BioXcel Therapeutics, Inc. Q3 FY2023 Earnings Call

Good morning, and welcome to the BioXcel Therapeutics Conference Call, which will cover its alignment with the FDA on its TRANQUILITY program, provide an update on strategic financing, and review its financial results for the third quarter of 2023. 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/or answers that may be given to questions asked are forward-looking statements that are subject to risks and uncertainties related to future events and/or the future financial or business performance of the company. 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, 2023, which can be found at www.bioxceltherapeutics.com or on www.sec.gov, and which will be updated in its quarterly report on Form 10-Q for the quarter ended September 30, 2023. As a reminder, today's conference is being recorded. Presenting on today's call are Dr. Vimal Mehta, Chief Executive Officer; and Richard Steinhart, Chief Financial Officer. Joining them for participation in the Q&A session are Matt Wiley, Chief Commercial Officer; Dr. Rob Risinger, Chief Medical Officer of Neuroscience; Dr. Vince O'Neill, Chief R&D Officer of OnkosXcel Therapeutics; and Dr. Frank Yocca, Chief Scientific Officer. It is now my pleasure to turn the call over to Dr. Mehta.

Thank you, operator. Good morning, and thank you for joining us. Today, I begin with several exciting and highly anticipated updates on our recent development with our two late-stage clinical programs for BXCL501, TRANQUILITY and SERENITY III. In addition, I will cover important news about our financing terms with Oaktree Capital Management and Qatar Investment Authority. After this, I will touch briefly on updates for our IGALMI commercial activities and OnkosXcel Therapeutics. Rich will then cover the financial results for the third quarter. Let me begin with TRANQUILITY and SERENITY III programs. I am very pleased to highlight the tremendous progress that we have made with these late-stage clinical programs, which we believe represent significant value-creating catalysts. In both cases, we completed productive meetings with the FDA regarding two proposed development paths. We are aligned with the FDA's recommendation regarding a Phase 3 trial in the at-home setting for the TRANQUILITY program, as confirmed in the meeting minutes. Our development path with SERENITY III is based on the feedback we received in last week's meeting with the FDA, subject to receipt of final meeting minutes we expect in December. Going into the TRANQUILITY in more detail, we are aligned with the FDA's recommendation regarding an additional Phase 3 trial in the at-home setting for TRANQUILITY as a potential path to an sNDA submission. This important development follows our positive pivotal TRANQUILITY II study results in June, the completed independent third-party TRANQUILITY II trial audit in October, and the receipt of our FDA meeting minutes just this month. Specifically, we plan to conduct a Phase 3 clinical trial of BXCL501 in the at-home setting for the acute treatment of agitation associated with Alzheimer's disease. This potential market opportunity could include acute treatment of agitation across the full spectrum of Alzheimer's-related dementia and severity of agitation across all care settings. We believe we are well-positioned to bring BXCL501 to this very large and underserved market, which represents a unique opportunity for which there are no FDA approved drugs. While the agency has approved a chronic agitation treatment, we believe we are breaking new ground for this important unmet medical need. We are pleased that as a result of our updated development plan, the TRANQUILITY III trial is no longer required as part of an FDA submission. We expect this will let us redeploy resources and focus on the recently agreed at-home-based trial for the TRANQUILITY II program. In summary, we believe we are now poised to advance the program efficiently and cost-effectively. Our confidence is further reinforced by the positive findings of an independent third-party audit of data integrity at the single TRANQUILITY II trial site we have previously identified. This audit found no evidence of misconduct or fraud beyond the instances previously reported. In addition, no findings were identified that impact data integrity. We look forward to finalizing our study protocol and moving this forward. Let me now turn to the SERENITY III program, which is also making steady progress. As a reminder, here we are evaluating the potential at-home use of BXCL501 for agitation associated with bipolar disorder or schizophrenia, the current approved indication for IGALMI. Last week, we completed a productive meeting with the FDA and expect to receive meeting minutes in the first half of December. However, I can share now that based on preliminary FDA feedback, we plan to conduct an additional Phase 3 trial evaluating safety of the 120-microgram dose to treat agitation in the home setting associated with bipolar or schizophrenia. We'll provide more details on this program as we advance. For now, we are pleased that we have multiple opportunities to bring BXCL501 to a much larger number of patients in the home setting. This is the expand portion of our land-and-expand strategy. In conjunction with the clinical development work, we are focused on enhancing our operational and financial flexibility. As reported today, we have entered into a binding term sheet with the Oaktree Capital and Qatar Investment Authority to amend our existing financing agreements. Subject to final documentation, we have agreed to revise terms that will increase our potential to access additional tranches of capital and have agreed to revise the revenue covenant to extend the compliance requirement and covenant levels to align with our current projections following our business reprioritization. We believe this is very positive news for the company as this is an integral part of our overall financing strategy. We are grateful to our strategic financial partners for their ongoing support. Briefly turning to IGALMI. We have focused commercial efforts to provide access to IGALMI to our current customers and deploy direct contracting with hospital systems. The recent issuance of a J-Code by CMS is expected to streamline the reimbursement process across commercial and government peers. We hope this will help us continue to establish brand equity in IGALMI and act as a bridge to the larger potential at-home market opportunities. Additionally, IGALMI patent protection has been extended to 2043 with two new Orange Book-listed U.S. patents. Before wrapping up, I would like to highlight that we are pleased with the continued progress of the NIDA-funded trial of BXCL501 for potential treatment of opioid use disorder being conducted by Columbia University. This may offer an important opportunity to address fentanyl combined with xylazine in what has been called an "emerging threat" by the White House Office of National Drug Control Policy. I'm also energized by our emerging neuroscience clinical development programs that are the result of our unique use of artificial intelligence platform to drive drug innovation. We look forward to sharing more information about our opioid use disorder program and exciting pipeline in an R&D event that we plan to host next month. Look for more details soon. In addition, we were pleased with the recent positive survival data reported for BXCL501 in our open-label Phase 2 trial in patients with metastatic castrate-resistant prostate cancer and in patients with small cell neuroendocrine prostate cancer. With these data in hand, we are focusing on various strategic options for OnkosXcel. I like to end by thanking all of our colleagues for their dedication to our mission of bringing transformative medicines to patients. It is ultimately their tireless work that drives our success. I will now turn the call over to Rich, who will review our third quarter financial results. Rich?

