During the earnings call, Marinus Pharmaceuticals provided a comprehensive update on their flagship product, ZTALMY, focusing on both financial and clinical progress. The company reported significant growth with net product revenues of $8 million for the second quarter. Marinus aims to potentially launch ZTALMY for tuberous sclerosis complex (TSC) in the second half of 2025, targeting profitability within 12 to 18 months post-launch. Additionally, the company is preparing for a Type C meeting with the FDA to discuss study endpoints and design for ganaxolone.
Key takeaways from the call include ZTALMY’s upcoming launch in China for treating CDKL5 deficiency disorder, anticipated Phase 3 readout for TSC, successful patent litigation, and plans for global market expansion. Marinus has extended their cash runway, implemented cost reduction plans, and aims to meet revenue guidance for 2024. The company is strategically focused on achieving profitability post-TSC launch and preparing for future medical meetings and FDA discussions.
Amidst financial challenges, Marinus is navigating through with a clear focus on product launches and clinical advancements. Analysts have revised their earnings downwards for the upcoming period, reflecting the company’s challenges in achieving profitability. Despite trading near its 52-week low, Marinus Pharmaceuticals has a market capitalization of $65.37 million and has experienced revenue growth, showcasing potential for future success in the epilepsy treatment market. Additional insights into the company’s financial metrics and analyst forecasts are available on InvestingPro for further evaluation. Tenacia Biotechnology is responsible for the commercialization of ganaxolone in China and plans to launch ZTALMY in the first quarter of 2025. Marinus has established commercial collaboration agreements in Europe and China, distribution agreements in MENA and Russia, and a managed access program for ganaxolone. They aim to supply ganaxolone on a named patient basis in MENA and Russia before regulatory approvals. They have engaged Uniphar Group to supply ganaxolone in more countries and expect the first patient to be approved soon. With ZTALMY approved in multiple regions, Marinus is expanding manufacturing capacity to meet demand. They are investing in a second facility to achieve mid and long-term forecasts. Ex-US launches are expected soon, with the first anticipated by the end of the year or early next year. In Europe, Orion Corporation is preparing for commercial launches, and Tenacia plans to launch in China in 2025. They are targeting a Japanese partner in 2025 and believe the global opportunity for ZTALMY is significant. They are focusing on achieving company profitability and are preparing for a potential TSC launch. Marinus will host an event on the oral franchise in September. Marinus successfully challenged a patent for IV ganaxolone. Lisa Lejuwaan provided an update on the commercial progress of ZTALMY in CDD and plans for potential expansion into TSC. Net product revenue for the second quarter grew over 85% compared to the same period in 2023, and Marinus is on track to achieve their revenue guidance for 2024. ZTALMY is making a positive impact on patients’ lives and changing the treatment approach for CDD. Physicians are increasingly prescribing ZTALMY for younger patients, indicating a wider acceptance in a patient population where parents are typically more cautious about trying new treatments. We are pleased with the positive patient experience, with over 70% of patients staying on active therapy since the launch. This aligns with the results from the Phase 3 Marigold trial and CDD, reflecting our expectations. The coverage for ZTALMY is widespread across commercial and government programs, demonstrating its value for patients and families affected by refractory epilepsy. We have not encountered any denials for coverage for CDD patients, highlighting favorable reimbursement dynamics.
Our rare disease approach has proven successful over the past two years, with a lean and efficient infrastructure in place. Our sales team continues to engage with key opinion leaders and healthcare providers, resulting in strong new patient enrollments and growth of new prescribers. We are focused on expanding the impact of ZTALMY in the CDD market through various initiatives, including robust data analysis to identify more CDD patients and educate physicians on the importance of genetic testing.
We are also launching initiatives to raise awareness of ZTALMY and CDD, such as the SHINING MOMENTS series featuring stories from caregivers and families. Additionally, we are planning to expand into the TSC market in the fourth quarter of 2025, leveraging our success in CDD. With a larger addressable patient population in TSC, we see a significant growth opportunity and a strong need for new therapies.
Our upcoming Phase 3 trial in TSC, TrustTSC, will include prior and concomitant usage of mTOR inhibitors and Epidiolex, providing confidence in combining medications. We anticipate rapid access across payers and straightforward patient activation in the TSC market. The unique mechanism of action of ZTALMY and its proven track record in CDD position it well for success in TSC. We are confident in our ability to replicate and accelerate our success in TSC and look forward to sharing updates at our upcoming Investor and Analyst Day.
Dr. Joe Hulihan will provide further updates on our clinical programs, including the upcoming Phase 3 data readout in TSC, progress in other rare genetic epilepsy programs, and the results of the Phase 3 RAISE trial. Despite the introduction of disease-specific anti-seizure medications, there remains a significant need for effective seizure control treatments. To address this need, we are currently evaluating oral ganaxolone in TSC patients with refractory seizures in the TrustTSC trial. Enrollment for the study was completed in May, and we anticipate reporting top-line results in the first half of the fourth quarter. TrustTSC is a global Phase 3, randomized, double-blind, placebo-controlled trial of adjunctive ganaxolone, which enrolled 129 patients with TSC-associated seizures. The trial provides 90% power to detect a 25% difference in seizure reductions between ganaxolone and placebo.
