Zynerba Pharmaceuticals, Inc.
Q4 2016 Earnings Call Transcript

Published: 27 Mar 2017

[Operator:]

Good day everyone and welcome to the Zynerba Pharmaceuticals Fourth Quarter and Full Year 2016 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode, later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. I would like to turn the call over to Kimberly Minarovich of Argot Partners.

[Kimberly Minarovich:]

Thank you, Grace. Good morning and thank you for joining us. A press release providing details of Zynerba’s financial and operating results for the quarter and year ended December 31, 2016 was issued earlier this morning. The press release is available on the company’s website at zynerba.com. For those of you joining us on the webcast, we will be using an interactive slide show presentation. If you have dialed in on the audio only conference call, you can access the slides on the company’s website at zyberba.com. The slides for today’s call can be found under the investor relations tab under news, events and webcast that are on the left-hand side of the page where you can find a link for the presentation. Before we begin, I’d like to remind you that any statements made during this call that are not historical and consider to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect Zynerba's current expectations regarding future events, including but not limited to statements regarding financial results, cash runway, timing and progress of clinical and regulatory activities within OO2 and within OO1 and statements relating to commercial potential for our product candidates. Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed from time-to-time in the company’s filings with the SEC on Form 10-K and our periodic filing on our periodic filing on Form 10-Q and 8-K and other filings made with the Securities and Exchange Commission. Links to these documents are available on the Investor Relations section of our website under the financial information tab and we encourage you to review these materials. Any forward-looking statements represent our view as of today March 27, 2017. A replay of the call will be available on the company’s website www.zcynerba.com following this call. You can find the dial-in information for the replay in today’s press release. Joining the call in Zynerba are Armando Anido, Chairman and Chief Executive Officer, Terri Sebree, President of Zynerba and Jim Fickenscher, CFO and VP Corporate Development. I would now like to turn the call over to Armando. Armando?

[Armando Anido:]

Thanks Kimberly. Good morning and thank you to everyone for joining our first quarterly earnings call. On Slide 3, I will begin with a brief overview of Zynerba and our accomplishment since going public in 2015. Terri will then provide an update on our clinical development programs and Jim will discuss our financial results for 2016. I will then discuss the anticipated milestones this year. Ensure, while we believe Zynerba is a compelling investment opportunity in the High-Growth Cannabinoid Space. Following our prepared remarks, we will have time to answer questions. On Slide 4, Zynerba is a clinical stage specialty pharmaceutical company focused on the development and commercialization of patent-protected synthetic cannabinoid therapies and indications with high unmet medical needs. We believe our transdermal delivery technology to provide substantial benefits to patients and our differentiated approach from other companies in the space. Our lead compounds ZYN002 is a patent-protected CBD Gel that is being evaluated in Phase 2 trials for the treatment of epilepsy, osteoarthritis and Fragile X syndrome. ZYN001 a patent-protected pro-drug of THC and a state-of-the-art drug-adhesive matrix patch is expected to enter Phase 1 clinical trials later this half and will enter Phase 2 in patients with fibromyalgia and peripheral neuropathic pain by the end of the year. We have global ownership of both assets. There are currently no royalty obligations to any third-party, which combined with an efficient synthetic production process, should allow us to achieve attractive pharmaceutical like margins if approved and commercialized. According to multiple data sources in the United States there are about 1.5 million adult epilepsy patients with focal seizures, approximately 31 million osteoarthritis patients, 15 million patients suffering from peripheral neuropathic pain and another 6 million fibromyalgia patients, all larger and underserved markets. The exception is Fragile X, an orphan disease with approximately 71,000 Fragile X patients and no approve therapies. Our management team has deep expertise in CNS and pain drug development and commercialization, as well as developing transdermal gels and patches such as custom and security [ph]. On Slide 5, we’ve made tremendous progress since our initial public offering, we’ve worked tirelessly to advance ZYN002 at a rapid pace through the clinic. Successfully completing three Phase 1 trials and initiating three Phase 2 studies. We recently announced that enrollment is complete in two of these Phase 2 clinical trials and that we will meet or exceed our target enrollments in both trials. We have also strengthened our balance sheet by raising over $64 million in the last six months. This provides us expected cash runway into 2019. On Slide 6, we believe that ZYN002 has significant benefit over oral delivery. First, it delivers consistent, controlled and sustained plasma levels, which may result in a better safety profile. In addition, it avoids first-pass liver metabolism which may result in lower drug-drug interactions. And finally, we believe by avoiding the GI tract, we will have lower GI disturbances and should avoid the potential degradation of CBD in the THC. This maybe important to physicians and patients as we believe such degradation may lead to negative psychoactive effects. On Slide 7, we believe that there are many potential indications for CBD and THC. On the left side of the chart you will find some potential indications for CBD while the right side shows some possible indications for THC. When we joined the company in 2014, our first order of business was to prioritize the indications that we would pursue, taking into account the scientific market and competitive dynamics. The indications we are currently evaluating are circled on the slide. On Slide 8, for ZYN002 we believe there are strong evidence suggesting the CBD should work effectively in the three indications that we are pursuing. For epilepsy, CBD is very active in animal models and we know that these models are highly predictive of efficacy in humans. Additionally, there are both open label and double blind placebo controlled trials that have proven the effectiveness and safety of CBD. With osteoarthritis there are both scientific rationale and animal model that provide us with the suggesting that CBD should work effectively. We know that CBD modulates of Vanilloid TRPV1 receptors mediating anti-nociceptive and anti-inflammatory effects. Additionally, in the Mono-Arthritic Rat model ZYN002 showed significant improvement in pain scores and anti-inflammatory markers. Finally, if proven effective the size of the market for this indication is substantial. We believe that there could be a significant commercial opportunity after patients have failed on NSAIDs, Cox2 inhibitors and before moving to opioid and invasive alternatives. And finally, for Fragile X, there is suggested evidence of efficacy from several case reports from key opinion leaders and knockout mouse model data which showed inhibition of the metabolism of an anandamide and 2-AG improved Fragile X symptoms. We received orphan drug designation from the FDA in February 2016, which could make this the fastest pathway to approval for the drug. I would now like to turn the call over to Terri Sebree, who will review our clinical program in more detail. Terri?

