BioXcel Therapeutics, Inc. Q3 FY2022 Earnings Call

Good morning, and welcome to the BioXcel Therapeutics Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. Just to remind everyone, certain matters discussed in today's conference call and answers to questions may include forward-looking statements that are subject to risks and uncertainties related to future events and the company's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. Risk factors that may affect future results are detailed in the company's quarterly report on Form 10-Q for the quarter ended June 30, 2022, which can be found at www.BioXceltherapeutics.com or on www.sec.gov, and will be updated in its quarterly report on Form 10-Q for the quarter ended September 30, 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 and Founder of BioXcel Therapeutics. Please go ahead.

Thank you, operator. Welcome everyone and thank you for joining our call today to discuss BioXcel Therapeutics financial performance and business highlights. The third quarter of 2022 marked a pivotal moment in the history of BioXcel Therapeutics. In the last few months, we have transitioned to a commercial organization and successfully launched IGALMI. We have made tremendous progress across all facets of our business and are very excited for 2023 and beyond. We continue to fully execute on our land and expense strategy for lead program, BXCL501 to build our neuroscience agitation franchise. In that regard, we have multiple pivotal data readouts from our ongoing trials expected in the first half of 2023. We believe this will allow us to capitalize on the $15 billion agitation market opportunity. This consists of 139 million episodes in total for our first three indications, including bipolar disorder, schizophrenia and Alzheimer's. Agitation is an underdiagnosed and underserved market that has not seen treatment innovation in nearly a decade. IGALMI is approved by the FDA for acute treatment of agitation for schizophrenia and bipolar disorders in adults. There are approximately 16 million agitation episodes of these conditions in the US annually, which are treated in the institutional medical setting. We truly believe the introduction of IGALMI could drive agitation market creation in a similar fashion as the emergence and rapid growth of the depression market following the introduction of novel treatment options in the early 1990s. IGALMI is a novel product with a broad label to treat the full spectrum of agitation in schizophrenia and bipolar 1 and 2 disorders. In short, we are leading new trails in the agitation market. We recently hosted a commercial day and clearly outlined the evolving agitation market dynamics, positive initial momentum and launch performance metrics. Neuropsychiatric products like IGALMI with novel mechanisms of action have never been launched to address agitation in an institutional setting. Our commercial path is unprecedented with no obvious analog. Yet there is a clear demand from hospitals for the pharmacoeconomic benefit and safety for healthcare professional patients. Within the first four months and with only 26 reps initially covering 700 target hospitals, we have already observed increasing market access, efficient targeting, and highly favorable market drivers. We recorded our first product revenue and are pleased to have extensive market reach and hundreds of formulary reviews scheduled in hospitals within a short span. Based on these factors, we made the strategic decision to expand our sales footprint across all major geographic markets. By December 1st, we will increase our sales force and deploy a total of 70 reps to cover approximately 1,700 target hospitals. We now have fully integrated commercial and medical teams with the necessary infrastructure to cover the entire U.S. agitation market to fuel our growth. To drive additional awareness and understanding of IGALMI, our medical affairs teams have been actively engaging with the medical community and P&T committee members, in addition to participating in leading industry conferences across the country. IGALMI awareness and scientific validation continues with two Medicare scripts from our PIVOTAL SERENITY TRIAL recently published in a leading scientific journal. We believe all of these efforts will facilitate formulary approvals, our key focus, that will result in demand generation. Our Chief Commercial Officer, Matt Wiley, will walk you through our launch progress to date and will review the launch performance basis shortly. In addition to our loan progress, our robust clinical pipeline is advancing rapidly. We are extremely enthusiastic about our indication expansion opportunity in Alzheimer's-related agitation, with an estimated $100 million annual agitation episode in the U.S. and no current FDA approved therapies for these patients. This represents a large and growing unmet medical need. BXCL501 received breakthrough therapy and Fast Track designation from the FDA for agitation related to dementia. We are looking forward to announcing top line data from the TRANQUILITY 2 pivotal trial in the first half of 2023. Also, we will be initiating the TRANQUILITY 3 pivotal trial by the end of this year. We are also excited about the SERENITY III pivotal program and potentially expanding 501 for at-home use to treat agitation associated with bipolar disorders and schizophrenia. There are approximately 23 million agitation episodes of these conditions in the US annually. The top line efficacy data readout from the SERENITY III pivotal trial is expected in the first half of 2023. SERENITY III has many parallels with the SERENITY I and II trials that form the basis for IGALMI's approval. At-home use is expected to more than double our current market opportunity with IGALMI. Truly, a pipeline within a product, BXCL501 also continues to be evaluated as an adjunctive treatment for Major Depressive Disorder, or MDD. We have already completed multiple cohorts in our Phase 1 dose escalation trial in healthy volunteers and expect to report top line results in the first half of 2022. Let me turn to OnkosXcel Therapeutics. This fully owned subsidiary is focused on the sustained growth of the company's immuno-oncology franchise. BXCL701, our lead program is a systemic activator of the innate immune system in development for aggressive forms of prostate cancer in combination with KEYTRUDA. We are pleased about the promising data for 701 in small cell neuroendocrine cancer or SCNC, recently presented at the Prostate Cancer Foundation Scientific Retreat. Recall, there is no FDA-approved treatment in SCNC and a high mortality rate. Our data demonstrated a composite response rate of 33% for the first 15 evaluable SCNC patients and a median duration of nine months in the first five responders. We have now completed the ongoing Phase II SCNC trial and expect to present top line data in early 2023. In addition, today in Sydney, we are presenting data on a potential predictive biomarker for 701 in patients with leukemia, including acute myeloid leukemia. We also believe these biomarkers could have potential implications for solid tumors. The poster will be available on our corporate website after this call. We continue to strengthen our intellectual property portfolio. For 501 in this quarter, we had two new US patents issued, two US notices of allowance, and seven patents from foreign offices. We expect these patents will be included in the FDA's approved drug products with therapeutic equivalent evaluation, which is commonly known as the Orange Book. Additionally, for 701, we had eight patents allowances/issuances received from foreign offices. In closing, BioXcel Therapeutics had a remarkable quarter. We are developing a leadership position in the agitation market, have multiple upcoming data catalysts, and are well positioned for growth in 2023. I would now like to turn the call over to Matt Wiley, to review our launch progress.

