Q3 2023 BioXcel Therapeutics Inc Earnings Call
Participants
Vimal Mehta; CEO; BioXcel Therapeutics, Inc.
Richard Steinhart; CFO & SVP; Richard Steinhart
Robert Risinger; Chief Medical Officer, Neuroscience; BioXcel Therapeutics, Inc.
Matt Wiley; SVP & Chief Commercial Officer; BioXcel Therapeutics, Inc.
Vince O'Neill; Chief R&D Officer of OnkosXcel Therapeutics; BioXcel Therapeutics, Inc.
Greg Harrison; Analyst; Bank of America
Rag Selvaraju; Analyst; H.C. Wainwright
Sumant Kulkarni; Analyst; Canaccord Genuity
Colin Bristow; Analyst; UBS
Robyn Karnauskas; Analyst; Truist Securities
Graig Suvannavejh; Analyst; Mizuho Securities USA
Corinne Jenkins; Analyst; Goldman Sachs
Presentation
Operator
Good morning, and welcome to BioXcel Therapeutics' Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) After the speakers' presentation, there will be a question-and-answer session. (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.bioxceltheapeutics.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; Joining them for participation in Q&A session are - 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.
Vimal Mehta
Thank you, operator. Good morning, and thank you for joining us. Today I begin with several exciting and highly anticipated updates on our recent development with our two late-stage clinical program for BXCL501 TRANQUILITY and SERENITY III.In addition, I will cover important news about our financing plans with Oaktree Capital Management and Qatar Investment Authority.
After this, I will touch briefly on update for our regarding the commercial activities and oncological benefit. Rich will then cover the financial results for the third quarter. let me begin with TRANQUILITY and SERENITY III programs. I am very pleased to highlight the tremendous progress that we have made with these late-stage clinical programs, which we believe represent significant value-creating catalysts.
In both cases, we completed a productive meeting with the FDA regarding to portfolio development that we are aligned with the FDA's recommendation regarding a Phase 3 trial in the at-home setting for TRANQUILITY program as confirmed in the meeting minutes.
And our development path SERENITY III is based on the feedback we received at last week's meeting with the FDA subject to receipt of final meeting minutes we expect in December. Going into the TRANQUILITY in more detail, we are aligned with the FDA's recommendation regarding an additional Phase 2 trial in the adjuvant setting for TRANQUILITY as a potential path to sNDA submission.
This important development follows our positive pivotal TRANQUILITY II study results. In June, we completed independent third party TRANQUILITY II trial audit in October and receipt of our FDA meeting minutes just this month.
Specifically, we plan to conduct a Phase 3 clinical trial of BXCL501 in that home setting for the acute treatment of agitation associated with Alzheimer's disease. This potential market opportunity could include acute treatment of agitation across the full spectrum of Alzheimer's and related dementia and severity of agitation across all care settings.
We believe we are well positioned to bring BXCL501 to this very large and underserved market, which represents a unique opportunity for which there are no FDA-approved drugs. Why the agency has approved the chronic agitation treatment. We believe we are breaking new ground for this important unmet medical need.
We are pleased that as a result of our updated development plan that TRANQUILITY trial is no longer required as part of an sNDA submission. We expect this will lead us to redeploy resources and focus on the recently agreed at Homebase trial for the TRANQUILITY program.
In summary we believe we are now poised to advance the program as efficiently and cost effectively. Our confidence is further reinforced by the positive findings of an independent third party audit of data integrity at the single and TRANQUILITY II trial site. We have previously identified. This audit found no evidence of misconduct or for our beyond the instant previously reported. In addition, no findings was identify that impact data integrated. We look forward to finalizing our study protocol and moving this forward.
Let me now turn to SERENITY III program, which is also making steady progress. As a reminder, here, we are evaluating the potential at home use of BXCL501 for agitation associated with bipolar disorder and schizophrenia.
