Earnings Call Transcript - PRAX Q1 FY2026

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Praxis Precision Medicine's First Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After this previous presentation, there will be a question and answer session. To ask a question, you will need to press star 11 on your telephone keypad. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. Dan Ferry of LifeSite Advisors.

Alex Kane, Head of Investor Relations

sir please begin good morning and welcome to praxis precision medicines first quarter 2026 financial results and business update conference call this call is being webcast live and can be accessed on the investor section of practices website at www.praxismedicine.com please note that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about the company's future expectations and plans, clinical development timelines, and financial projections. While these forward-looking statements represent Praxis's views as of today, they should not be relied upon as representing the company's views in the future. Praxis may update these statements in the future, but is not taking on an obligation to do so. Please refer to Praxis's most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with the company's business. Joining the call today are Marcio Souza, President and Chief Executive Officer of Praxis, and Tim Kelly, Chief Financial Officer. After providing updates on our key programs, we'll move to a Bruce Q&A session where Marcio and Tim will be joined by Steve Petra, President of Research and Development, and Megan Stanczynski, Chief Operating Officer. With that, it's my pleasure to turn the call over to Marcio.

Marcio Souza, CEO

Thank you, Dan, and good morning, everyone, and thanks for joining Praxis' first quarter 2026 conference call. Building our remarkable 2025, we have continued executing across our portfolio in our journey to become a commercial company. With strong momentum, building across four late-stage assets representing more than $20 billion in peak sales potential. With the NDAs for elixir-calitomide and relutrogen accepted by the FDA, and Pidufidase Seth, we're ramping up commercial efforts to support the two potential U.S. launch within the next eight months, while also making significant progress with our other clinical programs. It was incredibly exciting to announce that we have completed recruitment for the Emerald study in the broad DE population, with top-line results expected in the fourth quarter of this year, which we expect to support a potential supplemental NDA next year. Rouse on track to report results from our Power 1 study for brometrogen later this quarter. Rouse made exciting progress with our solids ASO platform, with the positive results from the Embraved Part A, showing a disease-modifying effect of housing nursing in SCN2A early onset and substantial reduction in monthly seizures, amongst many other results. With key hires made in our commercial organization and a strong financial foundation, we're accelerating the delivery of life-altering treatments to patients with CNS disorders. Let me provide a bit more detail on each one of our programs. Let's just start with you, Alexa. The FDA acceptance of our Elixir's NDA marked a meaningful step forward for the 7 million Americans living with essential tremor, who currently have no ET-specifically developed treatments approved. We estimate that about 2 million of those people living with ET are in immediate need for a therapy that can clinically improve their daily lives, representing a potential for over $10 billion in peak sales. to unlock the benefit for patients and the value who have been diligently preparing for a commercial launch based on the PDUFA date of January 29th next year. The commercial leadership team is in place with our field force plan to be hired and trained in advance of the launch. And we continue to expand and build the commercial infrastructure across multiple areas, like operations, marketing, access, and compliance. I have also successfully established a distribution network to ensure drug availabilities at launch at successful levels. Earlier this year, we conducted a very comprehensive observational study with physicians to understand their view of E.T. and ulixacalcamide. We surveyed more than 2,300 U.S. physicians who collectively managed tens of thousands of patients. The results were beyond encouraging. They validated the Elixacalpamide profile across efficacy, the breadth of benefits, and tolerability, reinforcing the more than $10 billion peak sale potential and the needs for a drug like Elixacalpamide in the markets. Importantly, we also wanted to hear in more detail from patients and conduct a similar work with over 1,300 ET patients, which further validated the agreements between the needs of patients in terms of their functional benefits with the results of the Essential 3 program. It's truly exciting to be in a place of such alignment amongst treating physicians, patients, and the results of our program. We're also very pleased with our robust presence at the American Academy of Neurology annual meeting last month With 15 scientific presentations, including a plenary presentation highlighting the Essential 3 program results, which received the AAM's Abstract of Distinction in Movement Disorder Awards, which underscore the strong interest and engagement of the medical community. To further enhance our engagement with healthcare professionals, we have launched the Essential 2 Me Disease State Campaign. Let's now move to our epilepsy programs. As we shared in March, in another pivotal moment for praxis and patients, the FDA has accepted, with priority review, the NDA for re-litrogene for seizures associated with SCN2A and 8A DE. Those are severe patients affected early in life and where the seizures are intractable from the very beginning. It's important to highlight that if approved, Relitrogene would be eligible for a pediatric review voucher. With the PDUFA date of September 27, preparation for launch are moving full steam ahead. We've continued hiring of commercial roles, building sufficient inventory, establishing a comprehensive patient support program, and engaging with payers to ensure timely access upon potential approval. We remain confident on the clinical potential for letrogene and the benefits to the broader DE population. With recruitment in Emerald study now completed in record time, it's clear that patients and investigators share our view. The potential launch in SCN2A and 8A will build the foundation, and the results of the The Emerald later this year, if positive, will significantly expand the commercial potential for Lutrogene by several folds considering the broad DE population is comprised of over 200,000 patients in the United States. Let's now talk about Vormatrogene, the most potent and selective sodium channel modulator ever developed for the 3.5 million people living with epilepsy in the United States. have three key milestones in the near future for the program. The first is the readouts of the Power 1 Phase 3 study later this quarter. Then the initiation of the Power 3 study, a milestone in the community using all the exciting features of vermetrogen to deliver on what the majority of the market really needs. And then, later in the year, the completion of the POWER II Phase III study, which is evaluating those of 20, 30, and 40 milligrams once daily. Enrollment is progressing well in our own track to finalize the study this year and report early next year. Lastly, let's talk about Elginersen, the first ASO in our platform. Elginersen also has a rare pediatric drug designation and is being developed for the treatment of early Ciguron-Sat patients with SN2A mutations. We have recently reported the results of Embrave Part A, which enrolls nine children aged 2 to 12 to a randomized 3 to 1 through Elginersen or SHAM over 24 weeks. We are thrilled with the impressive 77% placebo-adjusted reduction in monthly seizures and the disease-modifying components seen across multiple domains in those patients, while maintaining the generally safe and well-tolerated profile. The overall data from both the Embrave Program, Open Label Extension, and Emergency Use Program globally, highlight durable seizure reduction and meaningful global gains, which further underscore the transformational potentials of this drug. In conclusion, we're off to a great start for momentum continuing to accelerate across our clinical portfolio, preparations for commercial launch of Elixacal Mideon or Lutrogen well underway, the completion of the Emerald study enrollments, Power One top-line research, doubt coming up and many other achievements to come. Backed by a strong balance sheet and a long multi-layered IP portfolio across the programs, we're focused on rigorous execution and driving progress across our innovative, first and best-in-class portfolio of CNS therapies. And I'll hand over the call to our CFO, Tim Kelly.

