Good morning and welcome to the BioXcel Therapeutics first quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. If during the conference you require operator assistance, please press star, zero on your telephone keypad. After the presentation, there will be a question and answer session. If you would like to register a question, you may press star, one on your telephone keypad. Just to remind everyone, certain matters discussed in today’s conference call and/or answers that may be given to questions asked are forward-looking statements subject to risks and uncertainties related to future events and/or the future financial performance of the company. Actual results could differ materially from those anticipated in these forward-looking statements. Risk factors that may affect results are detailed in the company’s most recent public filings with the U.S. Securities and Exchange Commission, including BioXcel’s annual report on Form 10-K for the year ended December 31, 2021 which can be found at www.BioXceltherapeutics.com or on www.sec.gov, which will be updated in its quarterly report on Form 10-Q for the quarter ended March 31, 2022. As a reminder, today’s conference is being recorded. Joining us on today’s call are Dr. Vimal Mehta, Chief Executive Officer; Richard Steinhart, Chief Financial Officer; Matt Wiley, Chief Commercial Officer; Dr. Rob Risinger, Chief Medical Officer of Neuroscience; Dr. Frank Yocca, Chief Scientific Officer; and Dr. Vince O’Neill, Chief Medical Officer of Oncology. It is now my pleasure to turn the call over to Dr. Mehta, the CEO of BioXcel Therapeutics. Please go ahead.

Thank you, Operator. Welcome everyone and thank you for joining our call today to discuss BioXcel’s financial performance and business highlights for the first quarter of 2022. As you know, BioXcel Therapeutics is a biopharmaceutical company utilizing artificial intelligence approaches to develop transformative medicines in neuroscience and immune-oncology. It has been a transformational year for the company highlighted by our first FDA approval of IGALMI, our orally dissolving sublingual film approved last month for the acute treatment of mild, moderate, or severe agitation associated with schizophrenia or Bipolar I or II disorders in adults. We are gearing up for commercial launch to deliver this new treatment option to patients and caregivers. Our team has made tremendous progress preparing for the deployment of our U.S. national sales force and have finalized pricing for broad market access. Our Chief Commercial Officer, Matt Wiley will discuss key commercial activities in more detail shortly. Beyond offering an important treatment option to patients living with schizophrenia or bipolar disorder-related agitation, IGALMI’s FDA approval validates BioXcel’s AI-enabled drug discovery and development platform, which progressed from first-in-human trials to approval in just under 3.5 years. This approval also lays a strong foundation for the continued evaluation of BXCL501 for the treatment of agitation associated with other neuropsychiatric disorders, including Alzheimer’s, and as an adjunctive treatment with major depressive disorders, or MDDs. As such, we continue to make progress with our three-pillar portfolio expansion strategy for our 501 franchise, which includes indication expansion, extending our geographic reach, and growing the medical settings. First, as part of our indication expansion strategy, we view 501 as a pipeline within a product. Our TRANQUILITY program for the acute treatment of agitation in patients with Alzheimer’s disease is advancing well, with the first patient dosing in our TRANQUILITY 2 trial announced last week. We have designed an innovative strategy to rapidly enroll patients with top line data expected in the fourth quarter of 2022 or early next year. This, along with TRANQUILITY 3 patient enrollment initiated in the second half of the year, is helping position the franchise for our supplemental NDA. We believe 501 may provide an effective treatment option for Alzheimer’s disease-related agitation—an indication for which despite an estimated 100 million episodes per year in the U.S., there are no FDA-approved therapies. We have positive robustness efficacy, safety, and tolerability data in 40 and 60 microgram dosing regimens and have received breakthrough therapy designation from the FDA, giving us high confidence in our pivotal TRANQUILITY program. Further, in regards to our indication expansion strategy, we have advanced our 501 clinical program for potential adjunctive treatment of major depressive disorder and have initiated a Phase I multiple ascending dose clinical trial. With approximately 27 million cases a year, MDD remains the most common type of depression in the U.S. Current treatment limitations include slow onset of action and incomplete responses, and with over 300 million antidepressant prescriptions filled annually, we believe that our clinical data suggest 501 could be an effective treatment option for these patients. Second, with regard to our geographical expansion strategy, we are well poised to capture market opportunity outside of the U.S. We plan to submit a marketing authorization application to the European Medical Agency for BXCL501 for acute treatment of agitation associated with schizophrenia or bipolar II or II disorder in adults in the second quarter of this year. We are also exploring market entry strategies in Japan, which is expected to have the fastest-growing prevalence in Alzheimer’s disease with an estimated 4.9 million cases by 2026. Our third and final strategic pillar is expanding the medical settings where 501 can be offered. This is our land and expand strategy and we want 501 to ultimately be accessible to patients regardless of treatment setting. We continue to expand these opportunities with additional new indications, including our TRANQUILITY and MDD programs. Beyond 501, we are strategically augmenting our agitation franchise beginning with 501 for the chronic treatment of agitation related to dementia. Formulation and translation work is underway for 502, an important selective antagonist for a GPCR target affecting serotonergic signaling in the cerebral cortex. Shifting to our immune-oncology franchise, we recently announced the formation of the wholly-owned subsidiary, OnkosXcel Therapeutics. We expect this business structure to allow for further strategic and financial flexibility for our promising immune-oncology business while we continue to advance the clinical development of BXCL701, our leading IO clinical candidate, which is an orally administered systemic activator of innate immunity being developed for the treatment of aggressive forms of prostate cancer and advanced solid tumors. Following positive Phase II data for BXCL701 in combination with Keytruda announced this past February, we continued our Phase II trial in mCRPC patients with either small cell neuroendocrine carcinoma or adenocarcinoma phenotype. We expect enrollment to complete in our 28 patient SCNC cohort in the second half of this year. We have also enrolled the first patient in our adenocarcinoma randomized trial expansion evaluating BXCL701 monotherapy versus BXCL701-Keytruda combination therapy. We will provide additional updates about the OnkosXcel Therapeutics subsidiary in the second half of this year. Lastly, in April, we announced a $260 million strategic financing with Oaktree Capital and Qatar Investment Authority. Full execution with such financing will extend our cash runway into 2025 and support our commercial activities for IGALMI along with the expansion of clinical development efforts for BXCL501 and our additional neuroscience and immune-oncology programs. With our strengthened cash position, we remain confident in our ability to continue executing on our strategic priorities. In summary, we are incredibly pleased with our progress across key clinical, regulatory, and commercial milestones and realizing our vision of becoming the leading AI-enabled neuroscience company. Now I would like to turn the call over to Matt Wiley, who will give a commercial update. Matt?

