Marinus Pharmaceuticals Inc
NASDAQ:MRNS
Earnings Call Analysis
Q4-2023 Analysis
Marinus Pharmaceuticals Inc
The company reports managing business effectively in 2023, focusing on trials for RSE and TSC and commercialization of CDD. They anticipate a break-even on CDD investments by the first half of 2024. After halting the established status epilepticus trial and other cost reductions, they finished 2023 with $150.3 million, enough to sustain them until late Q4 2024, with a $100 million projection at the RSE readout. ZTALMY's 2024 projected revenues are between $32 million and $34 million, signaling continued growth but without full guidance for 2024 operating expenses, pending trial outcomes.
Product revenues from ZTALMY reached $6.6 million in Q4 and $19.6 million for the full year, surpassing their guidance. BARDA revenues stood at $11.4 million for the year, within guidance. R&D expenses increased due to onshoring efforts and clinical trials, partially offset by BARDA funding. SG&A expenses also rose, attributed to ZTALMY launch costs and higher headcount. The overall GAAP operating expenses were $160.5 million, within the revised guidance. Interest income increased benefiting from cash balance and yields, while interest expenses rose due to additional credit and financing arrangements. Pre-tax net loss widened to $142.9 million for the year, impacted by the priority review voucher sale in the prior year.
The company is prepared to build on the FDA-approved API in ZTALMY to develop an IV product. With planned meetings with the FDA, they aim to submit the NDA early in Q1 2025. The potential inclusion of safety results could optimize their labeling for the IV formulation. Statistical power for efficacy will be assessed from an interim analysis based on 83 patients, with ongoing enrollment providing additional safety data and supporting the targeting of major reimbursement in 2026.
Entering its third year, ZTALMY's patient acquisition continues from various sources, with an effective targeting strategy that will expand in 2024 without drastic shifts. Commercial efforts focus on maintaining strong involvement from pediatric neurologists and pediatricians. Dosing guidance for SRSE patients will be sought from the FDA, aiming to include safety and efficacy data in the label, consistent with the RAISE regimen.
The integrity and complexity of trial data collection, particularly for patients on multiple medications, have been significant challenges. A rigorous data cleaning process and effective screening by physicians for enrollment have boosted confidence in the integrity of the study. The Phase III RSE study reflects extensive work, with excitement from investigators and anticipation of impactful results on refractory status patients. A proof-of-concept study for oral ganaxolone is being considered for Lennox-Gastaut syndrome and other rare epilepsies, leveraging learnings from ZTALMY's PK and PD profiles.
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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, Investor Relations, Human Resources and Corporate Affairs. Ms. Weigle, you may begin.
Thank you, and good afternoon. With me from Marinus are Dr. Dr. Scott Braunstein, Chairman and Chief Executive Officer; Christy Shafer, Chief Commercial Officer; Dr. Joe Hulihan, 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 Form 10-K, 10-Q and 8-K. I will now turn the call over to our CEO, Dr. Scott Braunstein.
Thank you, Sonya. Marinus 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 ZTALMY. We finished 2023 with another strong quarter of enrollment and robust quarterly growth. As a result of the progress made by our commercial team, we expect to achieve profitability on our ZTALMY commercial investment by the second quarter of 2024, ahead of our previous 2-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 2 critical Phase III data readout in the second and fourth quarters of this year. . Our commercial partners in the EU, China and MENA regions continue to make important progress to support the ZTALMY launches around the globe. In China, the Tenacious team has been granted priority review of the NDA submission in TDD as well as contributing to the enrollment of the TrustTSC trial. In Europe, Orion continues to plan for the launch of the TAMI in select European countries in 2024. Finally, in the MENA region, we are targeting that our partner Biologics will 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 opportunities for ZTALMY over the coming years.
Turning to our clinical pipeline. I'll first share an update on our Phase III RAISE trial of IV ganaxolone in refractory status epilepticus. 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 6 months, we project approximately 100 patients to be included in the secondary endpoint analyses.
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 this 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 a 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 broad physician adoption.
Let me move to an update on our oral pipeline. Approximately 85% of the patients have been enrolled in our TrustTSC trial and the discontinuation rate is below 7%. Due to some minor delays in screening, we expect to complete enrollment in the TrustTSC trial during the first half of the second quarter. As a result, we now anticipate our top line Phase III 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 II. We believe the quality of this data set will support a compelling pricing strategy consistent with what we've seen to date for ZTALMY.
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 antiseizure 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 CDD, RSD and TSC market represent a multibillion-dollar opportunity, where we believe we can take a firm leadership position for these disease states and other refractory epilepsies. With an established commercial and clinical track record, we look forward to building our momentum for ZTALMY, 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.
