Q2 2023 BioXcel Therapeutics Inc Earnings Call
Participants
Frank D. Yocca; Senior VP & Chief Scientific Officer; BioXcel Therapeutics, Inc.
Matthew Wiley; Senior VP & Chief Commercial Officer; BioXcel Therapeutics, Inc.
Richard I. Steinhart; Senior VP & CFO; BioXcel Therapeutics, Inc.
Robert Risinger; Chief Medical Officer - Neuroscience; BioXcel Therapeutics, Inc.
Vimal D. Mehta; Founder, CEO, President, & Director; BioXcel Therapeutics, Inc.
Colin Nigel Bristow; Analyst; UBS Investment Bank, Research Division
Gregory Allen Harrison; Analyst; BofA Securities, Research Division
Kambiz Pashneh-Tala Yazdi; Equity Associate; Jefferies LLC, Research Division
Raghuram Selvaraju; MD of Equity Research & Senior Healthcare Analyst; H.C. Wainwright & Co, LLC, Research Division
Samir Devani; Research Analyst; Rx Securities Limited, Research Division
Sumant Satchidanand Kulkarni; Analyst; Canaccord Genuity Corp., Research Division
Unidentified Analyst
Yatin Suneja; MD & Senior Biotechnology Analyst; Guggenheim Securities, LLC, Research Division
Presentation
Operator
Good morning, and welcome to the BioXcel Therapeutics Second Quarter 2023 Financial Results Conference Call. (Operator Instructions)
Just to remind everyone, certain matters discussed in today's conference call and/or 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-Q] for the quarter ended March 31, 2023, which can be found at www.bioxceltherapeutics.com or on www.sec.gov and which will be updated in its quarterly report on Form 10-Q for the quarter ended June 30, 2023. As a reminder, today's conference is being recorded.
Joining us on today's call are Dr. Vimal Mehta, Chief Executive Officer; Richard Steinhart, Chief Financial Officer; Matt Wiley, Chief Commercial Officer; Dr. Rob Risinger, Chief Medical Officer of Neuroscience; Dr. Vince O'Neill, Chief R&D Officer of OnkosXcel Therapeutics; and Dr. Frank Yocca, Chief Scientific Officer.
It is now my pleasure to turn the call over to Dr. Mehta, the CEO and Founder of BioXcel Therapeutics. Please go ahead.
Vimal D. Mehta
Thank you, operator. Welcome, everyone, and thank you for joining our call today. Before we begin, I first want to say that the company was dismayed and frustrated by our recent discovery of certain investigator misconduct that occurred during our TRANQUILITY II trial. This summer has not progressed as we had anticipated, and we plan to make significant changes to our entire business structure. While I'm deeply disappointed, I'm more determined than ever to continue developing our drug candidates and put BioXcel Therapeutics back in a position to accomplish its core mission.
Now I will start by covering our strategic reprioritization and how it is designed to position us for success going forward. In addition, I will share as much information as I can about the status of our TRANQUILITY program in Alzheimer's associated agitation. Six years ago, we founded BioXcel Therapeutics with a clear mission to build a uniquely disruptive biopharmaceutical model using AI approaches to bring transformative medicines to patients. We believe we have fulfilled this mission with the approval and launch of IGALMI and with our programs in the late stage of clinical development.
We are now taking the necessary steps across the business to strengthen our ability to advance our land and expense strategy. Specifically, we are taking clear, well-defined and decisive actions in 3 areas. First, let's discuss our commercial reprioritization. We landed with IGALMI's approval in the institutional setting. We are now shifting resources to the expand effect of our market strategy into what we believe is a potentially more promising retail pharmacy and outpatient setting. This shift is largely due to the fact that the hospital setting proved to be more difficult to penetrate than we originally anticipated, particularly in a challenging post-COVID environment.
Despite these challenges, however, we remain committed to making IGALMI available to patients in the institutional setting. We began deploying a contracting effort with large hospitals, health care systems and integrated delivery network prior to our reprioritization and have been pleased to see it achieved some initial success with increased demand from existing hospital customers and large health systems. In fact, our Q2 revenues doubled from Q1 largely due to this contracting strategy. Therefore, we will now broadly adopt it.
