Inhibikase Therapeutics, Inc. (NASDAQ:IKT) Q2 2024 Earnings Call Transcript

Inhibikase Therapeutics, Inc. (NASDAQ:IKT) Q2 2024 Earnings Call Transcript August 15, 2024

Operator: Greetings and welcome to the Inhibikase Therapeutics Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief 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, Alex Lobo, Precision AQ, Investor Relations. Thank you, sir. You may begin.

Alexander Lobo: Good morning, and welcome to Inhibikase Therapeutics’ Second Quarter 2024 Financial Results Conference Call and Audio Webcast. With me today is Dr. Milton Werner, Chief Executive Officer; and Garth Lees-Rolfe, Chief Financial Officer. On August 14th, Inhibikase issued a press release announcing financial results for the second quarter ended June 30th, 2024. 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 Form 10-Q 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 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, August 15th, 2024. 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 webcast, except as may be required by applicable securities law.

With that said, I would like to turn the call over to Dr. Milton Werner. Milton, you may begin.

Milton Werner: Thank you, Alex. Thank you everybody for joining us today to review our second quarter 2024 financial results and recent clinical and business updates. We’ve been very pleased with the strength of our clinical progress through the first half of 2024. The speed at which we executed on key clinical and regulatory milestones has underscored what has been a very successful quarter marked by the accomplishment of many exciting achievements. We recently completed an enrollment for our Phase 2 201 trial for risvodetinib or often referred to as risvo in Parkinson’s disease, which is a significant milestone that we have been working tirelessly towards in an effort to bring risvo to patients suffering from untreated Parkinson’s disease and we expect to report top line data from the trial in November.

Additionally, we have had a productive engagement with US FDA over the past few months regarding IkT-001Pro’s opportunity in pulmonary arterial hypertension or PAH. Imatinib, the active ingredient in IkT-001Pro has previously been shown to be disease modifying for PAH and we believe that Pro has the potential to further demonstrate safe and efficacious treatment in PAH patients, using our novel Pro drug technology. We filed the IND for PAH and plan to open clinical development with a de-risking Phase 2b study as soon as practicable. Let me take a deeper dive into each of these programs, as we expect the back half of 2024 will be a catalyst for each period. Let me first start with risvodetinib. Risvo is a potent selective inhibitor of c-Abl that is administered once daily, that we believe may slow or halt the progression to Parkinson’s disease.

Our 201 trial was a two-phased trial with a 12-week double-blinded study across three doses plus placebo, for which enrollment has been completed. As of July 29th, 41 mild and eight moderate adverse events have been observed that may be related to risvo treatment. We’ve had six people withdrawn from the trial without completing 12 weeks of dosing. Looking ahead, we expect to report top line results evaluated in the safety and tolerability of risvo in untreated Parkinson’s disease in November of this year, following completion of the 12 week double-blinded period. We anticipate meeting with the FDA by year’s end to discuss our plans for Phase 3 and intend to launch a 12 month open label extension study as soon as possible. Moving now to IkT-001Pro, our Pro drug formulation of imatinib mesylate that has been designed to potentially improve the safety and tolerability profile of imatinib.

We continue to make significant strides in the advancement of the Pro drug through our ongoing discussions with the FDA. We received final meeting minutes for our pre-IND meeting for pulmonary arterial hypertension in May and filed the IND on August 9th to open clinical development later this year, subject to the receipt of the study may receive letter from the agency. PAH is a rare disease of the pulmonary microvasculature. PAH can arise spontaneously or can be caused by genetic mutations by drugs or environmental toxins. PAH is also associated with connective tissue disease, congenital heart disease, HIV infection and other insults that could affect the right side of the heart. Most treatments for PAH attempt to address symptoms of this progressive disorder, but the recent approval of sotatercept highlights that disease modification is possible.

