Greetings, and welcome to the Brickell Biotech Inc. First Quarter 2021 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Garth Russell with LifeSci Advisors. Thank you. You may begin..

Thank you, operator and good afternoon, everyone. Joining me on today's call are Brickell's Chief Executive Officer Rob Brown; Chief Financial Officer Bert Marchio; Chief R&D Officer Deepak Chadha; and Co-Founder and Chief Operating Officer Andy Sklawer.

Before I - we begin, I would like to remind everyone that this conference call and webcast will contain certain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ.

Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake any obligation to revise or publicly release these results - the results of any revisions to these forward-looking statements in light of new information or future events.

Factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Form 10-Q and 8-K as filed with the SEC.

I would now like to turn the call over to the company's Chief Executive Officer, Rob Brown. Rob, the floor is yours..

Thanks, Garth. Good afternoon, everyone and thanks for joining us on our call. Beginning of 2021 has been a very exciting time here at Brickell.

We continue to steadily advance our lead program sofpironium bromide through phase 3 pivotal clinical trials, evaluating it's safety and efficacy as potential best-in-class treatment option for primary axillary hyperhidrosis, also known as excessive underarm sweating. This year we've achieved some key milestones for sofpironium bromide.

First, we announced that patient enrollment was completed in the Cardigan 1 study, and the Cardigan 2 study surpassed 70% enrollment. As a reminder, both phase 3 pivotal clinical studies are evaluating sofpironium bromide gel 15% against placebo, and approximately 350 patients each with primary axillary hyperhidrosis.

Both Cardigan studies remain on-track and we expect to announce topline results from the phase 3 program in the fourth quarter of 2021. Second, we are pleased to have the results of our phase 3 open-label long-term safety study of sofpironium bromide gel highlighted during a late breaking oral presentation by Stacy - Dr.

Stacy Smith, at the American Academy of Dermatology 2021 virtual meeting experience in April. These results are important as they further support the safety, tolerability and efficacy data we previously observed in our phase 2b study.

Considering primary axillary hyperhidrosis is a chronic condition, we expect this long-term data, along with the two phase 3 pivotable clinical studies to form the basis for our prospective NDA filings. Third, in March, we hosted our first ever hyperhidrosis KOL event for investors, analysts and other interested stakeholders.

The event was led by two highly distinguished hyperhidrosis thought leaders and doctors, Adam Friedman and Joel Cohen [ph].

Through this event, we were able to share what many hyperhidrosis patients deal with in managing their daily lives, what the current treatment options are, and why we believe that hyperhidrosis remains an undertreated medical condition, adversely affecting their quality of life.

If you are unable to attend the event, I encourage you to watch a replay, which can be found in events and presentations on the Investor Sections of our Company's website. Now turning to our Japanese development partner, Kaken Pharmaceuticals.

As we've previously announced, Kaken is still in the early stages of its commercial launch of sofpironium bromide gel 5% in Japan under the brand name ECCLOCK for the once daily treatment of primary axillary hyperhidrosis.

The ECCLOCL launch is an important milestone for both companies, with Japan being the first country to approve sofpironium bromide for any invocation and ECCLOCK being the first topical prescription product for the treatment of primary axillary hyperhidrosis in the country.

As a reminder, Brickell is entitled to receive sales-based milestone payments, as well as tiered royalty based on a percentage of net sales of ECCLOCK in Japan. Finally, as a result of certain warrant exercises and proceeds raised through our ATM offering program, we've strengthened our balance sheet with $34.8 million of cash as of March 31, 2021.

This added financial stability provides us with sufficient cash runway to fund our operations into next year, and allows us to continue executing on key activities that will enable us to submit a new drug application with the FDA for sofpironium bromide gel in 2022, pending a successful outcome in phase 3 pivotal progress.

Let's now turn the call over to Deepak to provide a clinical update.

Deepak?.

Thanks, Rob. Greetings, everyone. As stated by Rob in his opening remarks, we have been pleased with patient enrollment today in the two U.S. phase 3 pivotal studies evaluating sofpironium bromide gel 15% for the treatment of primary axillary hyperhidrosis in approximately 350 patients each study.

