Definium Therapeutics, Inc. Q4 FY2022 Earnings Call

Good afternoon, and welcome to Mind Medicine's Fourth Quarter and Full Year 2022 Financial Results and Corporate Update Conference Call. For opening remarks, I would like to introduce Rob Barrow, CEO of MindMed. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to our fourth quarter and full year 2022 financial results and corporate update conference call. The press release reporting our financial results is available in the Investors & Media section of MindMed's website, and our annual report on Form 10-K for the year ended December 31, 2022, will be filed today with the Securities and Exchange Commission. Joining me today is Schond Greenway, our CFO; Dr. Dan Karlin, our Chief Medical Officer; and Dr. Miri Halperin Wernli, our Executive President. During today's call, we will be making forward-looking statements, including, without limitations, statements about potential, safety, efficacy and regulatory and clinical progress of our product candidates, financial projections, and our future expectations, plans, partnerships and prospects. These statements are subject to various risks that are described in the filings made with the SEC, including the most recent annual report on Form 10-K. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of today, March 9, 2023. MindMed disclaims any obligation to update such statements, even if management's views change. We are extremely pleased with the progress and transformational growth that propelled our business forward over the past year. And with our strong financial position and cash runway into the first half of 2025, we are well positioned to execute on our corporate objective and to reach multiple value-driving milestones. This year, we expect key data readouts from our Phase IIb trial of MM-120 for the treatment of generalized anxiety disorder, or GAD, as well as from our Phase IIa proof-of-concept trial of repeated low dose MM-120 in attention deficit hyperactivity disorder or ADHD. Additionally, we expect to present preclinical efficacy data on MM-402 in a model of autism spectrum disorder in the first half of 2023 and to initiate our first clinical trial of MM-402 later in the year. Before we dive further into our R&D and financial updates, I would like to take a moment to reflect on the extraordinary evolution that we have completed at MindMed over the past year. We have been able to attract high-caliber individuals with deep experience in the pharmaceutical industry to join our management team, such as Schond Greenway, our CFO; Dr. Francois Lilienthal as our Chief Commercial Officer; Dr. Rob Silva as our VP of Clinical; and Bridget Walton as our VP of Global Regulatory Affairs. We have also made significant changes to strengthen our Board of Directors, including with the addition of Dr. Suzanne Bruhn and Dr. Roger Crystal late last year. Besides personnel changes, we have also streamlined our pipeline, focusing our resources on the programs where we think we have the best chance to deliver novel treatment options to address major unmet medical needs. It is important to add that at every turn, the executives and Board members of MindMed remain steadfastly committed to our mission, pursuing a course that represents the long-term interest of our shareholders and of the patients we seek to help. Our employees work tirelessly toward our mission, and I believe we have one of the most talented, nimble and efficient organizations in our industry. I continue to be amazed by the dedication of our team, and I am confident that over the course of the coming year, our approach and execution will stand unmatched as demonstrated by the efficiency of our progress, the thoughtfulness and conviction of our scientific approach and the continued adherence to our mission. We remain deeply committed to advancing our organization and delivering new life-changing treatment options for the many patients living with brain health disorders. I will now turn to updates on our R&D programs, starting with our lead program, MM-120. MM-120 is a proprietary pharmaceutically optimized form of lysergide D-tartrate that we are developing for the treatment of GAD and ADHD. GAD is an often debilitating mental health disorder that affects approximately 6% of U.S. adults in their lifetime, but there has been very little innovation focused on the treatment of GAD over the past several decades. Symptoms of GAD include excessive anxiety and persistent worry, which can lead to significant impairment in social, occupational and other functioning. In August 2022, we initiated patient dosing for our Phase IIb trial of MM-120 in GAD. Enrollment is currently under way with 20 active sites, and top line results are expected later this year. The trial plans to enroll a total of 200 participants who will receive a single administration of up to 200 micrograms of MM-120 or placebo. The primary objective of this study is to determine the reduction in anxiety symptoms for up to 12 weeks after a single administration of MM-120 across the 5 treatment arms, with the primary endpoint measured at 4 weeks post dosing. The results of this trial will guide the dose selection and development strategy for MM-120 in GAD as well as deepen our scientific understanding of its clinical effects and its underlying functional mechanisms of action. We are also evaluating MM-120 for ADHD and also expect to report top line data for our Phase IIa trial in ADHD later this year. The Phase IIa trial is being conducted in collaboration with University Hospital Basel in Switzerland and Maastricht University in the Netherlands and is designed to evaluate the therapeutic utility of repeated sub-perceptual doses of MM-120 in adult patients with ADHD. Notably, this is the first modern study in which lysergide has been administered outside of a clinical setting. The trial expects to enroll a total of 52 participants who will receive a 20-microgram dose of MM-120 or placebo twice weekly for 6 weeks. The primary endpoint for this study is the mean change from baseline in ADHD symptoms as assessed by the AISRS after 6 weeks of treatment. We look forward to driving this proof-of-concept trial forward as part of our broader comprehensive MM-120 development strategy, which seeks to explore both session-based administration that harnesses the perceptual effects of serotonin agonism and innovative repeat administration models that harness the neuropharmacological effects of recurrent serotonin agonism. With respect to advances in our intellectual property strategy, our patent portfolio includes 26 pending U.S. applications and 12 pending PCT applications. These include applications covering compositions, dosing, dosage formulations and methods of treatment, among others, with projected expiration dates beginning in 2041. Additionally, as a reminder, MindMed currently owns and retains all clinical data and manufacturing rights for MM-120, and we are aggressively protecting and expanding our intellectual property portfolio. As we progress toward patent prosecution milestones in 2023 and beyond, we look forward to sharing in greater detail how the significant strategic advancements we have made since 2021 differentiate our product candidates and offer strong opportunities for marketing exclusivity and protection. Now I would like to turn to MM-402, or R-MDMA, which is a synthetic enantiomer of MDMA that has been preliminarily shown to impart prosocial effects with a favorable tolerability profile. MM-402 is in development for the treatment of core symptoms of autism spectrum disorder, or ASD, a disorder that is characterized by atypical social communication and interaction, repetitive patterns of behavior and restricted interest. Despite its significant and growing prevalence, there are no therapies approved to treat the core symptoms of ASD. MDMA is a synthetic molecule that is often referred to as an empathogen because it is reported to increase feelings of connectedness and compassion. The mechanism of action of R-MDMA is believed to involve increased engagement of the serotonin system and secretion