Tim Kelly, CFO

Thank you, Marcio. Good morning, everybody, and thank you for joining today's call. I'll provide a quick summary of our first quarter financials. In Q1, our operating expenses were approximately $106 million, with $78 million of that for R&D, and the remaining $28 million for SG&A, driven by ramping activities and hiring related to commercial launch preparations. During the first quarter, Praxis spent $86 million in operating cash, compared to $53 million in the first quarter of 2025, reflecting greater clinical trial activity, headcount growth, and commercial launch preparations. As of March 31, 2026, Praxis had $1.4 billion in cash, cash equivalents, and marketable securities, compared to $926 million as of December 31, 2025. This increase of approximately $474 million was primarily attributable to net proceeds from Praxis January 2026 follow-on public offering and interest income on marketable securities, partially offset by the previously mentioned cash used in operations. The company's cash, cash equivalents, and marketable securities as of March 31, 2026 are expected to fund operations into 2028. With that, I will hand the call back to Marcio.

Marcio Souza, CEO

I'm going to now move to your Q&A. Howard, maybe you can compile the queue for us.

Operator

Ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 11 again. Again, if you have a question or comment at this time, please press star 11 on your telephone keypad. please stand by while we compile the Q&A roster our first question or comment comes from the line of Yasmeen Rahimi from Piper Sandler your line is now

Yasmeen Rahimi, Analyst — Piper Sandler

open I'm good morning team thank you so much for all the great updates um maybe also congrats on emerald brain to the finish line enrollment and data and 4q as it's an important readout this year maybe remind us right what is the data that we have to support RIT-Luk-Judine working in a broader DE population both across preclinical and clinical data, and then also what you see on a blinded basis across safety and efficacy that continues to give you confidence on a high success in the EMERALDS study. And I'll jump back in the queue.

Marcio Souza, CEO

Sounds good. Thanks. Thanks, Yas. I'll take a step back here and maybe talk a a little bit about the genesis of going to the broad DE population, right? When you look into seizure activities, particularly on those intractable conditions like these, we know full well just how difficult those patients are to control, also know that when they can have at least some partial control for the most part is because that is a way to inhibit or block, better modulate their sojourn channel activities. Like you simply cannot have seizure activity without participation of those channels. So when we were conducting the EMBOLD program for SCN2NHA, the number one question we're getting from physicians back then is like, when are you going to expand this beyond this? So we'll take that in mind in terms of the overall clinical proof of concept, their idea and the needs that we're seeing. But we had to slow down a little bit and do a lot of work. And you might have seen, and it's available in our websites, a fair bit of the work in terms of different animal models, which are incredibly predictable in epilepsy, on understanding whether or not there was a good scientific rationale on top of the electrophysiology rationale, on top of the molecular rationale to go to this. And then the last part, we had to make sure that the FDA was in agreement that we could study in this population, right? Safety experiment, making sure that we're actually understanding the populations we're in. So when we checked all those boxes, we're able to initiate the study. I think what is incredible, I would say, is just the level of interest, right? If you're looking to ourselves, if you're looking to other studies in the EB40, if you're looking to competitive, and I'm going to put that very loosely, the world studies that are going right now, there was no interest on those others. It's kind of pretty obvious by the pace of enrollment that is happening with us and with others out there. And the number one reason why is, like, physicians are very confident on the ability here, just like we are. So it gave us, of course, this extra ability to move the things forward. But if I can turn to the business for a second, right, we are in the business of helping patients. But at the same time, the only way to continue to helping them is by continuing to generate, like, proper positive returns to invest in the future. The actual expansion towards the broad E is like 20-fold what it is, the initial application for SCN2N8A, which is incredibly important. But the second part makes not only scientific sense, but it's a tremendous upside in terms of the potential of this drug. And then lastly, I know we keep piling catalysts throughout the year. You guys might be tired of us having so many readouts. But we thought it was very important to get that, like, shortly thereafter, to really, with a fresh, hopefully, approval at that point in time, it gives the FTA a lot of flexibility to actually look into just the additional data and potentially even qualify to certain accelerated mechanisms that have been available. So, all and all, we see these are tremendous and maybe the key updates today that we're giving in terms of value inflection for investors.

