Marinus Pharmaceuticals Q4 2023 Earnings Call Transcript

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Provided by Quartr
March 5, 2024

There are 13 speakers on the call.

Operator

greetings and welcome to Maranis Pharmaceuticals 4th Quarter and Full Year 2023 Financial Results and Business Update Call. Today's call is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. And it is my pleasure to introduce your host, Sonja Weigel, Senior Vice President of Investor Relations, Human Resources and Corporate Affairs.

Operator

Ms. Weigel, you may begin.

Speaker 1

Thank you and good afternoon. With me from Meredith are Doctor. Scott Braunstein, Chairman and Chief Executive Officer Kristi Schaeffer, Chief Commercial Officer Doctor. Joe Houlihan, Chief Medical Officer and Steve Fanzil, Chief Financial Officer and Chief Operating Officer. Before we begin, I would like to remind everyone that some of the statements we are making today are forward looking statements under the securities laws.

Speaker 1

These forward looking statements involve substantial risks and uncertainties that could cause our clinical development program, future results, performance or achievements to 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 reports 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 Braunstein.

Speaker 2

Thank you, Sonia. Marin has concluded 2023 with a strong finish across all fronts commercial, clinical and operational. On today's call, I'll provide a brief overview of some of the key areas before turning it over to our leadership team. Starting with an update on ZITALMI. We finished 2023 with another strong quarter of enrollment and robust quarterly growth.

Speaker 2

As a result of the progress made by our commercial team, we expect to achieve profitability on our Xetomi commercial investment by the Q2 of 2024, ahead of our previous 2 year target. Kristi will provide a summary of our revenue results in her remarks, as well as an update on our investments that continue to grow the CDD business and our launch plans as we prepare for 2 critical Phase 3 data readouts in the second and fourth quarters of this year. Our commercial partners in the EU, China and MENA regions continue to make important progress to support zitomi launches around the globe. In China, the TENACHA team has been granted priority review of the NDA submission in TDD as well as contributing to the enrollment of the TRUST TSC trial. In Europe, Orion continues to plan for the launch of ZYPALME in select European countries in 2024.

Speaker 2

Finally, in the MENA region, we are targeting that our partner Biologics will begin their distribution strategy in the second half of this year. Concurrently, we are expanding our manufacturing investments to ensure that we can adequately supply not only our global partners, but the broader market opportunities for Zetalmi over the coming years. Turning to our clinical pipeline, I'll first share an update on our Phase 3 RAISE trial of IV gonaxalone in refractory status epilepticus. As we announced in our press release this afternoon, we are pleased to report that we have met the enrollment criteria for the interim analysis and now have more than 90 patients enrolled in the trial. We expect to deliver the interim results to the data monitoring committee over the coming weeks and plan to announce the outcome within the first half of the second quarter.

Speaker 2

Based on continued strong enrollment seen over the past 6 months, we project approximately 100 patients to be included in the secondary endpoint analyses. This growing data set should drive a robust package for both the FDA filing and our health economic outcomes. We expect to have the comprehensive trial results over the summer and to present this data at a series of medical meetings in the Q4. We are currently planning for an NDA submission in the Q1 of 2025 and are expecting a priority review. We see the recent uptick in enrollment as a strong reflection of the potential market opportunity for the IV franchise.

Speaker 2

Domestically, we believe the addressable market for RSC is approximately 35,000 patients per year and we have the unique opportunity to bring a novel therapy to physicians. We plan to build our leadership in the hospital by continuing to invest in future status epilepticus research, while making the appropriate commercial investments with the goal of ascertaining value based pricing and broad physician adoption. Let me move to an update on our oral pipeline. Approximately 85% of the patients have been enrolled in our TRUST TSC trial and the discontinuation rate is below 7%. Due to some minor delays in screening, we expect to complete enrollment in the TRUST TSC trial during the first half of the second quarter.

Speaker 2

As a result, we now anticipate our top line Phase 3 results in the first half of the fourth quarter of this year rather than the end of Q3. We could not be more pleased with the baseline demographics of the patients enrolled, the high percentage of patients rolling over to the open label portion of the study and the low overall discontinuation rates, which are substantially different than what we saw in Phase 2. We believe the quality of this data set will support a compelling pricing strategy consistent with what we've seen to date for zitami. The commercial team continues to make the appropriate investments to prepare for a potential launch in 2025 and we are eager to offer patients suffering from refractory ATSC a novel anti seizure therapy. Based on our market analysis, the addressable patient population in refractory TSC is projected to be about 10,000 patients in the United States.

Speaker 2

By leveraging our current commercial organization, we believe successful expansion of this opportunity will require a modest incremental investment. As a result, our goal is to drive profitability for the entire Xetomi franchise within 6 to 12 months of the 2025 TSC launch. 2024 will be a pivotal year for the company as we have built a solid foundation that has us well positioned to drive future growth. Together, the CDD, RSC and TSC markets represent a multibillion dollar opportunity where we believe we can take a firm leadership position for these disease states and other refractory epilepsies. With an established commercial and clinical track record, we look forward to building our momentum for zetalmi, while also reporting on these key data milestones later this year.

Speaker 2

I'll now turn the call over to our Chief Commercial Officer, Christi Schaeffer.

Speaker 3

Thank you, Scott, and good afternoon, everyone. In my remarks today, I will share an update on our XITOMI launch, the progress we are making to grow our CBD franchise and an update on our commercial readiness planning for potential launches into TSC and RSC. Starting with Atomy and our 1st full year of launch, we generated net product revenue of $19,600,000 for the full year 2023. This solid performance is the result of our strategy to establish zitome as a critical treatment in the comprehensive management of seizures associated with CBD and to ensure that patients have seamless access to Zetomie from prescription through fulfillment. We ended 2023 with more than 165 patients active on therapy.

