Marinus Pharmaceuticals Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2023

There are 13 speakers on the call.

Operator

Greetings, and welcome to the Marineris Pharmaceuticals Third Quarter 2023 Financial Results and Business Update Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You may queue back up for a follow-up if time permits. And now, it is my pleasure to introduce your host, Sonya Weigel, Senior Vice President, Investor Relations, Human Resources and Corporate Affairs.

Operator

You may begin, Ms. Weigel.

Speaker 1

Thank you, and good morning. With me from Verintas are Doctor. Scott Braunstein, Chairman and Chief Executive Officer Kristi Schafer, Chief Commercial Officer TJ Lyons, Chief Business Officer Doctor. Joe Houlihan, Chief Medical Officer And Steve Sandfield, Chief Financial Officer and Chief Operating Officer. Before we begin, I would like to remind everyone Some of the statements we are making today are forward looking statements under the securities laws.

Speaker 1

These forward looking statements Performance or achievements could differ significantly from those expressed or implied by such forward looking statements. These risks and uncertainties and risks associated with our business are described in the company's report filed with the Securities and Exchange Commission, including Form 10 ks, 10 Q and 8 ks. I will now turn the call over to our CEO, Doctor. Scott Braunschke.

Speaker 2

Thank you, Sonia, and welcome to our call. Before I turn to our progress in the Q3, I want to express my appreciation to those of you who attended in person or via webcast our investor and analyst events in September. I also want to thank our key opinion leaders, Doctor. Darr, Doctor. Koenig and Doctor.

Speaker 2

Khan, who reviewed their clinical The Q3 of 2023 was marked by strong XITOMI sales growth, Meaningful progress in expanding global access to zethylamy, continued advancement of our late stage clinical programs An ongoing development of our 2nd generation oral gonaxalone product. We are pleased to report that Zetami sales In the Q3, slightly exceeded our mid September expectations with revenues of $5,400,000 And we are once again raising our guidance to the range of $18,500,000 to $19,000,000 Just 4 full quarters into our launch, We are pleased to report our annual revenue run rate is well north of $20,000,000 These results Validate our efforts to build a strong commercial organization and execute on our rare disease focused strategy. Kristi Schafer, our Chief Commercial Officer, will review our achievements and the steps we are taking to prepare for 2 new potential launches In 20 25, in addition to the early commercial success in the U. S, we are making meaningful progress in expanding access to zitomi Today, we announced the launch of our new global managed access program Designed to provide physicians the opportunity to formally request the use of zitalmi for their patients in geographies where the product is not commercially available and as supported by local regulatory requirements.

Speaker 2

We are pleased to be collaborating with Durbin, an experienced leader in this area who will facilitate the program. Thomas Lyons, our Chief Business Officer, We'll provide an overview following comments from Christy. Our commercial partners in the EU, China and MENA regions have also made notable progress. The Center For Drug Evaluation of the China National Medical Products Administration granted priority review of the NDA submitted by Additionally, Orion Corporation continues to plan for the commercial launch of zetalmi In selected European countries in 2024, and we expect our partner in the MENA region, Biologics, We have product available for distribution by the end of this year. We are proud that in such a short period of time, Marinette has created a global network that will provide the opportunity for CDD patients and their families to access our novel anticonvulsant therapy.

Speaker 2

Let me take a few moments to review our clinical pipeline, starting with an update on the Phase 3 RAISE trial of IV ganaxalone In our last update provided at our Investor and Analyst event in September, we noted the RAISE trial enrollment was on an upward trajectory since early August following the activations of all clinical sites. Although total enrollment has continued to grow and screening activity remains The rate of enrollment has continued to show more variability than we expected. Based on current enrollment trends, We now project to enroll the number of patients required for the interim analysis by the end of the Q1 of 2024 rather than our previous guidance of January. As a result, we now anticipate top line data in the Q2 of 2024 if the predefined stopping criteria for the interim analysis are met. The entire organization remains acutely focused on advancing our Phase 3 clinical trials in refractory status epilepticus and TSC.

Speaker 2

We are confident in the benefit that IV Ganaxalone to bring to critically ill patients and a significant commercial opportunity for the 1st novel therapy for acute status in well over a decade. We are committed to successfully completing both the RAISE and TRUST PSC trials in 2024 and continue to make the investments to prepare for these commercial launches. Preparations are underway for an NDA filing, and we don't expect the additional delays to significantly impact the Finally, with the success of the Meetali, the recent extension of our cash runway into Q4 2024 And tightening up our spend to focus on our most valuable market opportunities, we believe we have the appropriate resources required This completes 2 key data readouts and prepare for a bright future. Before I turn to our oral franchise, I want to give a brief update on our RESET trial in established SC. We have chosen to discontinue The Phase 2 RESET trial in established status to focus additional resources on the expansion of our refractory clinical programs, including further investigation of a potential development opportunity in suprarefractory status.

Speaker 2

Our efforts will continue to focus on completing the RAISE trial, Accelerating the enrollment for RAISE 2 as well as generating additional data that has the potential to support further studies In SRSE and RSE Health Economic Outcomes Research, we will evaluate every investment the company is making and prioritize the opportunities that we believe will maximize shareholder value. Moving to our oral franchise, We are actively enrolling patients in our global Phase 3 TRUST TSC trial. We believe that tesali can address a significant unmet medical need for patients suffering Blinded discontinue rates in this trial remain low, which gives us high confidence in the tolerability and potential efficacy of our new titration schedule. We expect top line data mid-twenty 24 and have every reason to believe that this study can replicate the success of the topline The team in the Marigold trial and our real world experience to date. With several key readouts in 2024, We believe we have laid a strong foundation for near and long term growth and have prioritized key programs and our cash runway accordingly.