We've got an approved indication from government. Last week, we completed a productive meeting with the FDA and expect to receive meeting minutes in the first half of December. However, I can share now that based on preliminary FDA feedback, we plan to conduct an additional Phase 3 trial evaluating the safety of the 120 microgram dose to treat agitation in the home setting associated with bipolar and schizophrenia.
We'll provide more details on this program as we advance for now, we are pleased that we have multiple opportunities to bring BXCL501 to a much larger number of patients in the home setting. This is the expand portion of our land and expand strategy. In conjunction with the clinical development. While we are focused on enhancing our operational and financial flexibility.
As reported today, we have entered into a binding term sheet with the Oaktree Capital and Qatar Investment Authority to amend our existing financing agreements, subject to final documentation, we have agreed to revise down that will increase our potential to access additional tranches of capital and have agreed to revise the revenue covenants to extend the compliance requirements. And covenant levels to align with our current projections following our business reprioritization.
We believe this is very positive news for the company, and this is an integral part of our overall financing strategy. We are grateful to our strategic financial partner for their ongoing support. safely.
Briefly, we have focus commercial efforts to provide access for the government to our current customers and deploy direct contracting with hospital systems. The recent issuance of a [J code] by CMS is expected to streamline the reimbursement process across commercial and government payers. We hope this will help us continue to establish brand equity in economy and act as a bridge to the larger potential at-home market opportunities.
Additionally, if [currently] patent protection has been extended through 2043 with two new Orange Book-listed US patents.
Before wrapping up, I would like to highlight that we are pleased with the continued progress of NIDA-funded Trial of BXCL501 for potential treatment of opioid use disorder being conducted by Columbia University.
This may offer an important opportunity to address fentanyl combined with Allogene in what has been called an emerging threat by the White House Office of National Drug Control Policy. I'm also energized by our emerging neuroscience clinical development program that are the result of our unique use of artificial intelligence platform to drive drug innovation. We look forward to sharing more information about our opioid use disorder program and exciting pipeline in an R&D event that we plan to host next month.
Look for more details soon.
In addition, we were pleased with the recent positive survival data reported for BXCL501 in our open-label Phase two trial in patients with metastatic castration-resistant prostate cancer and in patients with small cell neuroendocrine prostate cancer.
With these data in hand, we are focusing on various strategic options for oncolytic. I'd like to end by thanking all of our colleagues for their dedication to our mission of bringing transformative medicines to patients is ultimately their tireless work that drives our census.
I will now turn the call over to Rich, who will review our third quarter financial results, Rich?
Richard Steinhart
Thank you Vimal. The quarter was indeed a transfer of a transformative time for the company, and I'm pleased to review our financial results for the third quarter of 2023. Net revenue of the company was approximately $341,000 for the quarter. Research and development expenses were $19.6 million for the third quarter of 2023 compared to $22.1 million for the same period in 2022.
The decreased expenses were primarily attributable to a decrease in costs associated with the BXCL501 SERENITY III and the TRANQUILITY II clinical trials. Selling, general and administrative expenses were $24.3 million for the third quarter of 2023 compared to $17.1 million for the same quarter in 2022. The increased expenses were primarily attributable to an increase in one-time legal and professional fees, costs associated with the oncolytic sale potential public offering, as well as in personnel and related costs to support commercialization of the Algami in the United States prior to our reprioritization.
BioXcel Therapeutics had a net loss of $50.5 million for the third quarter of 2023 compared to a net loss of $41.8 million for the same period in 2022. The company used approximately $37.6 million in operating cash during the third quarter. Cash and cash equivalents totaled $90 million. As of September 30, 2023, company estimates that its current cash and cash equivalents will last through mid 2024. The estimated cash runway does not include potential additional capital that may become available under the amendments to the strategic financing agreements or resulting from any potential financing activities that we may undertake.
Now I'd like to turn the call back to Vimal.
Vimal Mehta
Thank you Rich we would now like to open the call for questions.
Operator?
Question and Answer Session
Operator
Thank you.
(Operator Instructions)
Greg Harrison with Bank of America.