Yasmeen Rahimi, Analyst — Piper Sandler

Thank you so much.

Operator

Thank you. Thank you. Our next question or comment comes from the line of Ritu Baral from TD Cowan. Your line is now open.

Ritu Baral, Analyst — TD Cowen

Good morning, guys. Thanks for taking the question. A lot of client questions just around the upcoming power readout and what our expectations should be. How do you, knowing the baseline and knowing the relative baseline of other competitive therapies, how should investors, how should we be looking at placebo-adjusted seizure reduction, the safety profile, and then how might that data then frame the POWER II and III studies given the different doses in those studies and the different dosing paradigms?

Marcio Souza, CEO

Yeah, a great, great set of questions there, Ritu. So, I think let's just start with the baseline that that's what you mentioned, right? So we, if you look historically, at least in recent history, baseline for focal fat seizures in the refractory population, so one to three ASMs, and you know the drill there on the other criteria, being rovering around like nine to 11, 12, countable seizures on the previous 28 days, right? And I think we're probably a little higher than that, a tiny bit here for power one, which was kind of what we're aiming for, right? We knew these patients are fairly refractory or very confident about the drug. We wanted as well to make sure that once we establish their and very clear efficacy, as we expect, allow us to move incredibly quickly as well towards the ultimate goal of this drug that's being widely available for any patient with post-contact seizures and in the future other types of seizures as well. That brings to a second part of your question, that is the expectations. And I think that it's always dangerous to talk about expectations and setting bars, artificial bars, this late in the game in terms of, like, literally, like, weeks, I would say, before our readouts. But we've been fairly consistent on the expectation here for all the years is, number one, as the severity increase, I think this is one of the few areas, and you've got to be very excited about science, that the new drugs still deliver a lot. And we just see that recently with another program who expects to see the same, like here, drug delivered despite, like, being piling up on a lot of other drugs. For all the years, in a higher baseline, so more severity. And we've historically been giving that baseline, not baseline, sorry, adjusted by placebo around 30% or so as quite meaningful because when we talk to physicians, when you look into the actual prescription pattern, that seems to be a number that lands incredibly well. And then the last part is safety, right, as you mentioned. And we're very confident about the safety profile of this drug, both what we're seeing in the blinded are based on power one or also what we are seeing on a blended-based Power 2. That was the very last topic you mentioned. So fairly comprehensively, I think we're excited about the upcoming results, another cards to flip, another program to hopefully accelerate to bring to patients, and Power 2 is going really well. So as you saw as well in the press release, we reiterated finalizing the study by the end of the year and reading out early next year. So all in all, to think about a potential third or fourth drug or potential third submission of an NGA or four people count for this NGA in 12 months is no joke, and we are very, very proud of that.

Ritu Baral, Analyst — TD Cowen

Given that baseline, what about seizure-free, Marcio? Last question, I promise.

Marcio Souza, CEO

Yeah, no, no, no. Like, there's Nick there and one there, huh? And, like, I think, again, we should unblind it. I do feel the number one thing is really to make sure we have a very solid reduction. But, of course, we want to see seizure freedom here as well. It's important. It's something we saw on the radiance data, right, that when you treat patients longer, like by week 10, 12, your median seizure gets to 100 percent of the reduction. So, of course, we want to see the more we treat, the longer we treat patients, a very deepening of effect. That's what starkly is seeing. And I'll live like that, but we're excited with the overall profile.

Ritu Baral, Analyst — TD Cowen

Thank you.

Marcio Souza, CEO

Of course.

Operator

Thank you. Our next question or comment comes from the line of Tiago Falk from Raymond James. Your line is now open.

Marcio Souza, CEO

Thanks so much for taking the question. I had just one quick one on Elyxa.

David Hong, Analyst — Deutsche Bank

And it's also related to the communication plan to the street on the regulatory interactions. It's still a huge area of focus with investors. So I'm curious, what's the level of detail that the street can expect around mid-cycle review, labeling discussion, CMC, inspection scheduling, or anything related to that? Thank you.

Marcio Souza, CEO

Thanks, Thiago. So maybe, again, I'll take another step back here as well, right? So we are, of course, being communicated by the FDA when the expected mid-cycle meetings are going to happen for both programs, their communication pattern with us, when label negotiations are going to expect it to be started and completed, the entire cycle. So we have very good visibility from the agency's goals and from the conversations with us in relation to that. Although I can tell you that throughout this process, I think a very good shift, I would say, on the FDA is just their ability to really try to keep communicating with the companies throughout the process. And we are seeing that in both programs, which gives us, I'm going to be cautiously optimistic here, about a good level of comfort on how the process is moving on both drugs. Having said that, I think it would not be appropriate for us to give play-by-play. And at the mid-cycle, I think the expectations are in our end is that there are going to be, like, no major concerns, like keep reviewing, keep, like, finalizing, crossing the T's and dotting the I's. And if that's the case, I think we should expect very little from us. Of course, if something meaningful happens on those meetings, either on the view of, like, maybe they want to see something, or the opposite, they are moving faster and maybe they want to accelerate things, I think it would be appropriate for us to have a discussion. But we need to get to that point with both applications to be able to have a discussion. I know you asked, Alexa, but I want to make sure our equally loved childs get some attention here with reliturgy.

