Earnings Call Transcript - PRAX Q1 2022

Operator, Operator

Good day and thank you for being here. Welcome to the Praxis Precision Medicines First Quarter 2022 Corporate Update and Question and Answer Conference Call. All participants are currently in listen-only mode. After a brief introduction, we will move into a question-and-answer session. Now, I am pleased to turn the call over to your first speaker today, Alex Kane, Vice President of Investor Relations and Corporate Communications at Praxis. Thank you. Please proceed.

Alex Kane, Vice President Investor Relations and Corporate Communications

Thank you, Paul. Good afternoon, everyone, and thank you for joining us today for our first-quarter 2022 corporate update Q&A call. With me on the call is our President and Chief Executive Officer, Marcio Souza, our Chief Medical Officer, Bernard Ravina, and our CFO, Tim Kelly. Following the press releases and video update issued this afternoon, we will focus today's call on your questions. We ask that you keep to one question initially, and then please feel free to rejoin the queue for follow-up questions as needed. Before we proceed, I would like to remind you that during today's call, we may make certain statements that are forward-looking and subject to various risks and uncertainties. For additional detail on forward-looking statements and the risks associated with our business, I encourage you to consult our SEC filings. With that, I will now pass the call over to the Operator to open up the line for Q&A.

Operator, Operator

Thank you, Alex. We will now begin the question-and-answer session. Please stand by while we compile the Q&A roster. Your first question is from Yasmeen Rahimi with Piper Sandler. Please go ahead.

Lauren Riaz, Analyst

Hey, guys. Thanks so much. This is Lauren Riaz. I have a couple of questions. The first one, what are some of the key lessons you learned from PRAX 944 data that could impact your views into the essential Phase 2b study? And then speaking a little bit, the enrollment, how that's going into that study and do you think that the essential population will capture a similar demographic? Thank you.

Marcio Souza, CEO

Thank you for the question. I will start by saying that the patient population for Essential1 is likely different from 944-221. I’m very proud and excited about the progress we've made. One key difference is that we could not include patients with a Lam score less than 10 in Essential1. This relates to your first question as this is where we learned about conducting these studies and examining other data in this area. To achieve a more homogeneous group, we need a certain level of severity at baseline. Our study was quite broad, whereas 944-221 had stricter criteria, focusing on a higher baseline severity. We expect this will allow us to demonstrate even clearer results, although we believe today's data from Essential1 is already compelling. Enrollment in the trial is progressing well, and we plan to reinforce these results by the end of the year. Now, I’ll hand it over to Bernard for any additional comments regarding the enrollment.

Bernard Ravina, Chief Medical Officer

The point about the population is a key one, and then they got a couple of other key lessons. One is we learned that we can get most people up to the high end of the dose range. And we've previously shown we've got very well substantiated dose range based on that mechanistic biomarker of quantitative EEG. So really confirms we've got a 20x dose range that we can work in, where the drug appears to be active, and has potential to improve tremor. And then I think we learned a lot about the endpoints too, and we agree with the agency's suggestions about Activities of Daily Living (ADLs) and particularly modifying ADLs, and we've seen what a responsive measure that is, including in the randomized withdrawal, that blinded period. And so I think it really helps us focus in on function and understand that that is a reliable measure that integrates a lot of tremor in activities that patients come across every day.

Lauren Riaz, Analyst

Thank you so much for that information. Just one more question. What were the reasons for the three discontinuations in the PRAX-114 study?

Bernard Ravina, Chief Medical Officer

There was one person who discontinued for reasons unrelated to PRAX-114, as they needed a procedure for a pre-existing medical condition. The other two discontinuations were due to dizziness and primarily fatigue. All the adverse events reported were mild to moderate, with only one severe adverse event which involved worsening of tremor after the drug was withdrawn. Overall, the treatment was really well tolerated.

Lauren Riaz, Analyst

Thank you so much, guys.

Bernard Ravina, Chief Medical Officer

Thank you.

Operator, Operator

Your next question is from Laura Chico with Wedbush. Please go ahead.