As part of this action, we plan to reduce our total workforce from approximately 190 to 80 employees over the next several months. The majority of these reductions will be in the commercial organization to help us build towards potential label expansions and to support IGALMI, we will maintain a core 12 member team from market access, commercial operations, sales and trade functions. This decision to reduce our workforce was extremely difficult for the management team and the Board, but was necessitated by a variety of market and business factors. I'm grateful to all of our employees who made many contributions to our company. We are committed to providing support to those impacted as they transition from the company.
The second part of our business transformation involves shifting our development focus to high potential agitation market opportunities for BXCL501 in bipolar disorders, schizophrenia and Alzheimer's dementia. We firmly believe this drug has the potential to have a positive impact on patients and caregivers, and address a significant unmet medically. For example, 23 million episodes of bipolar schizophrenia-related agitation occur annually in the U.S. in the at-home setting. In addition, 100 million Alzheimer's-related agitation episodes occur every year in the U.S. Importantly, more than 80% of these patients are in an agitation setting and episode here represent more than half of the total episode volume.
We are motivated to develop 501 to address the needs of these patients. We have developed a comprehensive plan for our TRANQUILITY program in Alzheimer's-associated agitation. In June, we announced positive top line data from TRANQUILITY II. This was a uniquely complex trial requiring mobilization of clinical team whenever an agitation episode occurred. We were pleased that our top line data showed that we met our primary endpoint with the 60-microgram dose, with 501 demonstrating a statistically significant 39% greater reduction in PEC score from baseline compared to placebo at 2 hours. We also met a key secondary endpoint with a statistically significant reduction in agitation symptoms versus placebo as measured by PEC score change from baseline at 1 hour with 60-microgram dose.
501 was well tolerated with no drug-related serious adverse events over trial duration. As we disclosed in an 8-K filing, there were issues related to a principal investigator at a TRANQUILITY II clinical side. They conduct by this PI was unacceptable and extremely unfortunate. We are investigating the issue and, for example, have already initiated and audited by an independent third party of the data from the PI's clinical side.
In addition, we have requested a meeting with the FDA to discuss our entire TRANQUILITY program. This will include both TRANQUILITY II, TRANQUILITY III clinical trials, the data audit and the data package that may be required to support submission of an sNDA seeking approval of 501 for the acute treatment of agitation in mild to moderate dementia patients with probable Alzheimer's disease. We hope to have an update on the TRANQUILITY program, including the audit and FDA meeting by the end of the year.
Regarding TRANQUILITY III, we paused enrollment after early trial data showed a much higher background frequency of agitation episode than originally expected. It appears that this patient population may be better suited for a chronic treatment of agitation, while our focus is on developing 501 as acute treatment of Alzheimer's agitation. As a reminder, we have breakthrough therapy designation for the acute treatment of agitation associated with dementia.
In parallel, we are advancing our SERENITY program for the at-home acute treatment of agitation associated with bipolar disorders or schizophrenia. In May, we reported top line results from SERENITY Part I. We evaluated patients in Part 1 in a monitored medical setting as surrogates for the at-home setting. The trial assessed the safety and efficacy of 60-microgram dose of BXCL501, which is half of the lowest approved dose of IGALMI using the same primary and secondary endpoint as in the SERENITY I and SERENITY II.
While we believe the data suggests the potential for 501 to be effective in a monitored medical settling with 60-microgram dose, we did not meet the primary endpoint of mean change in PEC score at 2 hours. However, the 60-microgram dose was well tolerated and demonstrated favorable safety results, including proportionately fewer adverse events compared to those observed during SERENITY I and II, which evaluated the approved 120-microgram or 180-microgram doses. We believe these safety results support the potential for at-home use.
We are now conducting SERENITY III Part 2. It is a 12-week study to evaluate the safety of a 60-microgram dose of BXCL501, with an optional 60-microgram dose. To identify a dose to potentially provide an optimal balance between the safety and efficacy in the at-home population, we performed pharmacokinetic and pharmacodynamic modeling that suggested that use of an 80-microgram dose of BXCL501 could provide this balance. We believe the evaluation of an 80-microgram dose is further supported by our previous clinical experience with this dose during our Phase Ib trial in schizophrenia patients with agitation.