of prolactin resulting in feelings of increased sociability and interpersonal emotional connection. Preclinical studies of R-MDMA demonstrated acute prosocial and an empathogenic effect, while its diminished dopaminergic activity suggests that it could exhibit a preferable tolerability profile compared to racemic MDMA or the S-enantiomer. Our aim for MM-402 is to demonstrate its ability to enhance social engagement and interaction rather than having a sedating or blunting effect, which is often a result of currently used off-label medications in the ASD population. Over the course of 2022, we made significant advancements in the MM-402 program, hitting key preclinical milestones that are required to enable our first-in-human clinical trial. Additionally, we made important preclinical progress to explore the activity of MM-402 in animal models of certain brain health indications, including ASD, and plan to report comprehensive preclinical data of MM-402 in an ASD model in the first half of this year. In parallel, through our research collaboration with University Hospital Basel in 2022, we initiated and are currently enrolling healthy volunteers in a comparative PK/PD study of R, S, and racemic MDMA. This study is designed to evaluate the tolerability, pharmacokinetics and acute subjective physiological and endocrine effects of the 3 molecules. We believe that successful completion will accelerate our understanding of the pharmacological profile of MM-402, as we advance into later-stage clinical development. We are also extremely excited to initiate our Phase I clinical trial of MM-402 later this year. This trial is intended to characterize the tolerability, pharmacokinetics and pharmacodynamics of MM-402, and we continue to explore all opportunities to generate early signs of efficacy as soon as possible in development to support our approach in targeting core symptoms of ASD. Moving on, with an aim towards accelerating our R&D efforts, we've continued to collaborate with leading research organizations around the world that provide valuable opportunities to advance novel treatment for brain health disorders. The discoveries that emerge from these collaborations could position us for potential expansion of our development pipeline and offer insights into the potential life cycle management of our existing programs. We've collaborated with the Liechti Lab at University Hospital Basel in Switzerland and have exclusive global rights to data, compounds and patents associated with our research program, evaluating lysergide and other psychedelic compounds. This includes data from numerous completed and ongoing investigator-initiated trials in both healthy volunteers and patient populations. Our collaboration has been useful in derisking and informing our drug development pipeline and has generated a number of patent applications to date. As we continue to make strong progress advancing into later stages of development, I would also like to take a moment to discuss our view of the commercial opportunity for our product candidates. We have many reasons to believe that there are significant commercial opportunities for MM-402 and MM-120. Each program seeks to advance novel mechanisms of action in disorders that represent significant unmet medical need. I'll start by discussing the commercial opportunity for our lead asset MM-120 for the treatment of GAD in a session-based dosing delivery paradigm. There's been a noted increase in the incidence and prevalence of individuals diagnosed with GAD in the U.S. and Europe over the past several years. The number of patients who try and are not adequately treated by available therapies is also increasing. This is a product of the low rate of remission from and the multiple safety and tolerability challenges of the current pharmacological classes such as SSRIs, SNRIs, antipsychotics and benzodiazepines, and the absence of true innovation targeting GAD over the past decade. The research we have conducted with patients and health care practitioners in the U.S. and Europe tells us that there is a significant demand for new pharmacological class that could offer faster, more profound and more durable efficacy responses as well as favorable safety and tolerability profile. This is particularly true in the large segment of the market of patients who have been on available treatment for years and having exhausted all available options continue to experience intolerable anxiety. The innovation of MM-120 in its session-based delivery approach is driven by its mechanism of action as a potent serotonin receptor agonist, which leads to profound psychological effects. Extensive research over the past decade as well as more recent well-designed clinical studies have highlighted the potential of this approach to generate rapid and sustained reductions in anxiety symptoms after repeat dosing. It is important to remember that in this model, we believe MM-120 will be delivered as a single dose pharmacological intervention that will only require occasional administration. This approach is intended to allow us to disrupt the current model of care for people living with GAD, which is needed now more than ever. We recognize the potential challenges in commercializing a product with such a revolutionary delivery profile and embarked on a robust pre-commercialization plan seeking to convince all external stakeholders of the clinical and economic value of MM-120. This is why one of our key priorities in 2023 is to develop a market access strategy, document the clinical and socioeconomic burden of GAD and advance the generation of health economics and outcomes research data acquired to build a superior value proposition for payers. Another key priority for this year is to examine care models that were developed to enable the delivery of innovative products and other novel approaches in brain health disorders. There are many successful examples in the fields of autoimmune disorders and oncology, in which injectable administration of new treatments require the evolution of the existing care models or the introduction of new ones. Similar efforts have also been undertaken in other therapeutic areas, including psychiatry and neurology. That said, our approach of studying session-based administration is only one part of a broader strategy, which seeks to harness both the psychological and neurobiological activities that are driven by the serotonin system. We anticipate that our programs that are neurobiologically oriented would leverage well-established commercialization models similar to those that are used for currently available products. As we progress our pipeline across these delivery paradigms, we look forward to providing greater clarity on the commercial model and path forward for each program to maximize the reach of our novel product candidates. Lastly, moving to our digital medicine update. Our drug development strategy is closely complemented by a suite of digital medicine programs that have the potential to facilitate adoption, use and access to our product candidates. Our digital medicine programs are oriented towards applications during 2 primary clinical periods, activities during a treatment session, referred to as intrasession, and activities between treatment sessions, which we refer to as intersession. Each digital medicine program consists of a platform that contains separate underlying components, some of which we anticipate will be within the scope of the FDA's definition of medical devices. For these components that we believe qualify as medical devices, we plan to continue engaging with FDA and other regulatory authorities to receive guidance along our development pathway for the potential submission for regulatory clearance or approval. The ultimate goal of our digital medicine platform is to develop applications that overcome frictional points of care delivery, things to make our product candidates the easiest and most user-friendly for patients, providers and payers to adopt. I will now turn the call over to our CFO, Schond Greenway, to discuss our financial results. Schond?