Laura Chico, Analyst

Good afternoon. Thanks very much for taking the question, and I'll stick to one here. I guess I just wanted to verify or clarify some of the comments that you had in the video with respect to Essential1. You're updating the primary endpoint to this modified ADL and it sounds like you have agency support here. I'm just trying to understand, could Essential1 serve as a registrational study? I believe enrollment is around 115, 120 subjects. Just trying to understand, A. Does this become a registrational study, and also, B. Are there any mechanics behind changing the endpoints and how that might affect enrollment? Thank you.

Marcio Souza, CEO

Yes. There are a lot of mechanics behind some of that's one of the reasons why we're mentioning the video we're working through it will be informing all of you about those mechanics, how it specifically works. There are so many alternatives right now as you can imagine with such a robust rebound after the renewal of the drug. It gives us all the more confidence about some of the aspects that were unclear, like which dose should be used and things like that. So we're working on all of that. In favor of the endpoints, it just was incredibly clear with us, and we've others as wildly spaced on measures that would clearly affect function for those patients. So when you're looking at the ADLs, originally, as designed, we've already established pretty good assessment assumption. The ability to back more of this floor is one of the reasons why the agency suggested modifying the way that it was assessed. I want to make a point that by doing that we reduce the score by about 30%. If you were to have to use that, the results today would be even more positive, not that they needed to be. But it's a lot more trustworthy, I would say, the way that has been done right now. We are very convinced by the feedback to date that the endpoint is very clear. Now, whether or not the new design will be registrational, that's a matter of discussion with the FDA after we finalize that design. I think we're going to be very clear. The driving issue is for a clinically and a statistically significant change and then have a discussion with the agency once the results are in whether or not they could serve as one of two trials, or if you had to run two more trials, which we'll be incredibly pleased to do it as well for drug selection.

Laura Chico, Analyst

Thanks very much. Congratulations.

Marcio Souza, CEO

Thank you.

Bernard Ravina, Chief Medical Officer

Thank you.

Operator, Operator

Your next question is from Ritu Baral with Cowen, please go ahead.

Ritu Baral, Analyst

Good afternoon, guys. Thanks for taking the question. Now that you've gotten the last patient last visit in Aria, I just wanted to check in on final conduct, data retention, etc. Can you tell us when the last patient last visit is? And then further, just given GABAA Pam precedent showing deltas of 2.2 in larger say two phase 3 trials, you've mentioned that you powered this for a three-point difference. Is this mainly because you've got better placebo concept, or do you think that this could be driven by just sheer differential efficacy? Thanks.

Marcio Souza, CEO

We appreciate your question. First, we had hoped that the clinical trials would be up and running by now. You can expect to see updates in the next few hours or by tomorrow. The last patient visit occurred on the 5th of last week, which was for safety checks, and those visits had been conducted a few weeks prior. This was the final update we needed to complete. The patient attended as scheduled, allowing us to finalize the study. Next, we will focus on cleaning the data to lock the database on time and then report our findings. As mentioned in the video, we are satisfied with the underlying assumptions. This part of the process is behind us, though we have not yet seen the unblinded data since the database is not locked. However, we feel confident regarding the conduct so far. When conducting a controlled trial, it is crucial that both the drug and placebo respond as expected. We are more confident than ever that the placebo is performing as anticipated, which we have found through our averages. However, that alone does not guarantee the separation and overall results we expect. Our confidence in the drug's performance stems from the fact that it is the only drug in development known for its predictable exposure. Once administered, we manage the dosing to ensure that food intake does not interfere with the effects, preventing any carryover to the next day. Proper dosing is essential, as we've been attentive to the side effect profile since the beginning, maintaining the study parameters and being careful with our approach. Now, we are in the data-cleaning phase and look forward to discussing the results in due course.

Ritu Baral, Analyst

You have to talk about why you hate midnight cheeseburgers, but thanks for taking the questions.

Marcio Souza, CEO

I don't hate them, but I'm cautious.

Bernard Ravina, Chief Medical Officer

Not every night.

Marcio Souza, CEO

Not every night.

Operator, Operator

Your next question is from Douglas Tsao with H.C. Wainwright. Please go ahead.

Douglas Tsao, Analyst

Hi. Good afternoon. Thanks for taking the questions and congrats on the data. Just maybe it would be helpful to just walk through the implications if you will, of changing the primary endpoint to efficacy. And also, if you could just remind us what some of the differences between Essential1 and the two-way study are.