We plan to meet with the FDA to discuss the 80-microgram dose and a protocol amendment to the ongoing SERENITY III Part II study. The primary objective of part 2 is to describe the incidence of treatment emergent adverse event, the primary endpoint is a comparison of serious adverse events and treatment emergent adverse events as compared to placebo, and the secondary endpoints include a number of efficacy assessments.
Turning to our major depressive disorder program, we reported positive top line results from the Phase Ib multiple ascending dose trial in May. As part of our reprioritization effort, we will pause this program. To augment our clinical development team, Dr. Vince O'Neill, who is currently serving as Head of R&D for OnkosXcel, will play a broader role in our neuroscience development. Vince has been with the company since the IPO in 2018 and has been -- has extensive pharmaceutical clinical development experience. Vince played an instrumental role in SERENITY I and II trials, along with our Chief Medical Officer, Dr. Rob Risinger, that resulted in the approval of IGALMI and the successful human proof-of-concept trials for 701 in our oncology program.
Dusan Kostic, our Head of Medical Affairs, will play an important role in developing clinical and medical strategies of 501 to support commercialization of any potential indications. He has more than 2 decades of pharmaceutical industry experience in neuroscience. This includes clinical development and commercialization of leading drugs, such as Abilify, Invega, Abilify Maintena and Rexulti. We have also initiated a search to expand our Board of Directors to strengthen clinical development expertise.
The third part of our business transformation involves prioritizing AI-driven innovation to strengthen our neuroscience clinical development. Our unique integration of data science, clinical expertise and commercialization gives us a powerful and distinct competitive advantage in building a robust R&D pipeline. We are truly excited about our clinical initiatives and pipeline candidates, including BXCL502. We look forward to highlighting these developments at an R&D event we plan to host later this year. We also plan to spotlight our next-generation AI platform capabilities for identify and reinnovating late-stage truck candidates and introduce BXCL503 and 504.
In summary, this is a challenging yet transformative period for our company. We are taking swift and decisive steps with the goal of putting the company in the best possible position for future success. We have received interest from potential corporate partners. However, it is far too early to know what if any form such a transaction could take. We are passionate about our goals and remain committed to delivering long-term value to shareholders.
Now I will turn the call over to Rich, who will discuss our second quarter financial results.
Richard I. Steinhart
Thank you, Vimal. Our second quarter 2023 financial results are as follows: Net revenue of IGALMI was approximately $457,000 for the quarter. Research and development expenses were $27 million for the second quarter of 2023, compared to $17.9 million for the same period in 2022. The increased expenses were primarily attributable to increased clinical trial expenses for SERENITY III and TRANQUILITY II.
Selling, general and administrative expenses were $25.9 million for the second quarter of 2023, compared to $18.4 million for the same period in 2022. The increased expenses were primarily attributable to an increase in personnel and related costs to support the commercialization of IGALMI. BioXcel Therapeutics had a $53.5 million loss for the second quarter of 2023, compared to a net loss of $37.7 million for the same period in 2022. The loss for the quarter included approximately $6.1 million in non-cash stock-based compensation.
Cash and cash equivalents totaled $127.5 million as of June 30, 2023. As noted, the company is undertaking a strategic reprioritization that includes a reduction in the workforce of more than 50%, which is expected to reduce expenses significantly. In the absence of additional capital becoming available, the company under the strategic financing agreements or otherwise, the company estimates that its current cash and cash equivalents will last through mid-2024. The company's previously disclosed cash runway projection assumed a full utilization of its strategic financing agreements of $155 million with Oaktree Fund Administration and Qatar Investment Authority.
Based on recent events, the company is not likely to be in a position to meet the milestones required to access the additional capital under the financing agreements. The company is exploring multiple ways to extend its cash runway and is already in discussions with its strategic financing partners to amend the agreements. Successful modification of these agreements could extend the company's cash runway. Finally, with regards to OnkosXcel, we are currently examining strategic alternatives, including strategic partnerships or financing.
Now I'd like to turn the call back to Vimal.
Vimal D. Mehta
Thank you, Rich. We would now like to open the call for questions. Operator?