Thank you, Scott, and good afternoon, everyone. In my remarks today, I will share an update on our ZTALMY 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 RSE. Starting with ZTALMY in 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 the Tommy as a critical treatment in the comprehensive management of seizures associated with CDD and to ensure that patients have seamless access to ZTALMY 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 patients fill of approximately 2 weeks in the second half of 2023, representing a consistent improvement throughout the year and demonstrating payers' understanding of ZTALMY's impact on patients in need. . Additionally, payer approvals of CDD prescriptions remain at nearly 100%, indicating strong payer recognition of the value of ZTALMY for these patients. To date, discontinuation rates are still well within our anticipated expectations. Looking ahead, we continue to expect full year 2024 U.S. 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 CDD market penetration. We are utilizing new data sources and analytics to better identify patients who are not built with the CDD ICD-10 code and third-party claims and identify patients who may have CDD, but had yet to have a confirmatory genetic test.
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 ZTALMY's sustained efficacy and safety profile supporting the use of ZTALMY as a proven treatment for combating seizures associated with CDD. We are excited for the opportunity to bring ZTALMY to more CDD patients in need and believe our commercial strategy has us well positioned to realize the potential of this novel treatment. Our experience with ZTALMY provides Marinus with a solid foundation for 2 potential commercial launches in 2025. This includes ZTALMY's expansion into TSC and the IV formulation of ganaxolone for RSE.
Launch planning is well underway for both TSC and RSC in anticipation of 2 key trial readouts later this year. Let me take a few minutes to summarize our commercial planning in support of each of these programs. Starting with TSC, our rare genetic epilepsy business is led by Senior Vice President, Lisa Legalon, a 30-year veteran in ultra-rare disease. We are planning to build on the strong foundation we have established with ZTALMY and CDD 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 ZTALMY 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. Research suggests that there is a potential strong overlap with CDD 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, TrustTSC 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 and the RACE 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 Rudisill, our Vice President and Business Unit Lead for the Acute Care franchise. In 2024, 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, NTAP 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 this team under the Kadoma 114 guidelines is 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 who 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 will ultimately provide patients with earlier access to treatment. The combination of our team's leadership, the commercial plans we have outlined and the success of ZTALMY gives us the confidence that ganaxolone has the potential to become a blockbuster franchise across CBD, TSC and RSE. 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 Hulihan, for an update on our clinical programs and development.
Thank you, Christy, and good afternoon. I'm pleased to share an overview of our pipeline progress, which includes 2 key upcoming Phase III data readouts and initiatives to support our continued clinical and scientific understanding of RSE and TSC. Starting with the RAISE trial of IV ganaxolone in refractory status. After a strong end of 2023, I'm excited to report that in January, we hit our enrollment requirement for the interim analysis. With this critical milestone achieved and dates 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 scheme has been hard at work, ensuring the 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 set. Once the preparatory steps are complete, the 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. If the study achieves these prespecified stopping rules, the Marinus leadership team will then evaluate the data and share top line results publicly soon thereafter, including both the coprimary and key secondary endpoints.
Successful results would serve as the basis for submission of a U.S. regulatory filing. While preparation of data for the upcoming DFC is ongoing, as Scott mentioned, we'll continue to enroll patients in the double-blind phase of the study. Cater from these additional patients will be pooled with the interim analysis data set and will serve as the basis for analysis of other secondary and health care utilization end points. If double-blind enrollment is stopped based on immune analysis results, we will then enroll new patients in a planned open-label extension to collect additional safety data that 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. The 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 [indiscernible] infusion. 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 in the hospital and discharge destination. The results are anticipated by the fall, and we plan to present the major medical meetings later this year.
Turning to our second refractory status trial. RAISE 2 is a Phase III double-blind placebo-controlled registration study targeting enrollment of 70 patients who have failed first-line benzodiazepine treatment and at least 1 second-line IV anti-seizure medication. In this study, we're evaluating IV ganaxolone in the population that's earlier in the continuum of refractory status in whom 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 and could be used to expand the U.S. label. Data presented at AES last December as well as other published research suggest that earlier treatment intervention in patients with status improves clinical outcomes. At that December meeting, we presented results from a 5-year analysis of status epilepticus treatment dynamics in the U.S. This analysis showed that even in the absence of IV anesthesia, refractory status that was treated with 3 or more IV antiseizure medications had worse outcomes and longer lengths of stay.
[indiscernible] 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 INDs. Preliminary data on outcomes have been encouraging, particularly since we implemented a dosing regimen tailored to the treatment of SRSE. This regimen incorporates a higher daily dose of approximately 1,000 milligrams of ganaxolone with 63 grams of Captisol. Based on the outcomes we've observed, we intend to conduct a proof-of-concept study of IV ganaxolone 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 to our ZTALMY 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, we're evaluating ganaxolone in TSC patients with refractory seizures in our ongoing TrustTSC trial. This is a global Phase III randomized double-blind, placebo-controlled trial of adjunctive ganaxolone which will enroll approximately 128 patients with TSC-associated seizures.
As 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 of this year. As a reminder, the trial provides 90% power to detect a 25% difference in seizure reductions between ganaxolone 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 transitioned into the open-label extension, the rate as high or higher than observed in the MARIGOLD study. We're targeting submission of a supplemental NDA in the first half of 2025 with a priority [indiscernible] expected.