Speaker 2

With that, I'd like to turn the call over to our Chief Commercial Officer, Kristin Schaeffer.

Speaker 3

Thank you, Scott, and good morning. I'm pleased to present the progress we have made in the Q3 and over the 1st year following our successful Xetomi launch. We established the Tommy as a brand that physicians and patients trust, which validates our innovative approach and positions us for success With 2 near term additional potential launches, we continue to collaborate closely with our CDD Centers of Excellence, helping connect them with their community and local HCPs to maximize access to care for their patients. As a result of these successful efforts, net product revenues have grown steadily quarter over quarter since the TALMI's launch. Importantly, our patient retention rate remains very strong at approximately 80%.

Speaker 3

In the Q3 of 2023, net product revenues grew to $5,400,000 At the end of the Q3, we had approximately 140 patients active on therapy and on average it takes approximately

Speaker 4

There

Speaker 3

are 225,000,000 covered lives Payers are continuing to recognize that this is a serious condition to treat, Reducing reimbursement time from 4 to 2 weeks. Given our solid growth, we are pleased to increase our annual revenue guidance for 2023 to a range of $18,500,000 to $19,000,000 I want to thank the entire commercial team for the dedication and Looking ahead, a cross functional team of Marinus employees is working hard in preparation for the AES Annual Meeting, where we will continue to establish narrowness as a committed member of the epilepsy community. We are excited to build on our presence from last year's Conference in our 1st year in attendance as a commercial organization. We plan to engage with over 300 U. S.-based Doctor.

Speaker 3

Daniel Gossett from Texas Child Neurology and ongoing engagement with HCPs and patient advocacy groups. Additionally, our scientific and medical teams have planned for several data presentations that Joe will discuss in more detail. The rare genetic epilepsy franchise continues to evolve the SITOMI brand with new initiatives surrounding the importance of genetic testing, Early patient identification and caregiver engagement all support our continued progress into 2024 and focus on the CBD community, while allowing us to plan for an expanded indication in TSC. TSC planning and development is well underway with a clear focus on franchise efficiencies and the distinct needs of the TSC community. In terms of the next phase of our planning for the acute care franchise, we are making significant progress in preparation for the IV launch and are taking a strategic approach to plan for and build a hospital focused acute care commercial organization.

Speaker 3

During our Investor Day event in September, we underscored the clinical gaps faced by refractory status patients who progress through multiple ASMs or IV anesthesia, as well as the significant treatment costs tied to each approach. Since then, we have fully outlined the substantial economic burden on the healthcare system, while administering usual care to these patients. These vital insights have bolstered our total value proposition. And going into next year, we will be testing the key value messages across both clinical and financial stakeholders. This feedback directly from our customer base will support and refine how we Zetami's success to date provides a positive foundation for growth and a continued reason to believe that ganaxalone revenues have I'll now hand the call over to our Chief Business Officer, T.

Speaker 3

J. Lyons, to discuss our managed access programs And how we are expanding global access to Zitami.

Operator

Thank you, Christy.

Speaker 4

I'd like to take a moment to provide more detail on our new global managed access This initiative supports our mission to bring innovative medicines to patients with a CDD diagnosis. Irenis intends to provide physicians access to Zetalmi for qualifying CDD patients in geographies where Zetalmi is not available commercially and as supported by local regulatory requirements. Marius Access Program will be managed by Durbin, the leader in the international management and distribution of Part of Unifar Group's Product Access division, Durban works in partnership with global pharmaceutical and biotech companies to facilitate managed pharmaceutical product access programs throughout the world. The company has over 25 years of experience in designing and implementing access programs. Access requests in geographies where Mariner has Commercial arrangement in place will be managed by the local commercial organization in their respective territory and are not eligible for the Marineris access program.

Speaker 4

Additional details can be found in our press release issued this morning. We believe this program has the potential to generate incremental revenue from Aranes and could be supported by funding from sources such as government agencies, local hospitals, charitable institutions, Private insurance and in some cases, private pay depending upon the country. Net of transaction fees, the revenue generated from this program will go to Merida. We're very pleased to be working with Durban on the launch of the Mariner's access program. This program, along with our collaboration agreements in place in Europe, China and the MENA region will allow us to expand our global access strategy and help make SITOMI available for appropriate CDD patients in geographies where there are no approved treatment options and local regulations allow.

Speaker 4

At this time, I would like to turn the call over to our Chief Medical Officer, Doctor. Joe Lohan for an update on our clinical programs and development.

Speaker 5

Thank you, TJ, and hello, everyone. It's my pleasure to provide an overview of the pipeline progress we've made since our Q2 call. I'll start with our development programs in status epilepticus. As Scott mentioned, the RAISE trial of IV gonaxalone in refractory status continues to enroll With over 75% of the patients required for the interim analysis randomized to date, U. S.