Question and Answer Session
Operator
(Operator Instructions) Our first question today comes from Greg Harrison of Bank of America.
Gregory Allen Harrison
How are you thinking about the outlook for the company with this restructuring? And how do you think investors should think about the story at this point?
Vimal D. Mehta
Greg, this is Vimal. I'm very excited about the outlook for our business. As I shared earlier, we are laser-focused on the at-home opportunities for BXCL501. Specifically, the 2 value drivers for 501 are SERENITY program for schizophrenia and bipolar associated agitation; and our TRANQUILITY program for Alzheimer's agitation. We landed with IGALMI in the institutional setting. We are now shifting resources to expand into a potentially more promising retail pharmacy and outpatient setting. We also look forward to highlighting our pipeline with BXCL502 update at R&D Day by the end of this year.
Gregory Allen Harrison
Got it. That's helpful. And one more, if I can. Could you give us some more color on why you made the decision to shift focus to the at-home setting and away from institutional medical setting?
Vimal D. Mehta
We are shifting our focus from the institutional setting to the retail/at-home market due to the market and business factors we shared in our call. The hospital setting was more difficult to penetrate than originally anticipated, particularly in a challenging post-COVID environment. It is important to note that we will continue to make IGALMI available to our hospital customers through a more targeted contracting effort and small core team. We are committed to bringing IGALMI to current and future patients and their families for current indication and for new indications.
Operator
The next question is from Colin Bristow of UBS.
Colin Nigel Bristow
I just wanted to pass on by well done on this reprioritization. You made tough decisions, but I think they had to be done. And maybe first question, and just kind of piggying back off of the (inaudible), could you outline how you see the market opportunity to make our for IGALMI now that you're shifting the focus to the at-home setting? And how should we think about that specifically from a market opportunity point of view?
And then secondly, I think this is the most common question we're getting from investors is just updates on the timing of first the external order. I think I heard you said by the end of the year, but any more color you can give with where you are in this process would be great.
And then on the second part of that is just timing regarding feedback from FDA. I know you've requested a meeting, but when do you expect this to occur? And have you had any sort of interactions or feedback around this data issue?
Vimal D. Mehta
Colin, regarding your question about the TRANQUILITY program update, as I stated in my earlier remarks that we expect to have update -- our hope to have the update by the end of the year. Independent audit is in progress. We have requested a meeting. Once we have the meeting, we will have a clarity what is the data package required to file an sNDA and that will be a good time to provide an update on the TRANQUILITY program. I just would appreciate if you can come back to your first question that you had asked, so that we can address that.
Colin Nigel Bristow
Yes. My first question was...
Matthew Wiley
Colin, it's Matt.
Colin Nigel Bristow
I was just checking you heard it, right?
Matthew Wiley
I did. Yes. So the question about the market opportunity switching from the hospital setting to the at-home setting. Keep in mind that there are 23 million episodes in the at-home setting. One of the things that we accounted for in our models as well is that we would capture many of the patients that wind up in the emergency department in the at-home setting as well. And given the market research that we've conducted. We recognize the unmet need in the home setting is quite significant. It's underrecognized and underdiagnosed, but the patients certainly see value here. And they indicated that both they and their caregivers would use this product profile for BXCL501 in 80% of their episodes. So we feel that the market conditions for the at-home setting is quite favorable, and we look forward to bringing the drug to those patients.
Operator
The next question is from Sumant Kulkarni of Canaccord.
Sumant Satchidanand Kulkarni
So for your Breakthrough Therapy designation status, how exactly does the FDA defined acute treatment of agitation in terms of number of episodes or instances of film usage per month? Along those lines, do you think the current pricing of $105 per film is appropriate on a strategic misstep for the convenience of at-home use? I'm asking because of 2 factors. First, even one were to hit the annual specialty tier of roughly $10,000 per year for pricing on a gross basis, that would translate to a patient using 100 films a year, and makers of chronic treatments of agitation enjoy significantly higher market caps or buyout values but pricing assumptions they were much higher as well.
