Q4 2023 Marinus Pharmaceuticals Inc Earnings Call
Participants
Sonya Weigle; Senior Vice President of Investor Relations, Human Resource & Corporate Affairs; Marinus Pharmaceuticals Inc
Scott Braunstein; CEO, President & Chairman; Marinus Pharmaceuticals Inc
Christina Shafer; Chief Commercial Officer; Marinus Pharmaceuticals Inc
Joseph Hulihan; Chief Medical Officer; Marinus Pharmaceuticals Inc
Steven Pfansteil; Chief Financial Officer & Chief Operating Officer; Marinus Pharmaceuticals Inc
Brian Abrahams; Analyst; RBC Capital Markets
Peyton Bohnsack; Analyst; TD Cowen
Andrew Tsai; Analyst; Jefferies LLC
Charles Duncan; Analyst; Cantor Fitzgerald & Co.
Joon Lee; Analyst; Truist Securities, Inc
Douglas Tsao; Analyst; H.C. Wainwright & Co
Jason Butler; Analyst; JMP Securities
Brian Skorney; Analyst; Robert W. Baird & Co. Incorporated
Presentation
Operator
Ladies and gentlemen, greetings, and welcome to Marinus Pharmaceuticals Fourth Quarter and Full Year 2023 financial results and business update call. Today's call is being recorded (Operator Instructions) Thank you. And it is my pleasure to introduce your host, Sonya Weigle, Senior Vice President of Investor Relations. Human Resources and Corporate Affairs with Marinus, you may begin.
Sonya Weigle
Thank you and good afternoon. With me from Marinus are Dr. Scott Braunstein, Chairman and Chief Executive Officer; Christy Shafer, Chief Commercial Officer; Dr. Joe Hulihan, head Chief Medical Officer; and Steve Pfanstiel, Chief Financial Officer and Chief Operating Officer.
Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by such forward-looking statements. These risks and uncertainties and risks associated with our business are described in the Company's reports filed with the Securities and Exchange Commission, including Forms 10-K, 10-Q and 8-K.
I will now turn the call over to our CEO, Dr. Scott Braunstein.
Scott Braunstein
Thank you, Sonya. Marinu has concluded 2023 with a strong finish across all fronts, commercial, clinical and operational. On today's call, I'll provide a brief overview of some of the key areas before turning it over to our leadership team.
Starting with an update on the atomic, we finished 2023 with another strong quarter of enrollments and robust quarterly growth as a result of the progress made by our commercial team. We expect to achieve profitability on our atomic commercial investments by the second quarter of 2024, ahead of our previous two year target. Christy will provide a summary of our revenue results in her remarks, as well as an update on our investments to continue to grow the CDD business and our launch plans as we prepare for two critical phase three data readout in the second and fourth quarters of this year.
Our commercial partners in the EU, China and media regions continue to make important progress that supports the Tommy launches around the globe. In China, the tenacious team had been granted priority review of the NDA submission and TDD. as well as contributing to the enrollment of the trust TSC trial in Europe. Orion continues to plan for the launch of the [Tommy] in select European countries in 2024.
Finally, in the META region, we are targeting that our partner biologics, we'll begin their distribution strategy in the second half of this year. Concurrently, we are expanding our manufacturing investments to ensure that we can adequately supply not only our global partners, but the broader market opportunity for Tommy over the coming years.
Turning to our clinical pipeline, I'll first share an update on our Phase three RAISE trial of IV ganaxolone in refractory status.
Several as we announced in our press release this afternoon, we are pleased to report that we have met the enrollment criteria for the interim analysis and now have more than 90 patients enrolled in the trial. We expect to deliver the interim results to the data monitoring committee over the coming weeks and plan to announce the outcome within the first half of the second quarter.
Based on continued strong enrollment seen over the past six months, we project approximately 100 patients to be included in the secondary endpoint analysis. This growing data set should drive a robust package for both the FDA filing and our health economic outcomes. We expect to have the comprehensive trial results over the summer and to present the data at a series of medical meetings in the fourth quarter.
We are currently planning for an NDA submission in the first quarter of 2025 and are expecting the priority review, we see the recent uptick in enrollment as a strong reflection of the potential market opportunity for the IV franchise. Domestically, we believe the addressable market for RSE is approximately 35,000 patients per year, and we have the unique opportunity to bring a novel therapy to physicians.
We plan to build our leadership in the hospital by continuing to invest in future status epilepticus research while making the appropriate commercial investments with the goal of ascertaining value-based pricing and broader physician adoption.
Let me move to an update on our oral pipeline. Approximately 85% of the patients have been enrolled in our trust TSC trial, and the discontinuation rate is below 7% due to some minor delays in screening we expect to complete enrollment in the trust TSC trial during the first half of the second quarter.
As a result, we now anticipate our top line Phase 3 results in the first half of the fourth quarter of this year rather than the end of Q3, we could not be more pleased with the baseline demographics of the patients enrolled the high percentage of patients rolling over to the open-label portion of the study and the low overall discontinuation rates, which are substantially different than what we saw in Phase 2.
We believe the quality of this data set will support a compelling pricing strategy, consistent with what we've seen to date for Tom and the commercial team continues to make the appropriate investments to prepare for a potential launch in 2025, and we are eager to offer patients suffering from refractory TSC, a novel anti-seizure therapy based on our market analysis, the addressable patient population in refractory TSC is projected to be about 10,000 patients in the United States by leveraging our current commercial organization. We believe successful expansion of this opportunity will require a modest incremental investment.
As a result, our goal is to drive profitability for the entire ZTALMY franchise within 6 to 12 months of the 2025 TSC launch 2024 will be a pivotal year for the company as we have built a solid foundation that has us well positioned to drive future growth together. The CDRSC and TSC markets represent a multibillion-dollar opportunity where we believe we can take a firm leadership position for these disease, state and other refractory FL with an established commercial and clinical track record we look forward to building our momentum for the Tommy while also reporting on these key data milestones later this year.
