Vimal Mehta; President, Chief Executive Officer, Director; BioXcel Therapeutics Inc
Vincent O'Neill; Executive Vice President, Chief of Product Development and Medical Officer; BioXcel Therapeutics Inc
Richard Steinhart; Chief Financial Officer, Senior Vice President; BioXcel Therapeutics Inc
Matthew Wiley; Senior Vice President, Chief Commercial Officer; BioXcel Therapeutics Inc
Ram Selvaraju; Analyst; H.C. Wainwright
Good morning and welcome to the BioXcel Therapeutics second quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. (Operator Instructions) Just to remind everyone, certain matters discussed in today's conference call and our answers that may be given to questions asked are forward-looking statements that are subject to risks and uncertainties related to future events and or the future financial or business performance of the company.
Actual results could differ materially from those anticipated in these forward-looking statements. Risk factors that may affect future results are detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2023, which can be found at www.biocceltherapeutics.com, or on www.sec.gov, and which will be updated in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024. As a reminder, today's call is being recorded.
Speaking on today's call are Dr. Vimal Mehta, Chief Executive Officer; Dr. Vince, O'Neill, Chief of Product Development and Medical Officer; and Richard Steinhart, Chief Financial Officer. They will be joined in the question-and-answer session by Dr. Frank Yocca, Chief Scientific Officer; Matt Wiley, Chief Commercial Officer; and Dr. Rob Risinger, Chief Medical Officer of Neuroscience. It is now my pleasure to turn the call over to Dr. Mehta. Please go ahead.
Thank you, operator. Good morning, and thank you for joining us today. At BioXcel Therapeutics, we are focused on expanding our lead asset BXCL501 into the home setting for bipolar and schizophrenia related agitation and into a new indication for Alzheimer's related agitation. We are extremely passionate and motivated to bring this much-needed therapeutic option to millions of patients who are struggling with episodes of agitation.
We believe BXCL501 offers a compelling value proposition, and we look forward to advancing the development of our two clinical programs. At this time, we are delighted to reach an important juncture with the SERENITY program as we are finalizing development plans for BXCL501 in the at home setting, where the majority of agitation episodes occur.
We truly believe that this is a much-needed treatment option for patients, caregivers and healthcare providers as there are no FDA-approved therapies for agitation in the home setting. The SERENITY At-Home trial could represent a near-term value-creation opportunity to potentially expand beyond the institutional setting where IGALMI is currently marketed.
Our TRANQUILITY program plans with BXCL501 for Alzheimer's associated agitation are also progressing. This program could address a significant unmet medical need, and we are pleased to have received breakthrough therapy designation from the FDA for this indication.
We believe this program could represent a larger, longer term growth opportunity to potentially address an estimated 100 million annual episodes of Alzheimer's associated agitation. Vince will share updates on the TRANQUILITY and IGALMI program shortly.
Turning to IGALMI, we have seen growing adoption among psychiatric care clinic and behavioral health facility. This market segment represents a community adjacent opportunity characterized by strong product freight and lower administrative barriers.
Given our small field commercial footprint, we believe targeting this market sector positions IGALMI for continued growth and scalability. This could also serve as a bridge to the home setting to the at-home setting, if approved. We believe this approach coupled with substantial patent protection that extends to 2043 could enable us to fully realize the potential of IGALMI.
Finally, we remain focused on strengthening our balance sheet to support our late-stage clinical trials with the goal of reaching data readouts. We are also evaluating strategic financing alternatives such as royalty monetization, OnkosXcel monetization as well as strategic partnerships.
In summary, plans for our core clinical programs are advancing, our market access strategy with IGALMI is progressing, and we are pleased with growing patent portfolio.
With that, I will turn the call over to Vince.
Vincent O'Neill
Thank you, Vimal. So as Vimal announced, we're pleased to be preparing for initiation of our SERENITY At-Home trial, which as a reminder, is designed to be a double blind placebo controlled multi-center study to evaluate the safety and efficacy of the 120 microgram dose of BXCL501 over a 12-week period. The primary objective will be safety with efficacy measures as exploratory endpoints.
We recently received feedback on the trial protocol from the FDA. We've completed the CMC work we believe is sufficient to support the use of child proof pouches in the home setting and have finally defined the final statement of work in clinical site selection with our CRO, all preparing us for trial initiation.