Thanks, Rob, and thank you all for joining us today. We will now turn to our financial results for the fourth quarter and fiscal year ended December 31, 2022. As of December 31, 2022, our cash and cash equivalents totaled $142.1 million compared to $133.5 million as of December 31, 2021. We believe that our cash and equivalents positions us to accelerate our preparation for moving quickly into our pivotal program for our lead product candidate, MM-120, and will be sufficient to meet our operating requirements beyond our key development milestones in 2023 and into the first half of 2025. Our net cash used in operating activities was $50.1 million for the year ended December 31, 2022, compared to $45.8 million for the same period in 2021. Research and development expenses were $36.2 million for the year ended December 31, 2022, compared to $34.8 million for the same period in 2021, an increase of $1.4 million. This change was primarily due to increases of $2.9 million in expenses related to clinical research for MM-120 and $5.4 million in internal personnel costs as we continue to hire talent to build a world-class drug development team, as mentioned by Rob earlier in this call. These expenses were offset by a decrease of $5.6 million related to our MM-110 program and a decrease of $2.4 million of expenses in connection with various external R&D collaborations. General and administrative expenses were $30.2 million for the year ended December 31, 2022, compared to $59.1 million for the same period in 2021, which represents a decrease of $28.9 million. This decrease was primarily due to a reduction of $27.4 million in noncash stock-based compensation expenses, primarily related to the modification of stock option awards and RSUs recorded during the prior year. Our net loss for the year was $56.8 million compared to $93 million for the same period in 2021. The decrease of $36.2 million was primarily due to a lower operating loss of $27.6 million and an increase of $1.9 million in interest income and a 2022 financing warrant revaluation gain of $7.8 million. Lastly, I wish to reiterate that we are continuing to execute on a very efficient operation in terms of quarterly cash burn and headcount when compared to our peers in the space. As we have highlighted during our prior business update conference calls, we intend to continue to be thoughtful with our cash while also focusing and prioritizing our support for our most precious R&D activities directed towards our key value drivers. More specifically, we will review our discretionary expenses on a constant basis to ensure that we are seeking to capture value from operational efficiencies where we can. I will now turn the call back to Rob, who will provide some closing comments.

