a series of patents that support two of these ongoing research efforts. Our current goal is to have at least one second-generation formulation in the clinic in 2022. Additionally, we continue to expand and strengthen our organization. We have added recent high quality hires throughout the team, including clinical operations, regulatory, human resources and legal to name just a few. We are thrilled to have Steve Pfanstiel, our incoming CFO join the team next month. We expect to have head of both sales and marketing hired by the middle of this year, as Christy Shafer continues to round out her senior leadership team for the commercial organization. And finally, let me echo the sentiments of everyone here at Marinus, when I say, how grateful we are for the continued commitment and dedication of the study site personnel, our investigators, our patients and their families, as well as everyone who has been supportive of the company’s efforts through these trying times. I also want to thank the Marinus team that has worked tirelessly through what feels like thousands of teams in zoom calls and have not been deterred by the headwinds created by the ongoing pandemic. And with that, we will now open the call for questions. Operator?

[Operator:]

Thank you. Your first question comes from Joseph Thome from Cowen and Company. Your line is open.

[Joseph Thome:]

Hi, there. Thank you for taking my questions and congratulations to Ed and the rest of the team on some great progress. First question for me is just on TSC. You indicated the interim analysis met the efficacy and safety targets that you had laid out. If you could just give us a little bit more detail on maybe what that efficacy target was that gave you the confidence to move into Phase 3? And then, second, as you are approaching CDD and have some positive TSC data here, maybe how are you thinking about initial pricing decisions and kind of how -- what information has gone into that? Thank you.

[Dr. Scott Braunstein:]

Good morning, Joe. Thanks for the questions. This is Scott. Let me handle the TSC question. So, as Joe mentioned in his prepared remarks, we looked at several criteria for the Phase 3, go, no go decision. We looked at overall efficacy and we were looking for a consistent signal similar to what we’ve seen now in CDD and PCHD19 and that is a meaningful number of patients overall having what we view as an important clinical response. Secondly, we -- Joe spent a lot of time looking at seizure types and we wanted to see a differentiation in improvement in different seizure types and I’ll let Joe expand on that. Third, I think, it was critically important from a commercial standpoint that we see efficacy in patients who were refractory to all standards-of-care, including Epidiolex. And we’ve had several patients in the Phase 2 study, who were either on Epidiolex, who had failed Epidiolex and we are -- we -- that was an important go decision for us. And I think, finally, we were looking for what we typically would think about is a responder analysis where patients are having 40% or 50% response rates and looking at the percent of patients who are having meaningful clinical responses. So, all of those factors played in our decision. We’re not going to give any more specifics on that. Before I turn over to Christy to talk a little bit more about pricing, Joe, anything else you want to add on our -- on that -- on our TSC decision?

[Dr. Joe Hulihan:]

Yeah. Well -- hi, Joe. Scott mentioned seizure types and we know from CDD, the drug has efficacy across what we call major motor seizures, drop attacks and convulsions. Those are generalized seizures. In TSC patient’s predominantly focal seizures, because they have lesions often in the brain, so the seizures start in one location focally. And just wanted to make sure that we showed the same trend in efficacy in the focal seizures, as we do in the generalized seizures and we saw good signal there. So that was part of the decision to proceed.

[Dr. Scott Braunstein:]

Christy, do you want to jump in and talk a little bit about pricing.

[Christy Shafer:]

Yeah. Absolutely. Thanks, Scott. It’s a pleasure to meet you, Joe. Thanks for the question. As you can imagine, we’re dedicating a significant amount of time to our pricing and value construct for both the oral suspension and our IV franchises. So specific to CDD, to establish our value, we’ve done a quite a bit of work that’s been dedicated to understanding our patient journey, their treatment landscape and any access hurdles there are for our patients. So understanding that for CDD we will be the first and only indicated brings a lot of optionality. However, we’re designing our thoughts around both indications. So both CDD and TSE fall into traditionally defined orphan disease model and we have prior launches both in and out of the space to look to as reference points. So, nonetheless, we have confidence in ganaxolone ability to address the significant unmet need and the fact that it’s highly differentiated. So where we ultimately land on price will reflect that.

[Joseph Thome:]

Great. Thank you so much.

[Operator:]

And your next question will come from Douglas Tsao from H.C. Wainright. Your line is open.

[Douglas Tsao:]

Hi. Good morning. Thanks for taking the questions. Just -- Joe, as a follow up to that last comment, obviously, with the TSE data, we’ve now gotten some evidence of effect in both general, as well as focal onset seizures. I’m just curious, for you as well as Scott, what does that potentially mean in terms of the future development? How does that affect your thinking about development across epilepsy?