Thanks Vimal and good morning everyone. Today I’ll focus on commercial launch readiness, including the deployment of our sales team and market access activities; however, I would first like to discuss our decision on IGALMI pricing. We have taken a measured and clear-eyed approach to determining the wholesale acquisition cost for IGALMI, conducting both qualitative and quantitative research to shape our decision. This process spanned over eight months and evaluated multiple treatment settings, pair types, and potential indications. We also considered the volume of patients subject to additional dosing in our clinical trials, which was approximately 15% across both dosage strengths. With this comprehensive evidence-based research and all of our stakeholders in mind, we arrived at our final pricing decision for IGALMI with two clear objectives. First, we believe IGALMI is a disruptive and important entrant into the agitation market, and we want to ensure it is accessible to as many patients as possible. Second, we want to lay the groundwork to build a sustainable and profitable business. The research shows that the price point we are setting today provides a robust foundation for IGALMI with flexibility to adjust for future potential 501 indications, including Alzheimer’s disease-related agitation and major depressive disorder across treatment settings. We are very pleased with this outcome considering the rapidly evolving pair dynamics. IGALMI’S wholesale acquisition cost will be $105 per film across dosage strengths. The 120 microgram and 180 microgram doses of IGALMI will be packaged into heat-sealed foil pouches of 10 and 30-count films per carton. Our market access team is already engaged with target GPOs, IDNs, and interested hospital systems to coordinate scientific exchange and establish IGALMI’s value proposition. IGALMI’s WAC price finalization will enable more substantive discussions and move us closer to contract negotiations with these stakeholders. This is also a critical milestone in navigating the hospital formulary process, which on average can take six to 12 months. As we have stated in previous calls, there are approximately 25 million bipolar and schizophrenia agitation episodes each year. Approximately two-thirds of this market opportunity presents in the hospital and institutional setting, which presents a focused way to build a commercial beachhead. We have identified and are targeting 1,700 institutions in the United States representing about 75% of the defined agitation market. This includes psychiatric centers, academic medical centers, and community hospitals. Our institutional sales team is undergoing training which will be completed shortly. This is a highly talented team with an average of over 21 years of industry experience, 14 years in the hospital setting, and an average of eight product launches each. The pedigree of this team will allow us to access target hospital accounts swiftly and leverage stakeholder relationships to successfully navigate the formulary process. We expect that this team will start making initial demand impact in the second half of 2022 and will further amplify demand in 2023. We are excited to launch our field sales efforts in earnest and believe that we have built commercial conditions for considerable long-term market penetration and patient impact. Now I’ll turn the call over to Richard, who will give a financial update. Rich?