Thank you, Schond. Following a year of strong execution, our significant progress in 2022 has set the stage for what we expect to be a transformational 2023. We remain laser-focused on driving our key programs forward, which includes advancing our MM-120 product candidate in GAD and ADHD to Phase II clinical readouts as well as initiating our first clinical trial for MM-402. Additionally, our early R&D activities are progressing and our collaboration with University Hospital Basel continues to offer the opportunity to generate early clinical evidence to inform our pipeline progression. We have a highly talented and deeply committed team here at MindMed, who have continued to execute on our mission to advance novel treatments for brain health disorders. And I cannot be more excited for what the year ahead holds. With that, I'd like to thank you all again for being here today, and I'm happy to take any questions.

Your first question comes from the line of Charles Duncan from Cantor. gressing and our collaboration with University Hospital Basel continues to offer the opportunity to generate early clinical evidence to inform our pipeline progression. We have a highly talented and deeply committed team here at MindMed, who have continued to execute on our mission to advance novel treatments for brain health disorders. And I cannot be more excited for what the year ahead holds. With that, I'd like to thank you all again for being here today, and I'm happy to take any questions.

Congratulations on the progress last year. I had a couple of questions on 120 and then possibly one on 402. Quite intrigued with the 402 program, but I'm not sure I'll get into that with all my questions on 120. With regard to 120, can you give us a little bit more color on patients being enrolled? I know that you're probably hesitant to say the actual number. But then also, if you could clarify on the study that you're doing. Is this a parallel group study in which different patients are exposed to different doses? Or is it a sequential cohort design?

Yes. Thanks so much for the questions, Charles. So on the first question in terms of patient enrollment, we're very pleased with the progress in the study. We have not reported or announced publicly the exact enrollment numbers at this stage, but we do remain on track for a readout late this year. We've seen, as I mentioned during the call, 20 active sites, and really, our team has done an incredible job of bringing all of the sites online, driving interest in the study. We've seen at some of the sites, there's been national and local news coverage of what's happening with this program, and that itself has catalyzed a huge interest in patients who have been approaching the clinic. So we've been very pleased and are very optimistic about the path forward to get that readout later this year. As far as the study design, it is a parallel randomization model. So patients are randomized to receive 1 of the 5 treatment arms. There is no sequential multiphase dosing in the study. So 200 patients total, 40 patients per arm would receive 1 of the 5 doses that we're testing, which are placebo, obviously, 25-, 50-, 100- or 200-microgram dose of LSD.

Okay. And then with regard to top-line data by the end of the year, I guess you're probably assuming that would be the 4-week primary endpoint. Or would you have some patients, or all the patients, by then getting through 12 weeks?

Yes. So certainly, in terms of the primary endpoint, at a bare minimum is what we would anticipate seeing at 4 weeks. Certainly, there are a number of endpoints that we'll be assessing over the duration of follow-up, which is a 12-week follow-up in this study. But in terms of top line results, we would certainly be releasing any announcements on the primary endpoint, which is, again, the change in the Hamilton Anxiety Scale at 4 weeks post treatment.

