Newron Pharmaceuticals S.p.A. (NWRN) Earnings Call Transcript

Ladies and gentlemen, welcome to the Newron Update Call. I am Sandra, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Stefan Weber, CEO. Please go ahead, sir.

Thank you, Sandra, and thank you to everyone joining us today. I'm on this call with Ravi Anand, our Chief Medical Officer, who right now is in Tokyo, Japan. We appreciate the opportunity to speak with you directly about evenamide, ENIGMA-TRS Phase III program. We have received, as you read this morning, the FDA's written communication regarding the clinical hold at the U.S. study centers in the ENIGMA-TRS 2 study. Our team is reviewing the agency's feedback. And today, I want to share where that work stands and update you on the ENIGMA-TRS program. Let me start with saying that Newron has extensive experience in sodium channel pharmacology, including the development of [indiscernible], an approved product with sodium channel blocking activity on the market in Europe for 11 years and 9 years in the United States. We are right now mostly focused on developing evenamide for people living with treatment-resistant schizophrenia and poorly responding patients with schizophrenia. The therapeutic options remain extremely limited. We believe that evenamide's novel mechanism has the potential to offer a meaningful new approach to treatment. Our commitment to the patients we serve means putting safety first. We value our continued engagement with the FDA, and we appreciate the agency's focus on patient safety. Our 2 Phase III studies continue to make important progress with key milestones ahead for both ENIGMA-TRS 1 and ENIGMA-TRS 2. Let me start with the FDA's written feedback and what it means for the ENIGMA-TRS program. The FDA is concern related to a possible association between sodium-channel inhibitors and arrhythmias that may lead to sudden death. In its written communication, the FDA identified a potential safety signal based on 4 deaths among patients treated with evenamide compared with one death among patients receiving placebo. And please remember, when we speak about evenamide that always evenamide as add-on to an antipsychotic, and we speak about placebo that is always the antipsychotic alone. These deaths occurred in 4 different studies in the year since 2023, 2 of them, importantly, in long-term open-label extensions in which there is no or no longer placebo control. It's important to note that the adjusted combined mortality of evenamide and the background antipsychotic was 1.31 per 100 patient-years compared to 1.81 per 100 patient-years for placebo, which in our study is always is background at antipsychotic on its own. After 4 deaths among patients receiving evenamide, 3 were considered unrelated to evenamide by the investigator. One was considered possibly related as 2 autopsies could not identify a compelling case for mortality. The FDA also raised questions regarding evenamide's mechanism of action and the minimal shortening of the QTc interval observed on ECG. The FDA notes that unlike QTc prolongation, QTc shortening has no established risk threshold by intervention threshold, and that the normal screening ECG does not reliably exclude [indiscernible] disorders, such as concealed Brugada syndrome, a very rare genetic condition with an estimated incidence of 1 to 2 per 100,000. Newron has not observed the pattern of cardiac abnormalities or arrhythmias neither in the preclinical nor the clinical safety data generated with evenamide [indiscernible]. The data include findings from preclinical studies [indiscernible] QT study and more than 5,000 ECGs from over 700 patients with schizophrenia. We believe the cardiac data generated to date provide an important foundation as we prepare our response to the FDA. Let me turn to how we are preparing that response. Our review extends across the full evenamide development program. The work includes a review of more than 10,000 ECGs generated across the evenamide program. We are also reviewing relevant data from the broader schizophrenia field, including expected mortality in this patient population. Independent cardiac electrophysiologists are also providing input. Newron is evaluating additional cardiac screening and monitoring measures for ENIGMA-TRS 2. We intend to incorporate those findings into our response and submit it to the FDA once that work is completed. So let me turn now to the progress of our ENIGMA-TRS Phase III program. ENIGMA-TRS 1 is nearing completion of enrollment with 497, I believe today, we should have crossed the 500 patients randomized to treatment and another 172 patients in screening. We expect to reach that milestone of completion of randomization by mid-October. And top line 12-week data are expected in the first quarter of 2027. ENIGMA-TRS 2, the study that is impacted by the FDA hold on U.S. studies continues to enroll outside the United States. 85 patients having [indiscernible] so far and additional clinical sites are being added as planned and announced a few days ago. We are encouraged by the progress across both studies, and we remain focused on preparing for the planned data readout. In closing my remarks, Newron's priorities are clear. We are focused on completing our assessment of the FDA feedback, submitting our response and preparing for the planned ENIGMA-TRS data readouts. Let's spend a second on the financial impact and sufficient funding requirements. We are funded through most of 2027, and that means from today's perspective beyond the expected value inflection points, which are the 12- and 26-week results from ENIGMA-TRS 1 and the 12-week results from ENIGMA-TRS 2. And which are the key milestones investors should now monitor. First of all, the completion of ENIGMA-TRS 1 enrollment as stated around mid-October. So in a very short time. Followed by the submission of Newron's complete responses to the FDA and FDA feedback [indiscernible] agreed protocol changes. The progress in non-U.S. ENIGMA-TRS 2 enrollment. The top line 12-week ENIGMA-TRS 1 data in Q1 '27 and updated ENIGMA-TRS 2 timelines when visibility are sufficient. We remain committed to the responsible development of evenamide and most importantly, to the patients and families living with treatment-resistant schizophrenia. So thank you for joining us today and for your continued interest in Newron. Sandra, we can now move to the Q&A session.