Speaker 3

We continue to see swift payer approval with time from enrollment to patient fill of approximately 2 weeks in the second half of twenty twenty three, representing a consistent improvement throughout the year and demonstrating payers' understanding of Zetami's impact on patients in need. Additionally, payer approvals of CVD prescriptions remain at nearly 100%, indicating strong payer recognition of the value of Looking ahead, we continue to expect full year 2024 U. S. S. SITOMLI net product revenues of between $32,000,000 The midpoint of this range represents growth of nearly 70% versus 2023.

Speaker 3

We are executing a number of strategies to maximize CDB market penetration. We are utilizing new data sources and analytics to better identify patients who are not billed with the CDD ICD-ten code and third party claims and identify patients who may have CBD, but have yet to have a confirmatory genetic test. Leveraging these data, we have also rolled out a genetic testing initiative which will help accurately diagnose patients. And with the open label extension data published late last year, we are able to emphasize the sustained efficacy and safety profile supporting the use of Zetalmi as a proven treatment for combating seizures associated with CDD. We are excited for the opportunity to bring Xetalmi to more CDD patients in need and believe our commercial strategy has us well positioned to realize the potential of this novel treatment.

Speaker 3

Our experience with Xtami provides Marinette with a solid foundation for 2 potential commercial launches in 2025. These include Xetami's expansion into TSC and the IV formulation of ganaxalone for RSC. Launch planning is well underway for both TSC and RSC in anticipation of 2 key trial readouts later this year. Let me take a few minutes to summarize our commercial planning in support of each of these programs. Starting with TSC, our rare genetic epilepsy business is led by Senior Vice President, Lisa Lejuan, a 30 year veteran in ultra rare disease.

Speaker 3

We are planning to build on the strong foundation we have established with SITOMI in CBD and expand our proven strategy to capture the larger TSC market. We believe there is a strong business rationale and market opportunity for the expansion of our Zetomni business into TSC where we know there is a significant unmet need in refractory patients. We plan to take advantage of synergies with CDD and TSC while leveraging market data that will further support an additional commercial launch. Research suggests that there is a potential strong overlap with CDD rare disease treaters and unlike CDD, TSC patients may be easier to identify through a well established ICD-ten code, which has been in use for more than 30 years and the physical TSC attributes, which may be identified at birth. Our early plans to expand into the TSC market include disease state education for payers, engagement with very active and supportive advocacy partners, including the TSC Alliance, trust TSC data education with payers and formulary decision makers in the advance of an sNDA submission, and an enhancement of our patient services and specialty pharmacy model.

Speaker 3

Turning to RSC, with enrollment criteria now satisfied for the interim analysis and the RAGE trial and data anticipated in Q2, let me take a few moments to summarize our commercialization and launch plans. We have assembled a team with extensive commercial experience in the hospital setting under the leadership of industry veteran, Kristin Rudasil, our Vice President and Business Unit Lead for the Acute Care franchise. In 2024, our Acute Care business is focusing on aligning development and execution with key milestones. Driving access post approval is pivotal to our launch strategy and this year we are aiming to complete key access strategies such as channel and distribution plans, NCAP filing and pricing. In addition to strategic planning, we are preparing for execution with the build and deployment of a field access team entering the market as early as this summer.

Speaker 3

Activating this team under the FEDAMA-one hundred and fourteen guidelines is designed to address key access stakeholder and payer groups with information that addresses their key value drivers. These teams are permitted to disseminate healthcare economic information that is critically important to these financial decision makers who often control or influence formulary decisions for new therapies. With corporate and system level financial decision makers, we believe engaging with these key stakeholders can accelerate access and awareness leading to more favorable formulary placement and will ultimately provide patients with earlier access to treatment. The combination of our team's leadership, the commercial plans we have outlined and the success of ZITOMI gives us the confidence that Ganaxalone has the potential to become a blockbuster franchise across CBD, TSC and RSC. I look forward to providing further updates on our progress and plans throughout the year.

Speaker 3

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

Speaker 4

Thank you, Christy, and good afternoon. I'm pleased to share an overview of our pipeline progress, which includes 2 key upcoming Phase 3 data readouts and initiatives to support our continued clinical and scientific understanding of RSC and TSC. Starting with the RAISE trial of IV gunaxalone in Genaxalone in refractory status. After a strong end to 2023, I'm excited to report that in January, we hit our enrollment requirement for the interim analysis. With this critical milestone achieved and date scheduled for DMC review of the data, we continue to expect to report top line results in the Q2 of 2024.

Speaker 4

Now that we've achieved the required enrollment target for the interim analysis, the clinical operations team has been hard at work ensuring the integrity and completeness of the study data to be provided to the DMC for their review. Here's what you can expect next in the process. Presently, the clinical operations team is focused on data cleaning in anticipation of generating interim analysis data set. Once the preparatory steps are complete, the data will be provided to the DMC for a determination of whether the studies met the pre specified efficacy stopping boundaries on the co primary endpoints. If the study achieves these pre specified stopping rules, the Mariner's leadership team will then evaluate the data and share top line results publicly soon thereafter, including both the co primary and key secondary endpoints.

Speaker 4

Successful results would serve as the basis for submission of a U. S. Regulatory filing. While preparation of data for the upcoming DMC is ongoing, as Scott mentioned, we'll continue to enroll patients in the double blind phase of the study. Data from these additional patients will be pooled with the interim analysis data set and will serve as the basis for analysis of other secondary and healthcare utilization endpoints.