Okay. And last quick question, then I'll hop back in the queue. There's a little company out of Canada that's saying that they're going to develop 2-bromo-LSD. And I guess I'm wondering if you have a perspective on that? In part, they're saying that they don't need a hallucinogenic experience. And to me, it seems like that is part of the efficacy profile of 120. And so I'm just wondering if you could wax philosophical about that.

Well, I certainly can't comment necessarily about other organizations' programs, particularly ones that we're not closely acquainted with. But certainly, historical evidence and the data that our colleagues from UHB released earlier in 2022 suggest a high degree of correlation between the acute perceptual effects and the clinical outcomes. And so I think it's important to focus on the fact that with the molecules we're developing, in particular, MM-120 program, this is one of the best study, if not the best study, drug in this class. And when you go back in time, in particular, there have more studies and more patients dosed with LSD or lysergide than any of the other drugs in the class, psilocybin included. So given that historical context, given the modern evidence we have and all that we know about this molecule, we certainly feel extremely optimistic about the likelihood of success and the efficiencies we can have because we know so much about the molecule and its performance already.

Your next question comes from the line of Brian Abrahams from RBC.

First, a question about development investment. Schond, can you discuss your expectations or how we should think about the cadence of near-term operating expenses over the course of this year? And Rob and team, I'm curious about your latest longer-term views on the level of infrastructure buildup that may ultimately be required for MM-120 and how that thinking has evolved as you continue to watch uptake of ketamines and Spravato. I have a follow-up.

Sure. I can start off. Well, we have not provided any forward guidance as of yet on a quarterly basis. But what I would say is that I think if we look at the historical trend in the quarters, we typically range somewhere around that $15 million quarterly, plus or minus, say, roughly 20% or so, depending on various progress. But that said, we're continuing to be very efficient from a spending standpoint. And so where there are areas where we can capture some form of operational efficiencies, we certainly look to do that. But again, from a forward standpoint, we haven't provided any intricate detail from a quarterly basis. But historically, that seems to be a good parameter that some people will probably look to.

Thanks, Schond, and thanks so much, Brian, for being here for the question. When we look at the infrastructure build-out, people are generally focused on analogous commercial rollouts, and the most directly relevant in psychiatry is Spravato. One caveat we note for the rollout or uptake of Spravato is that it does not appear to perform very differently in terms of response or duration compared with racemic ketamines. When assessing the opportunity for Spravato uptake, we consider ketamine and its enantiomers together. They are used in similar ways; ketamine is frequently used off-label while Spravato is indicated for treatment-resistant depression. It is important to examine the infrastructure build-out and uptake of both racemic ketamine and Spravato together. Across the broader landscape — clinics, prescribers, and patients accessing ketamine or esketamine — there has been significant uptake. The infrastructure has been built out, and we are optimistic this could be replicated on an even larger scale with our molecules in the class. One other point I would highlight is that we believe these molecules and our product candidates that use a session-based delivery model will need to be administered in a healthcare setting. The specifics of that setting are important, including the connection between prescribers and providers, supply chain considerations, which offices are involved, and what qualifications are required to monitor and support patients during treatment. We expect connectivity with prescribers and psychiatry, and we believe the current infrastructure can be incrementally improved to enable adoption. It should not require a completely new build-out of physical infrastructure and personnel, although training and growth will be needed. We are already seeing uptake driven by ketamine and by other therapies coming to market now and over the next several years.

Got it. Great. No, that makes sense. And then maybe just as a quick follow-up, there have been some recent changes at the FDA in terms of leadership with regards to neuroscience. But we've also seen, I think, what seems to be greater permissiveness and flexibility on the part of the FDA around neuropsych drugs of late. So I guess I'm curious if you had any perspectives on that and just how some of the evolving regulatory dynamics might be impacting how you think about future development.

Yes, it's an interesting point. And certainly, when long-tenured individuals at FDA leave, there's a dynamic there, and you're always looking to see who is going to take over in that role more permanently, and ultimately, how that's going to shape FDA. I think one of the great things about working with FDA, though, is the institutional continuity that we see over time, particularly within a division, and the fact that division directors tend to have a high degree of discretion. And we've certainly seen a lot of productivity coming out of the office of neuroscience and the division of psychiatry in particular. So we have not seen directly any impact on our programs and feel quite optimistic about our engagement so far with FDA and the path forward.