Speaker 5

Centers account for the bulk of enrollment with newer sites continuing to add patients. With that said, based on the current enrollment rates, we believe the number of patients required for the interim analysis As Scott mentioned, although patient screening continues at a high rate, we're seeing more enrollment variability than anticipated. Our paramount consideration is limiting enrollment for the right patients to demonstrate the clinical benefit of ganaxalone in a highly refractory RSV population. And I'm confident that the criteria for study qualification will be that. We continue to maintain a strong emphasis on site engagement and education, including in person site outreach from our Medical Scientific Affairs team, peer to peer programs between site coordinators and principal investigators, Now, let me provide a brief overview of what to expect from the interim analysis.

Speaker 5

The protocol provides for an analysis of 82 patients, which is powered at 94% to detect a 40% difference between gunaxalone and placebo. As we've discussed previously, the co primary endpoints assessed 1, onset of accidents as measured by the proportion of participants with As reflected in the proportion of participants, you do not progress to IV anesthesia within 36 hours. The key secondary endpoints are: 1st, Time 2 status gestation following study drug initiation, which is another way to assess onset of effect and second, Lack of progression to IV anesthesia for 72 hours following study drug initiation. The latter endpoint is important because it assesses durability of effect after the infusion of study medication is completed. The top line data of the interim analysis This will include results of the co primary and key secondary endpoints, and we plan to announce these results because the study meets stopping criteria for efficacy.

Speaker 5

Other secondary and healthcare utilization endpoints will be analyzed after all patients have completed the full study and will be presented at upcoming scientific meetings. Following a successful interim analysis, we plan to begin transitioning the majority of RAISE sites to open label enrollment and then shortly transition the subset of these sites to the RACE 2 study. This will help support a smooth and rapid completion for RACE 2 with the goal of driving improved timelines. We anticipate enrolling the first patients in RAISE-two prior to the end of the year. In addition to supporting the EU regulatory filing, RayStu may also provide an opportunity for the expansion of the U.

Speaker 5

S. Label. We believe this study will serve a unique objective, which is to assess IV gonaxalone in a broader RSV patient population. The importance of treating at this earlier stage is supported by a recent study in JAMA Neurology that emphasizes the value of rapid status association, showing the duration of status as an independent predictor of subsequent neurologic disability. Our research has shown that patients who would not progress IV anesthesia for a variety of reasons and instead receive ongoing treatment with second line IV AEDs Also create a significant clinical and economic burden on healthcare system resources and create an important market opportunity for IV Ganaxalone.

Speaker 5

Additionally, we continue to supply IV ganaxalone to physicians upon request under emergency INDs for super refractory status epilepticus For SR SE. To date, 21 patients have been treated for SR SE, including 7 with a new dosing regimen developed specifically for this use. So far, results with the new regimen have been highly encouraging. Because of its potential utility in treating SRSV, We're considering initiation of a proof of concept study with IV Ganaxalone. Investigators will present additional clinical data on patients I'd now like to discuss updates on our oral franchise, starting with TSC.

Speaker 5

Seizures in TSC are often treatment resistant despite the availability of newer disease specific anti seizure medication. To address this unmet need, we're evaluating gonaxalone in PSP patients with refractory seizure. This Phase 3 study plus PSP is currently enrolling with top line data anticipated mid-twenty 24. As a reminder, we announced at our September Investor and Analyst event. Protocol amendment for the TRUST PSV trial has been finalized.

Speaker 5

The trial is now anticipated to enroll 128 patients, which provides 90% power to detect a 25% reduction in PSC associated seizures. Based on the blinded data, the discontinuation rate in this trial remains low at approximately 10% with only one treatment discontinuation to date attributed to the occurrence of Spamolone. This bolsters our confidence in the new titration schedule and we believe this new dosing paradigm can prove tolerability and therefore potentially have a favorable effect on efficacy as well. A review of the baseline demographics from the trust The PSP study provides some insight into the patients being enrolled. It's an extremely refractory population with a median baseline seizure rate of 52 per month And with patients taking an average of 3.1 in common and anti seizure medications, 41% enrolled to date are taking Afinitor and 25% are taking Epidiolex.

Speaker 5

As a reminder, this will be the 1st study in PSC to Now, I'll turn to our 2nd generation product development. As we previously announced, we initiated enrollment in our multiple ascending dose or MAD study with preliminary data from several cohorts expected by year end 2023. We're planning to finalize a clinical program for Lennox Gastaut syndrome in the first half of twenty twenty four, Pending results for the MAD trial. If the data from the MAD study are sufficiently informative, we could potentially move directly to a pivotal Phase 3 study. We believe this new formulation to be the future of the oral franchise and will continue to target its use in patients suffering from LGS and other refractory epilepsies.

Speaker 5

We saw a meaningful improvement in pharmacokinetics in our single ascending dose trial and are hopeful that the MAD study will reinforce our belief The 2nd generation formulation will have pharmacokinetic properties allowing twice a day administration and will provide physicians the ability to individualize This is a crucial aspect of seizure management and treatment resistant epilepsy. Also, we're pleased to share that all 7 of our submitted abstracts Among these will be a poster presentation from the open label extension of the Marigold study with 2 years of patient follow-up, which will show data supporting the durability of effective gonadagelone in treating refractory seizures associated with CDD. We've recently begun to analyze data from patients with 3 years of open label follow-up and our preliminary review shows that seizure reductions are stable over this longer duration of treatment and are consistent with outcomes at 2 years. We'll be hosting a scientific exhibit at AES, highlighting the breadth of our Ganaxalone research program and we hope to see many of you there. To conclude, we have a number of key data announcements in the next year and we remain resolute in our goal to successfully advance our ongoing clinical trials and develop new treatment options to help patients and families suffering from severe refractory seizure disorders.