We see tremendous opportunity in PAH, which has a global market valued at $7.7 billion annually worldwide. Imatinib, the active ingredient Pro has already been shown to be disease modifying more than 10 years ago, but the side-effect profile observed at that time precluded approval. We believe that Pro has the potential to achieve similar potency to imatinib mesylate, without the side effect profile that disqualified imatinib from approval studies, reported in 2010. Based on our constructive discussions with the FDA, we believe that we have alignment on our proposed Phase 2b trial design, and at the pre-IND meeting, the FDA confirmed that 001Pro would be viewed as a new molecular entity for PAH and that the appropriate path of approval appears to be 505(b)(2) statute.

Further, following the advice provided in our pre-NDA meeting with the FDA in January, we have scaled our manufacturing and process development efforts for Pro to support late-stage clinical development and NDA batch requirements. Activities include development of new dosage forms to differentiate 001Pro tablets from generic imatinib mesylate in alignment with the FDA feedback. Finally, turning to risvo Multiple System Atrophy or MSA, we are currently exploring alternative financing opportunities, including potential grant funding, through a new funding mechanism of clinical development, and neuroscience from the National Institute of Neurological Diseases and Stroke or NINDS. We look forward to advancing this program forward and providing further updates as on the program as appropriate.

Separately, we are also developing new antibody diagnostic and clinical biomarker tools that we believe will further differentiate the Company’s efforts in Parkinson’s disease and enable analysis of both target engagement and potentially disease modification. Both of these efforts are being pursued through two grant applications that are under review by the NINDS. I’d like to now turn the call over to our Chief Financial Officer, Garth Lees-Rolfe to review our financial results for the quarter. Garth?

Garth Lees-Rolfe: Thank you, Milton. At Inhibikase we remain committed to being good stewards of capital, as we’ve launched multiple high-value programs in both neurodegenerative and cardiopulmonary disease. As we approach multiple inflection points this year, we are pleased to bolster our balance sheet in May, raising $4 million in aggregate gross proceeds from our registered direct offering and concurrent private placement. These funds extend our cash runway into December 2024, and are sufficient to see us through top line data for our 201 trial in Parkinson’s disease. Now I’d like to take a moment to review highlights from our financial results for the quarter ended June 30th, 2024. Net loss for the quarter ended June 30th, 2024 was $5.0 million or $0.66 per share compared to a net loss of $5.8 million or $0.94 per share for the quarter ended June 30th, 2023.

Research and development expenses for the quarter ended June 30th, 2024 were $3.1 million, compared to $4.5 million for the same period in 2023. The $1.5 million decrease in research and development expenses was due to a decrease of $1.4 million in IkT-001Pro expenses, due to the completion of the three-part dose finding dose equivalent study in 2023 and a net decrease of $0.1 million in other research and development expenses. Selling, general and administrative expenses for the quarter ended June 30th, 2024 were $2.0 million, compared to $1.8 million for the same period in 2023. The $0.2 million increase was primarily driven by a $0.4 million increase in legal and consulting fees, partially offset by $0.1 million decrease in D&O insurance and a $0.1 million net decrease in all other normal selling, general and administrative expenses.

As of June 30th, 2024, we had $7.9 million in cash, cash equivalents and marketable securities. We expect that existing cash and cash equivalents will be sufficient to fund operations into December 2024. That concludes our review of our financial statements. I’d like to hand the call back over to Milton for closing remarks.

Milton Werner: Thank you, Garth. We expect the back half of the year will accelerate the momentum that we have seen through the first half. We’re proud of the hard work we put in by our clinical investigators across multiple trial sites and we appreciate the continued support we receive from our dedicated shareholders. We have multiple exciting near-term milestones we expect to achieve, including top line data from our 201 trial of risvo in Parkinson’s disease and anticipate the opening of clinical development of IkT-001Pro in PAH that will further differentiate our pipeline of neurological and cardiopulmonary assets. I’d like to now open the call to questions. Operator?

Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Jason McCarthy with the Maxim Group. Please proceed with your question.