Your next question comes from the line of Francois Brisebois from Oppenheimer.

Congrats on the progress. A couple of quick questions. I was wondering if you have any thoughts about hallucinogenic dosing and its relationship to efficacy. I'd love to hear your thoughts on the approach of using repeat low doses at sub-hallucinogenic levels for ADHD and why you think that's a better approach for ADHD versus GAD.

Yes. Thanks so much, Frank. One key concept we want to highlight when we talk about the multiple mechanisms we're seeking to target is that all of this is driven by engagement of the serotonin system, particularly with MM-120. The magnitude of dosing and exposure dictates the size of those acute perceptual effects. But it's not lost on us that non-hallucinogenic, non-perceptual engagement of serotonin is a common theme with many psychiatric drugs. SSRIs and SNRIs all engage the serotonin system in some way to drive treatment benefit. So when you look at opportunities to explore other ways of delivering these molecules, the dosing model being studied in ADHD was one that has historically been considered and that I found particularly interesting. In terms of differences between ADHD and GAD, one key point is that in anxiety and mood disorders we've seen a lot of recent evidence showing a correlation between acute perceptual effects and clinical response. That appears to be driven by acute dosing that has rapid and sustained benefits long outlasting exposure to the drug. But in conditions like ADHD and some other indications we've been studying with collaborators, the on-drug activity may be important, and the mechanism of action may not be driven by an acute exposure with the expectation that clinical response will long outlast that exposure. So when we look at models of more recurrent administration, it's simply another dosing paradigm and could be relevant to a number of indications. For the ADHD program, we thought it was particularly appropriate to start exploring, utilizing and studying the non-hallucinogenic psychological mechanism and ultimately generating proof-of-concept data to inform where we take that program from there.

Great. And if I can sneak in another one. In terms of the autism, I think very interesting program. Can you just talk about maybe the variability in autism and the spectrum and the impact that that would have on your patient selection and maybe efficacy here? And just if you could touch in also in the first half '23 that's kind of coming up/right now, what should we be looking for in terms of the preclinical data for 402?

Yes. Thanks so much for the question. We agree that the MM-402 program is particularly interesting, especially because there are no approved therapies for autism spectrum disorder. Also, the pharmacodynamic effects of both racemic MDMA and, preclinically, what we see with R-MDMA suggest that the on-drug effects could be closely aligned with what treatment benefit might look like in the core symptoms of ASD, which are deficits in social communication skills. As we approach that program, we are very interested in evaluating it early in development, even in Phase I in healthy volunteers, and as early as possible in the development program, looking at individuals with autism spectrum disorder to determine whether we are getting those acute on-drug pharmacodynamic-type effects that we think could be correlated with or predictive of a clinical response in larger, longer-term studies. That has been our general approach and what gets us excited about the ability to generate very early signs of efficacy and inform future development. In terms of the patient population, we have not yet released the specifics of the protocol for the patients we would be enrolling, and there will certainly be engagement with key opinion leaders and the FDA that we will announce and discuss at the appropriate time. Autism is a spectrum disorder with a high degree of variability and severity, and we want to make sure we approach it ethically and in a way that gives us the best opportunity for success and, ultimately, to demonstrate a treatment benefit for the patients who could benefit. More will come on the specifics of patient selection and where in the spectrum and severity we would be targeting, but we are certainly optimistic about seeing early signs that could support our direction.

Your next question comes from the line of Elemer Piros from EF Hutton.

So are you content with the 20 clinical sites that you have for the anxiety program? Or are you looking for it to expand to more sites at this stage?

We're very happy with the number of sites we have active. We're always exploring good clinical sites for current and future studies, but right now we started by targeting 20 and have 20 sites active, so we're very pleased with where we are.

Okay. Okay. And do you have any visibility on when some of the composition of matter patents would be published, whether it's first half or second half of this year?

We don't have precise dates for those publications yet, but there has been a lot of progress. As the year progresses, we expect much more clarity regarding patent prosecution, the focus of the patents, and our approach to marketing exclusivity and protecting our market.

And so the dosing in ADHD, I think it's at the 20-microgram level. I know it's a little bit of a forward-looking question, but how are you thinking about potentially controlling the distribution of this drug? Because if someone takes five pills, they're already in a trip, so to speak.