Speaker 5

I'd now like to turn the call over to our CFO and CEO, Steve Fanstiel, who will provide you with the financial

Speaker 6

Thanks, Joe, and good morning, everyone. I am pleased to be able to share our financial results for the Q3 of 2023. We ended the Q3 with cash, cash equivalents and short term investments of $176,400,000 which is expected to provide cash runway into the Q4 of 2024. The cash balance includes net proceeds of 25 of $900,000 from the sale of 3,700,000 shares to our ATM facility in the quarter. Turning to our revenue and operating guidance.

Speaker 6

As Kristi mentioned in her update, experienced another strong quarter of ZETOMI sales. Therefore, we are increasing our ZETOMI annual guidance again with net revenues now projected to be in the range of $15,500,000 to $19,000,000 which represents an increase of $1,500,000 on the lower end and $500,000 on the higher end of the prior guidance range. For BARDA revenue, we continue to expect revenues to be in the range of $11,000,000 to $12,000,000 We project our GAAP Operating expenses, inclusive of SG and A and R and D expenses, to be in the range of $158,000,000 to $162,000,000 of which we expect approximately $16,000,000 to be non cash stock based compensation. This is a reduction from our prior guidance of $160,000,000 to $165,000,000 and is driven by ongoing efforts to carefully manage costs and prudently invest in SITOMIC commercialization in our ongoing Phase 3 trial. I'll now take a few minutes to summarize our financial results.

Speaker 6

For the Q3 of 2023, we recognized product revenues The $5,400,000 $13,000,000 for the 3 9 months ended September 30, 2023, as compared to $600,000 for each of the same periods in the prior year. These revenues consist of the Tommy product sales, which we launched in the Q3 of 2022. Separately, we recognize BARDA revenues of $1,900,000 $10,800,000 for the 3 9 months ended September 30, 2023, as compared to $1,800,000 $5,100,000 for the same period in the prior year. The increase is driven primarily by activity associated with start up of our API oncoring initiative. Research and development expenses were $23,700,000 $73,000,000 for the 3 9 months ended September 30, 2023, as compared to $19,000,000 $58,500,000 for the same period in the prior year.

Speaker 6

The year to date change was due to increased costs associated with our ACI oncoring effort, As a reminder, the API on drawing effort is approximately 70% funded by BARDA, So the increase in R and D expenses is partially offset by the increased part of revenues in 2023. Selling, general and administrative expenses were 14,900,000 $45,800,000 for the 3 9 months ended September 30, 2023, as compared to $13,400,000 $42,200,000 for the same periods in the prior year. The primary drivers of the change on a year to date basis were increased headcount related to the U. S. Launch of the Tommy.

Speaker 6

Interest income was $1,900,000 $6,400,000 for the 3 9 months ended September 30, 2023, as compared to $500,000 $600,000 for the periods in the prior year. The increase in interest income was driven by the overall increase in cash, cash equivalents and short term investments and increased yield on those balances. Interest expense was $4,200,000 $12,600,000 for the 3 9 months ended September 30, 2023, as compared to $2,600,000 7,000,000 for the same period in the prior year. The increase is driven by drawdown of an additional $30,000,000 of credit under the Oaktree agreement in March 2022 upon FDA approval for SITOMI and non cash interest expense related to our revenue interest financing with regard. The company reported a net loss before income tax $33,000,000 $101,200,000 for the 3 9 months ended September 30, 2023, as compared to net income before taxes of $75,000,000 $16,200,000 for the same periods in the prior year.

Speaker 6

As a reminder, the prior year results included the one time sale of our priority review voucher in the 3rd quarter. These totals include non cash stock based compensation expense of $4,000,000 $11,600,000 for the 3 9 months ended September 30, as compared to $3,900,000 $11,100,000 for the same periods in the prior year. Cash used in operating activities was $91,000,000 for the 9 months ended September 30, 2023, as compared to cash used in operating activities of $91,000,000 for the same period in prior year. Before we move to Q and A, I will make a few concluding remarks. We are making meaningful progress in a number of areas, including strong Xetami sales growth, Progress in expanding global access to ZITOMI, continued advancement of our oral and IV gonaxone clinical programs and ongoing development of our 2nd generation product.

Speaker 6

As a result of these efforts, 2024 promises to be an exciting year for Marineris with 2 key data readouts expected. We look forward to seeing those of you attending the AES conference or one of the other investor or scientific conferences we will be attending in the coming months. Thanks again for your continued interest in Mariner. Operator, you may now open the call to questions. Thank

Operator

you. And again, we do ask that you refrain and keep yourself restricted to one question. You may queue up for a follow-up. One moment please for your first question. Your first question comes from the line of Brian Abrahams of RBC Capital Markets.

Operator

Your line is open.

Speaker 7

Hey, guys. Good morning. Thanks for taking my question. Congrats on all the progress. On the RAISE study, can you talk about some of the ways You could potentially reaccelerate enrollment there without compromising the stringent enrollment criteria that and the study conduct that you have.

Speaker 7

And Curious your level of confidence in the potential to complete the interim cohort by the end of the Q1 and readout second quarter. And then Would love if you can maybe just quickly comment on what you're seeing in terms of zetalmi trends, the types of patients getting on as that seems to be that growth there It seems to be accelerating even since September. Thanks.