Thank you, Vimal, and good morning, everyone. As we reported in our Commercial Day a few weeks ago, we are making very good progress on our IGALMI launch efforts. These efforts are continuing to pay off, and I'm pleased to share some additional updates with you today, specifically in relation to our launch performance metrics. Our market access activities are a critical component of our strategy, so I'll start with our progress with group purchasing organization or GPO contracting efforts. As we have mentioned in previous communications, the typical contracting time frame of GPOs averages six to nine months. We have made steady progress and increased our access to GPO throughout the quarter. We are now contracted with two GPOs, including the largest in the country, covering nearly 50% of the beds in our target universe. We are in ongoing negotiations with the other leading GPOs and expect to continue to improve our access in the coming weeks and months. As a reminder, the three largest GPOs represent over 90% of our target beds. So we are very happy with our achievements to date. In tandem, we continue to engage with integrated delivery networks, or IDNs, focusing on those systems that exert high control to drive further downstream utilization of IGALMI. We are concentrating on 59 high-value IDNs with formulary voting currently scheduled for 21% of the targeted beds. As part of our ramp-up efforts, we've deployed a team of corporate account directors dedicated to coordinating with our sales team and driving the formulary and contracting activity. We have learned a lot about the deployment process in the last four months of being in the field. In the first wave of our sales deployment, we chose 26 high-volume territories covering 700 target accounts and received resoundingly positive traction. We have been able to now reach over 75% of this initial target universe and have seen significant interest in pull-through as P&T committees continue to add IGALMI to future agendas. These positive results give us great confidence to deploy our full 70-person sales force, targeting approximately 1,700 hospitals. This will equip us to build upon the strong momentum we have made since launch in July. We expect to deploy this team in the field by December 1. To ensure ongoing optimization and informed deployment of our field force, we have taken a unique approach to our sales strategy by building out a database of 81 billion records spanning more than five years. With this data lake, we are able to examine and refine our targeting methodology by building a hierarchy of target hospitals informed by the location and frequency of agitation episodes. The model we have today represents the majority of agitation episodes in bipolar and schizophrenia patients and takes into account nearly 80% of the total site base in the United States. Turning now to marketing, we will continue to build on our peer-to-peer programs and digital marketing efforts for the balance of the year and amplify these efforts in 2023. To date, our peer-to-peer programs have engaged over 1,000 HCPs at speaker venues and conventions. And the IGALMI now available digital campaign has yielded significant engagement with over 140,000 visits to our HCP website. Our understanding of IGALMI’s value proposition in this market continues to evolve and strengthen. Just a month or so ago, new data from the American College of Emergency Physicians was released, showing that more than half of emergency room physicians have been physically assaulted, with one-third sustaining an injury. Bipolar and schizophrenia patients are much more likely to come in the emergency department following assaults and the current treatment paradigm for agitated patients may be exacerbating this issue. The dynamic provides a nice tailwind for going to enter the market, highlighting an additional and previously underappreciated value proposition. In summary, the market conditions and IGALMI receptivity are setting us up for success in 2023 and beyond. We have nearly 50% of our targeted beds under contract with GPOs with others in process. We have 21% of the Target IDN beds scheduled to vote with nearly 41,000 target beds and an additional 15,000 Tier 2 beds in progress. Additionally, we have over 120 out of 700 target hospitals scheduled for P&T vote, and nearly 350 P&T votes for Tier 2 hospitals in process. Keep in mind this is reflective of our initial 26 territory deployment. Both the IDN and P&T scheduled votes have improved since we last reported these figures on Commercial Day, and we expect these votes in process will continue to climb. Additionally, we have added positive formulary wins since our last readout, and we'll provide more specific details on this metric in future calls. Now, I'll turn the call over to Richard, who will give a financial update.