As announced in April, the Cardigan 1 study completed its enrollment and the Cardigan 2 study, which started enrolling patients, approximately two months after Cardigan 1 has now exceeded 70% enrollment.

Based on the current enrollment rate for Cardigan 2, we remain on-track to complete enrollment in the third quarter, and report topline data for both studies in the fourth quarter of this year.

As a reminder, each subject participating in the phase 3 Cardigan studies will be treated with either sofpironium bromide gel 15% or placebo for six weeks with two week follow-up periods. The core primary efficacy endpoints as agreed with the U.S.

FDA or the proportion of subjects achieving at least two point improvement on the patient reported outcome assessment, that is the hyperhidrosis disease severity measure, axillary, or HDSM-Ax scale and the change in gravimetric set production, each from baseline to the end of treatment.

This is a good time to mention that we have recently published validation results for Brickell's proprietary HDSM-Ax scale in the peer reviewed Journal of Drugs in Dermatology.

The published cycle psychometric analysis concludes that the HDSM-Ax scale is a well-defined, reliable and consistent measure that is expected to improve the assessment of hyperhidrosis treatment effects compared to pre-existing scale such as the hyperhidrosis disease severity scale, or SDSS.

Furthermore, the results demonstrate that at one point change in HDSM-Ax severity score on a five-point scale of 0 to 4 represents a clinically meaningful change in primary axillary hyperhidrosis severity. Turning now to our previously completed phase 3 open-label long-term safety study.

It's worth noting that the standalone study was not conducted as a conventional phase 3 open-label extension study where patients from pivotal studies rollover into an open-label extension study.

As this study provides a more complete clinical datasets evaluating treatment naive primary axillary hyperhidrosis patients who were not previously acclimated to sofpironium bromide gel treatment.

As many of you may already be aware, the results from the study were presented last month in a late breaking oral presentation at the American Academy of Dermatology's 2021 virtual meeting experience.

This study assessed the long-term safety and efficacy of sofpironium bromide gel 5% and 15% for 48-weeks of treatment in patients nine years and older with primary axillary hyperhidrosis. 300 patients across 30 U.S. sites were randomized in 1:2 ratio to receive either sofpironium bromide gel 5% or 15%.

Based on the outcome of the study, daily treatment by sofpironium bromide gel was generally well tolerated, and efficacy assessment showed clinically meaningful and sustained improvement in sweat severity through the 48-weeks of treatment.

For those interested in reviewing the results of this study in further detail, feel free to visit the Events and Presentations Page in the Investors Section on our website for a replay of the conference call we hosted in April discussing the data.

Finally, the past few months have been very productive for the company, and we are well positioned to execute on our goals this year.

The progress we continue to make speaks not only to the strength and resilience of over efficient and committed team, but also the excitement we have about the potential of sofpironium bromide to be an important treatment option for the millions of patients in the U.S. that suffered with primary axillary hyperhidrosis.

With that, I will now turn the call over to Bert Marchio to provide a financial overview.

Bert?.

Thanks, Deepak and good afternoon to everyone on the call. Before I provide a summary of the first quarter financial results, I want to encourage you to read our full consolidated financial statements and MD&A contained in our Quarterly Report on Form 10-Q, which can be accessed through the Investors Section of our website once filed with the SEC.

Starting with cash and investments. As of March 31, 2021 we reported $34.8 million in cash and cash equivalents, having spent $5.9 million in cash for operating activities during the first quarter of 2021. We believe our current cash position will support our operations beyond the topline results of the U.S. phase 3 pivotal program and into 2022.

Revenue for the first quarter was approximately $17,000, which was the royalty revenue we recognized from the sales of ECCLOCK in Japan by our Japanese development partner, Kaken.

This was compared to $1 million in total revenue reported for the same period in 2020, which was attributable to the recognition of an R&D payment we received pursuant to our license agreement with Kaken. R&D expenses were $6.1 million for the first quarter of 2021, compared to $2.7 million for the first quarter of 2020.

This increase was primarily due to an increase in clinical costs related to the phase 3 Cardigan studies that were initiated in the fourth quarter of last year. G&A expenses totaled $3 million for the first quarter of this year, compared to $2.5 million for the first quarter of the prior year.