Speaker 2

Thanks, Brian. I will let me take the raised question. I'll pass it over to Joe if he has any other comments and then I'll pass it over to Christy for her additional commentary on zetalmi. I think we have seen with the RAISE trial ebbs and flows of this study without question. We have and I've said this To lots of investors, we have weeks months where we have very high enrollment and we have weeks months that are still lower on a monthly basis for enrollment.

Speaker 2

We've got about 3 times the active number of sites recruiting patients, looking for patients as we did earlier in the year. I could not be prouder of the team and the way they've really energized sites across the country within Canada and Australia. And we're modeling today really enrollment rates that are very much aligned with the first half of the year, even though we have 2 to 3 more In terms of actually accelerating from here, we are so confident that these sites are All playing an active role in screening and those patients will those sites will deliver patients. And we still believe that the rate of enrollment can incrementally move ahead, but we wanted to be more conservative in our estimates to make sure that we did not have to move time lines. So I would say we feel very confident about more conservative time lines.

Speaker 2

We don't want to have to move them again. It's disappointing for us, and I know it's disappointing for investors. But I will say, I think The team has continued to be incredibly stringent in terms of the enrollment per se. And I think when our last protocol amendment when we And in language, I'm only enrolling patients who require IV anesthetics. That did narrow the pool.

Speaker 2

I think we Initially thought we'd have a placebo rate of about 30%, consistent with about a third of patients who would ultimately Not good to IV anesthesia, and I think we feel today that placebo rate is going to be much lower because of the more stringent criteria. And maybe to this discussion, Brian, we've really overpowered the study from where we started to where we are today. But that gives us Extremely high confidence on the study stopping at the interim. Joe, any comments you want to add there? And then we'll pass it to Christy after that.

Speaker 5

Yes. No, I'm also very confident about the enrollment. We're still, as I mentioned, we have high contact with sites. We're planning some new enrollment initiatives. We find that when patients when the sites receive some motivational messages, we're going Try to get messages out there

Speaker 2

to keep the study top

Speaker 5

of mind as we finish up coming toward the end of enrollment. You typically see sites Suddenly pick things up when they know that the time to enroll is limited. We hope to see that here. But we're maintaining our contact with the sites And the ebbs and flows, we expect to see things pick up again. Very confident about that.

Speaker 5

So I'm fully confident we're going to get to the enrollment target by the time we said we would.

Speaker 2

Yes. And just the last thing I'll add, Brian, to Joe's comment We're seeing substantially higher screening activity. And typically screening in the study has led to about a 50% enrollment rate. And I would just say Anecdotally, in the month of October, for example, that screening rate was lower than 50%. So I think that's just the and flows of the patients, but the activity level is extremely high, which is different than what we were seeing earlier in the year.

Speaker 2

So The sites are engaged, they're screening, and just happened to be the last few weeks, we've had more patients respond to standard therapy or not specifically yet enrolled. And I think that's important and gives us a lot of confidence in our projections. Sorry to cut you off there, Joe. Kristy, you want to jump in on Zottali?

Speaker 3

Absolutely. Good morning, Brian, and thanks for the question. We as a team have been so encouraged with the meaningful progress that we continue to have. The types of patients that you mentioned continue to stay the same. However, that's very, very broad.

Speaker 3

We see very, Very young and we have seen some young adults, also come into our enrollment progress. But what we have learned very significantly is that This brand is very promotionally responsive. So what we've done, we spoke a little bit about last quarter is we have expanded our reach Into the community, our COEs continue to be kind of central to our communication And our promotion, but then understanding that they work very closely with the community as well to get patients on therapy. Now we also talked a little bit last quarter about additional ICD-ten leads that we have. We have invested in additional sets of data To get that reach even farther, and so that data continues to grow and then that just triangulates back to how we are moving our promotion and targeting physicians and So, we have a lot that we're doing and it's working.

Speaker 3

And again, we're just really 0ed in on the fact that this is a very, very responsive market, not only with physicians and caregivers, and we continue to make sure that we are meeting these patients where they are and delivering what we need to.

Operator

Your next question comes from the line of Joseph Thome of TD Cowen. Your line is open.

Speaker 7

Hi there. Good morning.

Speaker 8

Thank you for taking my question. Maybe just in terms of the enrollment, are you seeing certain sites are very strong enrollers that you think you can rely on over the next quarter? Are there others that maybe have a high level of screen failure rates, meaning that they don't really maybe get the criteria? I guess, Is there bias in the sites that you're enrolling in the near some of these initiatives that you mentioned aimed at kind of increasing contact there? And maybe just a quick one on the safety database.

Speaker 8

How many patients above that 82 would you need for a filing, if any? Thank you.

Speaker 2

Thanks, Joe. Let me start with the last question. Once we have the interim analysis, we will go to the FDA and Really have a discussion on the actual number of patients they would like to see on a drug. Certainly, I'm a believer that This is always a function of risk reward. I'll let Joe talk about what we've seen in a blinded fashion in terms of safety, but I think we feel very good about Safety profile, we've talked openly about not only continuing the double blind portion during the interim analysis, but Then flipping the study over to an open label study, we've got RAISE 2 sites up and running, which is also using the same dosing protocol So I think we're going to have more than an ample number of patients who are getting a RAISE regimen at the time of filing, certainly given the efficacy and safety data that we'll have in the Phase 3.