Greg Harrison
Good morning, guys. Thanks for the update. And for taking the question with respect to the 100 patient trial, can you give us some more color on the TRANQUILITY development strategy as of going for a broad label initially? And then what are the criteria for success in this trial and what would a positive trial look like?
Vimal Mehta
Good morning, Greg. This is Vimal. We were very pleased that we have alignment on recommendation from the FDA to conduct a home setting time. As you know, home setting out most of the patients in Alzheimer's do live in their homes. I think and this was a very important development after we observed in TRANQUILITY III, that number of episodes that were required were like no more chronic in nature. So we don't need to conduct TRANQUILITY III anymore.
So under the circumstances, this is our best case scenario to move this drug and provide access to this medication to broadest possible patient population. So that's very exciting. And in terms of the clinical trial program, I will pass it on to Rob to describe what this program will entail at. Just remember, we just receive the meeting minutes from the FDA and we are in the process of developing the clinical protocol protocol right now.
Rob
Robert Risinger
So let me just highlight that we're really excited that we now agree with the FDA's proposed design will be a double-blind placebo-controlled study, primarily safety, and that includes describing clinical benefit as assessed by family or caregivers. We're actually working on the protocol and we expect to get back to you with them. Were there facts about that protocol?
Greg Harrison
Got it. And can you clarify whether you're able to use all of the data collected from TRANQUILITY II as part of their package.
Vimal Mehta
Company believe after receiving our independent audit and call the information we have that we will be able to use that TRANQUILITY II data that we announced in June.
Greg Harrison
Great.Thanks for taking the questions.
Vimal Mehta
Thanks.
Operator
Rag Selvaraju, H.C. Wainwright.
Rag Selvaraju
Hi. Thanks for taking my questions. I was wondering, first of all, if you could provide us with some additional context and clarity on what you expect to be the ultimate path forward for fiber I in chronic agitation and within what time line you expect to pursue this? And if we should be thinking about this as being something that you would look to target formally once you have and approval of the label in Alzheimer's associated acute agitation.
Vimal Mehta
That's a great question, Ram. When we had the conversation with the FDA on TRANQUILITYIII, considering there are so many number of episodes. And we did those Fiber One multiple times to to take those agitation episodes. So there was a discussion that would there be a possibility that Fiber I may be useful or could treat or could be developed as a chronic treatment?
We have done chronic dosing, as you know, in the healthy volunteers for our MDD program. And we have data, but we have no data right now that it can treat chronic agitation. We will work with the agency to developed a path of explore the path. Currently, our laser focus is on acute treatment of agitation in a home setting so that we can expand our use of this drug in Alzheimer's related agitation. So that that path exists for us and we will have the opportunity to explore. But at this point in time, the strategy will be to deploy all resources and focus in completion of that trial in a home setting.
Rag Selvaraju
Okay. And then secondly, with respect to the Opioid Use disorder indication, do you have any additional information you can provide to us regarding the potential size of this market opportunity and maybe give us a sense of how you would expect 501 to potentially be deployed if it were to be approved on.
Vimal Mehta
So as you note on this program is funded by NIDA. It's a huge, huge on national emerging track and the investigators we are working. They are wildly known investigators in this area and in the ongoing trial Phase 2 trial upon outcome of that trial, we will know what the path forward will be. But in terms of the market opportunity. I will pass it on to Matt if he can provide any color on this.
Matt Wiley
Well, Rag I will give us additional data as we get closer to data readout. But we do know that the fentanyl plus sales, our phenomenon is an emerging threat.
It's growing. And so there's not really great epidemiology yet on and we do know that certain cities like Philadelphia, where the state of Connecticut, for instance, has significant problems with this emerging threat. And it's certainly gotten the attention of the White House. We've got others we've got to do.
Rag Selvaraju
And lastly, if you can maybe comment on, you know, obviously, there's been some recent data that looks pretty positive for OnkosXcel. So can you give us a sense of, you know, on a qualitative basis and to what extent the availability of this clinical data might make it easier for you to either identify some kind of strategic partnership for seven oh one or indeed consummate spin out of OnkosXcel sell into a separate entity.