Jason McCarthy: Good morning, Milton. Thank you for taking the question. As far as the risvo Phase 2 study in the last update back in June, around 70 people had completed the 12 weeks, you completed the enrollment obviously the data is coming in November. And you had mentioned starting up the 12-month OLE. Is there going to be some lag time between when patients complete this trial and when they have the option to move to the OLE? And is there the potential that they might opt for symptomatic treatment during that time?

Milton Werner: Well, so the answer is that’s already been occurring. I believe currently 89 people are completed in the trial that leaves 31 total who are still on medication. And the last person will exit the trial in late September because it’s an ongoing trial. We’ve had people that have completed treatment of 12 weeks as long as nine months ago. I believe it’s the oldest patient who exited the trial. And while we have been trying to get the OLE study running in a full force, we’ve done all of the preparative work. We’ve completed now all the regulatory steps as well as the Ethics Review Board steps. We’ve had some financial constraints, but I think those have mostly been worked out now and I hope the OLE will be formally launched in the coming couple of months when we start our current thinking.

And so, yes, it has a potential impact on patients, some of whom because of the progression of their disease following 12 weeks of risvodetinib treatment who may go on to symptomatic meds, and we are tracking the number of people who have done that. So far, it’s been a small group. The patient experience at least what we hear anecdotally from the sites has been extremely positive on the drug that doesn’t necessarily mean anything. It just means the drug did make them feel badly, so that’s a good sign. But we don’t draw any conclusions from that kind of anecdotal commentary and we’ll be communicating this month with all of the sites about the time lines we anticipate for launching the 12-month study with full force. And some of the people in the trial may actually be on symptomatic meds, as you know, Jason, most of these extension studies are there to develop and begin to collect a safety database.

And so in our view, we also wanted to have as much measurement in the absence of symptomatic medicines we can, at least at the last measurement point we had about 1.5 weeks ago, very few people have gone on symptomatic meds given the number of people in the trial. And so if this thing launches in the time frame we’re now thinking, we should get most of the people who have not started symptomatic meds and some who have which will help us learn whether people on symptomatic medications tolerate the addition of risvodetinib well. And what additional benefit that it might have can’t be gleaned because there’s no control group. But nonetheless, we’ll be able to see if there’s any effect one way or another on the benefit of symptomatic therapy itself.

So it could be ultimately informative.

Jason McCarthy: Thank you. And so when you think about the Phase 3 program, would that entail two studies, and would you be looking to go out beyond three months to 12 to 18 months, targeting avoidance of use of symptomatic treatments. Is that the goal?

Milton Werner: Right. So Parkinson’s disease so even though we’re evaluating untreated Parkinson’s disease, that is not a subgroup of patients. We’re evaluating untreated Parkinson’s disease because we believe risvodetinib is monotherapy and disease modifying, although we have not proven yet that it is disease modifying in the disease. That’s what all of our preclinical and animal model data informs us about. So we want to evaluate with risvodetinib in Parkinson’s without any confounding components of other symptomatic therapy. We’ve developed patient recruitment tools that are, just in our view, spectacular. We don’t think we’ll have any trouble recruiting the patient population, will need 300 or so patients rough guess for a pair of Phase 3 studies, and it would have to be a pair of studies unless some miracle happens because you must do that for such a large market opportunity.

There’s just too many patients out there. It’s not a rare disease or often disease. There will be two Phase 3 trials. They will be dosed for up to 12 months. Historically, people don’t — in every other trial that has been run in the space, medications that were intended to alter the course of the disease have failed with virtually no exceptions. The one possible exception was a GLP-1 related molecule last year from that was reported earlier, early part of this year, that seemed to slow motor dysfunction in the absence of anything else, but people were on symptomatic therapy even in that trial. So in our case, we’re going to be enrolling significant number of people that will be a 12-month dosing trial. There’ll be two trials running at the same time and they’ll be global.

Jason McCarthy: Got it. And you said you had near alignment with FDA on the Phase 2b for PAH. Can you provide us any details on the size and scope of that study or is that forthcoming still?