[Dr. Joe Hulihan:]

Yeah. That’s a good question. I think it gives us confidence about the drug being a broad spectrum agent. As I mentioned in the remarks, one of the older studies in focal seizures, Phase 3 study failed to show efficacy in Phase 3, although, it didn’t Phase 2 the larger study it did not. So now this gives us confidence about the seizure types and then also further reinforces PK aspect of it with 3 times a day dosing with this formulation it’s important to have adequate levels throughout the day. So I think it tells us something about that as well.

[Douglas Tsao:]

And Scott, you’ve also spoken a lot about sort of new formulations, how quickly do you think those could be sort of advanced into the clinic, and obviously, how do you sort of weigh that balance between advancing with the current formulation, which seems to be having quite a good effect versus perhaps slowing down, but advancing what’s the formulations that could have better commercial potential or just sort of clinical effects? Thank you.

[Dr. Scott Braunstein:]

Yeah. Thanks for the question, Doug. I think at least what we’ve shared with you, in the CDD trial, certainly in the PCHD19 trial and our early look at the TSC data, we’re seeing a consistent signal of somewhere between seven and eight out of 10 patients having a meaningful clinical response and we think that meaningful clinical response is clearly tied to drug PK, bioavailability, absorption and serum concentrations. So we know from our market research that if we have a meaningful effect that’s durable in these patients, that’s a very important drug. And to your comment, Doug, we feel very good and the best certainly I’ve ever felt about our current oral suspension 3 times a day dosing. That being said, I think, we can make this drug incrementally better. I would like to see all patients have good absorption. I’d love to have physicians -- give physicians the opportunity to dose titrate if patients, let’s say, are absorbing and having blood level somewhere between 50 nanograms per ml and 75 nanograms per ml and still having seizures that physicians could titrate to 100 nanograms per ml to 150 nanograms per ml, we are quite convinced that that would have a meaningful effect on the number of seizures patients are having. So we’re really targeting two -- those two parameters in our second-generation programs and we certainly believe it will incrementally improve the efficacy of the drug. We we’ve talked about it a lot, Doug, that we have a few different formulation plans in place. They’re not expensive. We’ve made a tremendous amount of progress. As I commented on the call, we’ve now filed a series of patents in at least two different novel formulations. We’re excited about that and we think we can move pretty quickly. And our hope is to have one of these compounds in the clinic in ‘22, possibly two in ‘22, and again, we’d be looking to incrementally drive the efficacy of the drug. And I think it never would hurt to smooth the peaks and troughs of a drug that you’re looking for steady state doses. So let me stop there and operator. Thanks, Doug. Let’s move on to the next question because we’re a little tight on time today.

[Operator:]

Okay. Your next question will come from Alethia Young from Cantor. Your line is open.

[Alethia Young:]

Hey, guys. Thanks for taking my question and Ed wishing you all the best and great working with you. So a couple one, can you just talk a little bit about with RSE, your decision to make a separate study in Europe? Is that potentially due to kind of different treatment protocols there for refractory status? And then there’s another question, can you just talk a little bit more about the safety event seriously that was seen in the PCDH study that was attributed to ganaxolone? I mean, do you think there’s anything to make there as it relates to the asset, I know it is well characterized and it’s pretty low rate, but just want to get any color there? Thanks.

[Dr. Scott Braunstein:]

Yeah. Alethia, I could take those. So in terms of the serious adverse event, take that one first. It was -- what the investigator characterized as psychogenic seizures and attributed to the drug. I won’t say anything that, minimizes the event, I think that the patient needed to be admitted for EEG monitoring to characterize the event and because it was a hospitalization, that means it’s a serious adverse event. The severity was characterized as moderate. Psychogenic seizures are sometimes called non -- more contemporary terms, non-epileptic seizures, meaning there’s no electrical discharge in the brain. It’s felt to be a behavioral symptom and not something we see much of. And in terms of the U.S. versus Europe, initially that was the rationale for having a separate study. The treatment is different in Europe. They’re less inclined to progress patients to IV anesthesia for treatment of refractory status than in the U.S. and tend to use a number of different anti-epileptic drugs before taking that step for particularly for non-convulsive status. And so it evolved over time. It evolved into a different study based on our design considerations and regulatory feedback. I think we’ve got now a complimentary study to the U.S. study. In the U.S., they have to fill at least two IVDs and EU it is going to be at least one. And there are other design differences that make it actually a study that complements rather than duplicates the U.S. study. So we’re very pleased with how things are going.

[Alethia Young:]

Okay. Thank you.

[Dr. Scott Braunstein:]

Yeah. Sure.

[Operator:]

And your next question comes from Joon Lee from Truist Securities. Your line is open.