I'll now turn the call over to our Chief Commercial Officer Christy Shafer.
Christina Shafer
Thank you, Scott, and good afternoon, everyone. And my remarks today I will share an update on our Tommy launch, the progress we are making to grow our CDB. franchise and an update on our commercial readiness planning for potential launches into TSC and RSA.
Starting with Tommy and our first full year of launch, we generated net product revenue of $19.6 million for the full year 2023. This solid performance is the result of our strategy to establish autonomy as a critical treatment in the comprehensive management of seizures associated with CDD and to ensure that patients have seamless access to the Tommy from prescription through fulfillment, we ended 2023 with more than 165 patients active on therapy.
We continue to see Swift payer approval with time from enrollment to patient bill of approximately two weeks in the second half of 2023 representing a consistent improvement throughout the year and demonstrating payers understanding of the Tommy's impact on patients in need. Additionally, payer approvals of CBD prescriptions remain at nearly 100%, indicating strong payer recognition of the value of the Tommy for these patients to date, discontinuation rates are still well within our anticipated expectations.
Looking ahead, we continue to expect full year 2020 for US ZTALMY net product revenues of between $32 million and $34 million. The midpoint of this range represents growth of nearly 70% versus 2023. We are executing a number of strategies to maximize the market penetration. We are utilizing new data sources and analytics to better identify patients who are not billed with the CDB ICD-10 code and third party claims and identify patients who may have CBD, but have yet to have a confirmatory genetic tests.
Leveraging these data. We have also rolled out a genetic testing initiative, which will help accurately diagnose patients. And with the open-label extension data published late last year, we are able to emphasize the Tommy sustained efficacy and safety profile supporting the use of the company as a proven treatment for combating seizures associated with CDD.
We are excited for the opportunity to bring the Tommy to more CBD patients in need and believe our commercial strategy has us well positioned to realize the potential of this novel treatment. Our experience with the Tommy provides Marinus with a solid foundation for two potential commercial launches in 2025 These include the Tommy's expansion into TSC and the IV formulation of ganaxolone for our launch planning is well underway for both TSC and RSE in anticipation of two key trial readouts later this year.
Let me take a few minutes to summarize our commercial planning and support of each of these programs. Starting with TSC. Our rare genetic epilepsy business is led by senior vice president, Lisa Leger won a 30-year veteran in ultra rare disease.
We are planning to build on the strong foundation we have established with the ZTALMY and C CBD B and expand our proven strategy to capture the larger TSC market. We believe there is a strong business rationale and market opportunity for the expansion of our Tommy business into TSC, where we know there is a significant unmet need in refractory patients.
We plan to take advantage of synergies with CDD and TSC while leveraging market data that will further support an additional commercial launch. Our research suggests that there is a potential strong overlap with CDD, a rare disease treaters. And unlike CDD, TSC, patients may be easier to identify through a well-established ICD 10 code, which has been in use for more than 30 years and the physical TSC attributes, which may be identified at birth, our early plans to expand into the TSC market include disease state education for payers, engagement with very active and supportive advocacy partners, including the TSC alliance, first, TSC data education with payers and formulary decision makers in the advance of an SNDA submission and an enhancement of our patient services and specialty pharmacy model.
Turning to RSE with enrollment criteria now satisfied for the interim analysis in the RAISE trial and data anticipated in Q2.
Let me take a few moments to summarize our commercialization and launch plans. We have assembled a team with extensive commercial experience in the hospital setting under the leadership of industry veteran Kristin group to sell our Vice President and Business Unit lead for the acute care franchise in 2020 for our acute care business is focusing on aligning development and execution with key milestones driving access post-approval is pivotal to our launch strategy.
And this year, we are aiming to complete key access strategies such as channel and distribution plans and patent filing and pricing. In addition to strategic planning, we are preparing for execution with the build and deployment of a field access team entering the market as early as this summer activating that team under Dr. Donna won 14 guidelines. It's designed to address key access, stakeholder and payer groups with information that addresses their key value drivers.
These teams are permitted to disseminate health care economic information that is critically important to these financial decision-makers. We often control or influence formulary decisions for new therapies with corporate and system level financial decision makers. We believe engaging with these key stakeholders can accelerate access and awareness leading to more favorable formulary placement.
And we'll ultimately provide patients with earlier access to treat the combination of our team's leadership, the commercial plans we have outlined and the success of the Tommy gives us the confidence that ganaxolone has the potential to become a blockbuster franchise across CDD, PSC and RSC I look forward to providing further updates on our progress and plans throughout the year.
At this time, I would like to turn the call over to our Chief Medical Officer, Dr. Joe, who will hand for an update on our clinical programs and developments.
Joseph Hulihan
Thank you, Christy, and good afternoon. I'm pleased to share an overview of our pipeline progress, which includes two key upcoming Phase three data readouts initiatives to support our continued clinical and scientific understanding of our SCNTS, starting with the raise trial of 5G can actually refractory status after a strong end to 2023.
I'm excited to report that in January, we hit our enrollment requirements for the interim analysis with this critical milestone achieved and date scheduled for DMC review of the data. We continue to expect to report top-line results in the second quarter of 2024. Now that we've achieved the required enrollment target for the interim analysis, the clinical operations team has been hard at work, ensuring integrity and completeness of the study data to be provided to the DMC for their review. Here's what you can expect next in the process.
Presently, the clinical operations team is focused on data cleaning in anticipation of generating interim analysis data sets. Once the preparatory steps are complete, data will be provided to the DMC for a determination of whether the studies met the prespecified efficacy, stopping boundaries on the co-primary endpoints of the study achieves these pre-specified stopping rules, the Marinus leadership team will then evaluate the data and share top line results publicly soon thereafter, including both the co-primary and key secondary endpoints. Successful results will serve as the basis for submission of the US regulatory file, while preparation of data for the upcoming DMC is ongoing.