Vimal Mehta
With the data in hand and you saw the data from the two trials, I think that's very reinforcing about the 7.1 potential. Vince, you want to take the question?
Vince O'Neill
Yes, I monitor. I would just add to that, that the really the complete data package that we have, as you said, including survival, but also biomarker work is exactly the data potential partners would really want and need to see to form an assessment. So now that we have that in hand, I can tell you we are actively having those conversations.
Rag Selvaraju
Thank you.
Operator
Sumant Kulkarni with Canaccord Genuity.
Sumant Kulkarni
Good morning. Thanks for taking my questions and all the updates. So on your alignment with the FDA, did you specifically ask the agency about your ability to file on the basis of the TRANQUILITY II trial alone and asked another way, I guess, why did the company not choose to go with a more limited sNDA initially with the potential to expand the label further at some time? Or was that not possible because you're still interested establish a safety profile and order patiets?
Vimal Mehta
Sumant with the agency when we met, we had all the conversation around the TRANQUILITY II program, what will allow us to file an sNDA in terms of our strategy, we adopted this strategy. We want to have the broadest access to this data to the patient. We know 80% of the patients live in a home setting, which is home and ALF.
We have data in the airlines and to be able to get to the 8% patients, we needed to demonstrate safety and collect data on efficacy in a home setting. And that was the optimal choice by the company working with the agency that this will allow a broader access to the patients and also for their caregivers.
One of the biggest reasons for these patients who go from a home to ALF or to nursing home is, as you know, in Alzheimer's patient is agitation. So we thought this is the best case scenario that we conduct a study in a home setting and get the best possible label we can in this patient population where, as you know, there are no drugs approved and that are not to our knowledge, no drugs under development also for acute treatment of agitation. So we have a very unique position.
Sumant Kulkarni
Got it. And then is there a specific limit to the number of episodes that you can treat the four week period in this new trial to be considered an acute treatment? And how confident are you that the new at-home trial will not end up in a TRANQUILITY III like outcome where AD agitation is not really acute, chronic.
Vimal Mehta
We are not aware of any guidelines like migraine where you have 15 episodes and it's acute and after 15 is considered as chronic, does that the path we will be working with the FDA? What is the definition of a acute and episodic, but as Rob said, we are developing a protocol and he will be providing you the details that what our inclusion criteria will be for a acute episodic treatment.
And we will be discussing more on this one. But to answer your question, there is not a clear guideline set up or a path about that or they know their trade, their inflammation will define that if you have X number of episodes is acute and if you have a number of episodes, it's gone.
Sumant Kulkarni
And then the last question before I jump back in the queue, is on the 73 program you now are allowed to go home with a 1,000 microgram dose. Could you just give us some color on what led did that and the discussions with the FDA around that, given it's higher than what you had contemplated in the past?
Vimal Mehta
Yes. So when we had meeting on the city and the drill program, we had multiple choices for the doses. As you know, one 20 microgram is already approved dose for Aegon NV and now on company estimates that it has been given to at least more than 10,000 people, which is 120 and higher doses 180 and there is a lot of data generated which provide the confidence to the company as well as to the agency that this could be doors we should evaluate in a home setting.
We also had a choice to evaluate 80 where you understand and know that we had done PK/PD modeling based on our 60 microgram dose and we could have chosen the 80 microgram dose. Dose flexibility exists. The reason we are choosing one, 20 already a lot of safety data on 120 efficacy is already established. We need to evaluate primarily that safety in a home setting, and that will allow us to capture about 23 million episode that happened in a home setting and extend it beyond the 16 million episode that's in the hospital.
So it was very synergistic. Same does that give one in a hospital setting, if it can go in a home setting. And if patients in our homes adding need any more like no medication, they can always get 180 in the hospitals. So it's very, very synergistic. And as part of the reason we have chosen one 24 evaluating in a home setting.
Sumant Kulkarni
Thank you.