[Operator Instructions] First question comes from Boobalan from ROTH.

Stefan, can you hear me okay?

Perfect, Boobalan. Good to hear you.

So maybe at a high level, I just wanted to start with sodium channel drugs because they have precedents for cardiac warnings and targeted monitoring. For instance, drugs like lacosamide. So I'm just curious whether in doing your FDA discussions, there was mentioning of these drugs and can an approach that was taken for those drugs can be taken for evenamide as well? Or are they sort of signaling that they wanted to see the safety exposure package from the 12-week or 26-week package? I know it's a lot of questions bundled in one, but to the extent that you can answer, I would appreciate it.

Boobalan, this is Ravi. Good to hear from you. So let me try to answer your questions one by one. The FDA has had concerns about sodium channel modulators for quite some time, you may probably note the report out on [indiscernible] sodium channel modulators can be both anti-arrhythmic and pro-arrhythmic. [indiscernible], I mean, evenamide is a pure sodium channel blocker. It has no tendency for a QTc prolongation. In animal studies, there is no evidence at all of any arena. This is despite studies done at the request of the FDA with 15 observations per day for 12 weeks, nothing happened. 24-hour EEG, 24-hour ECG, 24-hour video recording in freely moving rats did not indicate anything at all. We have about tenfold safety ratio for the NAV 1.5 receptor, which, as you know, is expressed in the heart. So there's always a concern, but we don't have a concern because it's a tenfold higher level of exposure needed. The FDA asked us to do a TQT study, which we did. And there was the evidence shows that basically the prolongation of QTc was actually shorter than with [indiscernible]. Then the FDA then asked us to do a special assay called the [indiscernible] assay to look at the interaction of the type of sodium channels, and we did that. And the results indicate that evenamide is Class Ib anti-arrhythmic, not an arrhythmic. Now the FDA's position is that these people died and I'll go through the deaths in a minute, so there must be something, and they focused on Brugada syndrome. I can tell you that we have investigators in the trial and not one of them has ever seen a patient with Brugada syndrome. And then Brugada syndrome, what happens is that basically, there's a QT shortening which radically evenamide does do, but the extent of the shortening with evenamide is a few milliseconds. It's not massive. It's not like 30 milliseconds, not 50 milliseconds. But the FDA's point is, well, we don't know what level of shortening is needed. None of these patients had any ECG abnormality. None of them had any complaints of like an extra [indiscernible] palpitation, faintness, dizziness, no, we didn't have any of that [indiscernible]. The FDA -- this is the FDA's concern is, it's not so much that the drug did it, but because they couldn't find the reason, so they're saying it must be a usual drug. Now among these deaths, for instance, we have a patient who died a couple of months ago. She basically try to swallow 3 different pieces of [indiscernible] at the same time and started choking. The daughter tried to resuscitate and push the bread out of the mouth, she went blue and died. Do you think choking could be due to evenamide and this woman had already had the similar episode a few months before. There's another patient who died in his sleep, no abnormalities at all. Everything was perfectly okay. The FDA's contention was that maybe it was Brugada syndrome. And then the patient's mother informed us that the patients father had died the same way many years ago. That time there's no evenamide causing it. So it's not so much that there's a smoking gun that the drug has caused, it is because the FDA can't find any reason and we can't find any other reasons. So that's what it is. Two independent safety monitoring boards have looked at it and they all -- including cardiologists, and they all agree that there is nothing that they can say about it. We have now asked electrophysiologists who are cardiologists to propose criteria that could read out patients who are having Brugada syndrome or sodium-channel apathy, which might also produce the same thing, and we will incorporate that input into the protocol. There's no discussions from the FDA as to what [indiscernible] they themselves have said they don't know exactly what criteria to produce. So what they've done is they turned it over to us, who say you produce the criteria and submit it to us and we will look at it. Now you mentioned some of the other things. Now remember, most of the drugs that are there, they are not exactly [indiscernible] for instance, if you take [indiscernible] it's also the potassium channel blocker. Then you've got drugs like procanomide, [indiscernible] effect also. So this is not in the same category at all. Now one, we will be, of course, submitting the protocol to the FDA and discussing and trying to modify the population to exclude these theoretical patients with Brugada syndrome, which can only be done through a genetic test. And as Stefan mentioned, you barely find any patient with it. But we will do the test just to make sure we satisfy the authorities that we excluded those. I think that answers most of your questions, right?