Key secondary endpoints in the double-blind portion of the study include the percent change in seizure frequency during the maintenance period, the 50% responder rate, and clinical global impression scales reported by the treating clinician and the patient or their caregiver. The trial is the first double-blind study in TSC to allow enrollment of patients taking Epidiolex or mTOR inhibitors, including Afinitor. Patients in the TrustTSC study had failed a mean of 4.8 anti-seizure medications and had a median baseline rate of 50 TSC-associated seizures per 28 days.
We have modified the Phase 3 titration schedule based on insights from our Phase 2 TSC study to improve tolerability and efficacy. The discontinuation rate in the Phase 3 study is below 7%, with only two patients discontinuing due to somnolence-related adverse events. Over 90% of patients completing the Phase 3 study are transitioning into the open-label extension, indicating both tolerability and potential benefit from treatment.
In addition to TSC, we plan to explore the use of ganaxolone in the treatment of other rare epilepsies, such as Lennox-Gastaut syndrome (LGS). A proof-of-concept trial for LGS is planned for the first half of 2025. We are also working on developing a second-generation ganaxolone product to optimize efficacy, tolerability, and dosing frequency.
Furthermore, we will discuss the results of our Phase 3 RAISE trial of IV ganaxolone in refractory status epilepticus and share our plans for future clinical and regulatory approaches. The RAISE trial showed promising results in rapidly ceasing status epilepticus and achieving durable control, despite not meeting the co-primary endpoint related to IV anesthesia progression within 36 hours. We plan to request a meeting with the FDA to discuss the trial results and determine next steps for the program. We are optimistic that the RAISE dataset will support the advancement of our program for IV ganaxolone in the treatment of status epilepticus. We have already provided IV ganaxolone for the treatment of super refractory status epilepticus to over 30 patients under emergency IND applications. The results from the RAISE trial have been accepted for a platform presentation at the Neurocritical Care Society meeting in October, and we plan to submit additional data for presentation at this year’s American Epilepsy Society annual meeting. Our clinical research team is dedicated to bringing safe, effective, and innovative treatments to patients with refractory seizures and status epilepticus. Now, I will pass the call over to our CFO and COO, Steve Pfanstiel, for a financial update. Steve Pfanstiel: Thank you, Joe, and good morning, everyone. I am pleased to provide a financial update and share our financial results for the second quarter of 2024. In the second quarter, we took significant actions following the Phase 3 RAISE trial to extend our cash runway into the second quarter of 2025. Cost reduction plans initiated in April are ongoing, with full cost savings expected in the third quarter. We project a 30% decrease in combined selling, general and administrative, and R&D expenses for the second half of 2024. Our restructuring of credit agreements with Oaktree Capital and Sagard Healthcare has further strengthened our financial position, with cash and cash equivalents at $64.7 million as of June 2024. We remain focused on growing the ZTALMY franchise and expanding patient access globally. Our full-year 2024 guidance remains unchanged, with projected ZTALMY net product revenues between $33 million and $35 million. In summary, our financial results for the second quarter show robust growth in ZTALMY product revenues and ongoing cost management efforts. Thank you. Joe, can you provide some insights on the subgroup analyses from the Phase 2 open label study that give us confidence in the Phase 3 study? And can you also discuss the consistency of seizure reduction for those who stayed on therapy until the end of the maintenance phase?