[Terri Sebree:]

Thank you, Armando. It is pleasure to be here today and update you on the excellent work being done by a very talented development team at Zynerba. Let’s go to Slide 9. ZYN002 is Hydroalcoholic gel with the consistency and appearance of hand sanitizers. It is packaged in single unit of use sachet; the patients squeeze the gel from the sachet and rub the gel into their upper arm and/or shoulder. It is a clear gel that quickly absorbs into the skin. The investigators report the patients in our Phase 2 trials are receptive to the gel and find it convenient and easy to use. Slide 10 shows the design of the STAR 1 and STAR 2 trials, which are being conducted at 14 academic centers in Australia and New Zealand. Before entering week base on period patients that were diagnosis of focal epilepsy for at least two years and are currently being treated and maintained on a stable regimen of 1 to 3 anti-epileptic drug for AED. Upon entering based on patients were not allowed to change their current AEDs or doses. They also have a minimum of six observable focal seizures, cannot go seizure free for more than 21 day period and lastly highest compliance with daily diary before being eligible for randomization. After successfully completing the baseline period, patients are randomized to 1 to 3 ARM, high dose in OO2, low dose has been OO2 or placebo twice per day for 12 weeks. Once patients complete treatment in STAR 1, they are eligible to continue treatment in an open label extension trial for 12 months which is not at STAR 2. Patients initially received a high dose of ZYN002 twice per day, dosing maybe reused to lower the dose. As indicated on Slide 11, the primary efficacy endpoint is the median reduction in seizure frequency per 28 day period comparing based on with the maintenance period. This is the classic regulatory spending required for approval of in AED. There are several secondary endpoints that we are also evaluating, the proportion of patients with more than 50% reduction in seizure frequency, percent change from baseline and seizure frequency, the number of seizure free days and the percent of patients who are completely seizure free. Slide 12 highlights the baseline information about the patients enrolled. The Median Seizure frequency is 10.8 seizures per month during the baseline period which is comparable to the month of baseline seizure rate in many of the recently approved AED. On average, patients were taking 2.5 AEDs when they entered the study. The chart provides information on these medications which are the typical AEDs used to treat adult focal seizures. Moving to Slide 13, as we announced two weeks ago, we have continued enrollment in the STAR 1 trial and we will report top-line results in July, August and this year. 224 patients were screened and there are 170 patients randomized so far. There are 19 patients in the last few weeks of the baseline. We'll just say all patients will complete the baseline by mid-April and we will exceed the target of randomizing 180 patients. As of March 24, 110 patients have completed STAR 1 with 106 of these patients enrolling into STAR 2. We are very pleased with the high rate of roll-over and we believe that this indicates that minimum that the product is well tolerated. Slide 14, shows the design of our stop trial which is investigating the use of Zyner O2 and OA of the need. The trial is being conducted at 10 sites in Australia. This Phase 2 trial has a one week washout period for patients to stop taking their current pain therapy which typically is either an inset or cause II inhibitor. Following the washout period, the patients enter into a 7 to 10 day baseline period. Using electronic diary, the patients rate their worst pain of their knee on a scale of zero to 10 with zero being no pain and 10 being the worst pain ever. To be randomized the patient must be highly compliant with keeping their diary and have an average daily worse pain score between five