Thank you, Matt. I will now review our first quarter 2022 financial results. Research and development expenses were $18.6 million for the first quarter of 2022 compared to $14.7 million for the same period in 2021. The increased expenses were primarily attributable to clinical costs related to the company’s TRANQUILITY program. General and administrative costs were $12.9 million for the first quarter of 2022 compared to $11.6 million for the same period in 2021. The increase was primarily due to personnel and costs related to the commercial launch readiness efforts for IGALMI in the U.S. BioXcel Therapeutics reported a net loss of $31.5 million for the first quarter of 2022 compared to a net loss of $26.4 million for the same period in 2021. As of March 31, 2022, cash and cash equivalents totaled approximately $200 million. This excludes contributions from the $260 million strategic financing announced in April. To date, the company has drawn $70 million of the loan agreement and has met the milestone to receive $30 million of the royalty financing which is expected to be drawn down in the second quarter of this year. Now I’d like to turn the call back to Vimal.

Thank you, Richard. We would now like to open the call for questions. Operator?

Our first question is coming from Greg Harrison with Bank of America. Please proceed with your questions.

Hey, good morning guys. Thanks for taking the questions. On the price you announced, it’s a little lower than some might have anticipated. Is there any additional color you can give on your assumptions around what market penetration could be at this price point?

Good morning Greg, this is Vimal. That’s a great question. I will pass it onto Matt.

Yes, so the price point really does strike the balance between access and profitability. We wanted to ensure that we could deeply penetrate the market and put us at a price point that gives us the appropriate access, is consistent with what the market research told us the hospitals would want to see, and certainly gives us a means of a reasonable profit. One of the things that we have to consider is the fact that patients in our clinical trials were dosed more than once, and so that was part of the script, obviously. We saw 15% in our clinical trials and that needs to be considered as we were thinking about our price as well, so all of those things went into the decision. It was not one that we took lightly. There was a lot of great research that had been done over the last eight months. We did look at downstream indications as well to make sure that we did no harm to our future potential, and we also have good flexibility in what we found in that research for future indications.

Got it, that’s helpful. Thanks a lot.

Thank you. Our next question is coming from Chris Howerton with Jefferies. Please proceed with your question.

Hi, good morning. Thanks so much for taking the questions, really appreciate it. I guess maybe following up on Greg’s question with respect to pricing, can you remind us what the typical dosing that a patient might receive in the clinical setting? Would it be one film, would it be multiple films, or what could our expectations be around that utilization?

Sure Chris. In our clinical trials, we did see about 15% of the patients were re-dosed, and so we would expect to see the same in the clinic. We saw a little bit more re-dosing in the 120µg group than we did in the 180, but what happens in the hospital setting is something that we’ll have to observe, but we would expect to see additional dosing in those patients.

Thank you for the clarification. As we look ahead to the trade launch in the third quarter, can you outline what our expectations should be for that process? Also, regarding the Alzheimer’s agitation program, could you remind us of the dosing rationale since I believe that the 40µg was a recent addition? Thank you.

On the trade launch, when we talk about the third quarter for trade, we’re talking about July, so that’s not that far away. The activities that we’ll undertake between now and then include GPO contract negotiation, which is ongoing, sales force deployment to build interest and identify key stakeholders in the hospital, and drive the P&T committee process, so as we load our trade in July, we will have stakeholders that are ready for demand.