Thank you, Vimal. The quarter was indeed a transformative time for the company and I'm pleased to review our financial results for the third quarter of 2023. Net revenue of IGALMI was approximately $341,000 for the quarter. Research and development expenses were $19.6 million for the third quarter of 2023 compared to $22.1 million for the same period in 2022. The decreased expenses were primarily attributable to a decrease in costs associated with BXCL501 SERENITY III and the TRANQUILITY II clinical trials. Selling, general and administrative expenses were $24.3 million for the third quarter of 2023 compared to $17.1 million for the same quarter in 2022. The increased expenses were primarily attributable to an increase in one-time legal and professional fees, costs associated with the OnkosXcel potential public offering, as well as in personnel and related costs to support commercialization of IGALMI in the United States prior to our reprioritization. BioXcel Therapeutics had a net loss of $50.5 million for the third quarter of 2023 compared to a net loss of $41.8 million for the same period in 2022. The company used approximately $37.6 million in operating cash during the third quarter. Cash and cash equivalents totaled $90 million as of September 30, 2023. The company estimates that its current cash and cash equivalents will last through mid-2024. This estimated cash runway does not include potential additional capital that may become available under the amendments to the strategic financing agreements or resulting from any potential financing activities that we may undertake. Now, I'd like to turn the call back to Vimal.

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

Thank you. We will now be conducting a question-and-answer session. Our first question is coming from the line of Greg Harrison with Bank of America. Please proceed with your questions.

Hey, good morning, guys. Thanks for the update and for taking the questions. With respect to the 100 patient trial, can you give us some more color on the TRANQUILITY development strategy of going for a broad label initially? And then, what are the criteria for success in this trial, and what would a positive trial look like?

