Praxis Precision Medicines, Inc. (PRAX) Q1 2022 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Praxis Precision Medicines First Quarter 2022 Corporate Update, Question And Answer Conference Call. At this time, all participants are in a listen-only mode. After a short remark, there will be a question-and-answer session. [Operator Instructions] And now, my pleasure to hand the conference over to your first speaker today, Alex Kane, Vice President Investor Relations and Corporate Communications at Praxis. Thank you. Please go ahead.

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, and 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 beliefs 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.

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

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 guys 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 similar demographic? Thank you.

Thanks so much for the question. I would say -- maybe I will start from the end there. Like the involvements population for Essential1 is likely different than 944-221 [Indiscernible] very proud and very excited to have been used today. The key components there, there's a difference, is that we could not allow our patients with patients with doctor’s appointment Lam score less than 10 on Essential1, which would be although kind of related to your first question, that's where we learned conducting this studies and looking to other data in this space as well. There has to be in order to be -- like a little bit more homogeneous, a certain level of 3M or at baseline. We went through a fairly broad as 944-221 was to a limit more restrictive, some on the higher than them. And that would allow us, we expect to show even more clear results, not that we believe we needed based on today's data on the Essential1 coming up. And the enrollment on the trial is going pretty well. We are -- we've reinforced today and we will continue to reinforce the results by the end of the year. I'll hand over to Bernard for any other comments here about the [Indiscernible]

The point about the population is a key one, and then they got a couple of other key lessons. One, is we learn 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 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.

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

There were -- there was one person who had a discontinuation, totally unrelated to PRAX -114. So they needed a procedure for something that they had medical condition they're had going in. So it's totally unrelated. And then the other discontinuations -- one was dizziness and the other was primarily fatigue. So all the AE's there were mild-to-moderate. There's only one severe AE which was worsening of tremor when drug was withdrawn. So overall really well tolerated.

Thank you so much, guys.

Thank you.

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

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.

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's so many alternatives right now as you can imagine with such a robust rebounds after renewal of the drug. It gives us all the more confidence on some of the aspects that were unclear, like which dose should be [Indiscernible] and things like that. So we're working on all of that. In favors off the end points, 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 to the AGL, originally, as designed, we've already pretty good assessment assumption. The [Indiscernible] -- the ability to back more of this floor. That's one of the reasons why the agency is suggested. There is strongly, may I say, that we modify the way that [Indiscernible] 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 will 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 end point is very clear. Now, whether or not the new design will be registrational, that's a matter of discussions with the FDA after we found 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 trails, which we'll be incredibly pleased to do it as well for drug selective.

Thanks very much. Congratulations.

Thank you.

Thank you.

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

Good afternoon, guys. Thanks for taking the question. Now that you've gotten last patient last visit in Aria, I just wanted to check in on final conduct, data retention, et cetera. And can you tell us when 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 share differential efficacy? Thanks.

Of course, we appreciate the question. A couple of things here, one we're wishful that the clinical trials [Indiscernible] would be up as we speak with you. You're going to see that hopefully in the next few hours or by tomorrow. So the last patient last visit was on the 5th, so last week. That is the safety visits. Obviously, those were before that a few weeks before that. So that's really the last update that we needed to be completed. The patient showed up at the day he was supposed to, and so we were able to complete the study by itself. Now, the next phase here is obviously clean up all the data, making sure that we can lock the database in due time, and then reports. From an underlying assumptions perspective as we mentioned in the video, we're pretty happy with all the assumptions that went in. Now, this is behind us. We haven't seen the unblinded data yet. Of course, the database is not locked, but it gives us great confidence that from a conduct perspective, we are in good place. Two aspects here. Now, every time we run a control trial, both the drug and placebo have to behave as one expects. I think we're more confident than ever about placebo would give behave the way we've expected by averaging we know. But that alone wouldn't give us the separation and the overall profile that we expect. Why are we so confident the drug behave the same way? To our knowledge, this is the only drug in development that has predictable exposure. Once we give to the patient, we fold out foods, we -- without cheese burgers before bed time since we're going to get the exposures that are necessary. That is fundamental, right? No drug in the brain, no effects, and no carryover to the next day. The ability to dose the drug [Indiscernible] see from our side effect profile in the conduct itself, being obsessed with conduct from day 1, not changing the endpoints, is sticking to the conduct, is sticking with fuel sites being really other than a little [Indiscernible] about how to conduct gets us to this point that now we are just cleaning the data and we're going to have the results to discuss in due time.

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

I don't hate them, but I'm [Indiscernible]

Not every night.

Not every night.