Matthew Wiley
So let me -- I'll address the price question and the number of episodes. First and foremost, we did conduct research when we established our launch price in both bipolar, schizophrenia in the at-home setting and also in ADA. And what we found is that for episodic treatment, there was appetite in the market for that price point. Certainly, what we see is the volume of episodes in the mild Alzheimer's dementia patients is roughly 3 a month, and that can escalate further as they become more moderate. But we also recognize that 81% of the ADA patients are either in an at-home setting or an ALF setting, which is (inaudible) to an at-home setting, and represent over 50% of the total volume of agitation episodes. And that doesn't preclude 501 from being used in episodic breakthrough in other locations as well.
Sumant Satchidanand Kulkarni
Got it. And then does your new cash runway include the potential to redo TRANQUILITY II in case the FDA says you will not be able to file on just what you have currently?
Vimal D. Mehta
Sumant, we are not speculating on that. We are doing an audit, and we want to meet with the FDA and get the feedback, then we will be able to comment on it.
Operator
The next question comes from Ram Selvaraju of H.C. Wainwright.
Raghuram Selvaraju
I just wanted to revert back to the formulary wins that you had previously announced that you were previously engaged in pursuing in the institutional setting, and I wanted to ask how that is affected, if at all, by your reprioritization here into the at-home setting. To what extent could we potentially expect you to be able to capitalize on the formulary wins that have already happened in the institutional setting and along what trajectory? And also if you could comment at all on how you expect promotional activities to be different in the at-home context versus the institutional context?
Matthew Wiley
Sure. So first of all, we reported out that we had over 185 formulary wins, P&T wins to date. We're still accumulating those wins at a win rate of over 65%. In fact, we had 3 wins on Friday. And so we would expect that the 650-or-so hospitals that are still scheduled to vote will continue with that process. And assuming that we continue to accrue these hospitals, we will reach out to them through medical affairs activities, through market access activities, contracting and certainly support them of trade and distribution to ensure that they can access the drug and utilize it. The medical affairs support will obviously be really important in helping them determine how to develop protocols and pathways, so that planning is in place as well.
The promotional activities for the at-home market is a little bit different because you are educating physicians and patients at the same time. As you know, patients can be motivated to ask for prescription drugs, so that would be part of the plan as well, and then through sampling and contracting with PBMs. And these are activities -- the contract with PBMs and state Medicaid, those are activities that may be accomplished prior to even FDA approval, considering we have a drug on the market today. So those are activities that we're planning out to get ahead of that potential approval, and more to come on the actual market entry strategy in months to come.
Operator
The next question is from Yatin Suneja of Guggenheim Partners.
Yatin Suneja
Maybe first question is on the Alzheimer's disease agitation. I understand you will meet with the FDA and try to get their feedback on TRANQUILITY II and I. Can you just talk about what generally is the ICH guidelines for an indication like this? What sort of exposure, duration of exposure is needed from a regulatory perspective for a disease that affects millions of people? Because it seems like you were sort of stopping TRANQUILITY II. It's still not clear to me if TRANQUILITY I and II combined is enough for you to get an approval. So that's one. Basically just help me understand the path forward for Alzheimer's disease agitation as you understand.
The second is, it seems like on the R&D day, you're going to talk a little bit about the 502. Just curious, maybe if you can highlight a little bit there. And then in terms of the cash runway, maybe help us understand how should we model it going forward? Where exactly are you cutting cost? How many of the sales rep you're still going to have? So that's -- these 3 questions.
Vimal D. Mehta
Thank you, Yatin. First question regarding the TRANQUILITY program, Rob will answer like what our plans are.
Robert Risinger
Yes. So let me be clear that we paused the trial because the early data in TRANQUILITY III indicated that the patient population may be better suited for chronic as opposed to episodic therapy. And as you know, our focus is on the episodic treatment in line with our breakthrough therapy designation by FDA for episodic treatment. We have decided to pause the trial in order to discuss this issue with the FDA at an upcoming meeting, and we'll be able to provide more guidance on that once that meeting occurs.
We do expect at that meeting to discuss both the auditing and the TRANQUILITY II results. And at that point, we'll be able to provide more guidance at the end of the year with regard to what will be necessary for filing an sNDA package.
Vimal D. Mehta
Yatin, regarding your second question, I will pass it on to Rob -- pass it on to Frank for 502.