Yes, absolutely. That's very, very helpful, very comprehensive. Let me just ask you a very hypothetical question just for our investors' understanding. Let's say, the whole remains even after your 12-week and 26-week data comes out, let's just say. So how should investors think about evenamide's prospects in the U.S.? And also, is it possible for you to conduct TRS 2 [indiscernible] and bring TRS 1 and TRS data assuming the data is positive back to the U.S., under sort of file for an approval based off [indiscernible] data. Just curious to hear your thoughts on that.

I mean it's not a hypothetical question. It's a real question. In the case of [indiscernible], the pivotal studies were done ex U.S. We had no pivotal study in the U.S. We have studies done ex U.S., and we filed in the U.S. to get approval. Of course, that was some years ago, so now things have changed. First of all, if the 023 study, the ENIGMA-TRS 1 study is significant -- showing significant efficacy and the 26-week endpoint is showing significant efficacy. That is a major, major finding. The first time ever that an add-on treatment, improve patients with treatment-resistant schizodophenia. Secondly, this -- the improvement [indiscernible] also was there long term. I don't think the FDA has inherently something against good drugs. So I think if we were to submit that data to the FDA, I'm sure they would raise some [indiscernible] definitely, they would be open to it. And if at the same time, we had a second study, the TRS 2 study, [indiscernible] I doubt very much that anybody would say, no, no, no, you cannot do this out here. Don't forget the FDA has approved drugs without a single patient being treated in the U.S., you may remember the [indiscernible] drug from Japan, where basically there's not even an IND in the U.S. and the FDA asked them to file an NDA. So I definitely -- we think we would get an approval based upon that.

The next question comes from Bob Pooler from ValuationLAB.

A few questions from my side. Unfortunately, the line is a little bit bad, so I didn't hear all the answers from the previous questions. But what does the FDA need to see before lifting the clinical hold? Have they given any guidelines there?

I mean the FDA has basically said, we are not able to identify what criteria to put in. You work on the protocol, you put in some more safety criteria, you exclude patients who could be at risk. So what we have done is now we have finally given in and said, okay, if that's what you want, we will do a test for patients with Brugada syndrome. Like I said to you, it's like maybe 2 patients in 100,000 or so. So we're wasting money, but we'll do it. We'll do a test for [indiscernible], sodium-channel apathies. [indiscernible] Third, we will exclude patients with a very short QT like [indiscernible] milliseconds, which I have to say that I have not seen a single one until now. We will exclude patients who during this -- any period in the study who show a reduction in QT, we will exclude those patients. We will do more frequent assessments for things like are you [indiscernible]? Do you feel [indiscernible]? Do you feel [indiscernible]? things of this type kind of thing. So that's what we are doing. Then we will also modify the patient population to make sure that we take patients who are definitely not improving on anything at all. So we're trying to make a much better case for risk benefit. And those are the changes which we are working on. Again, as you can imagine, this is such an obscure field, it is not [indiscernible] field for a psychiatric to be in to find out things about Brugada syndrome. So we are going to have to go to outside experts which we have done now. both in Europe and in the U.S. and probably in the next 10 to 12 days, we will file amendment.

Okay. So yes, it seems you guys done a lot of work on this already in your thoughts there also with the independent experts. So what are the expected time lines for responding to the FDA and potentially resolve the hold? So that would be, would you say, 12 days or 6?

It's 2 weeks for us to file, and they will basically take one month to review, depending on third parties here. So let's make clear that these 2 weeks will depend on in time feedback from third parties.

Okay. And then potentially then we could see maybe some even sites coming back on, [indiscernible]. Just in general, could you comment on your history with sodium channel blockers being put on hold by the FDA?