Speaker 4

If double blind enrollment is stopped based on interim analysis results, we will then enroll new patients in a planned open label extension to collect additional safety data that will support upcoming regulatory filings and future discussions with payers and other key stakeholders. As a reminder, the interim analysis will include results of the co primary and key secondary study endpoints, which measure both onset of action and durability of effect in controlling status epilepticus. The co primary endpoints are status cessation within 30 minutes and prevention of escalation to 3rd line treatment with IV anesthetics. For the key secondary endpoints, we are looking at another measure of onset of action, the time to status cessation analysis and a further measure of treatment durability, lack of progression to IV anesthesia for 72 hours, which encompasses the 24 hour period following the end of the gonaxolone infusion. Following

Speaker 2

release of

Speaker 4

the top line data, analysis will continue and will yield results on other secondary endpoints and important healthcare utilization outcomes, including time on mechanical ventilation, days in the ICU and the hospital and discharge destination. The results are anticipated by the fall and we plan to present them at major medical meetings later this year. Turning to our 2nd refractory status trial. RAISE II is a Phase 3 double blind placebo controlled registration study targeting enrollment of 70 patients who have failed first line bezodiazepine treatment and at least one second line IV anti seizure medication. In this study, we're evaluating IV benaxalone in a population that's earlier in the continuum of refractory status in whom IV anesthesia is less likely to be an imminent next step in treatment.

Speaker 4

We believe this study, which is expected to complete enrollment by the end 2025 will support a European approval and can be used to expand the U. S. Label. Data presented at AES last December as well as other published research suggest that earlier treatment intervention in patients with status improves clinical outcomes. At that December meeting, we presented results from a 5 year analysis of status epilepticus treatment dynamics in the U.

Speaker 4

S. This analysis showed that even in the absence of IV anesthesia, refractory status that was treated with 3 or more IV anesthesia medications had worse outcomes and longer lengths of stay. A RAISE 2 trial is designed in a way that will allow us to assess the impact of IV gonaxalone on clinical outcomes and healthcare utilization in this subgroup of patients. Moving to super refractory status or SRSE. We continue to supply IV ganaximel to physicians upon request under emergency INDs for these patients whose life threatening condition has high rates of morbidity and mortality.

Speaker 4

To date, over 25 patients have been treated for SRSE with ganaxalone under EINDs. Preliminary data on outcomes have been encouraging, particularly since we implemented a dosing regimen tailored to the treatment of SR SE. This regimen incorporates a higher daily dose of approximately 1,000 milligrams of kinaxalone with 63 grams of Captisol. Based on the outcomes we've observed, we intend to conduct a proof of concept study of IV Ganaxalone in approximately 50 patients with SRIC. We plan to go to the FDA in the Q2 of this year with this modified dosing regimen and begin the study before year end.

Speaker 4

Turning towards the Atolemy franchise, first with TSC. Seizures in TSC are often treatment resistant despite the availability of newer disease specific anti seizure medications. To address this unmet need, we're evaluating gonaxalone in TSC patients with refractory seizures in our ongoing TRUST TSC trial. This is a global Phase 3 randomized double blind placebo controlled trial of adjunctive gonaxalone, which will enroll approximately 128 patients with TSC associated seizures. As Scott mentioned, we've achieved over 85% of target enrollment and are confident that we'll complete full enrollment early in Q2 this year.

Speaker 4

As a reminder, the trial provides 90% power to detect a 25% difference in seizure reductions between the maximum and placebo. As discussed previously, the titration schedule has been modified in consideration of the pharmacokinetics of Ganaxalone and the timing of side effect onset in prior studies. Currently, the discontinuation rate in the study is below 7%, giving us confidence in the potential benefit of the revised titration, not just on tolerability, but potentially on efficacy as well. In addition, we're seeing over 85% of patients who complete the study transition into the open label extension, a rate as high or higher than observed in the Marigold study. We're targeting submission of a supplemental NDA in the first half of twenty twenty five with a priority review expected.

Speaker 4

Additionally, we plan to expand our investment in Zetami to explore its potential in the treatment of other rare epilepsies. Planning is underway for a clinical trial that would assess oral Ganaxalone for the treatment of a broad range of epileptic encephalopathies. Many patients with seizures and neurodevelopmental disorders don't satisfy diagnostic criteria for Lennox Gastaut syndrome or other well defined developmental and epileptic encephalopathies. And we feel there's a substantial unmet need of procedure treatment in these patients. We plan to initiate a proof of concept trial assessing ganaxalone in approximately 100 patients in the Q4 of this year.

Speaker 4

In closing, helping patients and families suffering from severe refractory seizure disorders remains at the core of what we do. Our clinical team is motivated and focused on ensuring these lives are transformed with new, safe and effective treatment options. I'd now like to turn the call over to our CFO and COO, Stephen Fansteel for a financial update.

Speaker 5

Thanks, Joe, and good afternoon, everyone. I am pleased to be able to provide a financial update as well as share our financial results for the Q4 and full year of 2023. First of all, I am proud of how we manage the business in 2023. We ensured that we remain focused on our critical investments in the RSC and TSC trials and on the commercialization of CDD. On the latter, we now project a breakeven on our CDD commercial investment in the first half of twenty twenty four, which is ahead of our projections and less than 2 years from the launch.

Speaker 5

We were also not afraid to make tough decisions, such as discontinuing the established status epilepticus trial and making other cost reductions to ensure adequate cash runway headed into 2 significant data readouts. As a result, we ended 2023 with cash, cash equivalents and short term investments of 150,300,000 dollars This is expected to provide cash runway late into the Q4 of 2024 and importantly, we project a cash balance of greater than 100,000,000 dollars at the expected RSC readout. We announced early in the quarter that we project 2024 U. S. SITOMI net product revenues of between $32,000,000 34,000,000 As Christy mentioned, this increase in 2023 represents continued strong and steady execution on the launch.

Speaker 5

Unlike 2023, we are not providing full year 2024 operating expense guidance at this time, as the level of investment will depend on the outcome of the RSC and TSC Phase III trials. However, we expect operating expenses and cash burn in the near term to be consistent with the 2023 trends. I'll now take a few minutes to summarize our financial results for 2023. We recognized the TALMI product revenues of $6,600,000 $19,600,000 for the 3 12 months ended December 31, 2023, as compared to $2,300,000 $2,900,000 for the same periods in the prior year. The full year total of $19,600,000 exceeded our revised Atomy revenue guidance range of between $18,500,000 $19,000,000 Separately, we recognized BARDA revenues of $600,000 $11,400,000 for the 3 12 months ended December 31, 2023, as compared to $1,800,000 $6,900,000 for the same periods in the prior year.