Milton Werner: No, I think it’s probably okay to give you just a rough idea. So we initially imagine this to have an initial safety run-in, so that we could confirm that with prodrug at appropriate doses in a properly enrolled trial, where we’re really looking carefully at the patient enrollment and the degree of visibility the individual patients have. But we could have people in the trial that have a real unmet medical need and could actually do all the tasks that the trial would require and run a Phase 3 right in the back end. But as we thought through the process, it makes more sense to have a derisking trial first. So that’s formally a Phase 2b. It’s roughly 100 patients and two doses in the placebo, placebo-controlled.

We’re going to do a 12-week or at least we plan to do a 12-week safety review when half the patients have been enrolled and completed 12 weeks of dosing. And then we’ll do a futility analysis when half the people have completed 24 weeks, which is the length of measurement duration. So the trial itself will be — is designed to look carefully at safety to make sure that with a fresh view and a fresh approach and prodrug that has the potential to really change the tolerability and safety profile of imatinib itself that we’ll be able to overcome the very unfortunate side effect profile that disqualified imatinib from approval 15 years ago. And at that point, it’s a rare disease. If we see the efficacy that was previously proven for imatinib, combined with safety, that could be adequate in principle to seek approval on a conditional basis, to support going into a Phase 3 if approval cannot be sought on that basis depending on the overall benefit and safety profile we observe, et cetera.

So the IND has been filed. Of course, this trial design has already been reviewed by the FDA, and that was a part of their concerns in terms of designing a trial and bringing this drug forward again. And so we’re pretty confident that the IND is going to clear. Naturally, of course, prodrug has been in people. It was reviewed by Cancer Division. We’ve already had pre-NDA discussions in the cancer, in one of the Cancer divisions. So there’s little, it seems unlikely that there would be any issues that arise in the review by the Cardiology Division about letting the study go forward.

Jason McCarthy: Great. Thank you, Milton.

Operator: Our next question comes from Ed White with H.C. Wainwright. Please proceed with your question.

Edward White: Good morning. Thanks for taking my question. So just wanted to get a little bit more clarification on risvo. Milton, what do you want to see from the top line data that you’re going to get in November to proceed to the Phase 3 and then just can you clarify the 300 patients for both trials, so 150 each or is it 300 patients per trial that you’re thinking of for the Phase 3?

Milton Werner: Well, let’s deal with your second question first. It’s somewhere between, I believe just taking this off the top of my head because we’re still refining the trial design. It’s about between 300 and 400 patients to cover both trials. That depends on the effect size that we’ll ultimately shoot for in the trial. We need to see the unblinded data in November to finalize our viewable effect size, but we believe between 300 and 400 should cover the needs for both trials at least at current thinking. In terms of what we might expect to see in November, when the trial was originally established, no one would have thought that 12 weeks of treatment would be adequate to see a very substantial impact on the course of the patient’s disease.

We worked very hard with the design of the 201 Trial to make sure that we have a fairly uniform population of people enrolled who have not taken symptomatic medications, who have very significant visibility measured by a set of Parkinson’s disease assessments, the same type we’re using in our secondary endpoints and try to have that group to be roughly the same level of disability across most people. We’ve previously presented at Parkinson’s disease related meetings that our baseline scores were very substantial. Part 3s were in the 30s, excuse me, mid-20s. Part 2 scores of the UPDRS were in the mid-10s, that’s a very substantial disability, and that would allow us to see whether 12 weeks of treatment could show any effect on motor or nonmotor features of disease by a variety of measures, including measures in the gastrointestinal tract, one of the primary organs of disease.

As the data has evolved, we’ve remained very encouraged as we see what the measurements in patients have been like. Of course, it’s blinded data. We don’t know what that means. We’ve done the same with biomarker measurements which have further made us feel encouraged by what could be coming. Again, that’s just a hypothetical stuff. You don’t know what you’re going to see until it’s unblinded. But that combination of seeing trends across one or more assessments coupled with the potential of seeing an effect on the underlying protein pathology itself through our biomarker studies inside and outside of the central nervous system, I think, will give us a very robust support even though it’s only 12 weeks, it has the potential of giving us very robust support to go directly into Phase 3 without further studies.