This increase was primarily attributable to increases in compensation related expense and professional fees. Lastly, net loss for the first quarter of 2021 was $9 million, compared to $4.1 million for the first quarter of 2020. With that, I will now turn the call back over to Rob.

Rob?.

Thanks, Deepak and Bert for your recap. This is really an exciting time for Brickell as we continue to work together and build momentum behind our ongoing phase 3 pivotal clinical program. This concludes our prepared remarks. I'll now turn it over to the operator to open it up for questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from the line of Leland Gershell with Oppenheimer & Company. Please proceed with your question. Leland, you're live.

Are you muted on your side?.

I'm sorry, I put in out muted. Here we are. Hi, sorry about that. Good afternoon, thanks for taking my questions. I hope you can you hear me okay now. I have a couple of questions for you. One, looking back to the long-term safety study uptake you provided and talked through at the end of last month.

I wanted to ask you as we look at the data from that - understand that this wasn't a formal efficacy study but a long-term safety study. Nonetheless, if you look at the two different doses of the 5% versus 15%, it looks like you approached efficacy of the 15% with the 5% albeit with perhaps so much more favorable tolerability profile.

I'm wondering how that information may affect your thoughts going forward with product development? Could that be perhaps an extension strategy in the future for the U.S. market? Obviously, 5% I believe that the Japanese strength. So wanted to hear your thoughts there.

And also the question with regard to the sale but I really have [indiscernible] another company, and how that may affect the marketplace dynamics in hyperhidrosis space going forward? Thanks..

Sure. Hey, thanks for the questions, Leland. I'll start with the long-term safety, and Deepak, if you want to add, feel free. So, obviously, we were excited about the efficacy data, we saw the fact that the both the gels did quite well, and held and sustained their efficacy over the whole study.

The PRO [ph] that was used for the long-term safety study was similar to the one we used and the same as we used to in the 2b, and is one of our primary endpoints in the phase 3. And in the 2b, we also saw that the 5% and 15% on the PRO [ph] had relatively similar efficacy.

We didn't see that in the reduction of sweat measurement, the GSP tool, which is why we focus on 15%. But it does give us encouragement that that there may be the potential to look at a 5% down the road for the company.

Deepak, anything you'd like to add?.

I think Rob you covered the aspects with the GSP and meeting the second core primary endpoint, the reduction in sweat, the GSP; and that's the primary reason we are taking the high concentration 15% as part of the phase 3, and always, you know, like - we will be interested as part of the lifecycle management to bring the lower concentration of sofpironium bromide..

And in terms of the second question, Leland, the - in terms of the sale of Qbrexza, we were encouraged by that.

Obviously, the launch of Qbrexza has been hindered by Dermira's decision to focus their resources on a different asset, sell the company, then obviously, a pandemic, and then Lilly acquiring the asset right at the beginning of the pandemic; so it never really got fully engaged, if you will.

And then - obviously, then selling it to another party; that's a pretty tough launch for some - for a product to go through. So we're encouraged that there is a company that's focused on dermatology, that's going to go out and talk about hyperhidrosis.

When you have a marketplace like this where there is a big need and a lot of people who aren't seeking treatment, awareness of the condition and that there are treatments is the most important challenge. And in many ways, all the companies involved help each other in the sense that they create greater awareness and greater noise.

And when you do that, you get a bigger marketplace. So we see one of our biggest competitors being ignorance or lack of understanding that there is treatments out there, and so having somebody who is committed, dedicated and excited about the space is - I think can only help us as we go forward..

Thanks very much for the additional color..

There are no further questions. I'd like to hand it back to Robert Brown for closing remarks..

Okay. Thank you, operator. And thanks everyone for taking time this afternoon to listen to our update. I want to close out the call by thanking the clinical trial sites, and the hyperhidrosis patients for their ongoing interest in support of our phase 3 clinical program.

Not to mention, the principal Brickell team of the contract research organization for their outstanding commitment and tremendous patience [ph]. We look forward to keeping you all updated on the progress of these studies for the coming months. As always, please feel free to reach out to us anytime with any questions.

And we hope you all have a great rest of your day..

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day..