Speaker 5

Our actual 2023 BARDA revenue of $11,400,000 was within our guidance range of between $11,000,000 $12,000,000 Research and development expenses were 26 $400,000 $99,400,000 for the 3 12 months ended December 31, 2023, as compared to $21,400,000 $79,900,000 for the same periods in the prior year. The year to date change was due to increased costs associated with our API onshoring effort, increased TSC and RSC clinical trial activity and increased headcount. As a reminder, the API onshoring effort is approximately 70% funded by BARDA, so the increase in R and D expenses is partially offset by the increased BARDA revenue. Selling, general and administrative expenses were $15,400,000 $61,200,000 for the 3 12 months ended December 31, 2023, as compared to $14,700,000 $56,800,000 for the same periods in the prior year. The primary drivers of the change on a year to date basis were annualization of the U.

Speaker 5

S. SITOMI launch costs and increased headcount. Full year 2023 GAAP operating expenses consisting of both SG and A and R and D expense was $160,500,000 which was within our revised guidance range of between $158,000,000 $162,000,000 Interest income was $1,700,000 $8,100,000 for the 3 12 months ended December 31, 2023, as compared to $1,700,000 $2,400,000 for the same 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 4,300,000 dollars $16,900,000 for the 3 12 months ended December 31, 2023, as compared to $3,700,000 $10,700,000 for the same periods in the prior year.

Speaker 5

The increase is driven by drawdown of an additional $30,000,000 of credit under the Oaktree agreement in March 2022 and non cash interest expense related to our revenue interest financing with SIGARD. The company reported a net loss before income taxes of $41,800,000 $142,900,000 for the 3 12 months ended December 31, 2023, as compared to a net loss before income taxes of $32,700,000 $16,400,000 for the same periods in the prior year. As a reminder, the prior year's results included the one time sale of our priority review voucher in the 3rd quarter. These totals include non cash stock based as compared to $3,800,000 $14,900,000 for the same periods in the prior year. Cash used in operating activities was $118,000,000 for the 12 months ended December 31, 2023, as compared to cash used in operating activities of $112,900,000 in the prior year.

Speaker 5

Before we move to the Q and A, I will make a few concluding remarks. We are very pleased with our progress to date, all of which has led to a number of potentially transformational milestones in 2024. We have 2 key data readouts in RSC and TSC that is positive could drive significant growth for our gonaxelan franchise, and we look forward to sharing these and other important updates in the months ahead. Thanks again for your continued interest in Marinus. Operator, you may now open the call to questions.

Operator

Thank we will take our first question from Brian Abrahams with RBC Capital Markets. Your line is open.

Speaker 5

Hi there. Good afternoon. Congrats on the enrollment completion of the interim cohort and thanks for taking my question. I guess on TSC, as we think about the potential future commercial opportunity there, I'm curious how the reimbursement dynamics that you're seeing with XITALI both on and for on and off label use are shaping your view of what the ultimate what the future dynamics might look like commercially in the TSC indication?

Speaker 2

Thanks. Thanks, Brian. I'll kick it off. This is Scott. Thanks for the congratulations.

Speaker 2

And then I'll kick it over to Christy. We're incredibly proud of the job that Christy's team has done. Within 6 or so months of launch, we had every state Medicaid program reimbursing zetalmi. We currently have over 80% of commercial plans with relatively straight guidelines and we've yet to have a patient who's been denied a therapy. Equally interesting since launch, we've had a meaningful number, about 10% of our current sales are coming from spontaneous use refractory epilepsy or DE patients.

Speaker 2

And we're seeing overall about 2 thirds of those scripts, those prior authorization forms being reimbursed by the payers. So I think we really understand that the payers recognize that there are not a lot of therapy for these refractory patients. We have a limited data set and we're very pleased with the reimbursement dynamics as of today. And I think going into TSC, we will have a second randomized control study showing the value proposition. We'll have a patient population in TSC, which in many ways mimics the CDD population, a highly refractory patient population that has failed multiple prior therapies, a patient population currently getting standard of care either Epidiolex or Afinitor or mTOR inhibitors.

Speaker 2

And this will be the 1st add on study ever with Afinitor that's randomized double blind placebo control. So I think we're going to go into all of our discussions with a high level of I would say a high level and high expectations that what we will share with payers will be equally compelling to that of the data in CDKL5 for zitomi. Krissy, you want to add any? I know I rambled on, I apologize. But anybody you want to add?

Speaker 3

Nothing additional that I want to add, but I think that the most important thing is that we regularly are confirming assumptions that in the refractory patient population that payers have a very, very distinct appreciation for what these patients have gone through. It's a different disease state than CDD, yes. But I do think that, data suggesting that although these patients have gone through many, many different medications, they still are significantly at need in the refractory patient population. If CBD is an indicator of that success that we've had in the CBD population,

Operator

we'll be

Speaker 3

thrilled to see that again in TSC.

Speaker 5

Got it. Thanks. Thanks, Brian.

Operator

And we will take our next question from Payton Bonsack with TD Cowen. Your line is open.

Speaker 6

Hi, guys. Good afternoon and thanks for taking our questions. I guess, looking forward to potentially the data is positive, what remains to be done for the NDA package? How quickly do you think besides the guidance that you've given? And is there anything outstanding on either the safety database that needs to be completed or GMC?

Speaker 6

And that's it for me.