Yes. I mean we've had the experience [indiscernible].

I go way back with you guys, too.

That's right. [indiscernible] was put on hold for a very obscure reason. The FDA [indiscernible] the drug was going to produce [indiscernible]. And this was [indiscernible] partnered not just with Newron, [indiscernible]. And the whole program was put on hold for more than a year or so. And then basically, the [indiscernible] says, that is not the case. And then it basically holds -- the studies are completed. We turn to [indiscernible] tolerated and there's no issue at all. Then with evenamide, the FDA raised the same concern that you got seizures. This drug is going to produce seizures in patients, this that the other, reduce the dose, do this, do that. And we said, no, we think this is not a legitimate reason, we stick to this dose. And again, went on hold. As we, again, did the analysis to show them the sodium channel blockers can produce seizures, but it depends upon what circumstances, what dose under these circumstances, [indiscernible] patients with neuropathic low back pain, there is no risk. And then after having spent 1, 1.5 years on that and doing a lot of work on [indiscernible] studies in monkeys, then the FDA basically said, okay, go ahead. So it's not a new thing. I mean there are other sodium channel blockers, which have been stopped, [indiscernible] the potential. So I think if you take a novel drug, when you ever take a novel drug, you're going to have novel issues to deal with. And I think that's what it is that we're dealing with a completely new mechanism going into an area like treatment-resistant schizophrenia, add-on therapy, adding it on to an antipsychotics, we're adding it on to [indiscernible] for instance.[indiscernible] associated with high mortality. So we are in a pretty quagmire. And that's why I think it's difficult to make any prediction of any time but we have -- of the 500 something, we have 514 patients or so who have been randomized, all are doing well. No issues to investigate it. Not at all.

Yes. Just how much do you believe the U.S. all enrollment in TRS 2? And again, what were the percentage of planned TRS 2 patients coming from the U.S.?

Yes, that's a good question. I had anticipated putting in 100 patients from the U.S. into the trial [indiscernible], basically. So that was an agreement with the FDA. Of course, when this issue first hit, we slowed down the enrollment everywhere just to give enough time for the U.S. to be able to come back and put in the quarter. Now looking at it, I think you're taking a more pragmatic view. We will keep the U.S. sites open. We will hope that we will be able to enroll patients, if not 100, maybe 60, maybe 80. To compensate for that, I'm opening up additional sites in some other countries. So overall time line should not be impacted by too much.

Yes. Because I think Stefan said Q3, you expect then the top line results for TRS 2.

Exactly. So that's a 400-patient study so we expect now that we will -- we are done with the ENIGMA-TRS 1, all the resources will go to ENIGMA-TRS 2. And it's already, I think, close to about 100 patients screened.

Yes. Just on the U.S. patients, typically U.S. trials are a lot more and more expensive than non-U.S. trials. Is there may be some upside of enrolling non-U.S. patients into this in that respect that, yes, the delay cause you somewhat. But on the other hand, if you enroll and let's say, like a Plan B, okay, if the hold continues, you just continue with patients outside and file those 2 trials. Because again, this trial has been FDA approved. [indiscernible]?

The TRS 2 trial is fully approved is ongoing. Even the extension of the trial has been approved by some countries. You're absolutely right, the U.S. is far more expensive. At this rate, I will only say that basically, I would be ready to spend the money just to get this thing over with. But yes, by expanding the study outside the U.S. and the U.S. number of patients going down will probably equalize the cost difference.

Okay. And then just -- because it's very -- actually, we're in October. So Q1 is around the corner a little bit. Do you think that positive ENIGMA-TRS 1 data that materially can influence the FDA's risk-benefit assessment because then you have actually basically the first Phase III trial results there, if they're positive, of course?

That's true. However, if you remember about the design of the TRS 1 study is such that we will have the first results for the 3 months, but they won't be released, only after the 6-month data. And by the time the first 3 months, the results are available, the 6 months data endpoint would have been reached. So I don't think there's a major gain. I think it's probably better to go in with longer data. And by that time, we will have the TRS 2 data [indiscernible]. Of course, we will communicate the results for 3 months to the FDA in some way of that but it won't be like in the formal submission saying give us approval now.

Yes. Sorry, Bob, Ravi here. [indiscernible] We will have a press release on the 12 weeks of results, which will confirm that on the 30-milligram dose the drug, if it comes out positive, will have reached the endpoint and will have been safe and well tolerated. So there will be a communication on the 12 weeks results.