Plans for our TRANQUILITY program are also advancing with a focus on our tranquility In-Care trial. The proposed trial design is substantially similar to TRANQUILITY II. As a reminder, TRANQUILITY In-Care is a double-blind, placebo-controlled, multicenter study to evaluate the efficacy and safety of a 60 microgram dose of 501 over a 12-week period. The primary endpoint is expected to be the change in PEC score at two hours post first stores. The TRANQUILITY In-Care protocol is in final form, and we're planning to submit it to the agency.
Turning to our PMR study with IGALMI, we were pleased to have reported positive top line results, evaluating PRN or as needed treatment of IGALMI. The study achieved its objective and demonstrated no evidence of tachyphylaxis tolerance or withdrawal with the 180 microgram dose, the highest approved dose.
Although the study was not statistically powered to evaluate repeat dose efficacy, a reduction in agitation was observed for each episode occurring during the seven-day study period and no serious adverse events were reported following treatment.
I would now like to turn the call over to Rich, who will review our financial results for the second quarter.
Richard Steinhart
Thank you. Vince. Net revenue from of IGALMI was $1.1 million for the second quarter of 2024, compared to $457,000 for the same period in 2023. This represented 141% increase. Sequential quarterly revenue increased 90% in Q2 2024 from the first quarter of 2024. The growth in revenue for both periods was primarily driven by an increase in contracting with psychiatric care clinics and behavioral health facilities.
Research and development expenses were $8 million for the second quarter of 2024, compared to $27 million for the same period in 2023. The decreased expenses were primarily attributable to the wind-down of the SERENITY III and TRANQUILITY II and TRANQUILITY III trials as well as decreased professional fees, personnel and related costs.
Selling, general and administrative expenses were $9.5 million for the second quarter of 2024, compared to $25.9 million for the same period in 2023. The expense reduction was primarily attributable to a decrease in personnel and costs associated with the commercialization of IGALMI compared to the second quarter of 2023, driven by our reprioritization.
BioXcel Therapeutics had a net loss of $8.3 million for the second quarter of 2024, compared to a net loss of $53.5 million for the same period in 2023. In the second quarter of 2024, the loss from operations of $17.3 million was offset by an unrealized gains related to derivative liabilities. Company used $23.2 million in operating cash during the second quarter of 2024. Cash and cash equivalents totaled $56.3 million as of June 30, 2024.
Finally, to enable us to deliver on our strategic clinical priorities that Vimal and Vince have described earlier, we are continuing to optimize operational efficiencies across our business.
Now I'd like to turn the call back to Vimal.
Vimal Mehta
Thank you, Rich. We would now like to open the call for questions. Operator?
Operator
Thank you. (Operator Instructions) Sumant Kulkarni, Canaccord Genuity.
Sumant Kulkarni
I have three fairly quick ones. On TRANQUILITY In-Care, at what point do you expect to be able to let us know when data might be available? And on that trial, are there any new variables that might make the trial more or less expensive relative to how you characterized the cost previously?
Vincent O'Neill
This is Vince. So for TRANQUILITY In-Care, today we're not in a position to provide specific timing. To your second question in terms of cost, we don't obviously typically give specific cost guidance. But we see no reason to have changed our view on the cost of the study recently. It's essentially as previously thought or planned.
Sumant Kulkarni
Got it. And then my third one is on SERENITY At-Home, how aligned would you say you are with the FDA on that trial and is the child proof packaging the key part of enabling that trial to proceed?
Vincent O'Neill
So I would say we are very aligned with the FDA. As I mentioned in prepared remarks, we did receive feedback from the FDA that has been incorporated into the protocol. Also, as mentioned, CNC work is complete, statement of work with the CRO has also been defined. So essentially the make ready work for that study is complete.
Sumant Kulkarni
And I'll squeeze one last one in. Can you talk about any potential areas of discussion that you might have with the FDA on the specific TRANQUILITY In-Care protocol?
Vimal Mehta
I think one point I'll make is, obviously, TRANQUILITY versus SERENITY is an efficacy primary endpoint study. It's obviously a little more complicated, a little longer in duration and actually a little bit more expensive. We know that the FDA is very interested in repeat dose efficacy and I think that will be the one point that we want to get right going forward with that protocol.
Operator
Alec Stranahan, Bank of America.
Mary Kate
Good morning. This is Mary Kate on for Alec this morning. And we were just wondering, what are your expectations for the pace of trial execution for the Phase 3 trials upon initiation, maybe specifically SERENITY here? And maybe could you add some additional color on the potential market opportunity for the At-Home population here as well?