Speaker 7

Yes. Let me kick it off, David, and then

Speaker 2

I'll pass it over to Joe. So for everyone out there, as a reminder, this is the same API material that we have approved in zetalmi. So a substantial proportion of the NDA package has already been effectively blessed by the FDA. Certainly, the process from API to an IV product will be new. We have, as many of you know, we made a formulation change over a year ago.

Speaker 2

We did that with guidance from the FDA. About half of the study will be actually in patients who have received that new formulation. And over the coming weeks after positive data, we will set up a meeting with the FDA, a pre NDA CMC meeting, very similarly what we did with ttolmy and that was an incredibly successful strategy. For the filing, we will want to gather all the data from roughly 100 patients to provide that to the FDA. Although our expectation is the label will be driven from the interim and just to share with folks, we actually will have 83 patients in the interim.

Speaker 2

We had 2 patients enrolled in the same day to finish the study because we're Marinus, nothing is ever simple. But so that interim will be based on efficacy on 83 patients, but we will and we are expecting a label around those 83 patients, but certainly we'll provide all of the safety data and all of the double blind data from all 100 patients as part of the filing. We will keep our sites open and we will enroll patients should the interim be stopped for efficacy. We will continue to enroll patients in an open label fashion to continue to allow physicians to experience using the drug and will also file that additional open label data with the FDA. Certainly, the regulatory team is expecting to have a pre NDA meeting with the FDA soon after the top line data with our current plan for filing the NDA in the Q1 of 'twenty five, early in the Q1.

Speaker 2

And that's really aligned both with the data that we have to compile, but equally important with our commercial team's best thinking about the time of launch and when we're thinking about major reimbursement, including NTAP in 2026. So the wheels are in place from our standpoint to be 100% prepared and we'll walk you through as we go through these processes through 2024. Joe, anything that you want to add on the datasets?

Speaker 4

No. I mean, as Scott mentioned, I mean the pivotal dataset for efficacy is going to be the 83 patients from the interim analysis and then we'll be supplementing that, especially the secondary endpoints, we'll be looking at, we expect somewhere around, I don't know, we'll continue to enroll until the DMC meet, but that full data set of 100, who knows how many patients enrollment has picked up quite a bit. We'll analyze healthcare utilization endpoints and secondary endpoints on that larger data set. And so that will give us more patients with those secondary endpoints and we'll have a good sized safety data set as well. As Scott said, especially with continuing to enroll open label if the DMC stops the study for efficacy.

Speaker 6

Thank you guys so much for taking

Speaker 4

my questions.

Speaker 2

Thank you.

Operator

And we will take our next question from Andrew Tsai with Jefferies. Your line is open.

Speaker 7

Hey, thanks. Good afternoon. Congrats on the enrollment completion as well as other updates. So maybe an open ended question for you guys. If an investor were to ask you what are maybe 1 or 2 things that keep you up at night with the Phase 3 RSC study, that what things could have been done better or on an execution or a trial design standpoint, what would they be?

Speaker 7

And then really quickly, if the stopping criteria is not met, would you still provide some type of update right away to the Street? Thank you.

Speaker 2

Yes. Thanks, Andrew. I'll take the second one. We will unequivocally update you all on should the DSMB suggest that we continue the study. So you should expect some update from us in the 1st part of the second quarter.

Speaker 2

I think one of the things probably in the last few weeks that was keeping me awake, these are very complex patients. In our Phase 2, we had one patient who was on a 100 different drugs and just collecting all of that data could create issues. I'm going to really give a shout out to our clinical team who several months ago started to create really computer generated checkpoints for the data to make sure that the individual data sets were aligning with our primary endpoints accordingly. And with what physicians were filling out and what was being filled out at the sites And we could do that in a way to really ensure a high quality of the data. I would say, as Joe mentioned in his prepared remarks, we finished enrolling the study at the end of January.

Speaker 2

We've now had several weeks to start cleaning the data. And so I feel what was keeping me awake at night was the integrity and the complexity, but I think the team has really worked hard to get us there. And we're confident in delivering the data set as we talked about and probably even more excited about sharing some of the secondaries in the fall as well, Andrew. So the last few weeks, the team has made great progress and we are looking forward. This has been a 3 year project, the labor of love.

Speaker 2

I think our clinical team has done an amazing job at enrolling the right type of patients for this study. And I think we're going to unequivocally know that not only does this drug work, but can it have a material impact in the treatment of refractory status patients. And I was just at a meeting in Orlando this weekend. I met with 5 investigators and, it was a lot of excitement about the data set from the investigator team and I think they're equally excited to see the results as well. Thanks for the question.

Speaker 2

Great.

Speaker 7

Yes, fingers crossed. Thank you. Bye. Thanks. And we will take

Operator

our next question from Charles Duncan with Cantor Fitzgerald. Your line is open.

Speaker 8

Yes. Hey, good afternoon, Scott and team. Congrats on completing that enrollment and commercial progress in the year. I had a question regarding RAISE 1. I can't recall if you've ever shared with us stopping rules.

Speaker 8

And if you don't want to be all that granular, if you could just give us some guideposts? And then also, I didn't hear anything about 2nd generation oroquinaxalone. Do you have any color on the progress there? Thanks.

Speaker 2

Thanks, Charles. I'm going to pass over the stopping criteria to Joe, but I'll just quickly say, we didn't talk on this call. We were trying to keep the call brief, number 1. So we kept it to 30 minutes. On the 2nd gen program, I would tell you all that we're really thinking about our prodrug program now being our lead candidate.

Speaker 2

We are doing IND enabling work. We have a very high reason to believe that the prodrug both gadaxalone and the cleavage of the prodrug structurally looks incredibly safe. We will have that data over the summer, which in my view is a de risking event. For those of you who are not too familiar with what we've talked about the prodrug program, the data looks to have a once a day dosing regimen, a blunted Cmax, will have new intellectual property, we'll have improved cost of goods and there are some other important business issues that we will talk about over the coming months on the Prodrug program. And so our hope would be that we will finish that IND enabling work by year end and be able to take that program into the clinic next year.