As Scott mentioned, we'll continue to enroll patients in the double-blind phase of the study data from these additional patients will be pooled with the interim analysis data set will serve as the basis for analysis of other secondary and health care utilization endpoint.
It's double-blind enrollment has stopped based on the interim analysis results will then enroll new patients in our planned open-label extension to collect additional safety data will support upcoming regulatory filings and future discussions with payers and other key stakeholders. As a reminder, the interim analysis will include results of the co-primary and key secondary study endpoints, which measure both onset of action and durability of effect in controlling status epilepticus.
Co-primary endpoints are status cessation within 30 minutes and prevention of escalation to third-line treatment with IV anesthetics for the key secondary endpoints, we are looking at another measure of onset of action, the time to status cessation analysis and a further measure of treatment, durability, lack of progression to IV anesthesia for 72 hours, which encompasses the 24 hour period following the end that we can actually choose following release of the top line.
Data analysis will continue and will yield results on other secondary endpoints and important health care utilization outcomes, including time on mechanical ventilation days in the ICU and the hospital and discharge destination results are anticipated by the fall, and we plan to present them at major medical meetings later this year.
Turning to our second refractory status trial. Raise two is a Phase three double-blind placebo-controlled registration study targeting enrollment of 70 patients who have failed first line benzodiazepine treatment and at least one second-line IV antiseizure medications. In this study, we're evaluating IV ganaxolone to the populations earlier in the continuum of refractory status into IV anesthesia is less likely to be an imminent next step in treatment.
We believe this study, which is expected to complete enrollment by the end of 2025, will support a European approval. It can be used to expand the US label data presented at ATS last December as well as other published research suggests that earlier treatment intervention in patients with status improved clinical outcomes at that December meeting, we presented results from a five-year analysis of status epilepticus treatment dynamics in the US.
This analysis showed that even in the absence of IV anesthesia refractory status, that was treated with three or more IV antiseizure medications had worse outcomes and longer lengths of stay. Our A. two trial is designed in a way that will allow us to assess the impact of IV ganaxolone on clinical outcomes and health care utilization in this subgroup of patients.
Moving to super refractory status or SRSE, we continue to supply IV ganaxolone to physicians upon request under emergency INDs for these patients whose life-threatening condition has high rates of morbidity and mortality. To date, over 25 patients have been treated for SRSE with ganaxolone under EI and teams preliminary data on outcome to encourage, particularly since we implemented the dosing regimen tailored to the treatment of SRSE.
This regimen incorporates a higher daily dose of approximately 1,000 milligrams of ganaxolone was 63 grams of Captisol. Based on the outcomes we've observed, we intend to conduct a proof-of-concept study by the Dynasil in approximately 50 patients with SRSE we plan to go to the FDA in the second quarter of this year with this modified dosing regimen and begin the study before year-end.
Turning towards the Tommy franchise. First, with TSC seizures in TSC are often treatment resistant despite the availability of newer disease-specific antiseizure medications to address this unmet need for evaluating selinexor alone in TSC patients with refractory seizures in our ongoing trust TSC trial.
This is a global Phase three randomized double-blind placebo-controlled trial of adjunctive ganaxolone, which will enroll approximately 120 patients with TSC associated achieved Scott mentioned, we've achieved over 85% of the target enrollment and are confident that we'll complete full enrollment early in the second quarter this year.
As a reminder, the trial provides 90% powered to detect a 25% difference in seizure reductions between the actual arm and placebo. As discussed previously, the titration schedule has been modified in consideration of the pharmacokinetics of ganaxolone and the timing of side effect onset in prior studies. Currently, the discontinuation rate in the study is below 7%, giving us confidence in the potential benefit of the revised titration, not just on tolerability, but potentially on efficacy as well.
In addition, we're seeing over 85% of patients who complete the study transition into the open label extension for rate as high or higher than observed in the Marigold Study for targeting submission of a supplemental NDA in the first half of 2025 with a priority review I expect.
Additionally, we plan to expand our investment into [Tommy] to explore its potential in the treatment of other rare epilepsies planning is underway for a clinical trial that would assess oral ganaxolone for the treatment of a broad range of epileptic encephalopathies. Many patients with seizures and neurodevelopmental disorders don't satisfy diagnostic criteria for Lennox-Gastaut syndrome or other well defined developmental and epileptic encephalopathy, and we feel there's a substantial unmet need procedure treatment in these patients.
We plan to initiate a proof-of-concept trial assessing ganaxolone in approximately 100 patients in the fourth quarter of this year, closing helping patients and families suffering from severe refractory seizure disorders remains at the core of what we do. Our clinical teams motivated and focused on ensuring these slides have transformed with new, safe and effective treatment options.
I'd now like to turn the call over to our CFO and COO, Steven Pfanstiel, for a financial update.
Steven Pfansteil
Thanks, Joe. And good afternoon, everyone. I am pleased to be able to provide a financial update as well as share our financial results for the fourth quarter and full year of 2023. First of all, I am proud of how we manage the business in 2023. We ensured that we remain focused on our critical investments in the ROC and TSC trials and on the commercialization of CDD on the latter, we now project a breakeven on our CD commercial investment in the first half of 2024, which is ahead of our projections and less than two years from the launch.
We were also not afraid to make tough decisions such as discontinuing the established status epilepticus trial and making other cost reductions to ensure adequate cash runway headed into two significant data readouts. As a result, we ended 2023 with cash, cash equivalents and short-term investments of $150.3 million.