Yes. I think it's a correct point. I think it's also an opportunity, as so many times when we're working on drugs in this class, to zoom out and look at other molecules as well because it is absolutely true, there are many, many drugs that are distributed widely in a variety of populations where if you take too many of them, you'll have severe harm, where people can die from taking too many. And while certainly we would seek to explore distribution and control and dosage forms and everything that would enable a responsible rollout, it's also not lost on us that I think often the profound nature of the acute effect, the perceptual effects of psychedelics perhaps distort the view of the relevance to the real world here. So when you think of things like psychostimulants that are out distributed widely, when you think of benzodiazepines, when you think of a number of medications that if you were to take more than as prescribed or recommended, you would have very bad outcomes. And I think that gives us some degree of comfort that this has been done many, many times before. And while there would absolutely have to be proper controls in place, that is something that can be done. And notably, in our Phase IIa study, it's also been quite interesting. Because in that study, we're able to administer 20-microgram doses in Switzerland outside of a clinical setting and actually demonstrate safety and evidence that, that can be done. And so as we conclude the study and as we have those data and as we were able to ultimately engage with regulatory authorities to discuss the path forward, we think it's important to monitor that and pay very close attention to responsible rollout, but it shouldn't be perceived any differently than any other drug that could have a risk of overdosing and have an effect at those levels.

Yes. To your point, I once almost overdosed on caffeine. But yes, to what extent the University Hospital Basel studying the PK/PD study as a gatekeeping item and the results of it for your internal trial in ASD patients?

It's not a gatekeeping trial in any way. It will be advanced in parallel and has different aims. While we don't directly control the timelines of investigator-initiated studies, we expect those results to come at an appropriate time in development and to provide substantial insight into where to take the program. Importantly, because we are conducting a comparative study, it will also be an opportunity to demonstrate a differentiated profile versus racemic MDMA and S‑MDMA, and to show relevance to the population of interest.

Your next question comes from the line of Patrick Trucchio from H.C. Wainwright.

I have a few follow-up questions on MM-120 and GAD. First, just with the understanding of the blinding in the Phase IIb trial. I'm wondering if there have been any reports of severe adverse events or any other adverse events that had been unexpected or unusual based on your expectations going into the trial. And then secondly, I'm wondering if you can discuss the expected dose response in the trial and whether there's a particular dose or doses that would be beneficial bringing forward to a potential Phase III program from a safety or efficacy perspective based either on the literature or your work you've done with your collaborators.

Yes. Thanks so much for the question, Patrick. So to take the latter question first in terms of dose response, there has been, as I mentioned earlier, evidence that the degree of acute perceptual effect has been correlated with clinical response. And it's really important to highlight that while there has been a number of studies looking at dose response in terms of self-reported pharmacodynamic-type endpoints and pharmacokinetic endpoints, including from our collaborators in Switzerland, there has not been a robust dose response study conducted. And we certainly believe that this is the most extensive, most robust dose optimization, dose response study ever conducted with psychedelics in a patient population. So that's what we're looking to really drive the insights about the appropriate dose selection. One of the reasons we chose this design and one of the anticipated findings here is going to be to identify differences in both the acute magnitude of response and the durability of that response over the course of the 12 weeks that we follow a patient, which could inform both directly the dose we choose for our pivotal program but also other underpinnings of the functional mechanisms of action. The doses we chose correspond to different levels of that perceptual activity. And we do have good PK/PD characterization of these doses from some of the historical studies in healthy volunteers. So our overall view here is simply to determine which of those doses is best suited to take forward into a pivotal program. And certainly, there's always an interest to find a dose that drives the kind of efficacy we're anticipating and desiring to see, but the most clinically effective dose is one thing that's quite important for any program to identify in development.

And then just in terms of, with the enrollment as it has progressed to date, have there been any reports of unusual adverse events or anything unexpected going into the trial?

Yes. There is nothing that would warrant public disclosure; otherwise we would have announced it. We have been very pleased with the progress, and our team monitors all adverse events in the study. Because this is a blinded study, we cannot disclose whether there are any relevant changes in responses or adverse events in any of the dosing cohorts at this point.