Operator
Colin Bristow with UBS.
Colin Bristow
Good morning and thanks for the update, mainly just a point of clarification on the path forward in Alzheimer's agitation. I think I heard you say the company believes the TRANQUILITY II data can be used, but what did FDA specifically say about the miscibility of the data? Or will this still remain a review issue?
And then on the additional study. Can you just know from the time lines of properties we're going to this is looking to be sort of 2025 readout and then certainly on the cash runway.
And then on the cash runway, you're locked in Q2 you said your cash will get into mid '24. You've maintained that language. Is that simply because the updated agreement is finalized. More detail would be really helpful. Thanks.
Vimal Mehta
Sure, Colin, this is Vimal. Coming back to your question about specifically about the TRANQUILITY II data. . We have no reason to believe or we have not any discussion which tells that TRANQUILITY data is not usable.
As you know, once you do submission of your sNDA, FDA does his assessment and that will continue to be the case for any sNDA. And in terms of our discussion, we have no reason to believe that. And as we said, company believes this data is usable based on our own assessment as well as on the independent audit that was recently concluded.
On your second question was what about the additional study then the readout will be there. As you notice that we have about a 100 patient study to conduct it in a home setting. We are developing the protocol. We are designing how many sites will be required to conduct the study. Only thing I can mention it is that conducting a trial in home setting is going to be a lot more easy than conducting a trial like TRANQUILITY II and III.
The reason for that is in TRANQUILITY II entry. You have to helicopter in that CRO to make that assessment for the efficacy. And as we mentioned, we are trying to evaluate the safety and we'll continue to collect caregiver assessment of the efficacy.
So this time, we expect our burn to be relatively relatively easier in that setting, but we have not done a trial in a home setting. So we are very diligently working with our CRO, defining the protocol, getting that alignment on the protocol and very soon, we will be able to come back and say when we plan to initiate that trial when the first patient will be dosed when recruitment will be completed and how long will it take and when the value inflection catalyst will be there for the Alzheimer's related agitation program.
Third question is related to the Oak Tree. Recently we had concluding a binding term sheet with Opiant, Qatar Investment Authority. We are very grateful that they are very supportive. They have belief in BXCL501 and like us like we believe in it and now having a very clear path for Alzheimer's related agitation and also a path for expanding the label for [Regal may] in a home setting, which is the three program we bought.
And based on our recent reprioritization of our commercial efforts and and in the organization, this agreement our tons needed to be amended. We are very pleased to report today. They have been agreed upon under the binding term sheet, which will be documented very soon. And I will pass it on to Richard so that he can outline what is the value for the organization and why this was needed.
Richard Steinhart
Thanks. It's Richard Steinhart. So we've done a couple of things here column that make it attractive to us. We moved out the revenue covenants that would have started to impact our cash flow early next year for about a year. So that saves us into some significant cash payments that may have been required under the original deal. And as Vimal said, the new covenants and the new revenue targets really align with our reprioritization and our new budgets. So it gives us a lot more flexibility in terms of operation for us, and we renegotiated the tranches that may allow us to take down additional capital over the next few months.
Colin Bristow
Very helpful. Thank you.
Operator
Robyn Karnauskas, Truist Securities
Robyn Karnauskas
Good morning and thanks for taking my questions. And I guess starting with the first one, I think before you said like the FDA like to up the dose in half for these asthma trials in what kind of conversations did you have that using the 60 milligram for and 60 microgram for the for the for the asthma setting for TRANQUILITY.
Second question is at home. Can you update us on your thoughts on the number of potential doses that are in the market are episodes that you're going for at home and in the hospital setting or assisted living setting, like what is now the number that we should be thinking about? And then I have a follow-up.
Vimal Mehta
So I'm just trying to understand Robyn, your first question. Your first question is about the dose being used in the Alzheimer's related agitation, 60 microgram in a home setting. I just wanted to make sure that I understood.