This is expected to provide cash runway late into the fourth quarter of 2024. And importantly, we project a cash balance of greater than $100 million at the expected RSE readout. We announced early in the quarter that we project 2024 US. at Tommy net product revenues of between $32 million and $34 million. As Kristi mentioned, this increase in 2023 represents continued strong and steady execution on the launch. Unlike 2023, we are not providing full year 2020 for operating expense guidance at this time as the level of investment will depend on the outcome of the ROC and TSC Phase 3 trials. However, we expect operating expenses and cash burn in the near term to be consistent with the 2023 trends.
I'll now take a few minutes to summarize our financial results for 2023. We recognize that Tommy product revenues of $6.6 million and $19.6 million for the 3 and 12 months ended December 31, 2023, as compared to $2.3 million and $2.9 million for the same periods in the prior year.
The full year total of $19.6 million exceeded our revised ZTALMY revenue guidance range of between 18.5 and 19 million. Separately, we recognized barter revenues of $0.6 million and $11.4 million for the 3 and 12 months ended December 31, 2023 as compared to $1.8 million and $6.9 million for the same periods in the prior year. Our actual 2023 barter revenue of $11.4 million was within our guidance range of between $11 million and $12 million.
Research and development expenses were $26.4 million and $99.4 million for the three and 12 months ended December 31, 2023, as compared to $21.4 million from $79.9 billion for the same periods in the prior year. The year-to-date change was due to increased costs associated with our API. onshoring efforts, increased TSC and RSV clinical trial activity and increased head count.
As a reminder, the API onshoring effort is approximately 70% funded by Barta. So the increase in R&D expenses is partially offset by the increased part of revenue. Selling, general and administrative expenses were $15.4 million and $61.2 million for the 3 and 12 months ended December 31, 2023. As compared to $14.7 million and $56.8 million for the same periods in the prior year.
The primary drivers of the change on a year-to-date basis were annualization of the US, the ZTALMY launch costs and increased headcount. Full year 2023 GAAP operating expenses, consisting of both SG&A and R&D expense was $160.5 million, which was within our revised guidance range of between $158 million and $162 million.
Interest income was $1.7 million and $8.1 million for the 3 and 12 months ended December 31, 2023, as compared to $1.7 million and $2.4 million for the same periods in the prior year. The increase in interest income was driven by the overall increase in cash, cash equivalents and short-term investments and increased yield on those balances.
Interest expense was $4.3 million and $16.9 million for the 3 and 12 months ended December 31, 2023, as compared to $3.7 million and $10.7 million for the same periods in the prior year. The increase is driven by drawdown of an additional $30 million of credit under the Oaktree agreement in March 2022 and non-cash interest expense related to our revenue interest financing with Sagard, the company reported a net loss before income taxes of $41.8 million and $142.9 million for the 3 and 12 months ended December 31, 2023, as compared to a net loss before income taxes of $32.7 million and $15.4 million for the same periods in the prior year.
As a reminder, the prior year's results included the onetime sale of our priority review voucher in the third quarter. These totals include non-cash stock-based compensation expense of $3.9 million and $15.6 million for the three and 12 months ended December 31st, 2023 as compared to $3.8 million and $14.9 million for the same periods in the prior year. Cash used in operating activities was $118 million for the 12 months ended December 31, 2023, as compared to cash used in operating activities of $112.9 million in the prior year.
Before we move to the Q&A, I will make a few concluding remarks. We are very pleased with our progress to date, all of which has led to a number of potentially transformational milestones in 2024. We have two key data readouts in our SC and TSC that is positive to drive significant growth for our ganaxolone franchise, and we look forward to sharing these and other important updates in the months ahead. Thanks again for your continued interest in Marinus. Operator, you may now open the call to questions.
Question and Answer Session
Operator
Thank you. (Operator Instructions) Brian Abrahams with RBC Capital Markets.
Brian Abrahams
Good afternoon. Congrats on the enrollment completion and the interim cohort. And thanks for taking my question. I guess on TSC as we think about the potential future commercial opportunity there. I'm curious how the reimbursement dynamics that you're seeing would say tell me both so on and so on and off-label use are shaping your view of what the ultimate and what the future dynamics might look like commercially in the TSC indication. Thanks.
Scott Braunstein
Thanks, Brian. I'll kick it off this is Scott. Thanks for the congratulations, and then I'll kick over to Christy. We're incredibly proud of what the job that Christy's team has done within six or so months of launch. We had every state Medicaid program reimbursing Tommy. We currently have over 80% of commercial plans with with relatively straight guidelines.
And we've yet to have a patient who's been denied a therapy. And equally interesting, since launch, we've had a meaningful number. About 10% of of our current sales are coming from spontaneous use. Refractory epilepsy are the patients and we're seeing overall about two thirds of those script, those prior authorization forms being reimbursed by the payors.
So I think we really understand that the payers recognize that there are not a lot of therapy for these refractory patients. We have a limited dataset. We're very pleased with the reimbursement dynamics as of today. And I think going into TSC and we will have a second randomized controlled study, showing the value proposition will have a patient population in TSC, which in many ways mimics the CDD population, a highly refractory patient population that has failed multiple prior therapies of patient population currently getting standard of care, either Epidiolex or Afinitor or M4 inhibitors.
And this will be the first and on study ever with Afinitor. That's randomized, double-blind, placebo control. So I think we're going to go into all of our discussions with a high level of of and I would say a high level and high expectations that we'll we will share with payers will be equally compelling to that of the data in CDKL5 for this holiday.
Christy, you want to add and I know I rambled on I apologize, but anything you want to add?
Christina Shafer
Nothing additional that I want to add. But I think the most important thing is that we regularly are confirming assumptions that in the refractory patient population that payers have very, very distinct appreciation for what the patients have gone through that it's a different disease state than CDD.
