IKT - NASDAQ

Hello, and welcome to the Inhibikase Therapeutics Third Quarter 2023 Financial Results. [Operator Instructions] Please note today's event is being recorded. I'll now turn the conference over to Alexander Lobo of Stern Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to Inhibikase Therapeutics Third Quarter 2023 Financial Results Conference Call and Audio Webcast. With me today is Dr. Milton Werner, Chief Executive Officer; and Joseph Frattaroli, Chief Financial Officer. On Tuesday, November 14, 2023 Inhibikase issued a press release announcing financial results for the third quarter ended September 30, 2023. We encourage everyone to read yesterday's press release as well as Inhibikase's quarterly report on Form 10-Q, which has been filed with the SEC. The company's press release and quarterly report are also available on Inhibikase's website at inhibikase.com. In addition, this conference call is being webcast through the Investor Relations section of the company's website and will be archived there for future reference. Please note that certain information discussed on today's call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Participants are cautioned that this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 15, 2023. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. Information on potential risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live webcast, except as may be required by applicable securities law. With that said, I would now like to turn the call over to Dr. Milton Werner. Milton you may begin.

Thank you, Alex, and thank you, everyone, for joining us today. We are very pleased with the progress we've made throughout the third quarter as we have advanced our clinical and preclinical pipeline programs. In the clinic, we are continuing to evaluate the lead candidate, risvodetinib in our Phase II 201 trial in Parkinson's disease. The trial is actively screening and enrolling patients and activating the remaining clinical sites. In addition, our 501 bioequivalent study for IkT-001PRo is now complete, and we are in the process of submitting briefing documents in support of a meeting with the FDA to align on the requirements for approval under the 505(b)(2) regulatory pathway. Our medicinal chemistry efforts are also progressing, and we are excited to announce the evaluation of second-generation c-Abl inhibitors that emerge from internal programs and external collaborations. These second-generation molecules may potentially be deployed alone or in combination to improve brain delivery and c-Abl inhibition in the central nervous system. In the orphan disease areas, we are pleased to receive orphan drug designation from the U.S. FDA for risvodetinib as a treatment for multiple system atrophy. We are working towards initiation of the planned Phase II study and discussing conduct of the trial with private foundations of federal and industry stakeholders in an effort to initiate this trial in the future. Collectively, we believe that these accomplishments continue to demonstrate the potential of our programs to deliver transformative treatments for patients. Let us now take a deep dive into each of our programs, starting with our 201 trial. As a reminder, the 21 trial is a 12-week double-blinded study across 3 doses plus the placebo group. We have been working closely with our 28 active clinical sites to accelerate screening and enrollment into the trial and are pleased to say that we currently have 24 participants enrolled, 7 prospective participants are undergoing screening evaluations and 15 potential participants undergoing informed consents. Let me correct that. That's actually 9 prospective participants and 15 potential undergoing consent as we announced at the press release yesterday. 5 participants have completed the full 12-week regimen to date. As we continue to enroll participants into the trial, we are working to initiate a 12-month extension study for the 201 trial, subject to additional financing. The extension study once implemented, will roll participants who have completed the 201 trial into a study for an additional 12 months of treatment. The extension study will also evaluate our novel tablet formulation of risvodetinib, which we announced in August 2023. This novel tablet formulation is designed to improve drug exposure and overcome existing challenges related to patient use and mimics the oral formulation we used to evaluate efficacy and validated animal models of Parkinson's disease. The tablet nearly doubles drug exposure at steady state for the same dose of risvodetinib, which allow -- which may allow for lower doses that could lead to an overall improvement in safety and tolerability of risvodetinib. In addition, our ongoing work -- in addition to the ongoing work in the 201 trial, we recently presented public unblinded functional data from 11 previously ill patients with untreated Parkinson's disease who are removed from the 201 trial due to the temporary clinical hold imposed by the FDA in the fourth quarter of 2022. These results were presented at the Movement Disorder Congress in Copenhagen in August 2023. Of the 11 patients enrolled, 8 participants were on active drug; 3 at 50 milligrams, 2 at 100 milligrams and 3 at 200 milligrams and 3 were given placebo. For these patients, we evaluated changes in the functional assessments of motor and nonmotor features using a hierarchical analysis of 15 secondary endpoints. In particular, the study evaluated nonmotor functions such as activities of daily living using the MDS-UPDRS Part 2 score and evaluated motor function using the MDS-UPDRS Part 3 score. The sum of these scores was the top functional readout in the hierarchy. At the end of study time point, the 3 participants who received the 200-milligram dose had a combined Part 2 and Part 3 score that was lower by an average of minus 8.7 points. By contrast, the combined placebo score increased by an average of plus 1.7 points. This represents a minus 10.4 point spread between actively treated versus placebo participants. For comparison, Parkinson's patients typically have a plus 3 to plus 6 point increase in the sum of score assessment over the course of 12 months. Thus, a negative or lower score relative to placebo might be an indication of a clinical benefit. However, the small sample size at each dosing group precludes us from drawing this conclusion at the present time. Patients administered 50 or 100 milligrams experienced an average change of plus 1.7 and minus 1.3 points, respectively, for the combined score. An additional measure of nonmotor features of disease utilized what is called the Schwab and England Activities of Daily Life scale, the S&E scale, as we term it, was reduced for the 200-milligram group by an average of minus 3.3 points relative to baseline, while those on placebo had an average score increase of plus 3.3 points. That is a minus 6.6 point spread between actively treated participants and the placebos. The 50-milligram dose showed no effect for this measure, while the 100-milligram dose was on average minus 5 points lower relative to baseline. While the data set has to few participants to conclude a clinical benefit, we view these results with cautious optimism as we continue to roll patients in the ongoing 201 trial. Turning now to the IkT-001PrO program, our prodrug formulation for imatinib mesylate that has been developed to improve safety of imatinib. We recently completed the 501 bioequivalent studies evaluating the IkT-001Pro compared to 400-milligram imatinib mesylate or 600-milligram imatinib mesylate. The study met our expectations and demonstrated that the 600-milligram dose of IkT-001PRo was equivalent to standard of care 400-milligram imatinib mesylate, while a 900-milligram dose of IkT-001Pro should be equivalent to 600-milligram imatinib mesylate. IkT-001Pro demonstrated a favorable safety intolerability profile with minimal adverse events across 66 subjects in the trial. We are currently submitting briefing documents to the FDA to come to agreement on the particulars for approval of IkT-001Pro under the 505(b)(2) statute. Before I turn the call over to Joe to discuss our financials, I want to briefly touch on our preclinical activities. As scientists, we are always excited by the prospect of leveraging learnings from our work into new developments. In August, we announced the emergence of several new second-generation molecules from internal medicinal chemistry programs and external collaborations that we believe could enhance suppression of neurodegeneration through c-Abl inhibition. We believe that such molecules, whether acting alone or in combination with active [ c-Abl ] inhibitors like risvodetinib could be an improved approach to suppressed neurodegeneration arising from c-Abl activation inside and outside of the brain. In addition to these early-stage efforts, we are continuing to advance the preclinical development of risvodetinib for the treatment of multiple system atrophy. In October, we were pleased to receive orphan drug designation from the U.S. Food and Drug Administration. Orphan drug designation is provided to drugs or biologics that are used in prevention, diagnosis or treatment of diseases that affect fewer than 200,000 people. This designation will allow us to advance our work in MSA at greater speed and is encouraging to see the FDA acknowledge of devastating nature of MSA and the high unmet need that exists in the market. I'll now turn our call over to our chief financial officer Joseph Frattaroli to review our financial results for the quarter. Joe?