Good morning, Greg. This is Vimal. We were very pleased that we have an alignment on recommendation from the FDA to conduct a home-setting trial. As you know, most of the patients in Alzheimer's do live in the home setting. This was a very important development after we observed in TRANQUILITY III that number of episodes that were required were more chronic in nature, so we don't need to conduct TRANQUILITY III anymore. Under the circumstances, this is our best case scenario to move this drug and provide access to this medication to the broadest possible patient population. So that's very exciting. In terms of the clinical trial program, I will pass it on to Rob to describe what this program will entail. Just remember, we just received the meeting minutes from the FDA and we are in the process of developing the clinical protocol right now.

Sure. So, let me just highlight that we're really excited that we now agree with FDA's proposed design. This will be a double-blind, placebo-controlled study, primarily safety, and that includes describing clinical benefit as assessed by family or caregivers. We're actually working on the protocol. We expect to get back to you with further facts about that protocol.

Got it. And can you clarify whether you're able to use all of the data collected from TRANQUILITY II as part of your sNDA package?

The company believes after receiving our independent audit and all the information we have that we will be able to use the TRANQUILITY II data that we announced in June.

Great. Thanks for taking the questions.

Thanks.

Thank you. Our next questions come from the line of Ram Selvaraju with H.C. Wainwright. Please proceed with your questions.

Hi, thanks very much for taking my questions. I was wondering first of all if you could provide us with some additional context and clarity on what you expect to be the ultimate path forward for BXCL501 in chronic agitation and within what timeline you expect to pursue this, and if we should be thinking about this as being something that you would look to target only once you have an approval of the label in Alzheimer's associated acute agitation. Thank you.

That's a great question, Ram. When we had the conversation with the FDA regarding TRANQUILITY III, conceding there are so many episodes, we did dose 501 multiple times to treat those agitation episodes. So, there was a discussion that would there be a possibility that 501 may be useful or could treat or could be developed as a chronic treatment. We have done chronic dosing, as you know, in the healthy volunteers for our MDD program and we have data, but we have no data right now that it can treat chronic agitation. We will work with the agency to develop a path or explore the path. Currently, our laser-focus is on acute treatment of agitation in a home setting, so that we can expand our use of this drug in Alzheimer's-related agitation. So that path exists for us and we will have the opportunity to explore, but at this point in time, the strategy will be to deploy all resources and focus on completion of the trial in a home setting.

Okay. And then secondly, with respect to the opioid use disorder indication, do you have any additional information you can provide to us regarding the potential size of this market opportunity? And maybe give us a sense of how you would expect 501 to potentially be deployed if it were to be approved?

So, as you know, Ram, this program is funded by NIDA. It's a huge, like, on a national emerging threat. The investigators we are working with are world-renowned in this area and there is an ongoing Phase 2 trial. Upon outcome of that trial, we will know what the path forward will be. But in terms of the market opportunity, I will pass it on to Matt, if he can provide any color on this.

Sure. Ram, we'll give additional data as we get closer to data readout, but we do know that the fentanyl plus xylazine phenomenon is an emerging threat. It's growing. And so, there's not really great epidemiology yet on it. We do know that certain cities like Philadelphia or the State of Connecticut, for instance, have significant problems with this emerging threat and it's certainly gotten the attention of the White House and others.

Could you provide your thoughts on the recent positive data for OnkosXcel? How might this clinical data facilitate the identification of a strategic partnership for 701 or the potential spin-out of OnkosXcel into a separate entity? Thank you.

With the data in hand, and you saw the data from the two trials, I think that's very reinforcing about the 701 potential. Vince, do you want to take the question?

Yeah. Good morning, Ram. I would just add to that, that really the complete data package that we have, as you said, including survival, but also biomarker work, is exactly the data potential partners would really want and need to see to form an assessment. So, now that we have that in hand, I can tell you we are actively having those conversations.

Thank you. Our next questions come from the line of Sumant Kulkarni with Canaccord Genuity. Please proceed with your questions.