Yes, but I do think that on data suggesting that although these patients have I've gone through many, many different medications, they still are significantly and need in the refractory patient population. If CDD. as an indicator of that success that we've had in the CDD population will be we'll be thrilled to see that again in TSC.
Brian Abrahams
(multiple speakers)
Operator
Peyton Bohnsack, TD Cowen.
Peyton Bohnsack
Hi, guys. Good afternoon and thanks for taking your questions. I guess I'm looking forward to potentially if the data is positive, what remains to be done for the NDA package on how quickly do you think of the guidance that you've given? And is there anything outstanding on either the safety database that needs to be completed or on CMC? And that's it for me.
Scott Braunstein
Yes, let me kick it off and then I'll pass it over to Joe. So for everyone out there as a reminder, this is the same API material that we have approved in the Tommy. So a substantial proportion of the NDA package has already been effectively blessed by the FDA. Certainly the process from API2, an IV product is will be new. We have as many of you know, we made a formulation change over a year ago. We did that with guidance from the FDA about half of the study will be actually in patients who have received that new formulation.
And over the coming weeks after positive data, we will set up a meeting with the FDA, a pre-NDA CMC meeting very similar to what we did with the Total Knee. And that was an incredibly successful strategy for the filing. We will want to gather all the data from a roughly 100 patients to provide that to the FDA of our expectation that the label will be driven from the from the interim and just to share with folks, we actually will have 83 patients in the interim.
We had two patients enrolled in the same day to finish the study up because we're Marinus. Nothing is ever simple, but so that enrolled will be based on and efficacy on 83 patients. But we will we are expecting a label around around those 83 patients. But certainly we'll provide all of the safety data and all of the double-blind data from all 100 patients as part of the file, we will keep our sites open and we will enroll patients should should the interim be stopped for efficacy. We will continue to enroll patients in an open-label fashion to continue to allow physicians to experience using the drug.
And we'll also file that that additional open-label data with the FDA. Certainly the regulatory team is expecting to have a pre-NDA meeting with the FDA soon after the top line data with our current plan for filing the NDA in the first quarter of 25 early in the first quarter. And that's really aligned both with the data that we have to compile, but equally important with our commercial team's best thinking about the time of launch and when we're thinking about major reimbursement, including in TAP in 2026. So the wheels are in place from our standpoint to be 100% prepared. And I will walk you through as we go through these processes through 2024. Joe, anything that you want to add on on the dataset?
Joseph Hulihan
No. I mean there, as Scott mentioned, I mean, the pivotal data for FS efficacy is going to be the 83 patients from the interim analysis, and then we'll be supplementing that, especially the secondary endpoints we'll be looking at. We expect somewhere around it will continue to enroll until the DMC meet, but that full data set of 100 knows how many patients enrollment has picked up quite a bit.
We'll analyze health care utilization endpoints and secondary endpoints on that larger dataset. And so that will give us more patients with those secondary endpoints. And and we'll have a good-sized safety data set as well, as Scott said, especially with continuing to enroll open label, if the DMC stops the study for.
Peyton Bohnsack
Yes. I guess I'm asking a question.
Scott Braunstein
Thank you.
Operator
Andrew Tsai, Jefferies.
Andrew Tsai
Thanks, good afternoon. Congrats on the enrollment completion as well as other updates. So on maybe an open ended question for you guys. If an investor were to ask you what are maybe one or two things that keep you up at night with the Phase three RESET study of that, what what things could have been done that are on an execution or a trial design standpoint, what would they be? And then really quickly if the stopping criteria is not met, would you still provide some type of update right away to the street? Thank you.
Scott Braunstein
Yes. Thanks, Andrew. I'll take the second one. We will unequivocally update you all on. Should this should the DSMB? I suggest that we continue the study, so you should expect some some update from us in the first part in the second quarter. I think one of the things probably the last few weeks that was keeping me awake and these are very complex patients, some in our Phase 2, we had one patient who was on 100 different drugs and just collecting all of that data on in the could it could create issues.
I'm going to really give a shout out to our clinical team several months ago started to create a really a computer-generated checkpoints for the data to make sure that the individual data sets were aligning with our primary endpoints accordingly and with what physicians were filling out and what was being filled out at the site, and we could do that in a way to really ensure a high quality of the data.
I would say as Joe mentioned in his prepared remarks, we we finished enrolling the study at the end of January, we've now had several weeks to start cleaning the data. So I feel what was keeping me awake at night was the integrity and the complexity. But I think the team has we really worked hard to get us there, and we're confident in delivering the data set as we talked about and probably even more excited about sharing some of the secondaries in the fall as well as Andrew.
So on the last few weeks, we the team has made great progress and we are looking forward. This has been a three year project, the labor of love. I think our clinical team has done an amazing job at enrolling the right type of patient for this study. And I think we're going to unequivocally know that not only does this drug work, but can it have a material impact in the treatment of refractory status patients? And I was just at a meeting in Orlando this week and met with five investigators. And it was there was a lot of excitement about the dataset from the investigator team, and I think they're equally excited to see the results as well.
Andrew Tsai
Thanks for the question.
Scott Braunstein
Yes, fingers crossed.
Operator
Charles Duncan, Cantor Fitzgerald.
Charles Duncan
Yes, hey, good afternoon, Scott and team. Congrats on completing that enrollment and commercial progress in the year. I had a question regarding raise one. I can't recall if you've ever shared with us as stopping rules. And if you don't want to be all that granular, if you could just give us some guide posts.
And then also, I didn't hear anything about second generation oral ganaxolone. Do you have any color on the progress there? thanks.
Scott Braunstein
Thanks, Charles. I'm going to pass over the stopping criteria that Joe, but I'll just quickly say we didn't talk on the on this call. We're trying to keep the call brief number one. So we kept it to 30 minutes on the second gen program. I would tell you all that. We're really thinking about our pro-drug program now being our lead candidate. We are doing IND-enabling work. We have a very high reason to believe that the project both Good afternoon.