Robyn Karnauskas
Yes. I mentioned before you talked about how the FDA always wants to cut the dose when they go at home. And that's what you did with serenity and lower and what gives you confidence that you're using it and we wanted to have a high dose for and your trial that you did in this low data centers.
And as you know, in our assisted living TRANQUILITY II program, we tested two doses, 40 micrograms and 60 micrograms. 60 microgram was statistically significant and it was well tolerated and we have a very clear safety profile established. And in TRANQUILITY I also, we had the data for the 60 microgram. So that does we want to test in a home setting because it's clearly establish data efficacy and safety profile to drug.
Rob would like to add anything?
Robert Risinger
Yeah the enhancements to the FDA, you know, south of 60 microgram had efficacy as demonstrated in TRANQUILITY II, and therefore, that's the dose to test at home. The safety profile of 60 was consistent with being able to be dosed at home. And so we believe a successful at-home trial will be demonstrating safety consistent with what we shown on met in the TRANQUILITY II study.
Vimal Mehta
In terms of the number of episodes, we continue because there is no drug approved. We are what we believe one of the leaders in acute treatment of agitation in Alzheimer's related agitation so we continue to do a lot of work internally to understand the opportunity. I will invite Matt to provide a little color what our understanding is on the number of episodes Sure.
Matt Wiley
Good morning, Robyn. As Phil said earlier, better than 80% of patients with Alzheimer's dementia in an at-home setting. This is where the unmet need is potentially the greatest antipsychotics are not typically used in this population are due to the side effects and benzodiazepines are not an optimal choice. So typically what's used for these patients is some type of soothing technique and these are relatively ineffective. And so we believe that the opportunity is tremendous. What we've seen in our market research is that on average, the number of episodes per month for these patients in the at-home setting is six. So the opportunity out there is pretty tremendous.
Robyn Karnauskas
Would you get other variations like patients that are not completely diagnose a lot of patients are seem to have Alzheimer's, but maybe they have other kinds of dementia with that is something I read in your press release like assumed Alzheimer's that that might be upside to the opportunity.
And then on the financing question, maybe talk a little bit about how you're thinking about Pryor, focusing on future development for Serenity once you get the final minutes back versus TRANQUILITY versus, say, monetizing 701 like I guess you have to prioritize one given your cash position. How are you thinking about?
Robert Risinger
Yes. And regarding the prioritization on, I think good news is that we have full clarity on both program, a program and from our two recent FDA meeting. So we have both options at our disposal to bring this drug into the home setting, TRANQUILITY, considering a very large opportunity, it makes sense to prioritize TRANQUILITY program, and that is the meeting we had in October and we are more advanced in our protocol development and like taking next steps forward with the TRANQUILITY program.
Coming back related to your question about the financing arm, we believe that we are blessed that we have multiple options for financing. In addition to equity financing on the recently, I was able to revise our tons with our strategic partner to build financial flexibility in addition, we have opportunity to be able to partner 501 program.
Now we have a full clarity in Alzheimer's agitation ex US That opportunity. We have not explored because right now, we were waiting for clarity on these two programs. And in addition, as you mentioned, and Vince also mentioned that we are focusing on monetization of OnkosXcel. So depending on the business need. We can leverage one of these on options to us to extend our cash runway and get to the clinical meaningful clinical milestones for the TRANQUILITY program followed by the trinity.
Matt Wiley
And so Robyn, this is Matt. I'll just take on your question about the potential label for our presumed Alzheimer's dementia. And of course, these are things that we will test in the market to see how the market will react to them. But my initial reaction is that payers who might otherwise have a prior authorization due to a confirmed diagnosis might not be able to leverage a prior authorization in that way. That's number one.
Number two is that what we saw in our market research on episodes, one of the things we did collect is the number of episodes per month prior to the definitive diagnosis of Alzheimer's dementia, and that was three per month. So we do know that agitation exists prior to and may actually lead to the definitive diagnosis.
Robyn Karnauskas
Great. Thank you.
Operator
Yatin Suneja with Guggenheim.