Marcio Souza, CEO

Thank you, Doug. I'm going to hand this over straight to Bernard so he can walk us through that.

Bernard Ravina, Chief Medical Officer

One of the earlier questions was what do we learn? The reason we are changing Essential1 to an efficacy study is that we now know what is necessary to conduct an efficacy study. The key questions are, who is the appropriate population and can we measure the response? We discussed individuals with sufficient baseline severity to comprehend the dose range. We know we can adjust the dosage for individuals with good tolerability. We have a clear efficacy signal, which is evident from both the open-label and randomized withdrawal studies. We understand the endpoint and its implications, meaning we know how to construct an efficacy study now. It will be a matter of discussion with the agency, as Marcio mentioned. This will serve as one of the pivotal studies and includes all the essential components. We will provide more specific details about the amendment and redesign within the framework of what is already in place for the Essential1 study.

Douglas Tsao, Analyst

Just a follow-up. Have you or do you plan to engage with the agency in terms of this switch just to ensure that there are elements that you might need to change, to make sure that plan in particular is done appropriately so that it could function as a registrational study?

Marcio Souza, CEO

Yes. Doug, the interesting thing is when we submitted the regional proposal for CGP to the agency, they specifically noted what one would have to do in order to make Essential1 registrational. We chose not to. Then we have a very good idea of what the criteria is and we would be adhering to that 100% as we always do and then have a discussion with them. Now if we deem necessary, the changes are more than simply in terms of size or the act or the endpoints, obviously we would reach out, make sure we have their buy-in before the SAP is finalized.

Douglas Tsao, Analyst

Okay, Greg. I'll hop back in the queue.

Marcio Souza, CEO

Sure.

Operator, Operator

Your next question is from Myles Minter with William Blair. Please go ahead.

Myles Minter, Analyst

You're going to hate, but back on Essential1 and the potential trial modifications here, are you looking at increasing the patient enrollment number? And also on the stats plan, considering it's now going to be an efficacy trial, how are you going to adjust for multiplicity between the doses there? I only make a mention of that because there have been some recent FDA interactions in schizophrenia's pace where if not all the doses are positive, and it's not aligned with the statistics plan, then technically it’s not a positive trial. What are your thoughts all around that? Thank you.

Marcio Souza, CEO

Myles, there are several approaches to consider, and the situation is still evolving. We believe we have a solid grasp of which dose will be the most effective, and we prefer to keep that information confidential for now. You will hear more about it soon. We can prioritize one option if we decide to do so, making the other secondary, or even combine exposures at a specific dose at a certain time point. We're looking into various methods. I agree with you, and everyone here shares the same sentiment. Any review must be clearly justified and detailed in the new protocol because we will need to comply with those amendments. After that, we will prepare the statistical plan to send to the agency, await their feedback, and so forth. The timeline isn't ideal since we're in May, but we are aware of everything at this point. We have ample time to consult with the agency while we continue refining Essential1. Those are excellent points. As we gain more insights into the dose-dependent effects and which doses might saturate the effect, I think the process will be quite straightforward, but we will not take any shortcuts. We will adhere to this until the conclusion of the study.

Myles Minter, Analyst

I'll hop back in the queue. Thanks.

Operator, Operator

Once again, ladies and gentlemen, your next question is from Laura Chico with Wedbush, please go ahead.

Laura Chico, Analyst

Hey guys, sorry. Just one quick follow-up. I think cash runway actually changed from 2Q '23 into 3Q '23. I guess I just wanted to maybe take a step back with a number of these studies still set to start in the second half of the year. I'm just trying to understand what flexibility you might have in terms of prioritization of efforts, but also know further extension of cash runway. Thanks very much.

Marcio Souza, CEO

Sure. Thanks, Laura, very much for the question. Overall, we're very conservative when we look at our cash runway. And by that we mean we plan for success with our studies. And so, when we look at things like portfolio prioritization with the 562 indication falling out with a little bit of delay in our study with the way we're looking at 222 now, it created just a bit more space in our runway. So we move now into Q3 of '23.

Operator, Operator

Your next question is from Myles Minter, William Blair. Please go ahead.