Thank you, Matt. I will now review our third quarter 2022 financial results. Net revenue for the quarter was $137,000, driven primarily by early trial of IGALMI with limited market access. Due to the company's direct shipping model to hospitals, no wholesaler stocking was expected. Research and development expenses were $22.1 million for the third quarter of 2022 compared to $11.9 million for the same period in 2021. The increase in R&D expenses was primarily attributable to an increase in clinical trial costs as the company expanded its BXCL501 clinical program for Alzheimer's-related agitation, schizophrenia and bipolar-related agitation at-home use and MDD. Selling and general administrative expenses were $17.1 million for the third quarter of 2022 compared to $14.9 million for the same period in 2021. The increase in SG&A expenses was primarily due to personnel and costs related to the launch of IGALMI in the United States. BioXcel Therapeutics reported a net loss of $41.8 million for the third quarter of 2022 compared to a net loss of $26.8 million for the same period in 2021. Cash burn for the quarter was approximately $31.5 million, which is consistent with the first two quarters of 2022. As of September 30, 2022, cash and cash equivalents totaled approximately $232.3 million. 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?

Thank you. We will now be conducting our question-and-answer session. Our first question today is from Greg Harrison from Bank of America. Your line is now live.

Hey, good morning, guys. Glad to see the progress. Thanks for taking our questions. So how should we be thinking about the timing from here on the 470 P&T decisions you cited and the rate at which you could expect those to convert into formulary wins?

Good morning, Greg. Thank you for your question. I will pass it on to Matt.

Yes. So, Greg, those are currently scheduled between now and the end of the year or into Q1 of next year. So we would expect that should those agendas actually go to vote on time, which these things can get pushed, but typically, we would expect the majority of them to happen on time, then they'll go to vote. And once the decision is made to put IGALMI on formulary, one of the things that I had provided in the Commercial Day is the expectation of uptake. And so, over the course of the year, both emergency department physicians and psychiatrists, the majority of them would expect to try IGALMI within that first year post formulary access.

Got it. That's helpful. And then on the OnkosXcel side, what are your expectations for the differences between the 701 monotherapy arm and the KEYTRUDA combo? Just trying to think through mechanistically what the expectation could be for 701 response alone?

Vince, do you want to take that question?

Sure. Happy to do that. Hi, Greg.