Good morning. Thanks for taking my questions and all the updates. So, on your alignment with the FDA, did you specifically ask the agency about your ability to file on the basis of the TRANQUILITY II trial alone? Asked another way, I guess, why did the company not choose to go with a more limited sNDA initially with the potential to expand the label further at some time? Or was that not possible because you still need to establish a safety profile in older patients?

Sumant, with the agency, when we met, we had all the conversations around the TRANQUILITY II program, what will allow us to file an sNDA. In terms of our strategy, we adopted the strategy we want to have the broadest access to this drug to the patients. We know 80% of the patients live in the home setting, which is home and assisted living facilities. We have data in the assisted living facilities, and to be able to get to the 80% patient population, we needed to demonstrate safety and collect data on efficacy in a home setting. That was the optimal choice by the company working with the agency that this will allow broader access to the patient and also for the caregiver. One of the biggest reasons for these patients to go from a home to assisted living or to nursing home is, as you know, agitation. So, we thought this is the best case scenario that we conduct a study in a home setting and get the best possible label we can in this patient population, whereas you know there are no drugs approved and, to our knowledge, no drugs under development also for acute treatment of agitation. So, we have a very unique position.

Got it. And then, is there a specific limit to the number of episodes that you can treat per four-week period in this new trial to be considered an acute treatment? And how confident are you that the new at-home trial will not end up in a TRANQUILITY III-like outcome where Alzheimer's agitation is not really acute but chronic?

We are not aware of any guidelines like migraine, where you have 15 episodes and it's acute, and after 15, it's considered chronic. Those are the paths we will be working with the FDA regarding what is the definition of acute and episodic. But as Rob said, we are developing a protocol and he will be providing you the details on what our inclusion criteria will be for an acute episodic treatment. We will be discussing more on this, but to answer your question, there is not a clear guideline set up or literature information that defines if you have X number of episodes, it's acute, and if you have Y number of episodes, it's chronic.

Got it. And then my last question before I jump back in the queue is, on the SERENITY III program, you now are allowed to go home with a 120-microgram dose. Could you just give us some color on what led to that and the discussions with the FDA around that, given it's higher than what you had contemplated in the past?

Yes. So, when we had the meeting on the SERENITY III program, we had multiple choices for the doses. As you know, 120 microgram is already an approved dose for IGALMI. Now, the company estimates that it has been given to at least more than 10,000 people, which is 120 and higher doses 180, and there is a lot of data generated, which provides the confidence to the company as well as to the agency that this could be a dose we should evaluate in a home setting. We also had a choice to evaluate 80, where you understand and know that we had done PK/PD modeling based on our 60-microgram dose and we could have chosen the 80-microgram dose. Those flexibility exists. The reason we are choosing 120 is that we have a lot of safety data on 120. Efficacy is already established. We need to evaluate primarily the safety in a home setting. That will allow us to capture about 23 million episodes that happen in a home setting and extend it beyond the 16 million episodes in the hospital. So, it's very synergistic; the same dose is given in a hospital setting if it can go in a home setting, and if patients in a home setting need any more like medications, they can always get 180 in the hospital. So, it's very, very synergistic, and that's part of the reason we have chosen 120 for evaluation in a home setting.

Thank you.

Thank you. Our next questions come from the line of Colin Bristow with UBS. Please proceed with your questions.

Good morning, and thank you for the update. I would like some clarification on the path forward regarding Alzheimer's agitation. I believe you mentioned that the company thinks the TRANQUILITY II data could be useful, but what did the FDA specifically say about submitting that data? Will this continue to be a matter for review? Additionally, concerning the extra study, it seems that based on previous study timelines, we are looking at a 2025 readout. Regarding your cash runway, you mentioned in Q2 that your funds would last until mid-2024, and you've continued to say that. Is this due to the updated agreement not being finalized? Any further detail would be appreciated. Thank you.