[Joon Lee:]

Hi. Thanks for taking our questions. For the TSC program, are you able to disclose how many of the planned 25 total patients were part of the interim look? And is there any strategic reason for meeting with the FDA in second quarter with interim data as opposed to meeting in third quarter with the full data? Have you done any statistical work that would suggest that no further changes in the full data set its expected? And lastly, did the TSC study also stratified based on Allo-S, and if so, did you also not see any sort of difference based on that baseline and just see broad -- is that across the Board? Thank you.

[Dr. Scott Braunstein:]

So, it’s a great question, Joon. Kim, maybe you want to just talk about the regulatory strategy for TSC and then if Joe has anything to add and then we can have Alex jump in and talk about the Allo signal?

[Kimberly McCormick:]

Sure. So we do plan to submit a new request to discuss the Phase 3 study with the FDA once -- in terms of cut, we’re not waiting until the completion of the entire study. There is time that takes to submit the briefing documents have been made. So that meeting is target by the end of second quarter and then subsequently on -- in Europe shortly after that. So the plans are to take the interim look to the FDA to support our Phase 3, assuming that we feel that the data is robust enough to support the Phase 3 program moving forward.

[Dr. Scott Braunstein:]

So, Kim, maybe a little bit more specifically, Joon, was really asking why the interim cut rather than the final cut. So maybe you should talk a little bit about our goal in terms of safety and meeting with the agency.

[Kimberly McCormick:]

Sure. I think the agency is very, what’s most important is the safety of the data for Phase 3, as well as the signal and I think we feel strongly that based on the interim cut that we’ll have a strong enough safety support from the study, supported by our CDD and our other largest database to take the agency. So I don’t think it’d be required to have the full data set in order to get collaboration and agreement on the Phase 3 study design. Does that answer the question, Scott?

[Dr. Scott Braunstein:]

Yeah. I have been discussing Joon just to complete the thought we looked at about half the study population who had received drug for at least four weeks. And as a reminder, when we looked at our -- the Marigold Study, the efficacy of ganaxolone is really the same at the four-week periods as it is at the 12-week period. So we were able to look at about half the study and take at least a four-week look at the data set. Alex, you want to talk a little bit about the biomarker?

[Alex Aimetti:]

Sure. Thanks, guys, and thanks for the question Joon. So before I talked about the allopregnanolone sulfate in TSE, I just wanted to quickly comment on the use of it in PCHD19. As everyone’s aware, that study was designed to appropriately test the hypothesis whether endogenous allopregnanolone sulfate levels could potentially have a predictive effect on ganaxolone’s response. And as a result of that proper clinical trial design, I can say today with a higher degree of confidence that that does not appear to be the case. And although we recognize that a predictive biomarker for epilepsy is of high value. Again, I think, these data that we’ve shown here, the positive effects, I’m seeing now in the broad CDD population and the suggestive beneficial effects in the broad PCHD19 population with 3 times a day dosing is probably not surprisingly a better predictor of ganaxolone response. Now to your specific question, we are going to explore baseline allopregnanolone sulfate levels in TSC patients, but they are not stratified in that study in the primary efficacy endpoint is in all patients enrolled.

[Joon Lee:]

Thank you.

[Operator:]

And your next question will come from Marc Goodman from SVB Leerink. Your line is open.

[Marc Goodman:]

Scott, can you just talk to us about European partnership and how you’re thinking about it? What is the optimal kind of deal and economics and just to give us some baseline of how you’re thinking about that? And then just secondly, can you just remind us of what is going on behind the scenes with increasing testing, just so when your product hits the market? Will there be complete testing for CDD? Will there be testing for TSC, just to make sure we understand that? Thank you.

[Dr. Scott Braunstein:]

Thanks, Marc. And maybe I’ll pass a little bit of the testing over to Christy as well, because we’re getting a lot of feedback from our market research in terms of where some of the trigger points are in terms of early diagnosis. But specifically on the partnership, Marc, we’ve had some great discussions with several organizations, the vast majority are focused in Europe, several have some reach outside of Europe. We have some folks who are primarily focused on the orphan disease business. They are -- they have more of a specialty of focus, and certainly, that’s intriguing to us. We have other strategic partners interestingly who have an interest in both orphan and the hospital space and that certainly has a different level of strategic interest to us. Now that we have good confirmation on what’s needed in Europe from the -- for the IV program. We certainly want to make sure that we take full advantage of thinking about pricing and the commercial opportunities sooner rather than later. So we still have a really important strategic decision ahead of us, which I think there’s rationale for partnering both programs to a single partner. There’s rationale for just partnering the oral program and we would continue development of the IV program ourselves. And I think either way, Marc, we’re going to lead the research effort for both the global TSC program and the European IV program. In terms of the economics, we’re really thinking about the long-term NPV of the business. We have a lot of confidence in the business. Our balance sheet is certainly much stronger than it was. But some upfront payments and reimbursement around research and development will certainly extend our runway. So a combination of upfront, commercial and research reimbursements are important to us. But certainly, as you would expect, we are really interested in what the royalties are going to look like, particularly as the product grows. And, again, I think, the key focus for us is reaching NPVs that are really equitable for both parties. So I think I covered your question, Marc, did you have -- did -- was there another question that I missed, I apologize.