Kambiz Yazdi, Analyst — BTIG

Fair enough, fair enough. Thank you so much.

Marcio Souza, CEO

Of course.

Operator

Thank you. Our next question or comment comes from the line of Francois Brisebois from Lifesite Capital. Your line is open.

Francois Brisebois, Analyst — Lifeside Capital

Hey, thanks for the question, and congrats on the Emerald recruitment there. I was just wondering maybe if you can help us understand, And obviously, the patient population size is quite different between 2A and 8A and then going to broad. But I was just wondering, on the broad side, how different are these patients? And my question is geared towards expectations. Is it, you know, that the 2A and 8A are so severe that if we look at that data, that kind of sets these, you know, artificial bars or whatnot on expectations for the broad DEs? Or is that a dangerous game based on maybe the heterogeneity of the patient? Just a little more understanding on who are you going after with these broad TEs.

Marcio Souza, CEO

Yeah, and I'll split that question in two parts, right? So one, it is kind of insane to think this way, but it is the reality of the markets, right? When you go to these patients and to the physicians and we understand their clinical course and just how the diseases are downward slope, it only gets worse over time for those patients, unfortunately, leading to all sorts of complications and so that and so on. It is very clear that A, improvements, any improvements, would be the bar, meaning STAT-SIG is the bar for this, for the enrolled study, right? Of course, we want to deliver the best possible results for those patients, but I also think we have to be very careful about setting up the bars, and as I said, in relation to the previous study with Power 1 on Richard's question. So here we are in a situation that is a very large market, but that is nothing. It's kind of the end of the line, right, if you think about these patients. And throughout the times, we expect to give them a lot, but I think for this study, we need to be happy if we see statistical significance, as we expect to, and some improvements. Now, to go to the other side of the questions, like how heterogeneous is this population, our recruitment strategy was very clear. It was, we want these patients to be diagnosed with DEs, so that's very serious, has to be early, has to have a developmental impact together with seizure onsets, and a number of countable seizures at baseline. Having said that, we want to be the most diverse group of patients possible because that's what we're going after. That's what no other drug can do right now, and we'll accomplish that. By definition, one could argue that 2A and 8A are harder to treat, but this is more heterogeneous to treat. So if you can see, like, even half, I would say, what we're seeing on enrolled would be just, it's even hard to imagine how big of a market that would be. But if we see just stabilization and improvements on these patients, that would be incredibly meaningful. So on setting it up, what is meant to be a really major opportunity for all of us.

Francois Brisebois, Analyst — Lifeside Capital

And maybe if I could sneak in. On A and you obviously, I think the plan area was packed. like about 8,000 people attending. And so can you just talk about your interactions with neurologists and movement disorder specialists? Does that trigger any interest for XUS? Can you share what you guys are thinking on the XUS stage for elexicaltamide?

Marcio Souza, CEO

Yeah, thanks for reminding us of saying that I think we get so excited and so wanting to move forward as always that sometimes don't stop, slow down and smell the roses. Yeah, being on that plenary at AN in Chicago a couple weeks back and with, like, about 8,000 physicians attending, being the first one recognizes the most important clinical study presented at the meeting. It was very emotional for some of us, for me certainly, but the cool parts, the most cool parts, was actually the number of people who came afterwards to us and wanting us to go to their practice with our medical affairs team and present to the entire practice and for them to start thinking and so on. So it just reinforces the part. Now, there is a huge interest on XUS, as you can imagine. We believe, and to be very clear, this is first and foremost a U.S. opportunity right now. We're putting our heads down and we're executing the U.S. There are multiple implications of current policies in the United States, particularly the pricing policies that I would say don't excite us too much on explore split strategies for outside of the U.S. We wouldn't put at risk the U.S. business. So this is something that someone has to do globally. And of course, we're planning to eventually get there. but we're not really too excited about splitting the geographies with anyone

Operator

else. Thank you. Thank you. Our next question or comment comes from the line of Yatin Suneha from Guggenheim. Your line is now open. Hey guys, can you hear me?

Yatin Suneha, Analyst — Guggenheim

Yep. Perfect. Hey guys, congrats. A very nice update. Maybe two questions for me. So Marcia, you addressed the expectations for Power 1. So the follow-up question I have there is that at least in Power 1, we're going to get data on the 30 milligram QD dose. So could you maybe talk about the potential to capture additional efficacy with the 40 milligram in Power 2? Just love to hear from you. How should we think about the 30 and the 40, if there is any potential there? and then you know a broader question on the commercial side I mean obviously you are taking undertaking two big launches in the next let's say six months or so so could you talk about the manufacturing supply chain all of that