Speaker 2

In terms of the sites, I think the thing that I've been most Encouraged about and really since the summer, we added 10 or 15, I would say, new sites since This summer and many of those have been producing quite nicely in the study. So I think we have a substantially broader number of sites that are participating. It's been a long time for some of the bigger sites that have been in the study. We're asking them to Clean their databases now and really finalize the patients. So we are working our study coordinators hard.

Speaker 2

But to your question, I think we have more sites that are screening and following patients. I don't look at sites that are screening and have screened failures as something they're doing wrong. I think it's just a function. They're actively looking for patients. They're following the patients.

Speaker 2

They're getting consent. And either the patients are responding to second line therapy. And I'll remind folks, Our data would suggest it's probably happening sometime between 12 24 hours, which I would argue is pretty mediocre medical care overall or the patient can't be consented or there's a reason that ultimately the patient is contraindicated for the study. We've had patients with Hi, renal insufficiency, liver failure, etcetera. But we generally take Screening is a good sign and many of our best sites will have screen failures that's expected.

Speaker 2

I think just We've had a little less luck with turning them into enrollment this month. Joe, anything you want to add about sites?

Speaker 5

No, I'd just reiterate, The recent enrollment has come from newer sites, sites that have gotten up and running more recently. So as you know, again, as Scott mentioned, screening is high, enthusiasm is high and some patients just end up getting screened out. I think if we I'm very encouraged by the continued screening efforts and if we keep doing that, we'll enroll the study. As in any study, there's variability in how sites Perform, but we're seeing a broader representation of sites actively enrolling in the study and screening.

Speaker 2

And Joe, the last Joe told me the last comment I'll make is that I think it's Critical that our team, our clinicians and our site coordinators continue to really make sure that we're enrolling the right patients and we The high standards that we've had to date, that's the only way the study is going to win and have a decisive victory. And So it's always a catch-twenty 2 in that regard, but I have all the respect in the world for our clinical team and our physicians and our MSLs who are out there Educating, but not bending the rules to enroll patients just so we hit the numbers faster. That's always the balance when you run a study like this.

Speaker 5

Scott, you mentioned safety. Yes, I neglected to mention the safety looks good consistent with the Phase 2. We're not seeing any new safety signals. So that's looking favorable.

Speaker 2

Thanks, Joe.

Operator

Your next question comes from the line of Joon Lee of Truist Securities. Your line is open.

Speaker 4

Hey, thanks for taking our questions. I just want to confirm that at 82 patients, the study is 94% power to detect a 40% FX size on The co primary endpoints and but you haven't disclosed the stopping criteria. And has the stopping criteria changed over time as Look at the enrollment, which has been a little slower than expected, given that if you don't stop at interim, that you could actually split into maybe at a later time point for the full study to be done.

Speaker 5

Got you. Thanks for the question. Yes, that's absolutely right. It's 94% power to detect a 40% treatment difference. Actually, We could see statistical significance at a delta lower than that, down in the range of 25%.

Speaker 5

We would still see And the stopping criteria are statistical significance. When you do an interim analysis, there's always Spend in the alpha that you have to do, and that works out actually to have if we went to the end, it actually would have a minimal impact on the statistical power at the end of the study. But even with a it's 0.0293, But that is with that, we have 94% power to detect that 40% delta. So again, well powered at the interim, very confident about it.

Speaker 2

And Joe, the only I'll add, June, to be clear, we have not moved the goalpost at all on that. I think We had very conservative assumptions going into the trial, as I mentioned earlier, not having a good handle On exactly what the placebo rate would be, we conservatively thought about a placebo rate 30% or higher. And that's clearly, at least what we believe to be the case today, a much we're seeing a much lower placebo rate, which just in our minds gives us A lot more flexibility in terms of hitting statistical significance, but we have not moved the goalpost at all in that regard. Operator, next question.

Operator

Your next question comes from the line of Charles Duncan of Cantor Fitzgerald. Your line is open.

Speaker 9

Hey, morning, Scott and team. Congrats on the progress commercially. Appreciate the comments on placebo rate and Stringency for RAISE as well as discontinuation rate for Trust TSC, all good, but I didn't want to talk about that. I wanted to talk about the MAPS program. So I had a question on MAPS.

Speaker 9

I guess, I'm Kind of wondering what was the driver for the MAPS program? Was it patient or prescriber request? Was it your opportunity identification? And can you give us a sense of the financial terms with Urban? How much, And I'll call it dollar of sales or dollar of revenue will you retain?

Speaker 9

Thanks.

Speaker 2

Thanks, Charles. Really Appreciate the question. Since the launch of XITOLMI, we routinely, more than once or twice a month receive requests from patients, families, physicians outside the U. S. About access to zitomi.

Speaker 2

And so much of what we do is spending time with not only the IFCR in the U. S, but the CDK alliances in Europe and in other countries and our efforts with The Chinese CDKL5 Alliance, for example, has not only helped us understand just how big that How many patients are in China, over 600 that have been identified and growing and certainly has driven The orphan disease status and the priority review from the Chinese government. So we are in constant Discussions with our alliance groups around the world, and I think it's critical for us to help provide the drug to those patients, families And advocacy group. So 1st and foremost, that was our goal here. Secondly, I think we're in a position now with our supply that we can really think about global expansion.

Speaker 2

I mean, that's a critical piece of this. We're very comfortable with the 2 year shelf life and those all of those processes get a little bit more complicated as you go global. So I think we've made Tremendous progress in our supply chain and our comfort level of supplying drug. And I think we've had a lot of inbound interest in that regard from companies to partner And so maybe T. J, I'll flip it over to you and Steve, if you have any comments to talk a little bit more about the economics and how we're thinking about pricing.