The open-label extension study, which we hope to be fully launched perhaps in a couple of months more time because of the aspects of getting the whole thing fully functional across 32 sites in the US. We will remain an important aspect of this as we continue to gain safety and patient tolerability experience at different doses now using our tablet dosage form, which we made public about a year ago, which has a better delivery profile compared to the current profile using 201 Trial. And so we’ll be very well positioned for Phase 3, hoping that between the FDA meeting and our other efforts sometime in the latter half of next year that those trials could launch, which would just be with the assumption that you do something by the fourth quarter of next year, just hypothetically speaking, that’s roughly four years from ground zero.

It’s a pretty fast development program and a very large market opportunity. I think that just reflects the smoothness with which risvodetinib has continued to show a good patient safety and tolerability profile, and in November, we’ll learn whether we also see the indication that it’s having an impact on disease even if that impact is small, as one might expect for a 12-week dosing study, seeing anything at all in 12 weeks would be very surprising still, but we’re encouraged by what we’re seeing emerging in the trial overall.

Edward White: Okay. Thanks Milton. And then just on 001Pro. What are your expectations for IND clearance? Are there any gating factors to start the trial or locating sites, manufacturing of drug, any gating factors at all that could delay the start of that trial? And when do you expect to see it start?

Milton Werner: So the patient population for pulmonary arterial hypertension is a really delicate patient population. They’re literally dying as they’re being enrolled. It’s a rapidly fatal disease. And as a consequence, you really have to be mindful of all of those factors. In addition, because these patients are dying and we’re working with a medication that’s already proven to be effective, once you start dosing them, every patient, you have to be able to enroll every patient into an extension study for as long as it takes to get to approval. So you’re never losing the patient along that path. That creates a lot of infrastructure challenges to build up. We think it’s going to take approximately 9 to 12 months to gear up the whole trial, rough guess, as we start to think through this process and put in the elements of the execution of that trial in place.

And we know all the sites, fortunately, their recent study of the approved drug sotatercept, which was developed by Acceleron and then approved by Merck following their acquisition of Acceleron in 2021, gives us a lot of insight into sites worldwide that should be used for the study, that have a good flow of patients, the right patient characteristics. And one of the big advantages we have is that just as we’ve done in Parkinson’s disease, where rather than having internal medical team that has some experience in the disease area, we build a relationship with the leading clinical and scientific investigators worldwide and they work intimately in company in Parkinson’s disease. We’ve now done the same thing in pulmonary arterial hypertension with the two leading investigators worldwide very closely associated with the company now for clinical studies that allows us to also pick sites that are well understood, led by proper clinical investigators who both can do trial work and understand the patient population well.

And there are a whole bunch of other features that in the future we’ll have an opportunity to discuss that we think will also make the trial run efficiently. Of course, the biggest factor is capital. We have reported yesterday, we have about $8 million in cash at the moment, not adequate to do trials of this kind, obviously, and that’s another aspect that we’ll have to improve on if we’re going to execute this trial at all. And but we believe that as we work towards building up the trial aspects, we’ll see opportunities to have the trial properly funded and support that work because one of the real advantages what’s gotten us excited about this opportunity, having created the prodrug is that imatinib has already been shown to work. We have a number of data points, both in the preclinical toxicology setting as well as some information from the clinical studies we’ve done with Pro that supports our belief that prodrug may be a better tolerated form of imatinib.

We understand the dosing from the bioequivalence studies we’ve previously discussed in settings like this and in our press releases et cetera. And that combination gives you a high chance, a high probability you’re going to be successful overall and overcome the safety concerns that existed with imatinib therapy 15 years ago. And so when all those pieces come together, the trial will find its natural harmony and a natural source of capital to fund it.

Edward White: Okay, Milton, thank you for taking my questions.

Milton Werner: You’re welcome.

Operator: We have reached the end of the question-and-answer session. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

Milton Werner: Thank you.