Vincent O'Neill
This is Vince. Just to paraphrase your first question, essentially, you're asking about the timing of the SERENITY At-Home study, correct?
Mary Kate
Yeah. And how long it could potentially take in terms of enrollment once you guys initiate the trial?
Vincent O'Neill
Sure. So again, not in a position to give precise timelines today, but I'll actually just repeat what I said a moment ago, and that is that SERENITY -- of the two studies, SERENITY is the less complex study, therefore the faster study and the less expensive study.
Matthew Wiley
Yeah. Mary Kate, this Matt. I'll talk a little bit about the market opportunity. So there are 23 million episodes in the at-home market. And what we found in market research is that patients who experience agitation with bipolar schizophrenia indicated that they would use the BXCL501 in 80% of their episodes, oftentimes at the very beginning or even before those episodes started. So in the prodromal phase of the episode.
So the patients are motivated and rarely we could imagine taking some of the 23 million episodes adding to that as we draw some of those episodes out of the emergency department in the hospital.
Operator
Graig Suvannavejh, Mizuho.
Graig Suvannavejh
Hi. This is Avantika on for Graig. I just had a couple of questions. The first is what is the company's current cash runway? And the second is for both the SERENITY and TRANQUILITY studies, are you still planning to finance it yourself or are you thinking of partnering with someone to actually run the trials? And the last is what is the -- what are the gating factors for actually initiating the trials now that you have -- you've discussed the protocol with the FDA, specifically for SERENITY?
Richard Steinhart
Hi, this is Rich. On the cash runway, we really haven't changed our guidance on cash runway at all. So it remains similar to what we had talked about in the past.
Vimal Mehta
Good morning, Avantika, this is Vimal. Regarding your question on the financing, our fundraising strategy is based on funding both trial through various alternatives, as I mentioned. So we are exploring all those opportunities in parallel.
As you said, both trials are at a point where we already have a feedback and SERENITY At-Home can begin and shortly, and we are finalizing our plans for the TRANQUILITY In-Care, which Vince already mentioned. So both are strategic priorities and we are moving them along. And as I mentioned in my prepared remarks, we are looking at strategic partnerships as well as a part of this excercise.
Operator
Ram Selvaraju, H.C. Wainwright.
Ram Selvaraju
Thanks so much for taking my questions. Three quick ones here. Firstly, just a question on the commercial side. Can you comment on any favorable tailwinds that you see the product experiencing at this juncture and what impact that might have on the cadence of revenue growth and prescription uptake over the course of the second half of 2024?
Secondly, with respect to OnkosXcel, can you provide any update with respect to potential spin out of that entity or other ways in which you could conceivably monetize BXCL701? And then lastly, if you could perhaps comment on your plans for the neurology pipeline beyond BXCL501 and to what extent that might potentially provide you with additional sources of non-dilutive funding?
Matthew Wiley
So this is Matt. To answer your question about tailwinds, one of the things that we've observed over the last three quarters is an increase in the interest from these community behavioral health centers. There are about 36,000 of these in the United States.
And we know from previous market research that psychiatrists have the highest intent to use the product of all the constituents in a hospital setting. So we think that that translates nicely to this community mental health clinic type setting.
We also, based on our experience, we know that the process for acquiring IGALMI does not require the type of administrative hurdles they typically see in a hospital IDN setting. So we feel like this is an opportunity that is near term low hanging fruit, and we'll continue to progress on that over the balance of the year and into next year as well.
Vincent O'Neill
This is Vince. Just to reiterate what you have said, we are obviously committed to monetizing 701. So we have initiated partner outreach through a retained firm, a firm that specializes in this area and that's in addition to assessing -- formally assessing the commercial value or indications. So we're pleased with progress so far, and we'll update you in June.
Vimal Mehta
Good morning, Ram. This is Vimal. Regarding your third question, plan for our neuroscience pipeline. Currently, as I mentioned, we are very focused on moving two late-stage pivotal trials, but we will continue to look at it, what are the best options to progress the pipeline which is 502, 503 either through a partnership mechanism or any other ways to move those program forward.
Operator
Thank you. I would like to turn the floor over to Dr. Mehta for closing remarks.
Vimal Mehta
Thank you. Thank you, everyone, for joining us today and for your continued interest in BioXcel Therapeutics. Have a great day.
Operator
This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