Got it. And then just a follow-up on the commercialization strategy, some of the comments from earlier in the call. Our understanding is that earlier this month, the AMA published details regarding a Category III CPT code that could serve to facilitate future health care services tied to psychedelic therapeutics. It is also our understanding that although certain drug sponsors pursued that code, it's available to all those involved in psychedelic drug development who could eventually benefit from it. So I'm wondering if you can talk more about from the payer or reimbursement perspective, more about these codes or other aspects of the payer landscape regarding psychedelic medicines. And can you talk about these codes in more detail or perhaps how having some of these other compounds like MDMA or psilocybin entering the market ahead of MM-120 may help facilitate the launch if the drug is eventually approved?

Yes. Thanks, and it's a great question, Patrick. Any part of the infrastructure, and certainly there's a lot of focus on human capital and the personnel that will be required to deliver and oversee delivery of this drug class, and on the physical infrastructure, but it's often overlooked that there are many other steps in the commercialization and distribution process. There are a variety of approaches that have been and can be taken to overcome those challenges. That includes reimbursement models for distribution of the drug, risk evaluation and mitigation strategies if any of these drugs ultimately have one in place, and different approaches for how to administer that program. And certainly there will be the physical and structural infrastructure required. CPT codes are certainly an aspect that could come into play. There are some developments in this industry that are not competitive, in that if we had, overnight, an infrastructure build-out, that would likely benefit many organizations, and those organizations are going to be some of the first movers. So we feel very pleased with where we are and the fact that we will have our unique approach, which we believe will be, as I mentioned earlier in the call, aimed at making the adoption and utilization of our therapies the easiest and most user-friendly for providers, patients, and payers to reimburse. So that's our aim, and some of those underlying infrastructure elements in terms of CPT codes and distribution are going to be required. It is, again, something I think we are quite excited to work on collaboratively with the field.

Your question comes from the line of Charles Duncan from Cantor.

Actually, one of my questions on the CPT code was just addressed. So will look forward to seeing when these drugs become available, if the codes will apply broadly. But the second question that I had was on 402. And like I said earlier in the call, I'm quite intrigued with that. And I'm wondering if racemic or non-racemic R-enantiomer MDMA has any activity that specifically you think would be better evaluated in an ASD patient population versus PTSD patient population. What is it about the R-enantiomer that you think is going to result in a pharmacological profile that's differentiated than, say, a racemic?

Yes. It's a great question, Charles. There is historical evidence from early mechanistic studies with R, S racemic MDMA. Those early studies, both in terms of target engagement and in preclinical models, show that the R-enantiomer appears to maintain or even enhance the prosocial effects observed with racemic MDMA. The S-enantiomer seems to drive much more of the dopaminergic response and less of the interpersonal connection and prosocial activity. So we see more stimulant-like activity from S-MDMA and more prosocial, empathogenic qualities from R-MDMA. Given that profile, our anticipation is that R-MDMA, if we can enhance or maintain the prosocial benefits and mitigate some of the less desirable effects that might be dose- or duration-limiting, would offer significant opportunities to pursue this enantiomer in a new dosing paradigm quite distinct from racemic MDMA. At a target engagement level, we do see discrete pharmacology between the R and S enantiomers of MDMA, which is not an uncommon phenomenon with isomers of a drug. We have preclinical data and insights from historical literature, and a lot more that we have developed internally. We feel positive about selecting the R-enantiomer and its appropriateness to drive increases in serotonin levels, engagement of serotonin 2A, and release of prolactin, which all seem related to prosocial engagement and ultimately should drive a response in ASD.

So it sounds like it may be differentiated in terms of therapeutic window. So I guess that gives me the question that I'm wondering why you wouldn't look at a patient population, which MDMA has been shown to be useful already, and with yours being, call it, a second generation or best-in-class or next-in-class drug.

Yes, it's a good question, Charles, and I certainly would say that we actively explore opportunities for a number of indications, a number of CNS indications with all the molecules developing. So we're certainly exploring other avenues. And as we progress and as we have shared more data preclinically and as we get into the clinic and look at some of the clinical insights, we certainly, with any of these programs, would not restrict ourselves and say we're only going to position for a single indication over time.

This concludes the question-and-answer portion of the call. I will now turn the call back over to MindMed's CEO, Rob Barrow, for closing remarks. Rob?

Great. Thank you, operator, and thank you, everyone, who joined us today. Before we conclude, I just want to also thank the extended Mind Medicine team, our investors, our Board and many people who have been supportive to the company along the way, including all of our study participants and their families. We really are excited about the year ahead and look forward to sharing more about our continued progress over the months ahead. So thank you again for being here, and we look forward to reporting those results as we progress.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Thank you.