and nine during baseline. Patients are randomized into one of three ARMs high doses ZYN002, low doses ZYN002 or placebo trials daily. Patients are treated for 12 weeks. Slide 15 indications the primary endpoint of the study is a change from baseline and weekly mean of the 24-hour worst pain score at week 12th. We are also evaluating WOMAC subscales od Pain, Stiffness, and Physical Function. In addition, we are evaluating two responder rate of greater than 30% and greater than 50% reduction in pain. Other assessments include the percentage of patient using [indiscernible] and rescue medication and the presence of joint effusion. We are thrilled to report on Slide 16 that 320 patients have been randomized, exceeding our 300 patient targets in this trial. All patients have completed their baseline phase, we will be reporting top-line results in July-August of this year. The knee daily Worst Knee Pain Score there in baseline for all patients randomize is 6.8, which is in line with other OA trials. The design of our trial for Fragile X Syndrome is found on Slide 17. FXS is the most common form of an imperative intellectual disability in males and also causes intellectual disability in females. It is caused by the mutation of the Fragile X mental retardation gene on the X chromosome. The Phase 2 trial that we refer to as FAB-C is an open-label exploratory trial that is being conducted in three sites in Australia. This trial is in children in between the age of 8 and 17 with the full mutations of the Fragile X. Since this is our first trial of children, all patients will start at the lowest dose of 15 milligrams daily as CBD with the option to move up 250 milligrams daily for the first six-week period based on patient tolerance. At the end of six-week period, the dose will increase and patients will be on a daily maintenance dose of either 50 milligrams, 100 milligrams or 250 milligrams of CBD for another six-week. Please turn to Slide 18. Last July we met with the FDA and we believe that they're interested to find a treatment of this very difficult disease. The FDA incur shift [ph] to evaluate several option measures to help determine good primary endpoint in the next trial. After this discussion, we just started to use Anxiety, Depression and Mood Scale or ADAMS as the Primary Outcome Measure. Secondary Outcome Measures that we are evaluating include the Aberrant Behavior Checklist or ABC, a Visual Analog Scale to Assess Hyperactivity and Impulsivity and some Quality of Sleep measures. Both the ADAMS and ABC have been validated in patients with Fragile X Syndrome. We are targeting to enroll 16 patients. The complex healthcare needs of children with Fragile X Syndrome and the significant impact on families and caregivers have caused delays in patients enrolling into the study. Top-line data are now expected to be available in the third quarter of 2017 rather than the end of the first half of 2017. Please turn to Slide 19 for a discussion of our second development candidate in our pipelines ZYN001, a THC Pro-Drug Patch. We believe that a patch increase bioavailability or THC while providing sustain delivery and a better tolerate profile than an oral formulation. Please turn to Slide 20. Our patch is a synthetic D-glyceric acid ester of THC, because it is Pro-Drug of THC we were issued a [indiscernible] matter of patent, which covers the product in the United States through 2031. We are working with [technical difficulty] Systems, a worldwide leader of patch technology to optimize our formulation of ZYN001 into a drug adhesive matrix patch. We expect to begin Phase 1 clinical trials for the end of June and to moving to Phase 2 trial before the end of the year. I’m really excited about the opportunities set we'll evolve this year for our two product candidates and I want to thank the development team, our investigators and the patients for helping us achieve so much in so little time. At this point, I’ll turn the call over to Jim.