Regarding your second question, Chris, no new dose was added. The only thing is that we had selected two doses, 40µg and 60µg. As you know, we had seen dose dependent responses whether it was 30, 40 or 60. The only reason we did 40, we expected that efficacy, safety and tolerability will be somewhere between 30 and 60, and it was. We wanted to check the variability and after we tested the variability using the 40µg, Rob and the team did not see any need to change the powering assumptions. Rob, do you want to add anything to that?

No, the 40µg dose behaved exactly as we expected by all measures. It fell between 30 and 60, and so we essentially confirmed the variability of response for 40 and we are, as a result, not changing the powering of our trials in Alzheimer’s. Moving forward, we do not need to increase the enrollment, for example, in those studies, so we’re on track.

So Chris, just to wrap up, 40 was just a confirmation and it confirmed what we needed to see, and we are marching forward. As you saw, the first patient has been dosed. I got the update today that a lot more patients have been dosed and almost 20% of the patients have been screened, so the trial is moving at a fast pace.

Excellent. Okay, well thank you very much. I really appreciate you taking the questions. Actually, maybe if I can sneak one in, as you get closer to the trade launch in July, as you mentioned, Matt, is there any plans to do a strategic commercial day for us to really understand better how you guys see the market?

Chris, we will plan for it in the fall time frame, the commercial day. It will make sense to have a commercial day at that time.

Thank you. Our next question is coming from Robyn Karnauskas with Truist Securities. Please proceed with your question.

Hi guys, thanks for taking my question. I guess a few. On the price, you mentioned you want to have a reasonable profit. Can you give me any sense of COGS? Second, I know there was a lot of concern actually by other investors on the price point with the previous assumptions that the street had being too expensive versus anti-psychotics. How does this price differ from anti-psychotics? The third question is are you sampling?

What was the last one?

Are you sampling, so what are the dynamics for a launch? Are you going to be giving out free samples so that doctors get used to using it, or are you immediately going to potentially see some stocking and purchases when you launch in July?

Let me address your first question about profitability. The price is set at a level where we anticipate good profitability since GTN will perform similarly to other products of this nature. Our cost of goods sold is not particularly high, aligning more with smaller molecules in that range, so we do not expect any significant variation in gross or net margins aside from the usual discounts we might offer. I wanted to clarify that point regarding profitability. Your second question concerns anti-psychotic costs. You should consider this in the context of institutional settings and bundled payments, where IGALMI will be included. We conducted extensive price sensitivity analyses. In larger institutions where price sensitivity is lower, we found the sensitivity can be higher. For other types of hospitals, we determined a price that maximizes access for patients to IGALMI. There are about 25 million episodes, with two-thirds treated in institutional settings, so our goal was to ensure broad patient coverage, which would facilitate adoption and penetration. These were key factors in pricing IGALMI, which is aligned with our current indications—schizophrenia and bipolar I or II in institutional settings. Looking ahead, we have conducted additional research regarding future indications that we need to consider. There is greater flexibility, and we will continue our efforts as we introduce our product for Alzheimer’s related agitation, which represents a significant market with around 100 million episodes. Now, I will hand it over to Matt to discuss physician sampling.

Robyn, sampling is traditionally done in community setting locations and not in hospitals or institutions, so we do not have a sampling program to launch into the institutions.

Great, as a follow-up, you mentioned two conflicting statements. You considered other factors in the pricing, but you also indicated that you have significant flexibility, which relates specifically to your current priorities. Should we anticipate further price reductions upon launching if you succeed in the dementia market? Additionally, you mentioned possible discounting—under what circumstances might discounts be applied in this context? How should we account for this and consider costs, including any discounts above the price? Thanks.

I would say that these will be pretty much normal course of business, that we will be looking for what rebates are needed in the institutional setting and with what type of institutions. COGS, as I indicated, is pretty much in line with what I mentioned in terms of small molecule - it’s not a big cost to the overall of our pricing, so we haven’t given any specific items on the gross to net yet because we are working through all of that, so as we progress, we will be developing more robust strategies for what is optimal for the marketplace. Matt, do you want to add something?

I think that pretty much covers it. I mean, as we think of downstream indications, we wanted to learn a lot about how the market views IGALMI and what price points were acceptable to those markets, and what we find is that there is additional flexibility downstream on price, so that’s where we’ll leave it today.