Speaker 4

Thanks, Scott, and thanks, Charles, for the question. We Dermot, as we mentioned in both the release and in the conversation today, has a lot of experience in this space in EAP, And we're relying on their guidance on the pricing, which we anticipate will fall somewhere between EU pricing and projected EU pricing and U. S. Pricing on a country by country basis. So that's our pricing trajectory at the moment yet to be finalized.

Speaker 4

And with respect to the proportion that we would retain, It would be a significant majority of top line net expense that transaction fees from Durbin. Your

Speaker 6

next question comes from Charles, Steve, I would just add that Durbin is an important partner, but they're really administering the program on our behalf. We aren't disclosing the fees in detail here, but they make up a low percentage of the overall revenues expected.

Operator

Your next question comes from the line of Mark Goodman of Leerink Partners. Your line is open.

Speaker 10

Yes. With respect to SITALI, I was wondering if you could just give us a flavor for the gross to net in the quarter and how to think about it into next year. And Now that you've been out there a while, can you give us a sense of the number of patients that you think are truly there, the CDD patients? What's the big number there that we can get to that's reasonable? You know where the patients are and you feel pretty good that those are attainable.

Speaker 10

And are you seeing any off label in the 140? Thanks.

Speaker 2

Thanks, Mark. Steve, you want to start with gross to nets?

Speaker 6

Yes, sure. Happy to share a little bit of detail there. I think the gross to net deductions have been pretty consistent with our expectations. We've always said around 20%. It's actually been a little less than 20% over the course of the year on a year to date basis.

Speaker 6

We do see that the gross to net deductions coming down slightly. We have about 50% of our patients on Medicaid as their primary, the other 50% commercial. But of that 50% of commercial, about 25% have secondary Medicaid access. As they get through their deductibles, that Medicaid secondary drops off, and we see a little benefit from a gross to net. But they've been really consistent just below about 20%.

Speaker 2

Mark, let me make one or two comments before I pass over to Christy to give you a little more color. I think we've always We believe there are about 100 newborns a year, about 2,000 pediatric patients. The 3rd party hospital the 3rd party's ICD-ten codes certainly are suggesting that there's well north of 800 patients today and that number is growing. And remember, this code has only been around for 3 or 4 years. I will tell you, we still know many of our centers of excellence still don't use the ICD-ten codes.

Speaker 2

So we certainly know there are more than that number of patients out there coming into the population. I would say the biggest thing we've seen That's different from the time of launch. We have seen adults being treated for the disease, which has been a nice upside to how we thought about the market. So we certainly believe the market Potential is larger given the fact that we're seeing adult neurologists treat patients than we did originally. Christy, maybe I'll pass over to you for any additional

Speaker 3

Yes. Thanks, Scott. And Mark, thanks for the question. Scott makes really great points there. So again, just to kind of 0 in on it, We really believe that this 2,000 addressable pediatric patients is very achievable.

Speaker 3

And our continued progress really underscores that. With the fact that there are between 75100 newborns a year and we do not yet see that reflected in the ICD-ten codes. Now we know that We need to continue to drive that message forward, with the usage of the code. I think old habits are Hard to break for some physicians and then we just continue with that message. Another thing that continues to drive that number upward is not only Our promotional efforts with genetic testing, but the AES also Has a very, very large drive now to promote genetic testing, not only in newborn patients, but in maybe those who have A symptomatic diagnosis that don't have a diagnosis yet, from a genetic cause of their epilepsy.

Speaker 3

So, All of these things, not only what we're doing, but even in the epilepsy community are driving larger diagnoses of patients, which will help support Not only just the 2,000 addressable pediatric patients, but then again maybe some older patients as well.

Operator

Your next question comes from the line of Andrew Tsai of Jefferies. Your line is open.

Speaker 11

Hey, thanks. Good morning. Appreciate all the updates. So maybe one more on the RSV. Obviously, the goal is to get to 82 patients by March of next year.

Speaker 11

So as we think about your enrollment cadence, how should we think about the holiday period November, December timeframe, could enrollment slow down a little bit as people take time off or not necessarily? Or maybe said another way, Where would you ideally like to be on enrollment by year end 2023? And then finally, could we expect you when could we expect you to give you the next update on enrollment? Thank you.

Speaker 2

Let me start with the update, Andrew. I think we'll continue to update people. Certainly, at JPMorgan would be the most logical Time or the JPMorgan Healthcare Conference is the most logical time to update enrollment. Typically, we've given a business update at that point in time. So we'll continue to share the enrollment numbers with you folks.

Speaker 2

What we had talked about For us to hit these enrollment numbers was 4 to 5 patients a month. We felt very confident about that. With the current projections and our Timing, we're really expecting 3 to 4 patients a month to get to the finish line, for us to get and so We've tried to be as conservative as we could in terms of that thinking. At least my general view is that holidays, weekends Doesn't seem to have a big impact here. I would say last few weeks to months, we've probably enrolled 40%, 50% of our patients on Saturday Sunday, my wife used to call them Saturday night specials when I was in practice.

Speaker 2

So I don't think we've seen A major difference in cadence around holidays, certainly the weekends where you would think less staffing in the hospital would have an impact. So we're generally thinking about these trends kind of having their good and bad weeks, but are going to smooth out the 3 to 4 patients per month and that's And as I said, we'll plan on that update. Joe, anything you want to add to that?