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

Hi. Good afternoon. Thanks for taking the questions and congrats on the data. Just may 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.

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

One of the previous questions, what do we learn? I think we -- the reason we're changing it Essential1 to efficacy study is because we've learned what we need to know to conduct an efficacy study. Those big questions are, who's the right population and can you measure response? We talked about people with adequate baseline severity to understand the dose range. We do and we understand that we can tell -- we can titrate people up with good tolerability. We have a clear efficacy signal, which I think is remarkably clear from above the open-label and the randomized withdrawal. And we understand the endpoint and so implications are, we understand how to put together an efficacy study now and then, I think it's a matter of discussion with the agency like Marcio said. This serve as one of the pivotal studies, but it has all the key ingredients and we'll come back with more specifics about what that amendment and redesign will look like within the footprint of what we already have going in the Essential1 study.

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 make change, to make sure that plan in particular is done appropriately so that it could function as a registrational study?

Yes. Doug, the interesting thing is when we submitted the regional proposal for [Indiscernible] CGP to the agency, they specifically noted one would have to do in order to make Essential1 registrational. We chose not to. Then we have a very good idea on 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 change saw more than simply in terms of the size or the act or the endpoints, obviously we would reach out, make sure we have their buy-in before the SAP is finalized.

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

Sure.

Your next question is from Myles Minter with William Blair. Please go ahead.  Q - Myles Minter: You're gonna 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's been some recent FDA interactions in schizophrenia's pace where if not all the dose is a positive, and it's not aligned with the stat's plan, then technically is not a positive trial. Well, what are your thoughts all around that? Thank you.

Myles, there are a number of ways to do it as you well know, And this is still pretty much in flux right now. We do believe we have a very good understanding on which dose should be the most used. And we're going to hold that a little bit close to the vest right now. You're going to hear that soon. There are ways to prioritize one of those if we choose to do that and make the other one a secondary, or even to combine exposures at a given dose at a given time point. We're exploring different ways. I completely agree -- I think we all here completely agree with your statements. Whatever review has to be very clearly justified and spelled out in the new protocol because we're going to have just to meet that amendments. And subsequently, [Indiscernible] plan and that's sent to the agency, wait for comments, and so on. We're not very fortuitous because we're in May. We know all of this right now. We have plenty of time to consult with the agents while we continue to make the adjustments to Essential1. But very, very good points. As we are learning more about the type dependence of the effects, which those -- that would saturate the effect. I think it is going to be very straight forward but we're going to cross -- we're not going to cut any corners. We're going to [Indiscernible] towards the end of this day.  Q - Myles Minter: I'll hop back in the queue. Thanks.

Once again, ladies and gentlemen, [Operator's Instructions]. Your next question is from Laura Chico with Wedbush, please go ahead.

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.

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 [Indiscernible] indication falling out with a little bit of delay in our [Indiscernible] 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.

Your next question is from Myles Minter, William Blair. Please go ahead.  Q - Myles Minter: Yeah, Just [Indiscernible] I have the data released this afternoon. It does look as if when our patients come off job that they pretty much cannot draw in a circle, but they kind of put a baseline. I wonder what your theory is. Is there a dependency [Indiscernible] 944, or like, why would a patient that's come off drug not be able to enjoy that circle if they couldn't by fun. And that's just one patient. Did that happen for everyone who had a response to 944 under trial? Thanks.

Thanks for the question, Myles. There's definitely -- when you remove a drug and people are tremoring [Indiscernible] it's working, there can be brief trends in overshoot worsening, really not a physiologic dependence. Nothing like that. There are no signs of withdraws, just the tremor rebounds. And so it seems like that's a Day 56, a Day 70, they go back to their baseline. No, it does not happen in everybody, it is not unique to this class because you see it with other medications, including clinically, and its transit.

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

Hi, guys. I think you mentioned that eight of the 11 patients, I believe, if I was reading this -- reading my 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 reduced? What were these symptoms that drove it and what dose they had the dose reduced to?

And maybe just a reminder, you're right, Ritu, and then I'll hand over to Bernard is, we allowed for dose change into day 36 on the study and after that they had to be stable to enter into the randomized withdrawal [Indiscernible]. So that's one important phenomena here. The second is, when you look into our PG 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 to talk a little bit about the optionality and what we've seen.

I just want -- Rita, 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 AE that you see with CNS drugs, dizziness, there was difficulty paying attention and focusing. For the most part, those AEs 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.

Got it. Thanks.

Thank you.

[Operator Instructions] Your next question is from Douglas Tsao with H.C. Wainwright. Please go ahead.

Hi. Thanks for taking up 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.