[Jim Fickenscher:]

Thank you, Terri. Let’s begin with the discussion of the financial results for Zynerba on Slide 21. For the three months ended December 31, 2016 we invested $4.9 million on research and development a 48% increase over the same period of 2015. The increase in R&D expense was primarily caused by the increased spending on Phase 2 trials for ZYN002 in epilepsy and OA. G&A costs of 1.8 million were 17% lower than the fourth quarter of 2015 which included certain costs associated with the commencement of the company as a public company and cost related to maintaining and prosecuting our patent portfolio. Net loss for the quarter was $6.9 million or $0.71 per share compared to a net loss of $5.4 million or $0.62 per share in 2015. We received $4.7 million in net proceeds from an open market sales agreement in the fourth quarter of 2016. Excluding these proceeds the company burned approximately $5.5 million in cash in the fourth quarter of 2016. Moving to Slide 22, Zynerba strengthened its balance sheet with a successful offering which we completed in the first quarter of 2017. We raised 54.3 million in net proceeds from the sale and issuance of 3.2 million common shares at $18 per share. The proceeds from the offering in addition to the $31 million of cash as of December 31, 2016 implies an adjusted cash balance of $85.3 million. We believe that this is sufficient to develop five Phase 3 ready programs and assuming feedback from the supports the decision forward initiate at least one Phase 3 program and fund operations and capital requirements into 2019. There are approximately $13.2 million shares outstanding after giving effect the 2017 offering. I’ll now turn the call back over to Armando.

[Armando Anido:]

Thanks, Jim. Let’s move to Slide 23. We entered 2017 with tremendous momentum and expect it to be a transformational year. We have a strong pipeline and multiple key milestones are expected in the coming months for ZYN002 in epilepsy, OA and Fragile X. My current expectation is that we are likely to see the results of the epilepsy trial first followed by OA and then Fragile X. We are also excited enter the clinic with ZYN001 for the treatment of fibromyalgia and peripheral neuropathic pain. We look forward to providing additional clinical updates later in the year. I will conclude my comments on Slide 24. I believe that Zynerba is a compelling investment opportunity in the high growth Cannabinoid space for the following reasons. First, we believe there has been ZYN002 for focal seizure is a significantly de-risked asset because there are highly predictable animal model in open label and double-blind placebo control trials that have shown significant reduction in seizures for patients using CBD. Second, our unique transdermal deliveries have significant benefits and we expect them to be well received by patients and physicians. Third, those ZYN002 and ZYN001 address large markets which are not well served despite a plethora of approved treatment. Fourth, we’re expecting a number of significant milestones that may create value over the next 12 months and finally we believe we have the financial strength, differentiated assets and a strong management team to execute on our operating plans. Thank you very much for your attention this morning. I would like to open the call for your questions. Operator?

[Operator:]

Thank you. [Operator Instructions]. And our first question comes from Biren Amin from Jefferies. Your line is now open.

[Biren Amin:]

Yeah, hi guys. Thanks for taking the questions. Maybe just on STAR 2, how many patients continue to ZYN002 once they’ve progressed in STAR 2 and how many patients have dose reduced into the lower dose? Thanks.

[Armando Anido:]

Yeah, so we actually haven’t disclosed exactly the number of patients but I can tell you that we are quite pleased with the small level of discontinuations that we are seeing in STAR 2, which I think is a testament to the continued safety of the compound and your second question, please.

[Biren Amin:]

Second question was how many went from 195 to the lower dose?

[Armando Anido:]

It has actually been a relatively small number that have gone down in dose at this point.