Speaker 2

And I think quite honestly, that's going to align great with TSC data and the additional study that we're going to start in the Q4 in other refractory epilepsies. Joe, you want to talk about the stopping criteria?

Speaker 4

Yes, sure. I mean, we're glad to share what the details of that are. So the stopping criteria are based on the co primary endpoints, cessation within 30 minutes and lack of progression to IV anesthesia within 36 hours. Each of their co primary endpoints, so both of those need to hit on the statistical significance independently. And the way the power is based on an alpha spending function, The P value required P value at the interim is 0.0293 and that with that P value, we have over 90% power to detect 40% treatment difference.

Speaker 4

With that said, if we get deltas 25%, 30%, it will still be statistically significant. The analysis is very robust. And so we have a lot of power at the interim analysis based on the 83 patients. And then we'll also be looking at the key secondary endpoints at the interim, but the stopping rules depend on the co primaries.

Speaker 8

Very helpful. Thanks for the added color.

Speaker 4

Sure thing.

Speaker 2

Thanks, Charles.

Operator

And we will take our next question from Joon Lee with Truist Securities. Your line is open.

Speaker 7

Hey, congrats on the enrollment as well and taking thanks for taking our questions. Good to hear that you're already planning for launch of ZYPOMI and IVIGA and ARSOLONE next year. As you do the market research in preparation for launch, is there a specific efficacy profile that patients are looking for, the docs are looking for? And is that consistent with your pre specified stopping criteria? Thank you.

Speaker 7

So I just want to

Speaker 2

be clear the market research on the IV form of ganaxalone? Yes. Or ZYTALME for TSC? I wanted to be clear. I think an excellent

Speaker 1

Both actually.

Speaker 7

Both actually, but I think an excellent would be

Speaker 6

nice, yes.

Speaker 2

Chrissy, I'm happy to pass it to you.

Speaker 3

Yes. As Scott mentioned, one of the things that keeps him up at night is that these patients are quite sick. And I think what we've learned in our market research is, yes, these patients are quite sick. And they the value that we believe that IV and XLO can bring is quite expensive because everything is confirmatory, everything that has been done in RAISE-one to identify these patients is really what we've seen in real world evidence as well. So they really near each other and quite frankly that's super supportive of the commercialization efforts that we're trying to build.

Speaker 3

Similarly on the Zottome side of the business, I think that it is really important that we realize that this is the refractory patient population. And in trust TSC, it is exactly what they have been doing there as well. A little bit different from CVD, but again, it's super refractory patients. And so again, exactly who would be commercializing for.

Speaker 2

Yes. And the only thing I'll answer Christy's comments is that the literature is quite clear that IV anesthesia leads to increased morbidity and mortality. And I think we designed that Phase 3 trial specifically to replace a treatment paradigm, which is antiquated and really deleterious to the patient's outcome. So that in my mind, the study design in and of itself exactly what physicians told us they wanted. And certainly, I think it's going to be critical for the IV launch.

Speaker 2

Thanks for the question, June.

Speaker 7

Looking forward. Thank you.

Operator

And we will take our next question from Marc Goodman with Leerink Partners. Your line is open.

Speaker 9

Hi, good afternoon. This is Basma on for Mark. Thanks for taking our question. I have a question regarding RACE. So if RACE is successful and gonexolone is approved in RSC, how much of label use would you expect in the ESE and SRSC settings?

Speaker 9

And along the same lines, what you mentioned that there are 10% of FUTALMI sales are coming from off label use. Would you expect this percentage to stabilize or to increase? Thank you.

Speaker 2

Well, let me start with the second question and then we'll work our way to the first. Look, I think we as a company will never predict nor give a specific estimates about off label use. It's our sales organization is hyper focused on the CDD population, hyper focused on educating physicians about the use of genetic testing and we would be the same with TSC. That said, traditionally, I mean, you know the market better than us. When GW was an independent company, we saw epidiolex sales as high as 20% or 25% in the spontaneous use category.

Speaker 2

I think we will focus on doing additional studies either with SITOMI or 2nd generation and JI for label expansion over the coming years. But I think it's pretty clear that there's a significant number of patients with needs in the refractory epilepsy population. So I think it's great to see that physicians are asking payers to try zetalmi. It's great that payers are reimbursing and we're seeing about the same discontinuation rates in CDKL5 patients, low 20% range. So that's also encouraging on the efficacy side.

Speaker 2

On the IV side, the commercial team will be hyper focused on the refractory status population. I think that is our best strategy for reimbursement for formulary acceptance. I think we really believe that there are 3 major parts of the refractory population and we will start with the most difficult to treat and continue to focus on the importance of earlier intervention where there is significant data in the literature that the later you treat status patients, the worse their outcomes. The longer status patients are in status, the worse their outcomes. And we have good justification for moving up the treatment paradigm starting with RAISE 2, but other studies that we are considering today.

Speaker 2

I think we find equally compelling, it's a suprorafractory opportunity. We think there are about 5,000 patients in the U. S. Today suffering from suprorafractory status. The typical EIND patients that we are seeing today are spending about 30 days in the ICU as physicians ask to use our drug on a compassionate use basis.

Speaker 2

We continue to get 1 to 3 requests a month. We've had 2 more requests this month as EINDs. And I think our a critical goal for us is to go back to the FDA and align on a dosing strategy, which would change from the raised dosing of 830 mg 50 grams of Captisol to a daily dose of about a little over 1,000 mg of ganaxalone and 63 grams of Captisol. We think there's adequate safety there, but we do want to go to the FDA, get their alignment. And Joe is working on that final clinical trial design.

Speaker 7

Kristi, on the commercial side, do you want to add anything?

Speaker 3

Honestly, Scott, I think you hit on all points wonderfully. Thanks.