Thank you Milton. Now let me review our financial results for 3 months ended September 30, 2023 for the third quarter 2023, we report a net loss of approximately $4.6 million or $0.86 per share compared to a net loss of $4.49 million or $1.06 per share for the quarter ended September 30, 2023. Research and development expenses were $3.23 million for the quarter ended September 30, 2023 compared to $2.98 million for the quarter ended September 30, 2022. This increase was primarily due to company's ongoing Phase 0II 201 trial in Parkinson's disease. Selling, general and administrative expenses were $1.62 million for the quarter ended September 30, 2023, compared to $1.4 million for the quarter ended September 30, 2022. This increase was driven by a net increase in normal selling, general and administrative expenses. As of September 30, 2023, we had approximately $16.83 million in cash, cash equivalents and marketable securities. We expect that existing cash, cash equivalents and marketable securities will be sufficient to fund operations into the fourth quarter of 2024. That concludes our financial review of our financial statements. I'd like to hand the call back over to Milton for closing remarks.

Thank you, Joe. We believe that our programs have the potential to provide safe and efficacious treatment options for patients with Parkinson's and Parkinson's related disorders. As the value of c-Abl inhibition in neurodegeneration continues to come in to focus on the scientific community, we believe that the potential of risvodetinib too will continue to be recognized as a potentially disease-modifying treatment for Parkinson's. Before we open the call to questions, I would like to thank all our shareholders and partners for their continued support and dedication to Inhibikase. We work diligently to demonstrate the importance of our research with the scientific and investor communities, and we look forward to providing our shareholders and partners with updates as we progress in studies across our pipeline in order to transform the treatment paradigm for neurodegenetive diseases. I would now like to open the call to questions. Operator?

At this time, we will begin the question-and-answer session. [Operator Instructions] And the first question comes from Ed White with H.C. Wainwright.

First, Milton, I just wanted to get a little bit more information on the Phase II 201 trial. What is the typical time for patients to go from informed consent to dosing?