Okay, great. Thank you.

Thank you. Our next question is coming from Sumant Kulkarni with Canaccord. Please proceed with your question.

Good morning, thanks for taking my questions. I have a few here, a couple on pricing and then one on data. Now that you’re priced for access, do you have any updates on the number of treatments per year per patient in the approved indication and in Alzheimer’s agitation, not necessarily re-treatment for the same episode?

We haven’t provided any guidance on penetration in the market, if that’s the question. We view these markets as very large and underserved, and so we believe we have at the price point we announced today a good opportunity to penetrate deeply into those markets.

On the price, was this the specific or exact price that was used in setting the milestones and royalties in your latest financing agreement?

No.

Got it. Could you provide any color around that? Was it higher, or any sort of color you could provide around that would be helpful.

We haven’t provided anything because these agreements are obviously confidential, but we had very extensive discussions around the topic of what the opportunity is for the pricing, setting of the WAC price.

Got it. Then how would you weigh the relative contribution of pricing for access to ensure success for your potential broad range of indications versus pushback from hospitals or payors that made you arrive at this pricing decision?

There are a couple of things to consider. As we think about downstream indications, we want to have really good experience and utilization in the institutional setting, so we want to ensure that as many physicians and specifically psychiatrists get familiar with the product so their clinical experience will translate into future settings. That’s one consideration, but certainly there is a balance between the price, or actually it’s the net price to the hospital and the access we could expect to have in those hospital systems or the type of restrictions we might have, so all of those things were taken into account to come to the price. We have good profitability metrics as well as really good access in the hospital system so we can not just serve our patients today but also continue to serve them with future indications downstream.

Got it, and then my last question, when could we expect to see the data on the 40µg dose in the Alzheimer’s agitation trial?

We would expect that this will be part of our future presentation in a conference or in a publication.

Thank you. Our next question is coming from the line of Yatin Suneja with Guggenheim Partners. Please proceed with your question.

Hey guys, a couple questions from me. Can you talk about how many episodes per year you are modeling for these two indications per patient?

We have always guided at the 25 million agitation episodes, and that does span the severity in the institutional setting, or in the institutional and community setting, so that 25 million is how we are modeling it out.

Okay. Can you also confirm to us what is the average DRG reimbursement to institutions for each of these indications?

DRG reimbursement really depends on the hospital. Your smaller community hospitals may have a lower reimbursement rate; academic institutions may have something larger. It would be imprudent for me to give you the bookends there because it is so different. It’s vastly different between the settings.

Okay, maybe if you’d give a little bit more help there. Is it in the thousands or is it in the hundreds? Just trying to get a sense of, you know, of the percentage of the DRG quota, how much would your drug might apply to and what are some of the reasons that you believe an institution would be willing to apply whatever the percentage comes out to be towards of their budget to IGALMI?

Sure, you should be thinking about the DRG specifically in the four-digit range.

Thank you. Our next question is coming from the line of Colin Bristow with UBS. Please proceed with your question.

Hey, good morning, and congrats on the progress. I guess another one just on the pricing, I’ve heard your responses. I’m somewhat confused - I guess we were all in a similar ballpark just based on discussions with you prior to the launch, and then I guess I’m curious what is the specific pushback here from payors and institutions that ultimately led to what is quite a significantly lower price? Then also on the IGALMI operational structure, can you provide any guidance on when this will become a cash flow positive operation either from a timing perspective, number of patients treated perspective, market share perspective? Anything there would be helpful. Then just my final question is on 701 and OnkosXcel, again can you just walk us through the strategy there? I know you’ve kind of alluded to it before, but how do you plan to split resources, both financial and human? Any help there would be helpful, thanks.

Okay, so on the pricing, we did obviously qualitative to start our research and then we moved into quant, and we tested all range of net to hospital price. What we found is it’s almost like an equalizer - the higher the price, the higher the net price to the institution, the more restrictions and the lower the access, so $105 gives us the right balance between hospital access, fewer restrictions, and good profitability.

Okay, great. Thanks. Then maybe on the operational structure in 701?