And the cleavage of the pro-drug structurally looks incredibly safe. We will have that data over the summer, which in my view, is a de-risking event for those of you who are not too familiar with what we've talked about. The pro-drug program of the data looks to have a once-a-day dosing regiment. A blunted C-max will have real intellectual property will have improved cost of goods.
And there are some other important business issues that we will talk about over the coming months on the pro-drug program. And so our hope would be that we will finish that IND-enabling work by year end and be able to take that program into the clinic next year. And having quite honestly, that's going to align great with TSC data and the additional study that we're going to us start in the fourth quarter in other refractory epilepsies. Joe do you want to talk about the stopping criteria?
Joseph Hulihan
Yeah, sure. I mean we're glad to share what the details of that are. So the stopping criteria based on the co-primary endpoints, cessation within 30 minutes and lack of progression to IV anesthesia within 36 hours, each of their co-primary endpoints of both of those need to hit on the statistical significance independently. And the way the power of the powering is based on an alpha spending function, p-value required p-value with the interim is 0.0293.
And that with that p-value, we have over 90% power to detect 40% treatment difference. With that said, if we get a delta is 25%, 30%, it will still be statistically significant. The analysis is very robust. And so we have a lot of power at the interim analysis based on based on the 83 patients. And then we'll also be looking at the key secondary endpoint at the interim. But the stopping rules depend on the co-primaries.
Charles Duncan
Very helpful. Thanks for the added color.
Joseph Hulihan
Terrific.
Scott Braunstein
Thanks, Charles.
Operator
Joon Lee, Truist Securities.
Joon Lee
Congrats on the enrollment as well and picking up there for taking our question. Good to hear that you're already planned for launch of ZTALMY and I began a slow next year from as you do the market research in preparation for launch? Is there a specific efficacy profile that patients are looking for the banks are looking for? And is that consistent with your prespecified prespecified stopping criteria. Thank you.
Scott Braunstein
So I just wanted to be clear the market research on the IV form of the talk of ganaxolone.
Joon Lee
Yes.
(multiple speakers) , I am going to close actually growth actually, but I can ask maybe the ICR,
Scott Braunstein
Christy, I'm happy to pass it to you.
Christina Shafer
Yes. As Scott mentioned, one of the things that keeps him up at night is that these patients are quite sick. And I think what we've learned in our market research is yes, these patients are quite sick and they that the value that we believe that IV ganaxolone can bring is quite extensive because everything is confirmatory everything that has been done in raise one to identify these patients is really what we've seen in real-world evidence as well. So they really near each other. And quite frankly, that's super supportive of the commercialization efforts that we're trying to build.
Similarly on the Tommy side of the business, I think that it is really important that we realize that this is the refractory patient population and Entrust TSC. It is exactly what they have been doing there as well, a little bit different from CDD. But again, it's super refractory patients.
Scott Braunstein
And so again, exactly who would be commercializing four and the only thing I'll add to Chris's comments is that we know the literature is quite clear that IV anesthesia, we increased morbidity and mortality. And I think we designed that Phase three trial specifically to replace a treatment paradigm, which is antiquated and really deleterious to the patient's outcome. So that in my mind, the study design in and of itself, it's exactly what physicians told us they wanted. And certainly I think it's going to be critical for the for the IV league.
Joon Lee
Thanks. Thanks for the question, June, looking forward.
Scott Braunstein
Thank you.
Operator
Marc Goodman with Leerink Partners.
Hi, good afternoon. This is Basma on for mark. Thanks for taking our question. I had a question regarding Ray's. So if it's successful and CanExel and is approved and I see how much off label use would you expect in the ESE and SRSE settings. And along the same lines, what you mentioned that there are 10% of total new sales are coming from off-label use, or do you expect that percentage to stabilize or to increase our Thank you.
Scott Braunstein
Well, let me let me start with the second question and then we'll work away in the first. Look, I think we, as a company will never predict nor give us specific estimates about off-label use in our sales organization, hyper-focused on the CDD population, hyper focused on educating physicians about the use of genetic testing, and we would be the same with TSC That said, traditionally think you know the market better than us when GW was an independent company, we saw Epidiolex sales as high as 20 or 25% in the spontaneous use category. I think we will focus on doing additional studies either with the ZTALMY or second generation and drive for label expansion over the coming years.
But I think it's pretty clear that there's a significant number of patients with with needs in the refractory epilepsy population. So no, I think it's great to see that physicians are asking payers to tries it, Tommy, it's great that payers are reimbursing, and we're seeing about the same discontinuation rates in CDKL5 of patients, a low 20% range.
So that's also encouraging on the efficacy side. On the IV side, the commercial team will be hyper focused on the refractory status population. I think that is our best strategy for reimbursement for formulary acceptance. I think we really believe that there are three major parts of the refractory population, and we will start with the most difficult to treat and continue to focus on the importance of earlier intervention where there is significant data in the literature that the later you treat status, patients, the worst or outcomes, the longer status patients are in status, the worse their outcomes.
And we have good justification for moving up the treatment paradigm, starting with Raise 2. But other studies that we are in, we are considering today. I think we find equally compelling is the super refractory opportunity. We think there are about 5,000 patients in the US today suffering from super-refractory status, the typical eind patients that we are seeing today, we're spending about 30 days in the ICU as physicians asked to use our drug on a compassionate use basis. We continue to get one to three requests a month. We've had two more requests this month as EIND.s.
And I think we are a critical goal for us to go back to the FDA and align on a dosing strategy, which would change from the raised dosing of 830 milligrams and 50 grams of CAP dissolve through a daily dose of about a little over 1,000 milligrams of ganaxolone and 63 grams to cap dissolve. We think there's adequate safety there, but we do want to go to the FDA get their alignment. And Joe is working on that final clinical trial design.