Speaker 5

No, actually just remember New Year's Eve last year was a good time for enrollment. I don't think, yes, this is different than a chronic outpatient And I don't think that we'd expect holidays to have the same kind of impact as it has on a study like that.

Operator

Your next question comes from the line of Douglas Tsao of H. C. Wainwright. Your line is open.

Speaker 12

Hi, good morning. Thanks for taking the questions. I'm just curious in terms of the decision to discontinue the RESET trial And you sort of obviously consider pursuing development in SRC. Is that driven by sort of the feasibility or just the sort of simplicity of clinical how it would fit in clinical practice, maybe it's Easier or just from a value proposition pricing standpoint? Thank you.

Speaker 2

Yes. Thanks for the question, Doug. Really appreciate it. I think there's a lot of factors that play in here. I'll let Christy comment on the commercial side.

Speaker 2

But I think overall, the message that we're which I've always shared with investors is I always thought the ER opportunity would be a more I already thought the ER opportunity would be a more complex one for us. We need a lot of sales reps. There are Higher pressures in the emergency room from a pricing standpoint, but I thought it was important for us to do this study to really start to understand dosing in a frontline setting. That being said, as we've done this study, the costs have just really gone up dramatically As we have to obtain community consent and there's a huge upfront cost, and then we can spend money community consent and we may lose a site because they lose a coordinator or physician moves territories. And so I just Looked at what we were spending, we all did looked at what we were spending on the study and I was quite worried it was going to just continue to grow and we didn't have a great Commercial vision for this side of the business.

Speaker 2

The flip side is that we continue to get lots of requests for a super refractory status. We've shared that data a lot. We certainly think there is a regulatory path to expanding the label and getting to 63 grams of And we think it's a critically important and very meaningful business opportunity for us. And I think as we sat down as a team and really strategize with our commercial team and our senior MSL teams and we think about At GEO or Health Economic Outcomes, we recognize that we're going to have to do more in the space to really maintain our leadership and and access to the drug. So we really sat back as a team and said, we've got to spend our dollars wisely where we are today.

Speaker 2

It would be nice to continue the study, but given the cost of it, we think the dollars are going to be much more valuable, let's say, in a, call it a Phase 4, 63 gram Captisol 1,000 milligram of gonaxalone study in SRC patients, one that Physicians can understand dosing, we can align with the FDA. And obviously, we've seen a ton of interest given the number of patients that we've treated. So From a business standpoint, that's the way we're thinking about it. Chris, do you want to add anything on the commercial side?

Speaker 3

Yes. Thanks, Doug. I think one thing that Scott mentioned was just the infrastructure that it would take for Promotional effort inside of the ER, which I think we could all say is pretty robust. And so You know, who we are as Marinus is really focusing on an unmet medical need and the total value proposition And the SRC population is quite large. And what we mean by total value proposition is not only the Economic value proposition, but the clinical value that we could potentially bring is quite large.

Speaker 3

When we look at cost of care Inside the hospital system and moving and progressing through status, it grows significantly as it gets to SRS And if we're focusing on nonmet medical needs, these patients are in dire need and these healthcare providers really need something that is effective for these patients. And we've been encouraged what Joe's team has shown us with some of the patients that have been treated and we know that these patients are definitely responsive And given circumstances, so again, looking at the economic and clinical value prop for these patients is quite large.

Operator

Thank you. That's all the time we have for questions today. I will now turn the call over to Scott for some closing remarks.

Speaker 2

Thanks everyone for dialing in. Sorry that we couldn't get to all the Q and A today. I will openly admit that I'm a little bit under the weather and A little bit of a struggle for me to get through this call today, but appreciate you all dialing in. And we are keeping our heads We'll be working to the finish line on both of these studies, which we're incredibly excited about. Commercial team continues to do just a fantastic job, and we didn't spend any time on it on the call today, but we will continue to expect to have data on our 2nd generation program by year end.

Speaker 2

It's one that we're incredibly excited about as well. So thank you all for dialing in, and we look forward to getting the finish line on these studies, and we'll be in touch with you all shortly. Thanks so

Operator

much. This concludes today's conference call. You may now disconnect.

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Key Takeaways

  • Strong commercial traction for zetalmi, with Q3 net product revenues of $5.4 million, raised 2023 guidance to $18.5 – $19 million, and an implied annualized run rate exceeding $20 million just four quarters into launch.
  • Launch of a Global Managed Access Program in partnership with Durbin to deliver zitolmi to CDD patients in territories without commercial approval, complemented by EU, China and MENA collaboration agreements for 2024 rollouts.
  • Phase 3 RAISE trial of IV ganaxalone in refractory status epilepticus is on track to enroll 82 patients by end of Q1 2024 for an interim analysis powered to detect a 40% treatment difference, with topline data anticipated in Q2 2024.
  • Advancement of the oral gonaxalone franchise via the TRUST TSC Phase 3 trial—now enrolling 128 TSC patients (90% power for a 25% seizure reduction) with topline results mid-2024—and an ongoing MAD study for a twice-daily second-generation formulation targeting LGS.
  • Robust financial position with $176.4 million in cash and short-term investments providing runway into Q4 2024 and GAAP operating expense guidance narrowed to $158 – $162 million, reflecting disciplined spend on core rare disease programs.
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Earnings Conference Call
Marinus Pharmaceuticals Q3 2023
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