So, I think, the bottom line is, we don't know how 701 will behave as a monotherapy in a cold tumor. We know 701 has single-agent activity in a hot tumor, and that was data generated quite some time ago. We do know from the preclinical work that we've done, extensive preclinical work, and we presented a lot of that. But it really seems to be the synergy between the checkpoint and 701. So that's probably the best answer I can give. And we don't know, but we think that primarily fundamentally, it is the synergy between the two drugs.

Got it. Well, thanks for taking questions and congrats on the progress, again.

Thank you, Greg.

Thank you. Next question is coming from Colin Bristow from UBS. Your line is now live.

Hey, good morning and thanks for taking my questions and congrats on the continued progress. First one on OnkosXcel, just curious when you expect to provide a more substantive update and sort of, details of the path forward and structure there? And then the second one, more of a broad sort of conceptual one on 501, just what is your best guess on when you'll be in a position to, I guess, A, report a sales number that you're sort of enthused about and B, sort of provide ongoing sales guidance? I know this is a much debated topic, but I think it's an important one from an investor standpoint. Thank you.

Thanks, Colin, for your questions. Regarding the sales guidance, we are currently in an unprecedented area, as a product like IGALMI with a novel mechanism of action has never been launched in an institutional setting. We are working on building our launch matrices. Once we develop strong confidence in those matrices, we will start providing guidance. Now, I will pass it on to Matt for more details.

Yeah. So Colin, I think the way I would frame it up is this. I mean, we said that the process for formulary access typically takes 6 to 12 months. We have a lot of activity ongoing with just 26 reps in the field. That's about to change. And so the early progress that we're making is very encouraging. Certainly, getting on formularies when we can truly open up true demand driving activities. And we would expect that as these formularies are adopted in these hospitals, that our team is going to be able to very rapidly pull through demand. Now we do know, and I mentioned this earlier, that there are uptake expectations and trial expectations based on market research. But some of the early enthusiasm from early formulary hospitals gives us good confidence that when the formularies do get approved in the hospital, that the demand will shortly follow. So we feel really good about that. And just dovetailing on Vimal's point, this is unprecedented. No neuropsychiatric drug has been launched in the emergency department. And so we're breaking new ground here, but we feel really good about the response we're getting.

Great. And on the OnkosXcel sort of update path-forward structure?

Colin, can you please repeat that question?

Just in terms of your plans for OnkosXcel, just more details around the path-forward and structure there?

Sure. OnkosXcel, as we presented the initial data update for our first 15 patients in SCNC, that's very encouraging with a 33% composite response rate and durable responses in a tumor where there is no approved therapy. We have completed the full cohort of now 28 patients, and that data is now getting analyzed and will be presented early next year. With this data in hand, we will explore all the possible strategic options, including partnering as well as third-party investments. OnkosXcel. We are very excited about the progress for 701 and what we have seen in SCNC.

Okay. Great. Thank you.

Thanks, Colin.

Thank you. Next question is coming from Robyn Karnauskas from Truist. Your line is now live.

Hey. Hi. Thank you so much for taking my question. This is Anvesh on for Robyn. I have one on IGALMI. What are the main positive highlights and also pushbacks that you observed, if any, and that you are hearing from your discussions with peers and physicians?

First of all, thank you for the question, Robyn. I haven't encountered any significant negative feedback regarding the product itself. Naturally, formulary directors will always scrutinize the pricing, but that's not necessarily negative. In fact, when we consider the value proposition of IGALMI and its potential to either improve throughput or reduce staff injuries, administrators and hospital pharmacists recognize that value. The feedback we've received indicates that the onset of action is viewed very positively. After reviewing the product profile and hearing the IGALMI narrative, they clearly grasp the value proposition. We're seeing a strong response. It's worth noting that before the launch, we conducted market research where we presented only the product profile. Initially, the intent to use the drug was at 20%, but once we shared the comprehensive story that we're now conveying in the field, that number doubled. They anticipate that two out of every five patients will receive this drug. This is a convincing set of market research, and it's being reflected in the field. Our representatives are reporting similar feedback.

Okay. Great. And one more on the dementia market. So looking ahead to the dementia market, how would a launch in nursing homes and long-term care facilities be different from schizophrenia and bipolar markets? And do you anticipate adoption in the dementia market being faster or slower than the schizophrenia and bipolar market?