Christi on the commercial side, do you want to add anything?
Christina Shafer
Scott, I think you hit on all points wonderfully. Thanks.
Scott Braunstein
Thanks for the question.
Christina Shafer
Thank you.
Operator
Douglas Tsao, H.C. Wainwright.
Douglas Tsao
Hi, good afternoon. Thanks for taking my questions and congrats on all the progress from maybe starting with seat-only of just given now, we're entering our, I guess, our 3rd year of commercialization. So just curious if we've seen a shift in where new patients are coming from and how that's evolved and how you expect to see that sort of change over the next 12 to 24 months?
And then I have a follow up on on the IV franchise.
Scott Braunstein
Chris, you want to jump in.
Christina Shafer
Absolutly, I think you recall that and, you know, over time, we launch this drug in September of 2022. And there were a couple of interesting things to start after we really level the patients are coming from a myriad of places we get an enormous amount of patients from our centers of excellence. I'll remind you, there's 10 of them across the United States, but these patients also are being seen by their their local or community physicians on a regular basis.
And so we tend to see great involvement from pediatric neurologists or pediatricians and some sort of function around these patients throughout. So what we do know is that and the targeting that we've done has been very, very good from '22 to now. We've now given that a little bit more of a kit, if you will. And it's a little bit more robust for 2024. And we've we've broadened our scope a little bit on who we're targeting, but I don't see us targeting differently, just a little bit more abroad going into 2024. And there's not wild shifts on who's writing for the drug.
Douglas Tsao
Okay, great. That's really helpful. And then just to understand on a little bit what you're trying to do in SRSE on, Joe, you spoke about and Scott as well about getting alignment with the FDA in terms of the higher dosing arm would be my guess is you're not planning on sort of doing another sort of placebo controlled study in SRSE. I'm just curious in terms of the language or sort of on the dosing, would it be sort of just bigger as far as the in theory should be on-label to what you your label will be in terms of RSE, would it just be labeling you give specific guidance for that 1,000 milligrams from dose and for in SRSE patient? Or would it just be sort of providing visual language that you can dose up to 1,000 milligrams a day? Thank you.
Scott Braunstein
Let me kick it off and then Joe, I'll pass it to you. Don't have I mean, I feel we're expecting our label is going to be the the raise regimen, which is that 830 milligrams over 24 hours, which contains 50 grams of Captisol. So we want it unequivocally aligned with the agency that that higher dose could be studied safely. We don't think it will be an issue. Almost all of the EID patients have gotten ZAR62. And CAPS is all we have not seen a renal signal. We've never asked the agency because we've never had to go that high for raise. So we want to get their buy-in.
And we and along with that by and we will be doing what will be a single-arm study. And I'm going to pass it over to Joe and yes, I don't think there's any reason that we need to do a double-blind, placebo-controlled trial in this population, and we need to show safety in this population. But all of those patients would have failed multiple therapies. And I think that's the way we're approaching. And I think we also want to really create a more robust dataset for the drug outside of simply our raised and raised two populations. Joe, you want to talk about what you're thinking about for a trial design?
Joseph Hulihan
Yes, we've been working on this with Henry. The cavities or grab a former Brigham ICU doc, who's been really leading the design on this. And we're looking, as Scott mentioned, single-arm, open-label trial on the dosing regimen is different. It's a whereas raises 48 hours. It's been several days. This a dosing regimen we've implemented more recently for the emergency INDs.
And without as much of a bolus upfront, it's really a different approach. We start the drug while the patients on IV anesthesia continue it for a period of time and then bring it down and it dose of total highest daily doses 1,050 milligrams per day.
And as Scott mentioned, with 63 grams of Captisol. And as I said, we've treated over 25 patients with this regimen, including children and we haven't seen any safety signals from this higher regimen, and it looks like this higher dose regimen. It's hard to say, based on the EIND.s with 100% certainty, but it looks like it's having an effect beyond the regimen that we had used previously, which was basically the rage regimen.
So we really want to make sure that doctors are going to use it that they they use it done appropriately. It's not anything we promote, but I do think potentially they deserve. And so the dosing regimen is different and we want to we want to get some data on that from a clinical trial.
Douglas Tsao
And so just as a final clarification. So would you anticipate having that new dosing regimen on the label itself? Or would it just be to get the higher on dosing limits on sort of on the label?
Joseph Hulihan
I mean, this is a first step. It's a proof-of-concept study. So I think it depends on what we see there. But I mean, we're just taking it a step at a time when we really need to see, you know, kind of safety and preliminary efficacy from a proof-of-concept study. And Scott, I don't know if you have any more comments about the dosing and, you know, I think you're right on target ?
Scott Braunstein
Joe, I think I think, Doug, after we have this data, we'll go to the FDA, the teams ready to go and we'll hear we'll hear what they have to say. And we certainly see it as next steps. I mean, I think I'd love to see us get safety into the label, but we haven't had those discussions with the agency yet, but certainly that would be our goal, our hope and our plan.
Douglas Tsao
Okay, great. Thank you so much.
Scott Braunstein
Thanks for the question.
Operator
Jason Butler, Citizens JMP.
Jason Butler
Hi. Thanks for taking the question. And let me add my congrats on all the progress. Just dumb one about the proof-of-concept study for oral ganaxolone in Lennox-Gastaut and the other rare epilepsies, can you maybe speak to the amount of data you would need to generate from that study before moving into a registration study in any specific patient population?
And would there be any opportunity in that study to introduce the next-gen formulation of the pro-drug formulation? Or when would be the first time that you could bring that formulation into into this patient population. Thank you.