Yes. That is an incredibly important question and one what's one of the first things that we log into the data without like the last few days. The vast majority of the patients are respondents on the ADL, and all the patients once you remove the drug lost response. And I think that's quite important because obviously they get no cure on drug. So they -- and this is a seven-day look-back on their lives on the things that there were able to do or not do. One of the interesting things about the future when the FDA asked us to rescore the ADL, is that by removing the zero in each one of those items, you make every other item clinically meaningful because now every change is for not being able to do something, to be able to do something. Or unfortunately in some case years they actually remove the drug they lost that ability. So what we're seeing is a very clear gaining functions back on their life, and then when you remove the drug, progressively losing those functions. The half-life of 944 is fairly, I would say short, was by design that way so you can get [Indiscernible] during the day. But it's very clear it's necessary to continue dosing. Otherwise, it gets worse here. So it's unequivocal in our view that the any change on the ADL would be important and that the vast majority of the patients got those changes. The one that didn't not respond at all, which we're a few of the patients in this study, they really didn't respond throughout, which gives us confidence, 1. If it was on the open label that there are responders and non - responders. But now we have the benefit of randomizing these patients. They -- we don't know once more if they end up on drug or placebo. There's no functional binding here as Bernard just mentioned that DEEs happen at the beginning of the treatments. So the time they've got today for the [Indiscernible] that's really not a lot going on in terms of adverse events. So they really didn't know. And then when you remove the drugs, such a dramatic change on the ADLs and not happening at the same -- on the ones that keep on the drug, that just gives us confidence that now we'll just run to the [Indiscernible] to raise -- to make sure we can get this drug to patients in the market.

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

Great. Thank you so much.

[Operator Instructions]. Now, your next question is from Myles Minter with William Blair. Please go ahead.  Q - Myles Minter: 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.

Myles, the patient does not object to measure of response, but I'll give you a little bit of an idea of what happened here. We had one more patients randomized, as you know, to one group than the others since it was a large number. The patients there who were randomized to placebo had a numerically bigger response. It should be obvious by the numbers. We're just reinforcing that. But the one interesting thing is every one of them returned towards baseline. So there was no a super - responder or a loss responder, and others that stayed flat. While the ones that are stable are online [Indiscernible] they manufactured more like the typical group that stay on drug, which made this incredibly clear that there was -- the drug was still active. We're just seen small variability here and there. [Indiscernible] but very large change virtually all of them moving back to baseline, or even overshooting a little bit, which is not uncommon with CNS active drugs as you all know.  Q - Myles Minter: Thanks for the color in all the questions. Appreciate it.

[Operator Instructions]

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

Hi, guys. Thanks again. One last question. How is -- any comments on screen failure rates or the screening protocol going into the Essential1 study to help to understand to capture homogenous population? Any color on that would be helpful. Thank you.

Thanks for the question again. We haven't discussed that before, but it might be a good point to discuss how we do it. Just like Aria, and you also heard myself, Bernard, Tim, the entire team here at Praxis reinforcing how we stress our screening criteria for MTG, it's not any different. For Essential1, we have a central reviewer of severity as should be general concordance, otherwise the patients are excluded. We are seeing a number of patients getting excluded because they are not stable or they're not severe enough. I think we just saw here how important is that we stay true to that measure. If it's ramping up, I would say there is not necessarily critical mass that I will start talking about exactly what the ratio is. I think once we started talking about -- for Aria, for example, we have like three-quarters [Indiscernible] enrollments and gives us better like confidence on the numbers. But it is not as mall. We are excluding a significant number of patients from coming to trial because they cannot show that they're severe enough to participate which gives us great comfort actually that that's the right thing to do. We might now be able to provide other alternatives to these patients through different mechanisms, but, to be able to show this drug is efficacious meets the regulatory statutory definition and get the drug approved, that's in grab to stay the course. Moments though, was going too well before and the drug is going to continue to grow even better now that we have the majority of the sites in the US open recruiting patients is screening them actively every week.

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 can get -- 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 above -- at or above 10 points up.

Great. Thank you.

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

So thank you so much and thanks [Indiscernible] for joining, for supporting us and all those patients up through all the journey here. A couple of points I wanted to make just to close. We promised to deliver [Indiscernible] results in May. Here we are, we delivered. We promised you that [Indiscernible] results for [Indiscernible] in June, and that we're going to be the user build results, and then four more readouts after that. All of this, taking very good care for the shareholders. All the 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 resource, 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 [Indiscernible]. And we believe strongly here at Praxis to stay 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, translational data, giving clinical data to these patients, 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 you all soon.

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