Myles Minter, Analyst

I have the data released this afternoon. It seems that when our patients stop using the drug, they are unable to draw in a circle, but they establish a baseline. I'm curious about your theory on this. Is there a dependency involved, or why might a patient who has stopped the drug struggle to draw that circle? This is based on just one patient, so did this occur for everyone who responded to the 944 trial? Thank you.

Marcio Souza, CEO

Thanks for the question, Myles. When a drug is removed and people experience tremors, there can be temporary trends of worsening symptoms, but this does not indicate a physiological dependence. There are no signs of withdrawal, just a rebound in tremors. By Day 56 and Day 70, patients tend to return to their baseline levels. This does not occur in everyone and is not exclusive to this class of medications, as similar effects can be observed with other drugs clinically.

Operator, Operator

Your next question is from Ritu Baral with Cowen. Please go ahead.

Ritu Baral, Analyst

Hi, guys. I think you mentioned that eight of the 11 patients, I believe, if I was reading this correctly, eight of 11 patients were able to complete the open-label at full dose. Can you talk about why the, I believe, the three had two dose reductions? What were these symptoms that drove it and what dose they had the dose reduced to?

Marcio Souza, CEO

And maybe just a reminder, you’re right, Ritu, and then I’ll hand over to Bernard. We allowed for dose change into day 36 of the study, and after that, they had to be stable to enter into the randomized withdrawal study. So that's one important phenomena here. The second is, when you look into our pharmacokinetic curves versus concentration, which is the Sigma bands, we tape out around 80 milligrams, between 80 and 100. We wanted to push to 120 to make sure you have faith and if other patients needed to go there. Now, we knew all along that some of them would and some of them would not. We’re actually very pleased with the proportion of patients that were there. But I’ll have Bernard talk a little bit about the optionality and what we’ve seen.

Bernard Ravina, Chief Medical Officer

I just want to add, Ritu, thanks for the question. Overall, it’s really well-tolerated. Most of the people were able to get up to the highest dose there. The people who down-titrated or just didn’t titrate up, there was a range of common adverse events that you see with CNS drugs, dizziness, there was difficulty paying attention and focusing. For the most part, those adverse events occur early. So if people are going to have them, they tend to have them early. And so once they're titrating out, they generally do fine. And so what we've done in Essential1, and we plan to continue this, is we've lowered the starting dose so that people can get just a bit of a smoother ramp and we believe that that's going to help.

Ritu Baral, Analyst

Got it. Thanks.

Marcio Souza, CEO

Thank you.

Operator, Operator

Your next question is from Douglas Tsao with H.C. Wainwright. Please go ahead.

Douglas Tsao, Analyst

Hi. Thanks for taking the follow-ups. Just quickly, obviously it's a small number of patients and the ADL score improvements are really impressive. I'm just curious if you have a sense of what proportion of the patients responded with clinically meaningful responses? And how much variability across the patient population was there in terms of improvement? Thank you.

Marcio Souza, CEO

Yes, that's a very important question and one of the first things we analyzed in the data recently. Most of the patients are participants in the ADL, and all the patients who stopped the drug lost their response. This is significant because they don't achieve a cure from the drug. The assessment looks back over a seven-day period regarding the activities they could and could not perform. Interestingly, when the FDA requested us to rescore the ADL, removing the zero from each item made every other item clinically relevant, as any change indicates a shift from being unable to do something to being able to do it. Conversely, when the drug is discontinued, some patients lose that ability. We're observing a clear recovery of functions in their lives, but those functions decline again once the drug is removed. The half-life of 944 is short by design, allowing us to observe effects throughout the day. It's evident that continuous dosing is necessary; otherwise, conditions worsen. We believe that any change in the ADL is significant, and the majority of patients experienced these changes. A few patients in this study did not respond at all, which reassures us about the existence of responders and non-responders. Moreover, we now benefit from randomizing these patients without knowing if they receive the drug or placebo. As Bernard mentioned, adverse events typically occur early in treatment. By Day 56, there aren't many adverse events noted. The contrast in ADL changes is dramatic between those who continue with the drug and those who do not, reinforcing our confidence in bringing this drug to market for patients.

Bernard Ravina, Chief Medical Officer

Next to add about ADLs is the adverse events, predominantly CNS, but the ADLs really integrate any side effects you might have along with the benefit on tremor because of how they're functioning with that. To see that really more upside improvement in function tells you a lot about the benefit-risk.