So, Robyn, we're doing the work now to create a market entry strategy. And so we'll communicate that over time when we have better clarity on it. Suffice to say, the early market research that we're seeing is very compelling and that there's definitely an unmet need in this market. So we expect it to have really good penetration into that market.

And it's a different market dynamics because it has not been in an institutional setting. So as Matt said, we are developing a market entry strategy and we will lay it out more close to our data readout.

Okay. Got it. Thanks for taking my questions.

Thank you for your question.

Thank you. Next question is coming from Chris Howerton of Jefferies. Your line is now live.

This is A.J. for Chris. Two questions for me. My first one is about the launch. So are you seeing any early trends in use concentration geographic or otherwise? And do you have reorders yet, or is it still kind of too early?

I'll address the second question first. Yes, we have received reorders. Regarding the first question about geographical adoption, we haven't observed any specific concentrations. Our early orders are coming from areas with interest or where there is early formulary access, which spans across all 26 territories where we are currently operating.

Got you. And okay. So my second question is about MDD. So is the intention for at-home use similarly episodic space as in bipolar schizophrenia, or what are the goals of the Phase 1 study, given that we already have a good idea of the 501 safety profile?

Yes. This is Rob Risinger. The major depressive disorder will be a daily dosing regimen. It's not an as-needed regimen. So it will be taken in conjunction with their SS or SNRIs, serotonin-norepinephrine reuptake inhibitors. And we know that BXCL501 affects at least seven of the 17 items of the Hamilton Depression Rating Scale. So we know, for example, it will improve or augment sleep and treat insomnia. That's three items on the scale. For example, we know that patients reported regardless of the illness we've studied, they reported an improvement in anxiety. We know that's a major component of depression. So it will be a daily regimen. And that is the readout that we'll get from the daily dosing study. What is the regimen that can help people, what the tolerability is given, again, on a daily or even a twice-daily dosing?

So this is, again, our strategy to move the medical setting, and this will be at-home setting like our SERENITY III program.

Okay. Thank you.

Thank you, AJ.

Thank you. Your next question is coming from Yatin Suneja with Guggenheim Partners. Your line is now live.

Thank you. Two for me as well. First one is on TRANQUILITY. Could you just frame for us the expectations for that study is going to be down in the first half of 2023? What do you expect to show? And then if you can maybe further elaborate a little bit on the MAD side. It seems like you have completed a few dosing or dosing schedules. What are you learning from the safety perspective, given it is more of a daily dosing than episodic? Just articulate that for us so far, the learnings that you have learned from the healthy voluntary studies? Thanks.

Sure. So I'll handle those in reverse your last question first. The study is ongoing, the daily dosing study in healthy volunteers, the fact that it's ongoing, and we continue to enroll cohorts testing greater and greater doses. It's an MAD study or multiple ascending dose study means that it has been well tolerated. We've not run into a stopping criterion, whereby you would not dose the next scheduled cohort. So we have tested a range of doses and continue to escalate. We've not reached what is commonly called a maximum tolerated dose. And I view that as a very positive thing. The study, when it will read out is when we finally have a maximum tolerated dose. When we reach that point, we'll then be testing it in conjunction with an SNRI, and that will then enable the trial in – or a proof of concept trial in major depression. So turning now to your first question about TRANQUILITY, the readouts for the TRANQUILITY 2 study will be very similar to what we reported for TRANQUILITY 1. The primary efficacy measure is the change from baseline and the PANSS Excited Component at two hours after the first dose. We have repeated doses. So we'll report about the safety and tolerability of both first dose and every dose that they may receive whenever they have an episode of agitation over that three-month period. We will also be reporting some of the efficacy measures that are secondary or exploratory, for example, the Pittsburgh Agitation Scale and clinical global improvement. And so those will be what we should be able to report in the first half of 2023.

So just Yatin, to add to what Rob said, it is pretty much a similar study, what we have seen in TRANQUILITY 1, which forms the basis for breakthrough therapy designation with the FDA. So pretty much everything is the same except here, we are following up for three more months after first dosing each patient.

Got it. Thank you.

Next question is coming from Graig Suvannavejh from Mizuho Securities. Your line is now live.