[Marc Goodman:]

Yeah. Just on the genetic testing?

[Dr. Scott Braunstein:]

Oh! Genetic testing, sorry. Christy, you want to jump into take that?

[Christy Shafer:]

Sure. So for CDD specifically over the past six years to seven years that has become widely acceptable and it used genetic testing for CDD. When these patients present early in life, typically within the first few months of life, it’s widely acceptable to have a panel and there are several that physicians look to do these genetic tests. So, early diagnosis in CDD is something that we will rely on. As we all know, these patients tend to cycle through different anti-epileptics in their first few years of life. So by the time they get to us at the age of two, they will have 85% of these patients will be considered refractory. So we believe, again, early diagnosis and the high refractory rate will bring us a large part of the patient population.

[Marc Goodman:]

Thanks.

[Dr. Scott Braunstein:]

Thanks, Marc. And Operator, we have time for one more question and before we also wrap and take the last question, we just wanted to remind the investor community that we have posted a new set of slides on our website and those slides do include a little bit more detailed analysis of the PCHD19 trial, as well as our Phase 3 TSC trial design. So just as an FYI for individuals. Operator, why don’t we move to our last question?

[Operator:]

Okay. So our final question today will come from Jay Olson from Oppenheimer. Your line is open.

[Jay Olson:]

Oh! Hey. Congrats on all the progress and thanks for taking the question. Can you share any anecdotal feedback you’ve gotten from physicians or patients who received compassionate use of ganaxolone for a super refractory SE? And I think you said that a clinical trial in SRSE is not on the table at this time. But would you consider one in the future and what are some of the lessons learned from the stage study in SRSE that didn’t work out that might influence your decision to do a study or not or how to design that study? Thank you.

[Dr. Scott Braunstein:]

Let me -- thanks, Jay. Let me take a little bit of that question and I’ll pass over to Joe for the clinical experience. But certainly, we are going to support the research community. If drug is requested on an EIND basis for patients with super refractory status, we are certainly going to provide drug when we can. We’re learning that these patients can be extremely difficult. We’ve already been dosing patients at higher doses that our Phase 3 dose over 1000 milligrams per day, where we’re going up to 63 or physicians are going up to 63 grams of Captisol. And so we know there are real differences in this population, compared to the RSE population or the ESE population. So I think we want to continue to support the research and understand differences before we could even consider any type of trial design. But as we said, consistently, since the beginning of our IV program, dosing really matters in the acute setting and we want to get that right and we don’t want to make the same mistake others have made. I feel very good about where we are with RSE. We’re taking it a different approach in ESE, and currently, ultimately, a different approach in super refractory status as well. And I will say, we are now creating some new formulations, which may unleash our ability to be linked to Captisol down the road as well, but a few years of development ahead of us on that path. But Joe let me turn over to you for the clinical result on SRSE before we wrap the call.

[Dr. Joe Hulihan:]

Yeah. No. I agree with Scott. The main thing we’re learning about is dosing there and using a higher dose. The importance of getting high levels in initially. I don’t think we have enough experience yet. I think it’s been seven or eight patients so far have been treated under emergency INDs. I don’t think we have enough experience to look at patient types, age. Some patients have done very well, responded very quickly, and so there may be a role of etiology, some patients tougher to treat. And as Scott mentioned, the blood level, I think, that’s probably the main lesson learned is PK from the Sage study and the doses they were -- the dosing was constrained and so it’s important to get the high levels and ganaxolone may differ a bit from allopregnanolone. So, anyway, we’re continuing -- we’ll continue to respond and continue to explore different ways of dosing the drug in super refractory status.

[Jay Olson:]

Great. Thank you very much.

[Dr. Scott Braunstein:]

Well, I’m going to wrap up the call and I’d like to thank everyone for joining us today and your continued support and confidence and we look forward to providing updates in the coming months. Operator, back to you.

[Operator:]

Okay. Thank you, everyone, for joining us today. This will conclude today’s conference call. You may now disconnect.