Marcio Souza, CEO

stuff where do you stand there thank you so much no of course yes and but maybe even starting with that's right so we imagine when we were planning these launches. We're like, okay, what is likely to happen? And that's how we set our base and how we set the financial expectations. And you see in our forward-looking statements and overall what you're saying there. And then we go and we talk to the market and we're like, starts to be maybe a little conservative on some of those. And what if we're wrong on the upper sides of that, and then what if you are wrong by several folds on the upper side of that? And that's how we have to plan supply, in our view, and that's what we've been doing. We're blessed to, for Elixir, for example, to have dual, like two, completely independent drug substance manufacturers. They are being rock and rolling, inventory. We're talking about metric tons of drugs here. Alexa, just to give you an idea of scale, this is not like a small scale in general. It's like a very large scale. And we're also quite happy with the fact that the process is relatively, I'm going to say, in the grand scheme of things, simple, and we've been able to align that with the FTA before the submission. So we're good there. Relateragine, of course, the scale is smaller for 2N8A, but it's not small for GEs. So we're thinking about that as well, and we prepare for that for the launch, too. Very different distribution strategies, as you can imagine. It's like a much more full white glove, like one-on-one interactions all the way to the point of use with the Relutrogene app, and we're building like that. And then on the Elixa, we want to do a one-to-one as well, but of course there's a little bit less downstream here. So both inventory and management of the patient taking the drug have been quite sorted out. If I go back to your Power 1, Power 2 interrelatedness question, And 20, 30 milligrams per one, I believe you're going to see, like, very, very strong results there. But does back the question, is that even more to come? So if you look into recent history, very, very recent history, right, what we're seeing is companies dabbling with the issue of even a little bit more drug, and you trip the wire, and then the drug becomes completely useless from a clinical practice perspective. We saw that in our results a few weeks back when there are two doses and the top dose cannot be used at all by patients, despite delivering a little bit more efficacy on paper. But that is not the case here, right? We know that that is not that limitation with hormatogenes. So when you think about the youth may need a patient and the 3.5 million, not the 30,000 that maybe others are going after, that is the real market we're going after. and it requires to understand the heterogeneity of all those patients. That's why having the ability to deliver meaningful, either at 20, at 30, at 40, you name it, is so important. So not to create expectations that it could be even better, but, of course, by definition, it could be even better there on power, too. So we'll get there soon, and we're going to be able to review it. I hope I answered your questions.

Yatin Suneha, Analyst — Guggenheim

Very helpful. Thank you so much.

Operator

Thank you. Our next question or comment comes from the line of Kambiz Yazdi from BTIG. Your line is now open.

Kambiz Yazdi, Analyst — BTIG

Morning, team. Thank you so much for the questions. Three for me. On Yelixa, with the Essential to Me disease education campaign launched in April, can you give us a sense for the early response from healthcare providers and how you think this initiative is going to translate into kind of the top of patient funnel heading into the PADUFA. Maybe briefly on releutrogene, I know you touched base on it, Marcio, but how were you able to enroll emeralds so rapidly compared to competitors in the DEE space? And lastly, on vermatrogene, you commented a little bit about blinded, power one, power two, safety. How are you handling investigators' option to reduce dose of background medication in POWER1 relative to the RADIAN study? Thank you so much.

Marcio Souza, CEO

Sounds good. I'll try to tackle all of them so I can move on. So, essentially to me was something we developed with patients and the way they see themselves, And I think the reaction from the providers are being fantastic. Like people really love it. They see their patients. It reminds them to act. And so we're very happy with this. It will, and it's already doing it, like a great job on building further our database pre-launch to understand really who would be kind of the first in line here, both on the providers and on the patient. I'm going to give more of an update to that next quarter as well. On the how did you enroll Emeralds, right, I would say to go back in time, and people would ask, and maybe I'm going to be criticized by this comment, but I'm going to give it a try. Who asked Jordan how the hell he could be Jordan, right, it would go back to the court and would train and would understand the shots that worked and the ones that didn't. And it wouldn't take any win as a win, but as an opportunity to the next win to work. And I think we're never going to be as good as Jordan was, but I think we're pretty serious about every single day asking ourselves how can we do better because these patients need us. And we're pretty good as well on actually getting sites that have a large number of patients and therefore have the ability to enroll, and they understand us from the beginning, meaning they understand that our expectations is highest quality, first and foremost, but also high speeds in terms of you don't sit on queries or don't sit on eligibility form. You don't sit on a meeting that's going to happen next week. You need us, we're there immediately. And I think our team is just, if I were to say fantastic, they would be out fantastic on doing all of this because everyone is here for one single reason is to help this patient. So that's as simple as that. And I think there was a last question that I actually forgot now.

Kambiz Yazdi, Analyst — BTIG

Yes, just briefly, on Vermatrigine, you talked a little bit about blinded Power 1, Power 2, tolerability. How are you handling the investigator option to reduce dose and background in Power 1 relative to what was observed in Radiance? Thank you so much.

Marcio Souza, CEO

Yeah, absolutely. So, what we learned from Radiance, right, we got like a both pragmatic and programmatic reduction system in Power One, one must be very confident on what the investigational drug does to allow for the background to be reduced. Others reduce the investigational drug, as you know, because they don't trust the drug so much. Not our case. So we allow that to happen. I will tell you it happens sparsely, which is obviously very important, but I think was very effective as well. It's the same algorithm for Power 2. I think physicians are very happy with how it's done. It's very safely done, also very logical, the way it's done, and considers the fact that the background sometimes on placebo creates, like, circumstances as well, which is required. So it keeps the blinds, keeps the integrity, but at the same time manages the study in general. So super happy with that as well.

Kambiz Yazdi, Analyst — BTIG

Thank you so much.

Marcio Souza, CEO

You're back.

Operator

Thank you. Thank you. Our next question or comment comes from the line of Ami Fadia from Needham & Company. Your line is now open.