[Biren Amin:]

Okay, and then, Armando, you gave us I think on Slide 12, the STAR 1 baseline information and it seems like median seizure frequency went up in I guess -- since December when you provided data on the initial 105 patients, so if I calculate I guess the last 65 patients that were randomized I think around a medium frequency about 11.2, which brought your overall number up. So was there a tendency to enroll patients with more frequency. And then just on that slide, I noticed a number of background meds went up on a percentage basis like for example Levetiracetam went from 37% to 42% but then interestingly Perampanel, they were I think, last time they were 29 patients that were at baseline, now there are 16. Can you just tell us why there is a discrepancy at least on that one background drug?

[Terri Sebree:]

This is Terri, I’ll have to get back to you on that. I think the patients do have a few more seizures. We are -- some of the patients have come in at the end, were from New Zealand and they just think that they had a few more baseline seizures than some of the other patients and the drugs are a little bit different, not very different but a little bit different in New Zealand compared to Australia. But basically these are just your garden variety epilepsy patients with focal seizures, there is nothing unusual about them.

[Biren Amin:]

Got it. Okay. All right. Awesome. Thanks for taking my questions.

[Operator:]

Thank you. And our next question comes from Charles Duncan from Piper Jaffray. Your line is now open.

[Charles Duncan:]

Congrats on good progress this last year. I wanted to ask you question a little bit more on STAR 2 and the design of that study. Are you going to able to periodically provide information on the patient disposition over the course of that study and what is the entire or total treatment duration on STAR 2? That’s it.

[Armando Anido:]

Yes. So Charles the STAR 2 is actually a 12 months trial. So patients that enroll into that trial are able to say on per period of up to 12 months. And our plan is at this point, we will not give any information prior to the double-blind results from STAR 1 being released and then I hope that we will then probably periodically speak a little bit about where we are with STAR 2, number of patients, numbers that have continued, in order to give some good additional information in an open-label trial.

[Charles Duncan:]

[Technical difficulty].

[Armando Anido:]

Charles, you’re breaking up.

[Charles Duncan:]

Okay. Sorry about that. Can you hear me now?

[Armando Anido:]

Yes, sir.

[Charles Duncan:]

Okay. Super. The next question that I add was regarding the Phase 3 or the next study plans. So you anticipate being able to [technical difficulty]?

[Armando Anido:]

Okay. Charles, you broke-up, but I think your main question was, are we still planning on meeting with the FDA after the Phase 2 results and seeking their advice on what the potential Phase 3 program? Is that correct?

[Charles Duncan:]

Yes.

[Armando Anido:]

Yes. And yes, we are. I think the after the results for the Phase 2 are in blinded and we have it. Our plan would be to have a, what would hopefully be an end of Phase 2 meeting with the FDA and then seek their advice and input on a Phase 3 program that we would, propose to them.

[Charles Duncan:]

Okay. And last question hopefully you can hear me is. Are there any counter indications in terms of application site such as applying other material such as even sunscreen or anything else that would prevent product use of the drug?

[Terri Sebree:]

Charles, this is Terri. Since, we’re doing the study in Australia, New Zealand and where they use a lot of sunscreen, we have allowed patients to use sunscreen or moisturizer. They’re allowed to apply two hours after they apply the study gel and we've had no issues with that. The really only counter indication would be, you cannot apply over a tattoo at this time and we don’t have information of that. And because of the high alcohol content, you would not want to apply to open sore. Those are the two things that [Multiple Speakers].

[Charles Duncan:]

Okay. That makes sense. Thanks for taking my questions. Sorry for the transmission.

[Operator:]

Thank you. [Operator Instructions] And our next question comes from Michael Higgins with ROTH Capital Partners. Your line is now open.

[Michael Higgins:]

Thanks for the update on the Phase 2s and congrats on the progress on those trials. Question on the 002 on the FAB-C trial, how many sites are enrolling? And also is there a requirement in the design that maybe particularly problematic for patients and their families, can you give us any update on the number enrolled since beginning of the year, would be helpful? Thanks.