That varies widely because informed consents are followed by screening visits and there's more than one screening visits typically involved. They'll come in for laboratory safety and ECG measures, and in some cases, the safety measures for cardiovascular function or in a separate facility at the same site location requiring a separate appointment. They then go to the enrollment authorization Committee following baseline measures of Parkinson's disease-related assessments. The authorization committee typically takes 2 days to come to a decision on whether the person is suitable for enrollment unless they have questions. If they have questions, there could be back and forth that last for 1 or more days thereafter. If they're accepted by the enrollment authorization committee, then they'll go for their ophthalmology baseline exams to ensure that they meet the criteria for normal vision within the parameters we've defined in protocol. So collectively, it depends on the site and how it's organized, but it can take between 1 and 2 weeks, something in that order. I'm probably exaggerating that number, but that's my best guesstimate.

Okay. Thanks Milton. And just how many more sites do you plan on opening?

There are 4 plans that we'll get to 32. We had 34 that we've been talking about for a long time, 2 sites in the last month, as we disclosed in our Q, have dissolved the clinical research practice from their medical practice and now the clinical research practices that are breaking off don't have staff to continue their site activities, and we will have to wind down those sites. So right now, we plan on 32. We have several sites that are coming up that are large potential patient enrollment sites, coupled with the 201 trial outreach program that I think will satisfy our needs from trial in a timely manner.

Okay. And just a little bit more information on the potential multiple system atrophy trial. You said -- provided you get funding, I'm just curious as to how we should be thinking about the start to that trial. Is that going to be a 2024 event?

We -- it's aspirational at the moment until the money is in the bank. But yes, it's planned to be 2024. And MSA is really important. The preliminary data from the 11 patients that we pulled from the trial in 2022 is encouraging, but it's too small a data set to draw a strong conclusion. The -- because you saw indications, and these are just mild indications that as you increase the dose, you saw increasing benefit across many anti-Parkinsonian assessments was encouraging to us. Because of that, we are pushing the extension study hard and to be able to -- although it's still in a planned mode, hopefully, will be implemented in the near future. And MSA offers the opportunity to amplify those outcomes because patients with MSA decline at 4x faster rate than patients with Parkinson's disease who have a bigger dynamic range or a bigger measurement range over which you're going to see potential benefits. It's an orphan indication, the number of U.S. patients, although it's a little hard to calibrate it is somewhere between 16,000 and 25,000 people in the U.S. today, perhaps 50,000 to 70,000 people worldwide, and there's a large registry of patients. And so we think the trial is very feasible. Unlike Parkinson's, we don't have to worry about preexisting medications since MSA patients don't respond to anti-Parkinson's meds. We have imaging and biomarker analyses that are validated in the MSA in a way that they are not yet validated in Parkinson's and the faster rate of progression means a faster readout of potential benefit. The trial is planned for 6 months with an additional 6-month extension that will be provided in the updated protocol and we plan to run that trial in a registrational manner. We think there's a lot of interest at both the federal level with NINDS as well as in the primary foundation level, and we're working through those discussions. They'll take some time, but I am aspirational that this will get started in 2024.

Okay. And just a question on 001Pro. Can you make any comments on potential partner interest?

Well, there are 2 areas where that drug could be very attractive, certainly, to the CML and also to the gastrointestinal stromal or GIST community, although we're seeking initially just a label for CML in imatinib intolerance and newly diagnosed. But there is an additional application of imatinib, where the indications of improved safety from 001Pro may be very attractive, and that's in pulmonary arterial hypertension. We have not spoken with any of the current players in pulmonary arterial hypertension about this medication and the potential interest in imatinib. As you may recall, a number of years ago, Phase III program from Novartis was rejected by the FDA and it was not pursued further by Novartis because of safety concerns at the doses used for imatinib in PAH, which is the acronym for pulmonary arterial hypertension, but 001Pro offers a move away from those risk factors. And so it's an interesting potential application that can be further explored. Now that we have a complete data package, we're going to be going after partners, both large and small companies that work in specialty areas around 505(b)(2) approvals. And hopefully, in the early part of next year, we'll have something more to say about that.

Great. And perhaps if I could just ask 2 more financial questions. One, you had said that you have cash into the fourth quarter of '24. Does that include the initiation or the preparation for the MSA trial?

Well, MSA currently is not funded in the program. So Joe, go ahead and speak to that.

There's normal expenses budgeted within the MSA trial, but really not an initiation of the study pending additional working capital raise or nondilutive funding sources?

Okay. And then just the last question. You mentioned that R&D spending we saw was down from -- excuse me, up from last year, but down 29% quarter-over-quarter. I was just wondering if there's anything onetime in nature in the quarter? And how should we be thinking about the fourth quarter?

Yes, great question. To get trial started, there were some nonrecurring costs that will be incurred. Most of the cost are -- many of the costs are variable depending upon the rate of enrollment. So the rate of enrollment will have that fluctuate month-to-month and quarter-to-quarter. But through the next year, we expect to burn an average of about $1.2 million to $1.3 million a month, again, subject to a rate of -- actual rate of recruitment.