Yasmeen Rahimi, Analyst — Piper Sandler

Hi. This is Puna on for Ami. Thank you for taking our question. For focal onset epilepsy, are there any first-to-market dynamics you see if Phenon's product is first-to-market? Our KOL checks have been overwhelmingly positive for vomatigine, but just wanted to understand

Ritu Baral, Analyst — TD Cowen

if there are any other factors that may have an impact here. And also, have you had any early discussions with payers on what data you may need to generate to support early-aligned use? Thank you.

Marcio Souza, CEO

Yeah, so I think when you look into the overall market, right, and we did a lot of work on this, it's very sad in a sense that when you go outside of the very small number of patients that are treated at level 4 epilepsy centers, and you go to a much larger market outside of that, These patients are failing at very high proportions. They are, like, switching medications, like they're adding on top of that, and so on. So I said this before. I don't believe that is one winner game here, that if we had 10 other drugs involved with seizures, it would be needed, right? What we have right now is completely inadequate. Having said that, the biggest complication for all the years is when you get, like, a drug and you really can't, like, allow the physician to have flexibility to tailor it for their patient's needs. And I think what we're seeing with hermatergine is that it gives a lot of flexibility in terms of what can be done, as we just discussed on the previous question, for example. and it's not the case for other potential competitors here. I'm also pretty confident about our overall pace, right? Like being a few months behind, I remind all of you, we were way more than several months behind the other DE study not that long ago, and now we're reading out soon, when the other study is not even written out until late next year. So I'm not sure if a few months is really a first-mover advantage. And I don't believe there was ever a mechanistic sojourn channel or a modulator removed from the markets, but there certainly was for the other mechanism that you mentioned. And all the state signals are showing up there as well. So I think the physicians we talked to are happy on having more options but cautious about things that they've seen before not happening too well or working so well for patients on the safety sides. So we'll play that. We'll play full-card press on the markets, and I have no doubt we're going to win.

Ritu Baral, Analyst — TD Cowen

Got it. That makes a lot of sense. Thank you.

Operator

Thank you. Our next question or comment comes from the line of Andrew Tsai from Jefferies. Mr. Tsai, your line is now open.

Andrew Tsai, Analyst — Jefferies

Hi, good morning. Appreciate all the updates. I know we've talked a lot about Emerald study. I did have one small pointed question about it. When you guys shared the 2AA data, 53% placebo-adjusted reduction overall, I'm curious if you saw a consistent seizure reduction in both or each of the two DEE subgroups. Maybe that can give investors confidence you'll see robust and consistent efficacy across a broader DE subgroup. So would it be possible to share the seizure reduction in both subgroups? And then for ET, appreciate all the AN analyses and so forth, and maybe based on your ongoing work on a friendlier titration schedule, ultimately should this be approved, what kind of compliance rate do you expect to see in the real world? How long do you think Alexa responders could be on the drug for? Thank you.

Marcio Souza, CEO

No, thanks. Thanks, Andrew. Maybe I'll start with ET, and then we can move back to 2A and 8A on involves and in general. So when you ask physicians, right, and we had a number of advisor boards and this insanely large, like, overall observational study, we asked them on how they would manage and what the expectation is. And I think the positive surprise for us was just like how comfortable they were on managing what we know to be a tolerability concern that happens on the first few days and first few weeks of this drug, right? So we're going into this launch fully aware of that being the single most important driver of retention of patients in the long run. And they're incredibly comfortable, and we're actually telling us the things that we thought they could do in terms of, like, calling these patients and then advising them better and so on and so forth. So very comfortable with that. Now, how does that translate to overall retention, overtime, and financials? There are two approaches here that we can take. One is saying what are the things we're thinking about, and that is your classical oral chronic therapy compliance and retention. So it starts anywhere there on the 60s to 80 percent, right? That's just overall numbers out there. And then what is the minimum to sustain the forecasts we put in front of you all to be over $10 billion? That number is way smaller. So I'm not saying the number will be smaller. I'm saying we're going to have to believe on something to go into a forecast, and we don't need to believe a lot to go to $10 billion plus. And that gives us insane comforts. We also have hundreds, hundreds of patients in the safety database, as you know, that have been on this drug for six months, one year, two years. So that gives us a very good indicator on how persistent all these patients are. On the second question is very actually appropriate to be asked right now, the results on 2A and 8A, despite the fact that the manifestations and the elapsed physiology and the overall clinical manifestation of NAV 1.2 deregulations and NAV 1.6 deregulations are very different. The results are quite similar. and very good in terms of the overall reduction, developmental gains, and seizure freedom. So it gives us insane comforts that it is so similar across to ANFA. As well, very good points. Thanks for reminding us to make the highlights.

Andrew Tsai, Analyst — Jefferies

Thank you, as always.

Operator

Of course. Thank you. Our next question or comment comes from the line of David Hong from Deutsche Bank. Mr. Hong, your line is open.

David Hong, Analyst — Deutsche Bank

All right. Thanks for taking my question. So I just had a couple here. Maybe back to vormatrigine in focal epilepsy across power one and power two. I know you're looking at three doses, 20, 30, 40 migs. How many of those doses would you like to actually take to market? And what do you think would be the best number for commercial viability? And then in terms of the Power 3 study, the monotherapy study that you also intend to conduct. Could you talk a little bit about how that fits into your broader plans for vermatrogen and why aren't other sponsors pursuing monotherapy studies like that? Thanks a lot.