Good morning. This is Dan on for Yatin. Thanks for the update. Could you please clarify what are the safety long-term requirements for submission for the pancreatic program? And then in the next, frankly, looking at the are you planning to use that clinical site which are awaiting register misconduct? Thank you.
Vimal Mehta
Regarding the long-term safety, as we have outlined that, that is a will continue to be a topic of discussion with the FDA. Our drug is acute treatment of agitation is episodic in nature, depending on what is acute and episodic and what is chronic those discussion will continue. So it's a topic that we based on our frequency of agitation we will discuss with the agency in terms of the site.
We are not planning to use on that side, which you mentioned, and that was specifically site design for the ALFs set and now as we mentioned that we are moving forward with the at-home setting. So we'll be using the new sites next month.
Thank you then.
Operator
Graig Suvannavejh, Mizuho Securities USA
Graig Suvannavejh
Thanks for taking my questions. And a couple if I could. Just with respect to the comments around long-term safety requirements, I'm just wondering in support have an sNDA in the AD agitation setting, what is your current expectation or and what you'll need?
I guess, and the question is beyond the 100 patient four week study, is there a current thinking that you will need additional long-term safety in order to support and sNDA momentum.
A follow-up question, if I could. Just on the current OpEx. I think it came in significantly higher than we were expecting. And given the current turnover, wondering how we should anticipate OpEx to evolve in the fourth quarter and the first half of next year thing.
Vimal Mehta
Greg, regarding the long-term safety, as I mentioned, this will be a continued topic of discussion. It will happen between now when we are initiating the home setting trial as well as at the pre-NDA meeting. There is not a drug that has been approved, which is acute treatment for agitation in Alzheimer's and is the episodic in nature. So that package will be discussed with the agency, and we'll continue to update like where we are on those discussions. Currently, we are focused on the study for that home setting a pivotal trial that we have agreed with the agency.
In terms of the cash run rate, I will pass it on to Richard to provide color on is what our guidance is.
Richard Steinhart
So good morning, Greg, how are you? The results of the reprioritization will begin to impact the fourth quarter and then certainly into next year. So we will see our burn rate start to decrease. In addition, there were a couple of one-time charges in this quarter that will be repeated moving forward. So overall, we expect the burn rate to decrease next quarter and then continue into next year.
Graig Suvannavejh
Great. And if I could ask maybe just one follow-on J code. How how should we expect that how that might impact the trajectory of account sales.
Richard Steinhart
And so so great. First of all, we were we were very pleased with CMS' decision to issue a permanent J-code. We do believe that this will neutralize any economic concerns that hospitals and clinics might have in putting a gummy either on formulary or providing broader use within the hospital clinic. So we look at this as a positive certainly our corporate account director team has been getting positive feedback from from either key hospitals or systems that they've been in contact with. So we feel very good about this development and do think that it alleviates of one of the barriers to two increased use.
Graig Suvannavejh
Thank you.
Operator
Corinne Jenkins, Goldman Sachs.
Corinne Jenkins
I guess just a couple from us. When do you anticipate that you're going to be able to finalize these protocols and initiate the at-home study for TRANQUILITY? And based on one of your prior answers, will these all be new trial sites that you need to enroll?
And then, on the TRANQUILITY point, you guided, I think, for 100 patients in that study, but it comes that you've yet to determine the primary endpoint that you'll be evaluating. So how did you come up with that guidance number of fusions required and could it evolve as you determine that critical?
Vimal Mehta
So in terms of the protocol, it's under development. We had a meeting with the FDA last month. So we were expecting the meeting minutes to confirm our understanding what protocol is in progress. We are finalizing the protocol once we had input from our all our experts are at board, then we will submit a protocol to that.
And after the protocol has been submitted, as you know, we will be in a position and within a short time after that to be able to initiate that trial. So I will and we will provide the guidance on when we think the trial can be initiated and what when first patient will be dosed. Also, we are in the process of finding how many trial sites we will open and what the recruitment rate will look like.