Sure, Colin. This is Vimal. Coming back to your question about the TRANQUILITY II data specifically, we have no reason to believe or we have not had any discussions which tell us that the TRANQUILITY data is not usable. As you know, once you submit your sNDA, the FDA does its assessment, and that will continue to be the case for any sNDA. In terms of our discussion, we have no reason to believe that, and as we said, the company believes this data is usable based on our own assessment as well as on the independent audit that was recently concluded. Your second question was about the additional studies and when we expect the readout will be there. As you notice, we have about a 100-patient study to conduct. It's in the home setting. We are developing the protocol. We are designing how many sites will be required to conduct the study. The only thing I can mention here is that conducting a trial in the home setting is going to be a lot easier than conducting a trial like TRANQUILITY II and III. The reason for that is in TRANQUILITY II and III; you have to helicopter in the CRO to make the assessments for the efficacy. Here, as we mentioned, we are trying to evaluate the safety and will continue to collect caregiver assessments of the efficacy. These trials are expected to be relatively easier in that setting, but we have not done a trial in a home setting yet. So, we are diligently working with our CRO, defining the protocol, getting the alignment on the protocol, and very soon we will be able to come back and say when we plan to initiate the trial, when the first patient will be dosed, when recruitment will be completed, how long it will take, and when the value inflection catalyst will be there for the Alzheimer's-related agitation program. Third question is related to Oaktree. Recently, we concluded a binding term sheet with Oaktree and Qatar Investment Authority. We are very grateful that they are very supportive. They have belief in the BXCL501 drug and, like us, like we believe in it. Having a very clear path for the Alzheimer's-related agitation and also a path for expanding the label for IGALMI in a home setting with the SERENITY III program, we both, based on our recent reprioritization of our commercial efforts and in the organization, needed to amend this agreement or terms. We are very pleased to report today that they have been agreed upon under the binding term sheet, which will be documented very soon. I will pass it on to Richard so that he can outline what the value for the organization is and why this was needed.

Sure, Colin, thanks. It's Richard. So, we've done a couple of things here, Colin, that make it attractive to us. We moved out the revenue covenants that would have started to impact our cash flow early next year for about a year. So that saves us some significant cash payments that may have been required under the original deal. As Vimal said, the new covenants and the new revenue targets really align with our reprioritization in our new budgets. This gives us a lot more flexibility in terms of operations. We renegotiated the tranches that may allow us to take down additional capital over the next few months.

Very helpful. Thank you.

Thank you. Our next questions come from the line of Robyn Karnauskas with Truist. Please proceed with your questions.

Good morning, and thank you for taking my questions. To start, you previously mentioned that the FDA prefers to reduce the dose by half for at-home trials. What discussions have you had regarding the use of 60 micrograms for the at-home setting for TRANQUILITY? For my second question, can you provide an update on your perspective regarding the number of potential doses available in the market or the episodes you are exploring for both at-home and hospital or assisted living settings? What is the current figure we should be considering? I also have a follow-up.

So, I'm just trying to understand, Robyn, your first question. Your first question is about the dose being used in the Alzheimer's-related agitation, 60 micrograms in a home setting? I just want to make sure I understood.

Yeah. I mean, I think before you talked about how the FDA always wants to cut the dose when they go at home, and that's what you did with SERENITY, it was a little lower. And what gives you confidence that you're using 60 micrograms, which is the high dose for your trial that you did in assisted living?

As you know, in our assisted living TRANQUILITY II program, we tested two doses: 40 micrograms and 60 micrograms. 60 micrograms was statistically significant, and it was well tolerated, and we have a very clear safety profile established. In TRANQUILITY I also, we had the data for the 60 micrograms. So that's the dose we want to test in a home setting, because it's clearly established the efficacy and the safety profile through two trials. Rob, do you like to add anything on it?

Yeah. No, the FDA felt that 60 micrograms had efficacy as demonstrated in TRANQUILITY II, and therefore, that's the dose to test at home. The safety profile of 60 was consistent with being able to be dosed at home. So, we believe a successful at-home trial will be demonstrating safety consistent with what we've shown in the TRANQUILITY II study.

In terms of the number of episodes, we continue because there is no drug approved. We believe we are one of the leaders in acute treatment of agitation related to Alzheimer's. Therefore, we are doing a lot of internal work to understand the opportunity. I will invite Matt to provide some insight on our understanding of the number of episodes.