In terms of 701, we’ve already been, Colin, operating like two business units internally, so it’s just a little bit more formal that we did the structuring of OnkosXcel. It’s the same team that was focused on immune-oncology that will continue to focus on that plan, and we are building what the overall mission of OnkosXcel is and what are our choices, strategic choices, because we do believe that 701 is a very unique asset, its overall level of innate immunity, and it’s one of the most advanced, we believe, that can be combined with immunotherapy and we have already proven or published the mechanism in the journal. We have already optimized the safety and now are seeing efficacy signals in cold tumors, so overall nothing much changes. But as things evolve, we will provide more updates in the second half.

Okay, and then just on the metrics to achieve profitability with IGALMI, just help us out there. Are you confident you can get there with the current indication or do we need to see an expanded label? Any thoughts there would be helpful.

Colin, we haven’t provided any metrics right now in terms of when profitability will be achieved. As you know, there is no commercial precedent for IGALMI. We will be learning about it in the next couple of quarters how the launch is progressing, what launch metrics we should be following and providing guidance on profitability. But one thing we know is that the pricing we have done provides us the maximum for broad coverage, and there are a lot of agitation episodes that happen among these patients, so as we continue to do the work, we will be able to provide more clarity on those things.

Okay, great. Actually, one last one before I jump off. How trackable will this be from our point of view using third party data? Any help there?

The drug will be shipped directly to hospitals and as such, there won’t be any good syndicated data that you can leverage to observe our progress, but we’ll be giving updates each quarter.

Great, thank you very much, guys.

Thank you. Our next question is coming from the line of Corinne Jenkins with Goldman Sachs. Please proceed with your question.

Hey, good morning everybody. I know you’ve mentioned that you’re not going to be disclosing gross to nets here, but that they will be in line with industry standard. Can you just point us to a range of what you would expect to see in a similar setting with respect to gross to net, again recognizing that this won’t be IGALMI specific but just more general for the industry?

Let me see if I can answer your question. Here’s how I would frame it, is the hospital gross to net for drugs like this are perhaps more favorable in some ways than retail. The payors’ expectations are a little bit different in the community or retail setting than they are in the hospital setting, and so we believe that we have a price point that gives us a good gross to net value and puts our contracting negotiations in a fairly conservative place.

You will have the same price for both doses in this setting, but since we are seeing varying doses in the Alzheimer’s trial, should we anticipate that the price will always remain consistent across the different dose ranges, or is there a possibility to adjust the prices based on the specific market related to the different dosages?

There is going to be flexibility depending on the indications we’re pursuing, and there is also flexibility in how we brand, so we should think about it that way. But certainly we’re not necessarily tied to a price point per microgram, as you mentioned.

Okay, that’s helpful. Thank you.

Thank you. Our next question is coming from the line of Anita Dushyanth with Berenberg. Please proceed with your question.

Hi, good morning. Thanks for taking my questions. I just wanted to know between the two doses, 120 and 180µg, as per your internal projections, do you think one dose might be stocked higher by hospitals than the other?

That’s strictly going to be dependent on how it’s used when it gets out in the market. We approached this pricing decision as a flat price specifically because we want to ensure that the providers can use the dose that they think is appropriate for the patient and not have restrictions dependent on the dose that they want to administer. That was a very important consideration in the pricing work, and that’s why we did it this way.

Thank you. I have a follow-up regarding the reimbursement. Can you provide a timeline for when we might expect this reimbursement to be established?

Sure, so the GPO contracts typically take about six to nine months. The P&T committee formulary process on average takes six to 12 months - those are running in parallel, and so that’s a good time frame for you to consider when modeling.

Great, thank you, and then the last one, sorry if I missed it, for OnkosXcel, would you be providing some updates later in the year about how you plan to have the financial and operational resources?

That’s right - we plan to provide an update in the second half.

Okay, thank you. That will be all.

Thank you, Anita.

Thank you. We have reached the end of our question and answer session, so I’d like to pass the floor back to Dr. Mehta for any additional or closing remarks.

Thank you everyone for joining us today. We look forward to connecting with many of you in the coming weeks and updating you on our continued progress. Have a great day.

Ladies and gentlemen, this does conclude today’s teleconference. Once again, we thank you for your participation and you may disconnect your lines at this time.