Coming back to your question about the 100 number that was as you saw that it is designed for a safety and to collect efficacy data. So FDA and has felt that that number will be sufficient to add to our current data set we have in with Fiber I in that early patient population. So those were the drivers and decision. We ended up making what needs to be shown in our homes. I think what patient number will be relevant and what the success criteria will be in terms of demonstrating the safety.
Rob you'd like to add anything?
Robert Risinger
Just that the protocol in development is really focused on both feasible and rapid generation. And I recognize this is a pivotal trial, but the primary aim is described safety and only about 100 patients. And they are being treated as needed with the 60 microgram dose or placebo. And so it's designed to generate placebo-controlled safety data on adverse events for the FDA to review with respect to including these in a potential labeling at home. So we're not able to say when the results will be available. However, we'll share more facts once the protocol is finalized. And of course, we expect that we'll announce when in the enrollment begins.
Corinne Jenkins
Okay. And then as you think about this extended agreement with Oaktree and QIA., how do you think about are we taking on additional debt versus and taking capital through the equity merger?
Vimal Mehta
I think always it's a delicate balance based on the business need say your current cash position, the options you have at your disposal.
The good news is that we have both equity as well potential that option in addition to as I mentioned previously, our partnering, which can be outside the US for Alzheimer's related agitation because it's opportunity in US and outside is really large. In addition, as we mentioned that we have started now more a concerted effort for the Amkor's access. So we'll leverage these assets to develop our financing strategy that is create best value for our shareholders.
Corinne Jenkins
Yes. Thank you.
Operator
Sumant Kulkarni with Canaccord Genuity.
Sumant Kulkarni
You have to so you mentioned it's easier to conduct a trial at home because of the lack of I think you used the term helicopter in the CRO, but would the burden of ensuring safety in the patient at home not be greater relative to a more marked monitored setting and how real time will feed back to the company be based on safety based events in the new Phase 3 trial.
Vimal Mehta
So AMF setting, as you know, it is a nonmedical setting where we have conducted TRANQUILITY II and II. So the only reason you had to handicap that in a CRO is to measure the efficacy, like, you know, back measurement and safety profile. We now have in elderly patients in TRANQUILITY II and II and we will be evaluating now in the home setting. So safety will be measured as for any other drug like that is being tested in a home setting.
And then in terms of the efficacy, it will be more collecting the efficacy data, whether there were the agitation that the patient will come given more by your caregiver. And we are developing the protocol and how we will measure that. But safety is because we have now established 60 microgram efficacy in ALF and that that was primarily the reason to come up with a design in a home setting to expand the patient access to this drug to the patient population if we get approved.
Sumant Kulkarni
And then we understand that the FDA could only opine on the data that you have in hand with TRANQUILITY II as part of a review, but did did the agency specifically say that only this one additional trial would be required to submit an sNDA or you won't require more efficacy trials.
Vimal Mehta
I think this is our alignment, and this is the recommendation of the FDA that it is a 100 patient home setting trial with the efficacy assessment as well as collecting a safety assessment and collecting efficacy using a caregiver because that is the best possible design executable in a home setting some. So that's our clear understanding and company believe that there will be one more trial that we have outlined today will be required for a potential submission of this sNDA.
Sumant Kulkarni
And last one, I'll squeeze one in is this trial going to have a Part one In part two like SERENITY trial?
Vimal Mehta
No, this will not have Part one and Part two because as you know, 60 microgram has efficacy has been established, we believe, in TRANQUILITY I and then further confirmed in our TRANQUILITY II trial. So I in SERENITY, we were trying to determine a lower dose than the approved dose and time to see it will be efficacious and safe. And that's part of the reason it was designed as a two-part study and TRANQUILITY, there was no need to design that as a two-part story.
Sumant Kulkarni
Thanks for the clarification.
Operator
Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Dr. Mehta for closing remarks.
Vimal Mehta
Thank you, everyone, for joining us today and for your continued interest in BioXcel Therapeutics. Have a great day. Thank you.
Operator
This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time and enjoy the rest of your day.