Thank you. Good morning and congratulations on the progress. I did have a question just on what you reported for sales. And certainly, you have been telegraphing for some time, that it would be slow and gradual. I think perhaps this might have been a bit slower than we were anticipating. So as we think about the fourth quarter and perhaps into 2023, should the expectation be that it will be kind of similar to this and then there's a kind of inflection maybe after year 1. Just any color on how we should be thinking about the uptake curve? And then I have a follow-up. Thanks.

Yes. So Graig, it's Matt. I'll handle that one. So as we mentioned at Commercial Day and reiterated again this morning, we have over a dozen formulary wins. And so the expectation of uptake after formulary win, you know, you can kind of look back in the market research we did to see what that looks like. But it's roughly 37-or-so percent in emergency department and site physicians expect to try IGALMI the first six months or so post formulary approval. So I think things are falling in line based on those metrics. We expect there will be a very nice acceleration in formulary approvals over the next couple of quarters. And so we'll see improving metrics in true demand over that time. Keep in mind, we don't stock the wholesalers. So we are doing a drop ship model directly to the hospitals. So there's no stocking inventory to be concerned with. And we recorded this first quarter of revenue with 26 reps in the field. We're in the midst of expanding that. We will have 70 deployed by December 1, and we think that that's going to have a meaningful improvement and acceleration on all of these metrics. So I don't know if that's helpful in framing how you examine your uptake in your models. But I think that's how we think about it. And certainly, we feel really bullish about the early signs that we're seeing.

Thanks, Matt. Maybe my other question just has to do with the 137,000 in sales that you did, in fact, record by the math, if you divide by 105, it's about 1,300 strips. And I guess the question is those strips that were used were they bought basically or purchased through contracting, or were there hospitals that thought using the WAC price? I'm just trying to understand the dynamics of the actual films that were used?

Yes. So one of the GPO contracts came online later in the third quarter. So a lot of those units would not have been impacted by that sort of contract. So you shouldn't really be thinking about too much gross to net deduction. There is some, but you wouldn't expect a lot of those contracts that would impact the GTN a little bit more to really be in place in a fulsome way in Q3.

Okay. Thanks, again.

Thanks, Graig.

Thank you. The next question is coming from Ram Selvaraju from H.C. Wainwright. Your line is live.

Thank you. Can you hear me?

Yes, we can hear you.

So just two quick ones. Firstly, I was wondering if you could comment on whether you expect inventory stocking to be a feature of any future channels label extension indications for IGALMI going forward? In other words, the absence of inventory stocking is a feature that is specific only to the initial approved indication and would not necessarily be applicable in the future? And then the second question is with respect to the cadence of completion of enrollment in the ongoing clinical trials of 501. If you could just give us a sense of that? I know you've provided us with the timeline for announcement of topline data. But if you could just give us a sense of when you expect those clinical programs to reach full enrollment, that would be helpful. Thank you.

So, hey Ram, it's Matt. So, on the wholesaler stocking question for future indications, typically, when you go into a retail setting, you would go full line in the channel, which means that we would stock the wholesalers, and there'd be some stock inventory there. That is wholly dependent on whether we intend to use that traditional distribution model. Right now, that is a good operating assumption. And then secondarily for Alzheimer's dementia, we would have to cross that same bridge. Is it going to be in wholesale or is it going to be in specialty or some hybrid of each? So I think as we get our market entry strategies in a more complete form, we can communicate that out to you at a later date. But if we go full retail, you would expect to see that there'll be some wholesaler stocking in the distribution centers.

Good morning, Ram. Regarding your other question about the clinical trials, TRANQUILITY II is progressing on track. We have already had a DSM meeting, which typically occurs when a clinical trial is well advanced. Enrollment is progressing well. There are two components; after the first dosing, patients are followed for three months. We are well into that process, and many patients have completed the three-month period as well. We will provide guidance once we have full enrollment. That was for TRANQUILITY II. Rob, did you want to add something about SERENITY III?

