New Haven, Connecticut-based biotechnology company BioXcel Theraputics has been able to move into phase 3 clinical trials for its anti-agitation drug, BXCL501, in just two years, an unusually rapid timeline that’s enabled the CFO to make efficiency a hallmark of the company’s use of capital.
"We have a very capital-efficient business model, and that’s one of the reasons [we won’t have] to wait 10 years to develop a drug," CFO Richard Steinhart told CFO Dive. "We’re doing this much more rapidly, and so far the model’s been working."
Key to the company’s rapid pace of trials is its parent company’s artificial intelligence platform. The parent company, BioXcel Corporation, launched about 15 years ago to help companies dig through existing drug research in a fraction of the time it would normally take so companies can design clinical trials in a more targeted way.
"The AI platform can crunch hundreds of papers a day, where a good drug developer might be able to read one a day," Steinhart said.
To leverage this capability for its own products, BioXcel launched BioXcel Therapeutics about five years ago and gave it exclusive rights to use the AI platform for two categories of drugs: neuropsychiatry and immuno-oncology.
"About five years ago ... they started looking at this question of acute agitation and the AI started looking at second and third degree connections, which a good drug developer might be able to do, but it might take him 100 years," he said. "It made this connection of dexmedetomidine and said, 'If you can take this invasive IV drug and make it a non-invasive drug, and treat acute agitation, you might have something, because of this mechanism of action,' and that’s what we did."
Potential for wide use
The company’s main drug under development, BXCL501, reformulates the generic anti-anxiety drug dexmedetomidine from something that’s administered intravenously into a strip that patients can take sublingually.
By giving emergency room and ICU doctors and nurses an easy way to give the drug to highly agitated patients, particularly those with schizophrenia or bipolar disorder, they can calm the patients down without having to put them to sleep. This lets doctors engage with the patients at critical moments.
"The traditional approach is to give them an injection of something ER doctors call a B-52, and that puts them to sleep," he said.
Steinhart said the company completed a successful Phase 1b/2, trial last September, and now it’s working to release phase 3 trial results, on schizophrenia and bipolar patients, by mid-2020.
In anticipation, company executives have been looking to bring on board a chief commercial officer to lead its go-to-market strategy.
“We’re looking at all areas,” he said. “There are firms out there that do royalty monetization, which means they’ll give you upfront money for royalties down the road. Companies announce these kinds of transactions all the time ... We know we can’t sell this product in Japan or Europe," he added. "We’re a small company. We don’t have that kind of bandwidth, so we’re talking to folks in those parts of the world. We don’t know what form it will take at this point."
Efficient capital use
The company has about $40 million on hand. It raised about $60 million two years ago, when it held its initial public offering, and then conducted a second capital raise about a year later, bringing in an additional $20 million.
Steinhart said he and the CEO talk regularly with the investment community. The CEO is the main company spokesperson, while his role as CFO is to help reassure people that the company uses its capital efficiently.
"They want to talk to the CFO and make sure [they're] spending money where they say they're spending money, and they have a team capable of doing this," he said. "So, I think it’s a split responsibility."
The company also has an immuno-oncology drug in a Phase 1b/2 study for treatment emergent Neuroendocrine Prostate Cancer (tNEPC). The drug was previously under development for non-small cell lung cancer by another company, Point Therapeutics, but it wasn’t getting the results it needed to commercialize the product.
"The compound was sitting on a shelf," he said. "We went to the subsequent company [that purchased the company] and bought the whole package from them. They wanted to pursue a larger market, non-small cell lung cancer. It’s a bigger disease than [other indications] in terms of population."
The parent company’s AI platform was instrumental in their decision to buy the drug, despite the previous company's inability to commercialize it.
"Our models say it wouldn’t work in non-small cell lung cancer and it didn’t," he said. "Our models do say it will probably work in [other indications] and, sure enough, they had some pretty decent activity. That’s why they failed. The trial in non-small cell lung cancer was not successful."