Speaker 2

Good. Thanks so much. Thanks for the question.

Speaker 9

Thank you. And we will

Operator

take our next question from Douglas Tsao with H. C. Wainwright. Your line is open.

Speaker 10

Hi, good afternoon. Thanks for taking the questions and congrats on all the progress. Maybe starting with SITOMNI, just given now we're entering our, I guess, our 3rd year of commercialization. I'm just curious if we've seen a shift in where new patients are coming from and how that's evolved and how you expect to see that sort of change over the next 12 to 24 months? And then I have a follow-up on the IV franchise.

Speaker 2

Okay. Christy, you want to jump in?

Speaker 3

Absolutely. Thanks for the call, Doug. Over time, we launched this drug September of 2022 and there were a couple of interesting things to start, but after we really leveled off, patients are coming from a myriad of places. We get an enormous amount of patients from our centers of excellence. I'll remind you there's 10 of them across the United States.

Speaker 3

But these patients also are being seen by their local or community

Speaker 7

physicians on a regular basis.

Speaker 3

And so we tend to see great function around these patients throughout. So what we do know is that, the targeting that we've done has been very, very good from 2022 to now. We've now given that a little bit more of a kick, if you will, and it's a little bit more robust for 2024 and we've broadened our scope a little bit on who we're targeting. But I don't see us targeting differently, just a little bit more broad going into 2024 and there's not wild shifts on who's riding for the drug.

Speaker 10

Okay, great. That's really helpful. And then just to understand a little bit what you're trying to do in SRC. Joe, you spoke about and Scott as well getting alignment with the FDA in terms of the higher dosing. My guess is you're not planning on sort of doing another sort of placebo controlled study in SRC.

Speaker 10

I'm just curious in terms of the language or sort of on the dosing, would it be sort of just because SRC in theory should be on label to what your label will be in terms of RRC. Would it just be labeling to give specific guidance for that 1,000 milligrams dose for an SRC patient or would it just be sort of providing looser language that you can dose up to 1,000 milligrams a day? Thank you.

Speaker 7

Let me kick it off

Speaker 2

and then Joe, I'll pass it to you. Yes, Doug, I mean, we're expecting our label is going to be the RAISE regimen, which is that 8 30 milligrams over 24 hours, which contains 50 grams of Captisol. So we want to unequivocally align with the agency that that higher dose can be studied safely. We don't think there'll be an issue. Almost all of these EIND patients have gotten 63 grams of Absol.

Speaker 2

We have not seen a renal signal. We've never asked the agency because we've never had to go that high for RAISE. So we want to get their buy in and along with that buy in, we will be doing what will be a single arm study and I'm going to pass it over to Joe. And yes, I don't think there's any reason that we need to do a double blind placebo controlled trial in this population. I think we need to show safety in this population, but all of those patients would have failed multiple therapies.

Speaker 2

And I think that's the way we're approaching it. I think we also want to really create a more robust data set for the drug outside of simply our RAISE and RAISE-two populations. Joe, you want to talk about what you're thinking about for a trial design?

Speaker 4

Yes. We've been working on this with Henry Bekavitus, our former Brigham ICU doc who's been really leading the design on this. And we're looking, as Scott mentioned, single arm open label trial. The dosing regimen is different. It's whereas RAISE is 48 hours, it's been several days.

Speaker 4

This dosing regimen we've implemented more recently for the emergency INDs and without as much of a bolus upfront. It's really a different approach. We start the drug while the patient's on IV anesthesia, continue it for a period of time and then bring it down. And a dose of total highest daily dose is 1050 milligrams per day. And as Scott mentioned, it was 63 grams of Captisol.

Speaker 4

And as I said, we've treated over 25 patients with this regimen, including children. And we haven't seen any safety signals from this higher regimen. And it looks like this higher dose regimen, it's hard to say based on the EINDs with 100% certainty, but it looks like it's having an effect beyond the regimen that we had used previously, which was basically the RAISE regimen. So we really want to make sure that if docs are going to use it that they use it appropriately. It's not anything we promote, but I do think potentially they'd use it.

Speaker 4

And so the dosing regimen is different and we want to get some data on that from a clinical trial.

Speaker 10

And so just as a final clarification, so would you anticipate having that new dosing regimen on the label itself or would it just be to get the higher dosing limits sort of on the label?

Speaker 4

I mean, this is a first step. It's a proof of concept study. So I think it depends on what we see there. But I mean, we're just taking it a step at a time. We really need to see kind of safety and preliminary efficacy from a proof of concept study.

Speaker 4

And Scott, I don't know if you have any more comments about the dosing.

Speaker 2

No, I think you're right on target, Joe. I think Doug, after we have this data, we'll go to the FDA, the team's ready to go and we'll hear what they have to say and we certainly see it as next steps. I mean, I think I'd love to see us get safety into the label, but we haven't had those discussions with the agency yet. But certainly that would be our goal, our hope and our plan.

Speaker 10

Okay, great. Thank you so much.

Speaker 2

Thanks for the question.

Operator

And we'll take our next question from Jason Butler with Citizens JMP. Your line is open.

Speaker 11

Hi. Thanks for taking the question and let me add my congrats on all the progress. Just one about the proof of concept study for oral gonaxalone and Lennox Gastaut and the other rare epilepsy. Can you maybe just speak to the amount of data you would need to generate from that study before moving into a registration study in any specific patient population? And would there be any opportunity in that study to introduce the next gen formulation, the prodrug formulation?

Speaker 11

Or when would be the first time that you could bring that formulation into this patient population? Thank you.

Speaker 7

Yes. Joan, let me kick it off and

Speaker 2

then I'll pass it over to you for the trial design. Jason, what we're really thinking is that this will be a zetalmi study. And I think quite honestly, 5 years ago, I would have felt crazy to run this study. But given now what we understand about tsetolemy, the PK, the PD, the blood levels And what we've seen over the years is a consistent improvement in serum concentrations of the drug. And by the and when we finish the TSC study, we'll be happy to share some of the we haven't seen the blood levels in TSC, but we've seen them in other healthy volunteer studies or SAD, MAB studies.