Marcio Souza, CEO

Thanks. Thanks so much for the question, Dave. So, 2030-40, when you started at 20 for a power one, and the thought is like, normally people start, if you go to the public documents for, like, other sponsors, for example, everyone's going to be like, how close to the MES-CC50 can I get when you translate that to humans? And I'm going to be pretty close to that because they can all go much higher. We can go much higher here. So we're like, where do we start that the drugs are going to be clearly effective, right? So that's where it started at. And where do we end for now when we believe that it's kind of the maximum efficacy? And I think that's the bookends that you're seeing. But a pretty big feedback from the thousands of neurologists that treat these patients is flexibility is important for them as they're going through different patient types and different comorbid conditions. So we intend to bring all of those to the market because we believe that gives the highest flexibility to physicians and our largest ability to obtain and keep market share, right? Power 3 is a different animal. Power 3 requires the profile for metrology. So the answer to your question why others are not doing it is because they cannot, right? Because you would be able to, you need to be able to use the drug as monotherapy. Now, there's steps towards monotherapy, right? It's not an immediate reduction to monotherapy. It has to be done pretty safely, pretty thoughtfully. But that patients fail because they can't be on one mechanism. The only mechanism that can, if tolerated, as we believe here, Hormatrogen can truly stop any seizures is by acting on the IAS and by modulating these channels. And we're the only ones that do that right now. Like everything else is upstream of that mechanism. So that's why the confidence when you have a drug like Hormatrogen, as I said in my prepared remarks, this is the most potent and most selective ever developed. So we have this data publicly available for anyone to scrutinize. So that is the confidence there. What it does is to move from what has been in a little bit, a little bit of the definition of insanity on how these drugs are developed to get more and more severe patients, smaller pools of patients, and they no longer represent the broader markets on those refractory studies. And you're never really addressing the true market, the true mad needs. There are those patients who are struggling to go back to work, struggling to stay driving, struggling to have concentration. Significant number of patients with epilepsy go into disability costs themselves and the healthcare system and the social security system. Insane amount of resource because the drugs they were put in are compounding the issue with the condition. And I think we have an obligation as a company with such a potent, such an interesting drug to go there and change and revolutionize, as we say, the treatments of epilepsy. That is the long answer to the question.

Operator

Thanks a lot.

Marcio Souza, CEO

You bet.

Operator

Thank you. Our next question or comment comes from the line of Jay Olson. I'm sorry, Olson Jay from Opco. Your line is now open.

Andrew Tsai, Analyst — Jefferies

Oh, hi. Thanks for taking the question. Congrats on all the progress. This is Chen on the line for Jay. Maybe a couple from us. First, on the OLXA commercialization, just to install with the

Marcio Souza, CEO

feedback from A&M and market research conducted, kind of what do you view as the most important driver of adoption? And then I think at A&M, you also presented some data on certain channel model that are in pain. So I'm just a curious about related thinking around this opportunity and if there's anything we should expect in the near term. Yeah, yeah, of course. Thanks, Shane. So the most important thing for physicians, right, when you rank, and as I mentioned before, and I appreciate you bringing up the question, it was very extensive testing and really understanding the details from them. And there are a number of things they really like. They really like the fact that they never had something targeted for essential tremors. So having something that the most fundamental mechanism is C-type calcium modulation, and now they have something for that, or soon they're going to have something for that. The second was actually a little bit surprising to all of us. They absolutely love the fact that in two weeks, for the majority of the patients, you have the ability to have a conversation with the patients, and they really have an effect. They just don't have that right now in a sustainable manner. They like the fact that we tested the durability of effects on study two. And I would say all those things together, and there are many others, really are going to be key drivers of adoption. And as I mentioned in one of the previous call, about inventory and building, if anything, they're giving us indications they're going to prescribe to way more patients than we originally thought there. And then the second part of your question about our pain program, well, I think we've been, as you can imagine, right, we're a CNS company. We need to look into areas of science that make sense for us based on our technology. On one end, on another end, we do have a fair bit of things that are moving forward. As we discussed today, many more catalysts to come. So we've been taking a measured approach in terms of exploring a number of other areas in science that our molecules and our platforms can play a significant role. And at AAN, we did present some of the work we've been doing in PEN, and you will hear more from us in the future about how we are advancing quite significantly on that regard

Andrew Tsai, Analyst — Jefferies

Thank you so much.

Operator

Thank you. Our next question or comment comes from the line of Douglas Sal from H.C. Wainrap. Your line is now open.

Sam Douglas, Analyst — H.C. Wainwright

Hi, good morning. Thanks for taking the question. Hello, can you hear me? Yes, we can, Doug. Sorry about that. You know, Marcio, just starting with Emerald, I'm just curious. Congrats on completion of enrollment. Obviously, demand was very strong. I'm just curious if you have insight in terms of the subsets of patients that you received, and were there any particular Ds where you saw very strong demand to reflect sort of the magnitude of unmet need? Because obviously for so many of these, there's no approved therapy, and physicians are just basically trying to figure it out as they go along using sort of off-label ASMs.

Marcio Souza, CEO

So I'm going to be honest. Like when we went to the sites and we talked to physicians who presented a protocol, maybe what I haven't said in the call so far is we disappointed a lot of physicians by telling them, no, no, no, you've got to stop. You can't enroll more patients on this study. We really got there pretty fast because exactly, and it seems like you have a deep understanding of this, exactly what you just said. There is so many patients out there that there is very little or nothing they can do, even patients who have other drugs technically approved, but they failed already, right, or they tried to have some optimal response. So it is very broad, the both phenotype and genotype of patients we got here, and it is within what we expected. And unfortunately, and maybe this is a mea culpa, an apology, we couldn't get all the patients that wanted to be on the study. But I think our promise is if the drug works, we're going to get the drug to them in the near future. So really, really happy on everything and all the dynamics here.