Sure, good morning, Robyn. As Vimal said earlier, better than 80% of patients with Alzheimer's dementia are in an at-home setting. This is where the unmet need is potentially the greatest. Antipsychotics are not typically used in this population due to the side effects, and benzodiazepines are not an optimal choice. So, typically what's used for these patients is some type of soothing technique. These are relatively ineffective. We believe that the opportunity is tremendous. What we've seen in our market research is that, on average, the number of episodes per month for these patients in the at-home setting is six. So, the opportunity is pretty tremendous.

Would you get other reasons like patients that are not completely diagnosed, a lot of patients seem to have Alzheimer's, but maybe they have other kinds of dementia? Would that be something that reads in your press release, like assumed Alzheimer's that might be upside to the opportunity? And then, on the financing question, Vimal, maybe talk a little bit about how you're thinking about prioritizing future development for SERENITY once you get the final minutes back versus TRANQUILITY versus, say, monetizing 701? Like, I guess you have to prioritize one given your cash position; how are you thinking about that?

Regarding the prioritization, I think the good news is that we have full clarity on both programs and from our two recent FDA meetings. So, we have both options at our disposal to bring this drug into the home setting. TRANQUILITY is conceding a very large opportunity. It makes sense to prioritize the TRANQUILITY program, and that is the meeting we had in October, and we are more advanced in our protocol development and are taking the next steps forward with the TRANQUILITY program. Coming back to your question about the financing, we believe that we are blessed that we have multiple options for financing. In addition to equity financing, we recently were able to revise our terms with our strategic partner to build financial flexibility. In addition, we have the opportunity to partner the 501 program. Now, we have full clarity on the Alzheimer's agitation ex-U.S. That opportunity we have not explored because right now we were waiting for clarity on these two programs. In addition, as you mentioned, and Vince also mentioned, we are focusing on monetization of OnkosXcel. So, depending on the business need, we can leverage one of these options to us to extend our cash runway and get to the meaningful clinical milestones for the TRANQUILITY program, followed by the SERENITY program.

And, Robyn, this is Matt. I'll just take on your question about the potential label for presumed Alzheimer's dementia. And of course, these are things that we will test in the market to see how the market will react. But my initial reaction is that payers who might otherwise have a prior authorization due to a confirmed diagnosis might not be able to leverage a prior authorization in that way. That's number one. Number two is that what we saw in our market research on episodes, one of the things we did collect is the number of episodes per month prior to the definitive diagnosis of Alzheimer's dementia, and that was three per month. So, we do know that agitation exists prior to and may actually lead to the definitive diagnosis.

Okay, great. Thank you.

Thank you. Our next questions come from the line of Yatin Suneja with Guggenheim. Please proceed with your questions.

Hi. Good morning. This is Delma for Yatin. Thanks for the update. Could you please clarify what the safety long-term requirements for submission for the TRANQUILITY program are going forward? And then, in the next TRANQUILITY study, are you planning to use that clinical site where you saw misconduct issues? Thank you.

Regarding long-term safety, as we have outlined, that will continue to be a topic of discussion with the FDA. Our drug is intended for the acute treatment of agitation, which is episodic. Discussions will continue depending on what is considered acute, episodic, or chronic. Based on our frequency of agitation, we will present this to the agency. As for the site, we do not plan to use the one you mentioned, as it was specifically designed for an assisted living facility. Instead, we are moving forward with the at-home setting, so we will utilize the new site.

Thank you. Our next questions come from the line of Graig Suvannavejh with Mizuho. Please proceed with your questions.

Thanks for taking my questions. A couple, if I could. Just with respect to the comments around long-term safety requirements, I'm just wondering in support of an sNDA in the 80 agitation setting, what is your current expectation around what you'll need? And I guess the question is beyond the 100 patient four-week study, is there current thinking that you will need additional long-term safety in order to support an sNDA? And then, a follow-up question, if I could. Just on the current OpEx, I think it came in significantly higher than we were expecting. Given the current burn, I'm just wondering how we should anticipate OpEx to evolve in the fourth quarter and the first half of next year. Thanks.