Sonya Weigle
As Joseph kick it off, and then I'll pass it over to you for the trial design. Jason, what we're really thinking is that this will be as a ZTALMY study. And I think quite honestly, five years ago, I would have felt crazy to run this study. But given now what we understand about the ZTALMY the PK, the PD, the blood levels and what we've seen over the years, a consistent improvement in serum concentrations of the drug and bio.
And when we finish the TSC study, we'll be happy to share some of the so we haven't seen the black blood levels in TSC, but we've seen them in other healthy volunteer studies or SAD MAD studies. And certainly we're feeling good about the discontinuation rates in the real world. So I have a heck of a lot more confidence today that in any study with ZTALMY, we can get the vast majority of patients to a therapeutic blood level.
And I think our goal in this study is to really show that proof of concept. And I'll let Joe talk about it. I think what we also want to walk away is where do we think ganaxolone as a molecule is most effective. It's not only in LGS, but in other refractory disease, but we would not expect this study that we will kick off. You have to really include that second gen will use this study to help guide us on efficacy and where we want to go with the pivotal and we'll take the next gen due to the SAD MAD studies.
And hopefully those will align in terms of what we wanted to do with it with the the prodrug program. And I think we have, though the luxury of a little time to get this right to be thoughtful. We've got two launches that we'll be planning for in '25. So that will keep us pretty busy. And but that being said, I think there are not a lot of folks who are really thinking about these patients and it is a priority for us to get there.
Joe, you want to talk a little bit more about the trial design?
Joseph Hulihan
Yes.
Scott Braunstein
What I'm wondering about the trial design yet?
Joseph Hulihan
Yeah. So again, this would be the initial trials proof of concept, single arm open label. We have not yet done the detailed discussions about what statistical signal we want to see to say the drug is particularly effective in condition. I mean, I think there are a lot of things we can get out of such a study on besides signal finding, I mean, we look at signals based on the genetic etiology, a seizure phenotype, the type of seizure. We can also get information on non seizure outcomes on some preliminary PK/PD data and also information to inform other pieces of a study design selection of the clinical endpoints.
You know how we collect the data, but how we do the measurement and a basis for statistical more than statistics within the study itself, a basis for statistical powering on any subsequent study we would do on the general comment would be if everything if overall we get a good effect in every every subset seems to be trending in the same direction.
That will tell us one thing. But if something happens to pop, we may get patients in the study with specific disorders of gamma urging a transmission that may show a differential effect. All of those things will be informative in terms of how much of a signal. I don't think we have a we haven't done the statistical powering on on that yet. A lot of a lot of the description, a lot of the U.S. statistical descriptions in the study will be truly descriptive. Statistics were about a priority, our statistical power.
Scott Braunstein
Okay. So thanks for the question. Operator, we're going to take one more question from the call, and then we're going to have to cut the call.
Operator
Thank you.
Brian Skorney, Baird.
Brian Skorney
Hey, good afternoon, guys. I just wanted to ask a question also on rate and sort of powering assumptions there, and it is powered for a 40% delta. And I think you've been talking about a low of a 30% delta, three inch that. So I'm just wondering how to kind of think about it 30% of Delta is that based on blinded response rates overall in this study, just kind of going through the powering analysis and how different results wind up hitting stat sig on at 83 patients. And so I know that informed at all by a blinded analysis that occurs that consistent with the original analysis.
And can you review any of the statistical assumptions underpinning the time to cessation analysis and that's the secondary endpoints. And so it's not a binary outcome. Just what sort of separation you need to see there to be static?
Scott Braunstein
Joe, let me kick off and then I'll turn it over to him. So, Brian, we have not looked at the blinded data. It's had no impact on our decision making here. I think when we started the study, we really could not get a very comfortable handle on where placebo rates would be in this study.
They use own very clear enough once we started the study and we added a protocol amendment and we had our physicians really screening every patient, our confidence continued to grow that we were seeing a highly refractory population that was very likely going to have a low placebo rate.
We've shared with you that blinded data, the average patient in the study is not it's failing 3.5 drugs, 3 to 3.5 drugs. They are being observed for 24 hours compared to about eight hours for our Phase 2, giving us a lot of confidence that physicians have run out of options and our clinical team has pressed every enrollment, every physician on enrollment of making it crystal clear that if a patient was to be enrolled, the physician had to feel comfortable that IV anesthetic was an extra choice.
Now that being said, there's still going to be some placebo patients that probably or drug patients that still are having an epileptic form activity and are not getting an IV anesthesia physicians are not a perfect piece, but we feel quite confident that the placebo rate will come in lower than our original assumption of 30% to 40%.
And I don't think we had any magical way to really think about that when the study started, given that the only publication suggested about a 9% response rate in third line patients so I think we have just seen this patient, the study progress. We feel very good about it. We feel that we're likely overpowered for a 40% delta where we were and we think for the interim analysis, these 83 patients will be more than sufficient.
Joe, you want to talk about the secondaries and then we're going to wrap here.
Joseph Hulihan
Yes, just real quick about I mean, the power calculations, the hardest data we had was were survey of the investigators and the sites when they when we presented them with the profile based on the inclusion criteria, they said that they were advanced IV anesthesia now 70% of the time within two hours. And so 70%, you know, advanced seconds to 30%, not advanced there.
There would be basically what we would translate to the placebo rate 30%, 35% on in terms of the secondaries, you know, the time to status cessation. We expect that actually to be the you know, it's a continuous variable.
So even more robust than the responder analysis on the primary and the way status would stop you know in the Phase 2, it was a median of five minutes and we can actually on group patients in the placebo group on kind of stopped spontaneously when they'll stop it when they're they're treated. And so that's going to be a period of hours, probably in most cases. And so that continuous variables extremely robust in terms of now statistical power.
Brian Skorney
Great. Thanks a lot.
Operator
And ladies and gentlemen, that is all the time we have for questions today. This will also conclude today's call. We thank you for your participation and you may now disconnect.