[Armando Anido:]

Sure. So, thank you, Michael. So the FAB-C trial has three sites in Australia that are open and enrolling. And at this particular point we are in single-digits in terms of the number of patients that have enrolled and I think the key thing here is that this is a very, very difficult patient group, highly anxious and we've had a greater number that have been pre-screened and have had to cancel their visit for first dosing in the trial. I think the position believes that they will come in eventually, but these patients and their caregivers are also very, very cognizant of the type of trial that they have and they are very hesitant to kind of I guess mess up their life on a given day. So we anticipate that the total enrollment will hit 16. We have a good expectation that will happen, the enrollment target will be hit in the second quarter and will be in a position that we'll be able to report the top lines results now in the third quarter of 2017.

[Michael Higgins:]

Okay, very good. And just one follow-up if I could on ZYN001. I believe the formulation studies are complete, what’s the next gating step from that program or is it the formulation studies are not yet complete?

[Armando Anido:]

Yeah, so we’ve made a lot of progress with it and I think we are in the final flows of selecting what’s the final drug adhesive matrix patch is, we looked at a number of them. And we hope to be in the Phase 1 trial later on this half. So by the end of the first half we will be in the Phase 1s, we will have selected what we believe is the best of the patch formulations and we'll be up and running at that point.

[Michael Higgins:]

Appreciate it. Thanks, guys.

[Operator:]

Thank you. And our next question comes from Corey Davis with Wainwright. Your line is now open.

[Corey Davis:]

With respect to STAR 1, can you remind us how much of a reduction in the seizure frequency you’re going to need both for statistical significance and also what the community would like to see in terms of clinical relevance. And then how quickly after you finish STAR 1 can you get things open in the U.S. and start Phase 3 program. And ideally assuming both doses would hit statistical significance, would you want both doses in a Phase 3 and want both doses eventually approved or would the goal be to take the lowest effective dose forward?

[Armando Anido:]

Okay. So, thank you for your three part question, Corey. So let me start with the delta between active and placebo, we have set the powering of the trial to show a 20% difference between the active and placebo, and for clarity we have set the placebo reduction at about 20% which means that the active should come in at about 40% and that is a clinically meaningful delta for physicians and also with the statistical powers, this is a highly-powered study should give us very good significance. So that’s kind of the pathway in terms of that, the first question. On the second one is I think in terms of the speed at which we would be able to move forward and get started in the United States and actually to be quite honest also in Europe and probably back in Australia as well for Phase 3, is really going to be gated by the end of Phase 2 meeting with the FDA and getting that clarity from them. I think if all is running perfectly, I think you are probably looking at the beginning of ’18, maybe if there is no hiccups at all, the end of ’17, but I would say the beginning of ’18 would be a good target for us to get the Phase 3 program up and running, meaning site starting, site initiation visits complete and patients having the ability to start into the trial.

[Corey Davis:]

Right. And with respect to dose?

[Armando Anido:]

Final one. Terri, if you want to address do we go with both doses or do we go with --?

[Terri Sebree:]

I think Corey, that’s a hard question to answer right now, we need to get the data and look at the data and see the differences between the response in both groups and then we’ll make a decision, I think we’ll also take into account FDAs comments and concerns.

[Corey Davis:]

Okay, that’s great, thank you very much.

[Operator:]

Thank you. And our next question comes from Arlinda Lee from Cannacord. Your line is now open.

[Arlinda Lee:]

I wanted to ask about Fragile X, maybe if you could provide additional color on the enrollment and what’s the delay? I know you said that people are reluctant to kind of disrupt these children's normal schedule, but I guess I’m curious whether it's that people aren’t signing up, or they are signing up and to passing some of the enrollment criteria or any additional color would be helpful. Thanks.

[Terri Sebree:]

I just spent some time down in Australia and met with the three investigators, and I think it's just more -- its taking longer from the time that the investigator approaches the families and pre-screens the patients and then to get the patients ready to come in and get it worked out with these patients and with the patient’s families and their schedules. It's just taking a little bit longer than we anticipated between pre-screening and finally getting to patients [in the dose]. As Armando said, we anticipate the patients will be dosed, it's just taking a little bit longer just to get you know for the families to get everything ready for the patients to come into the study. They are qualifying for the study, it's just -- it’s a longer lease of time to get the kids used to the idea of coming in and get the families comfortable with it too. So we feel confident we’ll make the enrolment, it's just a little bit slower.