So, Graig, regarding the long-term safety, as I mentioned, this will be a continued topic of discussion. It will happen between now when we are initiating the home-setting trial as well as at the pre-NDA meeting. There is not a drug that has been approved which is an acute treatment for agitation in Alzheimer's and is episodic in nature. So that package will be discussed with the agency, and we will continue to update where we are on those discussions. Currently, we are focused on the study for the at-home setting pivotal trial that we have agreed with the agency. In terms of the cash burn rates, I will pass it on to Richard to provide color on it, what our guidance is.

Sure. Good morning, Graig. How are you? The results of the reprioritization will begin to impact the fourth quarter and then certainly into next year. So, we'll see our burn rates start to decrease. Additionally, there were a couple of one-time charges in this quarter that won't be repeated moving forward. So, overall, we expect the burn rate to decrease next quarter and then continue into next year.

All right, great. If I could ask maybe just one follow-on. The J-Code, how should we expect that might impact the trajectory of sales? Thanks.

So, Graig, first of all, we were very pleased with CMS's decision to issue a permanent J-Code. We do believe that this will neutralize any economic concerns that hospitals and clinics might have in putting IGALMI either on formulary or providing broader use within the hospital or clinic. So, we look at this as a positive. Certainly, our corporate account director team has been getting positive feedback from either key hospitals or systems that they've been in contact with. So, we feel very good about this development and do think that it alleviates one of the barriers to increased use.

Thank you.

Thank you. Our next questions come from the line of Corinne Jenkins with Goldman Sachs. Please proceed with your questions.

Great. Thanks. I guess a couple from us. When do you anticipate that you're going to be able to finalize these protocols and initiate the at-home study for TRANQUILITY? And based on one of your prior answers, will these all be new trial sites that you need to enroll at? And then, on the TRANQUILITY point, you guided I think for 100 patients in that study, but it sounds like you've yet to determine the primary endpoint that you'll be evaluating. So, how did you come up with that guidance for the number of patients required? And could it evolve as you determine the protocol?

So, in terms of the protocol, it's under development. We had a meeting with the FDA last month. We were expecting the meeting minutes to confirm our understanding. The protocol is in progress. We are finalizing the protocol; once we have input from all our experts or at the board, then we will submit the protocol to the FDA. After the protocol has been submitted, we will be in a position to initiate the trial shortly after that. I will provide guidance on when we think the trial can be initiated, when the first patient will be dosed, when recruitment will be completed, and how long it will take, and when the value inflection catalyst will be there for the Alzheimer's-related agitation program. Coming back to your question about the 100 number, that was designed for safety and to collect efficacy data. The FDA and we felt that that number will be sufficient to add to our current data set we have with 501 in the elderly patient population. Those were the choices and decisions we ended up making regarding what needs to be shown in a home setting, what patient number will be relevant, and what the success criteria will be for demonstrating the safety profile. Rob, do you want to add anything?

Just that the protocol in development is really focused on both feasible and rapid generation. I recognize this is a pivotal trial, but the primary aim is to describe safety in only about 100 patients who are being treated as needed with the 60-microgram dose or placebo. It's designed to generate placebo-controlled safety data on adverse events for the FDA to review with respect to including these in a potential labeling at home. We aren't able to say when the results will be available. However, we'll share more facts once the protocol is finalized, and of course, we expect that we'll announce when enrollment begins.

Okay. And then, as you think about this extended agreement with Oaktree and QIA, how do you think about taking on additional debt versus seeking capital through the equity market?

I think always it's a delicate balance based on the business need, your current cash position, and the options you have at your disposal. The good news is that we have both equity as well as potential debt options in addition to, as I mentioned previously, partnering, which can be outside the U.S. for Alzheimer's-related agitation, because this opportunity, both in the U.S. and outside, is really large. Additionally, we mentioned that we have started now more concerted efforts for the OnkosXcel. So, we leverage these assets to develop our financing strategy to create the best value for our shareholders.

Okay, thanks.

Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Dr. Mehta for closing remarks.

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

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.