Speaker 2

And certainly, we're feeling good about the discontinuation rates in the real world. So I have a heck of a lot more confidence today that in any study with cetalmi, we can get the vast majority of patients to a therapeutic blood level. And I think our goal in this study is to really show that proof of concept and I'll let Joe talk about it. I think what we also want to walk away is where do we think gonasalone as a molecule is most effective. It's not only in LGS, but in other refractory DEEs.

Speaker 2

But I would not expect this study that we will kick off to really include that 2nd gen. We'll use this study to help guide us on efficacy and where we want to go with the pivotal and we'll take the next gen through the SAD, MAD studies and hopefully those will align in terms of what we want to do with the prodrug program. And I think we have the luxury of a little time to get this right, to be thoughtful. We've got 2 launches that we'll be planning for in 2025. So that will keep us pretty busy.

Speaker 2

But that being said, I think there are not a lot of folks who are really thinking about these patients and it is a priority for us to get there. Phil, you want to talk a little bit more about the trial design?

Speaker 4

Yes.

Speaker 2

What you're thinking about the trial design?

Speaker 4

Yes. So, again, this would be the initial trials proof of concept, single arm open label. We have not yet done the detailed discussions about what statistical signal we want to see to say the drug is particularly effective in condition X. I mean, I think there are a lot of things we can get out of such a study besides signal finding. I mean, we look at signals based on the genetic ideology, seizure phenotype, the type of seizure.

Speaker 4

We could also get information on non seizure outcomes, some preliminary PKPD data and also information to inform other pieces of a study design, selection of the clinical endpoints, even how we collect the data, how we do the measurements, and a basis for statistical more than the statistics within the study itself, a basis for statistical powering on any subsequent study we would do. The general comment would be, if everything if overall we get a good effect and every subset seems to be trending in the same direction, that'll tell us one thing. But if something happens to pop, we may get patients in the study with specific disorders of GABAergic transmission that may show a differential effect. All of those things will be informative. In terms of how much of a signal, I don't think we have we haven't done the statistical powering on that yet.

Speaker 4

A lot of the statistical descriptions in the study will be purely descriptive statistics without a prior statistical powering.

Speaker 2

Okay. Great. Thank you. Thanks for the question. Operator, we're going to take one more question from the call in and then we're going to have to cut the call.

Operator

Thank you. We will take our final question from Brian Skorney with Baird. Your line is open.

Speaker 12

Hey, good afternoon guys. I just wanted to ask a question also on RAVE and sort of powering assumptions there, it was originally powered for 40% delta and I think you've been talking about as low as a 30% delta to reach that. So I'm just wondering how to kind of think about that 30% delta. Is that based on blinded response rates overall in this study? Just kind of going through the powering analysis and how different results wind up hitting STAT SEG at 83 patients.

Speaker 12

So I don't know, is that informed at all by a blinded analysis or is that consistent with the original analysis? And can you review any of the statistical assumptions underpinning the time to cessation analysis? That's a secondary endpoint since it's not binary outcome. Just what sort of separation do you need to see there to be stat sig? Thanks.

Speaker 2

Joe, let me kick off and then I'll turn it over to you. So Brian, we have not looked at the blinded data. It's had no impact on our decision making here. I think when we started the study, we really could not get a very comfortable handle on where placebo rates would be in the study. I think it was very clear to us that once we started the study and we added a protocol amendment and we had our physicians really screening every patient, our confidence continued to grow that we were seeing a highly refractory population that was very likely going to have a low placebo rate.

Speaker 2

We've shared with you that blinded data that the average patient in this study is not it's failing 3.5 drugs, 3 to 3.5 drugs. They are being observed for 24 hours compared to about 8 hours for our Phase 2, giving us a lot of confidence that physicians have run out of options. And our clinical team has pressed every enrollment, every physician on enrollment, making it crystal clear that if patient was to be enrolled, the physician had to feel comfortable that IV anesthetic was an extra good choice. Now that being said, there are still going to be some placebo patients that probably or drug patients that still are having epileptiform activity and are not getting IV anesthesia. Physicians are not perfect beasts, but we feel quite confident that the placebo rate will come in lower than our original assumption of 30% to 40%.

Speaker 2

And I don't think we had any magical way to really think about that when the study started, given that the only publication suggested about a 9% response rate in third line patients. So I think we have just seen this patient this study progress. We feel very good about it. We feel that we're likely overpowered for a 40% delta where we were. And we think for the interim analysis, these 83 patients will be more than sufficient.

Speaker 2

Joe, you want to talk about the secondaries and then we're going to wrap.

Speaker 4

Yes. Just real quick about, I mean, the power calculation, the hardest data we had was from a survey of the investigators. When they of the sites, when we presented them with the profile based on the inclusion criteria, they said that they would advance to IV anesthesia 70% of the time within 2 hours. And so 70% advanced that gives the 30% non advanced there would be basically what we would translate to the placebo rate 30%, 35%. In terms of the secondaries, the TIME-two status cessation, we expect that actually to be it's a continuous variable, so even more robust than the responder analysis on the primary.

Speaker 4

And the way status would stop, in the Phase 2, it was a median of 5 minutes in the gonaxalone group. Patients in the placebo group aren't going to stop spontaneously. When they'll stop, it's when they're treated. And so that's going to be a period of hours probably in most cases. And so that continuous variable is extremely robust in terms of statistical power.

Speaker 12

Great. Thanks a lot.

Operator

And ladies and gentlemen, that is all the time we have for questions today. This will also conclude today's call. We thank you for your participation and you may now disconnect.

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Earnings Conference Call
Marinus Pharmaceuticals Q4 2023
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