[Armando Anido:]

Yeah, I mean Arlinda, in thinking about the Fragile X kids, I mean they are super anxious and they actually have a hard time coming in for normal, this is with a physician. So this is not an uncommon occurrence, we’ve had a high number of them that have been screened and are pre-screened and ready to come in and then the morning of the appointments, they call and cancel, because the child is not kind of in the right frame of mind and super anxious. So their caregiver makes a decision that it's probably not the right day for them to come in. So it then takes a little time for them to reschedule when they'll come in.

[Arlinda Lee:]

Got it. And then on the endpoint, could you provide additional color on what discussions you've had with whom about moving forward in the anxiety endpoints? Thanks.

[Terri Sebree:]

So when we have the Pre-IND meeting with FDA in July, it was a very good meeting and they urge us to explore several outcomes and look at several different outcomes. So the ADAMS I think is one of the best measures to look at anxiety in Fragile X children. So that is our primary outcome measures, but we will also be looking at some of the others such as Aberrant Behavior Checklist and some of the Quality of Sleep. But I think for Anxiety that will come from the ADAMS scale.

[Arlinda Lee:]

Okay. Thank you.

[Operator:]

Thank you. [Operator Instructions]. And your next question comes from Lauren Chung from Maxim Group. Your line is now open.

[Lauren Chung:]

I have couple of the questions. On the STOP study, what do you need to show the difference from baseline pain score? And secondly, for the Fragile X study. Do you intent to open-up more sites from the three to having these issues that were previously discussed to sort of ramp up on the enrollment sites?

[Armando Anido:]

So on the STOP trial, it is the change from week 12 to the baseline time for both the active, as well as the placebo and we've powered it very highly with the 300 patients, now up to 320 that are randomize. What we are looking for is a delta of about one point between the active and the placebo change from week 12 from baseline. So it’s a clinically significant change, based on the physicians that treat these patients and we have highly powered it, so that’s what we’re expecting. And then relative to the Fragile X. At this point, because there are a limited number of sites even here in the United States that actually really have a very active Fragile X patient population. The three sites we are committed to and they are committed to getting to the 16 patients and we anticipate that they will get there. So at this point adding any additional is not in the plans.

[Lauren Chung:]

Thank you.

[Armando Anido:]

Thank you, Lauren. I think we have time for probably only one more question at this point. Operator?

[Operator:]

Thank you. We have a follow-up question from Michael Higgins from ROTH Capital Partners. Your line is now open.

[Michael Higgins:]

Just if we can get your 40,000 foot view on the regulatory environment at the FDA. This last political cycle we saw an increase in Med Marijuana states, but Sessions and Trump are -- seem to be leaning against those trends. Didn’t learn much from [indiscernible] schedule two decision, the DEA decision last week on that. Just trying to get your sense for say regulatory environment? Thanks.

[Armando Anido:]

Yeah, so Michael, thanks for the question. I think that the Medical Marijuana legislation at the state level, I don’t think actually affects us tremendously. We are focused on going down the FDA pathway, we believe that for the FDA and the DEA we and the others that are going down the same pathway are solution for some of their concerns about the various regulations at each of the individual state. So I feel very confident that regardless of what happens at the individual state, I think that the folks that are involved in doing the right things by going in through Phase 2, Phase 3, making sure their manufacturing processes meet GMP, is the most appropriate way to go and I think that the FDA and the DEA, I think are cheering us on in order for us to get the market as quickly as possible, because I think we do become a solution for some of their concerns about the wide range of regulations at each of the states that has now approved Medical Marijuana for use.

[Michael Higgins:]

Appreciate. Thanks for the follow-up.

[Operator:]

Thank you. And at this movement, I’m showing no further questions. I would like to turn the call back to Armando Anido for any closing remarks.

[Armando Anido:]

Great. Thank you, Grace and thank you all for joining us this morning. We do appreciate your continued support and look forward to providing you with any additional updates over the coming months. At this point, our call is complete. Thank you.

[Operator:]

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone have a great day.