Ritu Baral, Analyst

Great. Thank you so much.

Operator, Operator

Now, your next question is from Myles Minter with William Blair. Please go ahead.

Myles Minter, Analyst

Yes. Thanks. Last one from me. On slide 6, are you disclosing how many patients actually had a response to 944 and then got randomized to placebo, or for that matter, didn't respond? They got randomized to placebo because theoretically that pricing should be flat over the 56-day period with their tremor. So I'm just wondering how much they actually contributed to the dive-a-bit we're seeing here. Thanks.

Marcio Souza, CEO

The patient did not object to measuring the response, and I’ll provide some context. We had one more patient assigned to one group than the others due to the larger size. The patients assigned to the placebo showed a numerically greater response, which should be evident from the data. We are simply emphasizing this point. However, what's particularly interesting is that each of them returned to their baseline levels. There were no super-responders or non-responders, and others maintained flat responses. The stable patients resembled the typical group that stays on the medication, clearly indicating that the drug remained effective. We are just observing some small variations, but there was a significant change, with nearly all of them returning to baseline or even exceeding it slightly, which is not unusual with CNS-active drugs as everyone is aware.

Operator, Operator

You have a follow-up or additional question from Yasmeen Rahimi with Piper Sandler. Please go ahead.

Yasmeen Rahimi, Analyst

Hi, everyone. Thank you again. I have one last question. Can you provide any comments on the screen failure rates or the screening protocol for the Essential1 study? It would be helpful to understand how we can capture a homogenous population. Thank you.

Marcio Souza, CEO

Thank you for the question. We haven't discussed this before, but it's worth talking about our approach. Similar to Aria, our team at Praxis emphasizes strict screening criteria for MTG. For Essential1, we have a central reviewer who assesses severity, and patients who don't meet the criteria are excluded. We're currently excluding a number of patients because they are not stable or severe enough. It's important for us to adhere to these standards. While I can't specify an exact ratio just yet, we've seen that once we started substantial discussions about Aria, we had three-quarters of enrollments, which gives us increased confidence in our numbers. However, the number of patients being excluded is significant, and this reassures us that we're making the right choice. We may explore providing alternatives to these patients through other avenues, but demonstrating the drug's efficacy in line with regulatory standards and obtaining approval is paramount. We have experienced some positive momentum recently, and we anticipate continued growth as we now have most of our US sites actively screening and recruiting patients each week.

Bernard Ravina, Chief Medical Officer

I'd add that the way we do the reviews here is we do videos. So it is paired with the history of their tremor. So it helps us confirm the diagnosis, which I think is very important because you want to screen out the mimics just like we've talked about in Aria. So you want to get the correct diagnosis, and we confirm severity. We've said in central review you lose a little of granularity and the amplitude, but you could still confirm that it's at or above 10 points up.

Yasmeen Rahimi, Analyst

Great. Thank you.

Operator, Operator

As there are no additional questions or follow-ups, I will now hand the conference back to Marcio Souza, CEO, for any final comments.

Marcio Souza, CEO

So thank you so much and thanks for joining, for supporting us and all those patients throughout this journey here. A couple of points I wanted to make just to close. We promised to deliver results in May. Here we are, we delivered. We promised you that we'll deliver results for upcoming studies in June, and we’re going to be sharing the results for four more readouts after that. All of this, takes very good care of our shareholders and all other stakeholders in it for the cash we have enhanced. So, we can deliver those drugs to more and more patients. We haven't changed anything in terms of just how disciplined we are on the use of capital, use of resources, being serious and clear with the science. The science today is speaking volumes for us to continue 944 in Louisville. But if it was not the case, we will be cautious. And we believe strongly here at Praxis to stay true to our dealers, every drug screened for genetics, variable translational data. And I want to remind everyone we had beautiful translational data for 944 that was presented at AAN last month. Here we are, with translational data giving clinical data to these patients. We have beautiful translational data for 104, and we’re all excited to be sharing that soon as well and many more drugs to come in the future. Thanks again for all the patients that participated in the trial, for our investigators, and for all the practitioners that worked day and night to get to this moment. Talk to you all soon.

Operator, Operator

This concludes today's question-and-answer session. Thank you for participating. You may now disconnect. Have a great day.