Yes. SERENITY III, we'll be initiating before the end of this year. SERENITY III recall is similarly designed to SERENITY I and II, our pivotal trials, which enrolled in a matter of months, even during the peak of COVID, perhaps because of isolation, but we have now opened enrollment in the SERENITY III to both bipolar patients and patients with schizophrenia. So, we believe we're using the same site, same design, and same raters. We believe this will be equally, if not faster enrolling than our pivotal trials were. And so we fully anticipate and are confident in reporting topline for SERENITY III in the first half of 2023.

Thank you.

Thank you, Ram.

Thank you. Our next question is coming from Sumant Kulkarni from Canaccord Genuity. Your line is now live.

Hey guys. This is Kyle speaking for Sumant. A few questions from us. Since your launch have any IDN notes on IGALMI and any instances where hospitals refused to move IGALMI to enrolling stage? And another question, any potential obstacles that can delay the timing of currently scheduled formulary decisions? And then maybe one last question. Any feedback from patients on self-administration and potential difficulties as well as any caregiver experience on that?

So regarding your first question on IDNs. Right now, we have about 40,000 of our targeted IDN votes in process. So those are scheduled to vote, but we have not had votes yet. To date, we have not had any negative response for IDN votes. I did not, Kyle, get your second question. So I'll move to the third real quick and then maybe you can repeat it. But patients, we've only spoken to hospital pharmacists that have observed some of the velocity with IGALMI. The feedback that we're getting from them is that the drug is working as expected, that the patients are able to take it, and that we've seen some improvements in discharge time, etc., and that it's well-tolerated to the profile that we present. So I haven't heard of any patient difficulty or anything like that or from an administration perspective. So what was your second question, Kyle?

Second question is any potential obstacles that could delay the timing of the formulary decisions?

Well, I mean, I think one of the things that our guest speaker at the Commercial Day expressed is that the P&T committees handle a lot of things beyond just drug evaluation for formulary inclusion. A lot of things. And so, because the agendas and schedule can change, those are risks to getting formulary approval. But we've seen a pretty good cadence of P&T committees meeting. And assuming that they have a quorum, we would expect to be reviewed, and we believe that we have put ourselves in a position for a positive formulary review.

That’s it from me.

Thank you. Your next question is coming from Corinne Jenkins from Goldman Sachs. Your line is now live.

Yeah. Good morning, everyone. Maybe just on SERENITY III, could you just share with us some of the powering assumptions there, particularly given we know pretty well the dose-dependent response with IGALMI?

Sure. We saw a very consistent dose-dependent response, and we compare, for example, SERENITY I in patients with schizophrenia with Serenity II in patients with bipolar disorder, and there's very little, precious little difference in their response. So knowing that it's a very consistent response, the FDA has agreed that we can enroll both patients with bipolar disorder or patients with schizophrenia in the trial. We have a total N, I believe, it's not on clinic trials that got it will be very shortly. But the N is much smaller than the SERENITY 1 or 2 trials. Again, we know it's a very high effect size, number needed to treat in the range of two or three. So our total N is around 200, and that gives us greater than 90% power to detect a difference from placebo in patients with schizophrenia or bipolar disorder.

Okay. And then, on the TRANQUILITY 3 study, just curious, what are the gating factors that are still standing between now and initiating that trial in December?

I believe the key factor has been ensuring that TRANQUILITY 2 is completed on schedule. The trials are similar in size, and we are also focused on gaining experience from TRANQUILITY 2 to fully concentrate on TRANQUILITY 3 once TRANQUILITY 2 concludes. Other than that, there are no additional gating factors.

Okay. Understood. And then, just what does a December initiation imply with respect to potential readouts? Is that kind of a 2023 idea, or is there any reason to think it would be earlier or beyond that?

Once we have our first patient dose and a clear understanding of the full enrollment for TRANQUILITY, we will be in a position to provide guidance on when to expect the data readout for TRANQUILITY 3. As you can see, the size is quite similar to TRANQUILITY 2, and it took us about the same time to complete TRANQUILITY 2 starting from the first patient dose, which was around May.

Yeah. Makes sense. Thank you.

Thank you. We reach the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Thank you, everyone, for joining us today and for your interest in BioXcel Therapeutics. Have a great day.

That does conclude today's teleconference and webcast. You may disconnect your line at this time. And have a wonderful day. We thank you for your participation today.