Joe: In the Phase 2 open label study, we saw consistent and significant seizure reduction across various subgroups of patients, including those with different seizure types and severity. The patients who stayed on therapy until the end of the maintenance phase showed sustained seizure reduction, which gives us confidence in the positive outcomes of the Phase 3 study. As for the ongoing Phase 3 study, we have over 100 patients who have entered the open label extension phase, demonstrating the continued interest and support for our therapy. The final patient visit will take place in September, most likely in the first or second week of the month. At this point, the majority of patients will have transitioned into the open-label phase of the study. We are seeing over 90% of patients completing the study and moving into the open-label phase, which is a significant improvement from the 26% discontinuation rate we experienced in Phase 2. This success can be attributed to the adjustments made to the dosing paradigm by Joe and the team. Patients who participated in Phase 2 are also able to continue in the open-label extension of the Phase 3 study, showing positive results. In terms of subpopulations, patients with focal seizure types and those on Cannabidiol and Everolimus have shown particularly good responses. With the right subtypes and seizure types included in the Phase 3 study, we are confident in the efficacy of ganaxolone. The baseline seizure frequency and number of prior therapies failed in the Phase 3 study are higher than in Phase 2, but we believe this will help minimize the placebo response and increase the likelihood of success in demonstrating the benefits of ganaxolone in these more challenging patients. Lisa’s market research is indicating that the high seizure burden will minimize placebo effects in the discussion. Based on the data, the company feels confident about the efficacy and expects the placebo rate to be in the high single digits to low double digits. They made a strategic decision to stay out of Eastern European countries to avoid high placebo rates, based on previous experiences. The Phase 3 trial has mostly patients with focal onset seizures, which are expected to show good efficacy with less variability. The company is also focused on patient stability and reducing somnolence to ensure optimal efficacy. The Type C meeting with the FDA is in progress, with a focus on realigning endpoints to better reflect the drug’s durability and efficacy. We are hopeful and aiming to submit the filing by the end of the month. A typical Type C meeting is scheduled for a 90-day review, so we are hoping to have that meeting early in the fourth quarter. We have a good understanding of the dataset, particularly Joe’s analysis of the EEG dataset and practice patterns. Unfortunately, we observed disheartening practice patterns in the ICU study, where physicians rotated every 12 hours. Despite this, we are confident in the efficacy of the drug and are focused on demonstrating its value to the FDA by aligning on a stratification strategy to ensure balanced patient outcomes. We will be presenting the majority of our data at the NCS meeting in October, where we will showcase the efficacy and tolerability of the drug. As for future studies, we are considering trial design and enrollment strategies to ensure success within a two-year timeframe. We are also exploring financing options with strategic partners and BARDA. We are optimistic about our interaction with the FDA and believe we have a clear path forward. Thank you for your question. We reviewed the analysis of our larger sites and found a stronger signal for the drug in our high-enrolling sites. This may be due to the fact that physicians at these sites are more likely to advance care with IV anesthesia. As a result, placebo rates were lower and the treatment effect was larger compared to the overall study. However, we have learned that using advancement to IV anesthesia as an endpoint may be too subjective. Despite physician reports that they would move to IV anesthesia 80% of the time after failing two drugs, the actual practice varied significantly. This variability in practice patterns was more pronounced in sites with fewer enrollees, potentially leading to site bias.
Moving forward, we are focused on minimizing variability in patient selection for future studies based on the insights gained from the RAISE study. We are also exploring alternative endpoints that may better reflect the efficacy of the drug, such as EEG differences between patients receiving ganaxolone and placebo. We are planning to discuss these findings with the FDA and seek their input on the most appropriate endpoints for future studies.
Regarding the long-term extension data for TSC, we are encouraged by the durability of response seen across different disease states. We believe the unique pan extrasynaptic activity of ganaxolone contributes to this durability and sets it apart from other drugs. We will be presenting this data at our upcoming Analyst Day in September and look forward to sharing more insights on the potential of ganaxolone in the treatment of refractory seizure disorders. Please proceed with your question.
Marc Goodman: Can you talk about any off label use you’ve seen with ganaxolone? And secondly, you mentioned eligibility for milestones. Can you elaborate a little bit for this year? Thanks.
Scott Braunstein: Marc, I apologize for missing the first question on ganaxolone. [Technical Difficulty] Steve, would you like to address the questions on off label use?
Steven Pfanstiel: Sure, I can provide some insight. In terms of milestones, the nearest term milestone is a EUR10 million payment from Orion upon commercialization of CDD. As for off label use, we have about 15% of patients on therapy without a CDD diagnosis, and most payers are covering the drug for these patients due to significant unmet need.
Operator: Thank you. The next question is from the line of Jason Butler with JMP. Please proceed with your question.
Unidentified Analyst: Hey, it’s Roy [ph] on for Jason. Just a quick one, for ZTALMY, Lisa mentioned key initiatives with over 1,000 patients IV and patients with possible CDD but no official diagnosis. What proportion of patients currently have a diagnosis?
Scott Braunstein: We estimate that there are more than 2,500 patients with a diagnosis or symptoms that haven’t been diagnosed yet. The exponential growth in the use of the ICD-10 code for CDKL5 indicates a growing number of patients being identified and treated. Our data-driven approach and increased genetic testing support have also contributed to the rise in CDKL5 diagnoses. Operator: We’re going to take one more call before we wrap up. Charles Duncan is on the line.
Operator: Yes, that’s correct. Please go ahead, Mr. Duncan.
Charles Duncan: Thank you for taking my follow-up, Scott. Assuming TrustTSC goes well and S&DA is approved, I wanted to ask about manufacturing capacity by the end of ’25. Can you provide some insight on that?
Scott Braunstein: Absolutely, Charles. We are confident in our current manufacturing capabilities and have a strong partner dedicated to helping us with ganaxolone. The long shelf life of the API gives us flexibility in production. We are looking to expand our capacity to meet the growing demand for ZTALMY, especially with the TSC launch on the horizon. We have plans in place to scale up production by ’27 and ’29 to meet expected demand. We are also preparing for global launches and have invested in a second manufacturing site to minimize risk. Our team is focused on executing our strategy post-data release, and we are confident in our ability to meet market demands. Thank you for your question, Charles.
Charles Duncan: Thank you.
Scott Braunstein: Thank you all for joining the call. We appreciate your time and look forward to the analyst event in September. Have a great day.
Operator: This concludes today’s conference. Thank you for participating. Have a wonderful day.