Sam Douglas, Analyst — H.C. Wainwright

Okay, great. And if I can, on a follow-up in terms for Vormatrigine, just with Power One, I'm just curious, do you have any insight in terms of the discontinuation rate so far? Because obviously, I think in Radiant, there were some discontinuations, but we certainly heard from clinicians that, you know, they sort of had patients who maybe dropped out, who if they would have provided some additional counseling, just given the robustness ultimately of the drug, it would maybe sort of encourage them to stay in. Additionally, given the fact that you sort of titrate up in Tower One, you know, if we're seeing any evidence that that is having an effect. Thank you. Yeah, absolutely.

Marcio Souza, CEO

So we're pretty happy with how it got reduced, I would say, the overall disconfiguration here in terms of the historical with the program. I think some of the points you mentioned, right, people get more experience with their studies and so on. They get more comfortable in managing. So I'll say I think we're very comfortable with that. I think we're very comfortable with the new benchmark as well when you consider, like, drugs people are excited about, have like 22% to 25% discontinuation with further 25% dose reduction on the top dose, that's definitely not what we are seeing. So we think we are very, very competitive here considering like recent competitive events.

Sam Douglas, Analyst — H.C. Wainwright

Okay, great.

Operator

Thank you so much. Thank you. Our next question or comment comes to the line of Danielle Brill from Truist Securities. Your line is now open.

Tyler, Analyst — Truist Securities

Hi. Tyler here for Danielle. Thanks so much for taking our questions. My question is regarding the total addressable market in essential tremor. So up to 7 million patients have essential tremor, but you've recently said that there are approximately 1 million actively seeking treatment. So what's this gap between the predicted prevalent population and the seeking treatment? And with that, is education still needed in the field for more accurate diagnosis? And do higher-volume academic centers typically have that more accurate diagnosis?

Marcio Souza, CEO

Yeah. So there's about, like, 2 to 2.5 million patients right now either who are being, like, treated and seeing a physician at this moment or just done it and are sitting on the side. So when you go from 7 to, let's say, 2 to 3, it is a drop. It is not unheard of. I'll say there are many, many reasons here. It is not a misdiagnosed problem, and I want you to clarify that. And this is mostly like something they know, and they're either not speaking publicly or disclosing or discussing because they know there's a stigma, there's a fact. I think we just saw this week Senator Collins speaking about her diagnosis of essential tremor in defense of people attacking that she might not be fit, which obviously is absurd, right, because this is a progressive disease only of movements. For example, people are afraid of talking about things like that. It is a disease that, for the most part, runs in the family, so people are aware. It is a combination of two factors. One is the progress, so it's how quickly and how far the disease patients are. We call that the level of disability, and that's what gives us about 3 million. And the other is society sometimes not being too ready for someone to raise their hands and say they have a condition. And I think the last one is when you have two or three family members and a physician tells the first one, there's nothing I can do right now because there's no good alternatives available. You disengage the other family members. With Elixac Altamide coming to the market hopefully soon, that all those dynamics change, right? So we bring this to the forefront. One of the reasons why our campaign is called Essential to Me because it's really what is essential for death, for the patients. That's what we want to awaken on that.

Tyler, Analyst — Truist Securities

Thanks so much.

Operator

Thank you. Our next question or comment comes from the line of Brian Scorny from Baird. Your line is now open. Hey, good morning, Kim.

David Hong, Analyst — Deutsche Bank

Thanks for fitting me in here. You've alluded to the opportunity to develop Ulexa and the role of two-type calcium channel antagonists and indications beyond ET. Obviously, you're pretty full with two NDA reviews and running another few capital studies, so maybe it's a little bit on back burner, but just wondering if you had any updated thoughts on the exploration of other indications where Elexa could have an impact, and if there's any timeframe you can provide where we might hear an update on that.

Marcio Souza, CEO

Brian, we did select two other indications we're going to be going through. We're just going through the last, I'll say, checking everything here, ticking and tying, and making sure that we can discuss a little bit more publicly. We're discussing the format of that as well, if it's an R&D day or if it's maybe a series of calls and experts with us. So sit tights just for a bit, and you're going to be able to talk about that. We are very excited, both scientifically, patient side, and market potential for either of those indications.

Operator

Great. Thanks for the update. Thank you. Thank you. I'm afraid that's all the time we have for Q&A at this time. I would like to turn the conference back over to Mr. Maricio Souza for any closing remarks.

Marcio Souza, CEO

So thank you very much, everyone. I'm sorry for the questions we couldn't take on today's call. I think we're running a little bit ahead here. Like, incredibly exciting way to start the year, right? As you think back on the last 12 months, so much happened. in really moving the needle for so many patients. Yes, another study, they were finalizing, making sure that we flip the card, make sure that if there is a benefit, we're going to get that as quickly as possible. This year already, with Embrave, Part A being positive, Embrave III recruiting really well, Emerald coming up, Power 1 coming up, Power 2 coming up, new indications, as Brian just asked. So we're a full team ahead. The focus is very clear, is to deliver as much value for everyone, including our shareholders. And we promise you, we'll have our heads down on the execution here, getting everything done. Thanks for the interest, and we're going to be talking soon.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.