Frank D. Yocca
Yatin, this is Frank Yocca. I'm excited about our emerging pipeline development candidates, especially BXCL502. We really are looking forward to incoming R&D Day where we'll present our progress with this molecule, particularly its development, but also discuss some unique indications of interest.
Secondly, we will discuss our next-generation AI platform. This has evolved considerably. From the first time we did our R&D Day 2 years ago, the capabilities are -- have been enhanced for identifying and reinnovating late-stage opportunities. And we'll also discuss some candidates for additional pipeline entries, such as BXCL503 and 504. So it will be a very interesting day.
Vimal D. Mehta
So regarding your third question, Yatin, related to the cash runway, Richard will answer.
Richard I. Steinhart
Sure, Yatin. So the reprioritization that we're working on now will extend the cash runway by reducing our burn significantly. And we're also working on various other options to extend the cash runway, which includes working with our strategic partner. As we said, the goal is to get the company to about an $80 million go-forward annualized burn rate, and that's what we're working towards. In terms of the market, we'll reduce that, the market access team will be a core group of market access teams to work through the commercial sector.
Operator
The next question is from Greg Subazende of Mizuho Securities.
Unidentified Analyst
This is Richard on for Greg Subazende from Mizuho. So just 2 questions from me. One, just following up from the cash question, how do you expect the split between R&D and SG&A going forward? And then two, for the IGALMI opportunity and sales, how should we be moving that on a go-forward basis now that your primary focus is on the at-home setting?
Richard I. Steinhart
So in terms of the commercialization, it's going to be a small core team of about a dozen people. So that will reduce our SG&A expenses pretty dramatically moving forward. Our R&D expenses should go down. Remember, in the first half of the year, we had SERENITY III and TRANQUILITY II fully implemented, and that's what caused the increase in expenses in the first half of 2023.
Matthew Wiley
And Richard, regarding your second question on modeling. We've never provided guidance on IGALMI sales. And so I think the way to think about this is by reducing our headcount in commercial to 12, it limits our ability to go out and prospect the way that we had in targeting the 1,700 hospitals. However, we will continue to support through contracting efforts and through trade and distribution on both our existing customers and those that choose to come online and approve IGALMI through formulary, we will support them in the same way. So that may help you, but I can't give guidance beyond that.
Operator
The next question is from Robyn Karnauskas of Truist Securities.
Unidentified Analyst
This is Alex on for Robyn. Can you remind us what the approximate market opportunity is, breakdown for dementia setting between assisted living facility versus nursing home? And what are the gating factors to IGALMI uptake on the assisted living facility?
Matthew Wiley
So as I think we've communicated previously with -- there are 100 million episodes total, about an 80% of the patients with Alzheimer's dementia, I mentioned this earlier in the call, are in either the at-home setting or the ALF setting. And I don't have a specific breakdown for you here, but certainly something I can communicate later as we get closer to market entry disclosure. Better than 50% of the episodes are in those settings. And we feel that, that allows us to price the drug as an episodic drug as opposed to pricing it as a chronic drug, and certainly can be used episodically in any setting. So we think that the TAM still holds at 100 million episodes.
Operator
The next question is from Corinne Jenkins of Goldman Sachs.
Unidentified Analyst
This is (inaudible) on for Corinne Jenkins. So first, what do you view as your best options to further extend runway beyond mid-2024? And then second question is, if the FDA requires an additional study, will they have to start -- to start it completely new trial with the same population in TRANQUILITY II?
Vimal D. Mehta
This is Vimal. Regarding our cash runway expense, and as Richard has already outlined, our cash runway in mid of 2024. And that's obviously predicated on what clinical trials we will be executing on. In terms of our option to extend that cash runway, we have multiple opportunities. One is working with our strategic partner, which Richard has already outlined, who are our financing partners. There is a interest developing in these programs by other corporate partners. We are looking into that. And in addition, we have some core assets that we can monetize and capitalize to extend our cash runway. So good news is that we have multiple opportunities to extend our cash runway and achieve meaningful clinical milestones.
Robert Risinger
So let me handle if the FDA has to do another study, at this point, it's premature to discuss whether another study is required. But in terms of whether that study would be ALF or just at-home, again, we certainly make that decision upon consultation with the FDA, and we'll be providing that update later this year.
Vimal D. Mehta
I think I'd just like to add on top of what Rob said, we are a pioneer in developing episodic medication to treat agitation. We are learning from the data, from the science, from the clinical outcomes that we are observing. We never or FDA never expected that we will have so many episodes observed in the nursing homes setting. So we are taking that information back to the FDA and designing a program what makes most sense. Does it make sense to have ALF and home setting as an episodic, and whatever is needed to put together that package. And would it make sense to go back later on and evaluate the nursing home as a more chronic option?
Because I'd like to remind everyone our Breakthrough Therapy designation is in for acute treatment of agitation, and we believe mild-to-moderate probable Alzheimer's disease population is a relevant one so far what we have observed.
Operator
The next question is from Samir Devani of Rx Securities.
Samir Devani
It must have been asked already, but I've got a couple. I guess, the big question for me is it realistic for you guys to market directly to the generalist physicians for the at-home setting? Isn't that really more the domain of big pharma? And is it -- have you thought about just doing a partnership deal around IGALMI to address that and reduce the cash burn? And then I guess the second question is just really out of interest, how many agitation episodes were you seeing in TRANQUILITY III in the nursing home setting?
Matthew Wiley
I'll take the first question. So when we think about the at-home setting for bipolar and schizophrenia, there are roughly 7,000 to 8,000 psychiatrists that either diagnose or actively manage the therapeutic treatments for those patients. So we feel that we would be very well positioned to access that market. As it relates to Alzheimer's dementia agitation, these patients are managed from a top line perspective by about 65,000 physicians in the United States, about 30,000 of those would be of interest to us. Those 30,000 are additionally making the diagnosis and treatment evaluation for these patients.
Now of those, there are somewhere between 3,000 to 4,000 that are specialists of interest. But the primary care opportunity or the generalist opportunity, as you described, we would either have to partner with a CSO, a potential partnership with a larger pharmaceutical company or permutations of all 3 of those. And so that market entry strategy has not yet clearly defined, but we're working through those problems for those potential opportunities, I guess, at this time.
Vimal D. Mehta
So Samir, regarding how many episodes we observed. I will let Rob answer that.
Robert Risinger
So there are patients continuing in the trial at this point, and they continue to have episodes. So the number is accruing. It's hard to say it on a given day. So I think the best way to describe it would be to say it's regular. And it is greater on an individual basis than what we reported in our TRANQUILITY II results. And this is exactly why we are discussing it with the FDA, so that we have a clear path forward for episodic treatment of acute episodes, and we'll have that guidance at the end of the year.
Operator
The next question is from Kambiz Yazdi of Jefferies.
Kambiz Pashneh-Tala Yazdi
What are the proposed features that are going to be in the protocol amendment for SERENITY III Part 2? What are the kind of the key secondary efficacy assessments, that will be valuable? And then maybe on your strategic financing partnerships, what modifications to your credit agreement -- would enable you to access capital earlier and be attractive to your partners?
Robert Risinger
So we are finalizing that amended protocol. The secondary measures have to do with a variety of different, we'll call them perspectives on efficacy. And once we have the meeting with the FDA, I think it will be much easier to describe the entire study and the details.
Vimal D. Mehta
So Kambiz, did it answer your question? Because what we are saying is now we have selected dose 80 micrograms based on our pharmacokinetic/pharmacodynamic modeling as we were expecting. And now it's a matter of modifying protocol submitting to the FDA, and then we will be in a position to initiate the study. As Robert said, the primary is safety and then efficacy trends as we measure over a 12-week period. So that's what will be the outcome we will be looking from that time.
Regarding your next question, modification on the credit agreement. As Richard has mentioned that we are in active discussions. And as we make progress, we'll provide an update.
Operator
There are no additional questions at this time. I'd like to turn the call back over to Dr. Mehta for closing remarks.
Vimal D. Mehta
Thank you, everyone, for joining us today. We are excited about our path forward through this strategic reprioritization and look forward to sharing updates on our progress. Thank you for your continued interest in BioXcel Therapeutics, and have a great day.
Operator
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