Additionally, we plan to expand our investment in ZTALMY 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 encephalopathies and we feel there is a substantial unmet for seizure 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.
In closing, helping patients and families suffering from severe refractory seizure disorders remains at the core of what we do. Our clinical team is motivated and focused on ensuring these lives are transformed with new, safe and effective treatment options. I'd now like to turn the call over to our CFO and COO, Stephen Pfanstiel, for financial update.
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 managed the business in 2023. And we ensured that we remain focused on our critical investments in the RSE and TSC trials and on the commercialization of CDD. On the latter, we now project a breakeven on our CDD commercial investment in the first half of 2024, which is ahead of our projections in less than 2 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 2 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 earlier in the quarter that we project 2024 U.S. ZTALMY net product revenues of between $32 million and $34 million. As Christy mentioned, this increase from 2023 represents continued strong and steady execution on the launch. Unlike 2023, we are not providing full year 2024 operating expense guidance at this time as the level of investment will depend on the outcome of the RSE and TSC Phase III 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 recognized ZTALMY 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 period in the prior year. The full year total of $19.6 million exceeded our revised ZTALMY revenue guidance range of between $18.5 million and $19 million. Separately, we recognized BARDA 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 period in the prior year.
Our actual 2023 BARDA 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 3 and 12 months ended December 31, 2023, as compared to $21.4 million and $79.9 million 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 RSE clinical trial activity and increased headcount. As a reminder, the API onshoring effort is approximately 70% funded by BARDA, so the increase in R&D expenses is partially offset by the increased BARDA 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 period in the prior year.
The primary drivers of the change on a year-to-date basis were annualization of the U.S. 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 period 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 noncash 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 $16.4 million for the same period 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 noncash stock-based compensation expense of $3.9 million and $15.6 million for the 3 and 12 months ended December 31, 2023, as compared to $3.8 million and $14.9 million for the same period in the prior year. Cash used in operating activities was $118 million for the 12 months ended December 31, 2023, and 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 2 key data readouts in RSC 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.
[Operator Instructions] And we will take our first question from Brian Abrahams with RBC Capital Markets.
Good afternoon. Congrats on the enrollment completion of 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 with ZTALMY both for on and off label use are shaping your view of what the ultimate -- what the future dynamics might look like commercially in the TSC indication.
Thanks, Brian. I'll kick it off. This is Scott. Thanks for the congratulations, and then I'll kick it over to Christie. We're incredibly proud of the job that Christi's team has done within 6 or so months of launch, we had every state Medicaid program reimbursing ZTALMY. We currently have over 80% of commercial plans with relatively straight guidelines, and we've yet to have a patient who's been denied a therapy. Equally interesting since launch. We've had a meaningful number, about 10% of our current sales are coming from spontaneous use refractory epilepsy or [indiscernible] patients. And we're seeing, overall, about 2/3 of those script, those prior authorization forms being reimbursed by the payers. 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 data set, and we're very pleased with the reimbursement dynamics as of today. And I think going into TSC, we will have a second patient population in TSC, which in many ways mimics the CDD population, a highly refractory patient population that has failed multiple prior therapies, a patient population currently getting standard of care, either Epidiolex or Afinitor or [indiscernible] inhibitors and this will be the first add-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 I would say, a high level and high expectations that what we will share with payers will be equally compelling to that of the data in CDKL5 for ZTALMY. Christy, do you want to add I know I rambled on, I apologize. But anything you want to add?
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 a very, very distinct appreciation for what these patients have gone through. It's a different disease state than CDD, yes. But I do think that data is suggesting that although these patients have gone through many, many different medications they still are significantly in need in the refractory patient population. If CDD is an indicator of that success that we've had in the CDD population, we'll be thrilled to see that again in TSC.
And we will take our next question from [indiscernible] with TD Cowen.
I guess looking forward to potentially the data is positive, what remains to be done for the NDA package? How quickly do you think besides the guidance that you've given -- and is there anything outstanding on either the safety database that needs to be completed or TMC -- and that's it for me.
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 ZTALMY. So a substantial proportion of the NDA package has already been effectively blessed by the FDA. Certainly, the process from API to 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 similarly what we did with ZTALMY and that was an incredibly successful strategy. . For the filing, we will want to gather all the data from roughly 100 patients to provide that to the FDA, although our expectation is the label will be driven from those -- from the interim and just to share with folks, we actually will have 83 patients in the interim. We had 2 patients enrolled in the same day to finish the study. because we're Marinus, nothing is ever simple. But -- so that interim will be based on efficacy on 83 patients, but we will -- we are expecting a label 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 filing.
We will keep our sites open, and we will enroll patients 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 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 NTAP in 2026.
So the wheels are in place from our standpoint to be 100% prepared and we'll walk you through as we go through these processes through 2024. Joe, anything that you want to add on the data sets?
No. I mean as Scott mentioned, I mean, the pivotal data set for 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, I don't know, we'll continue to enroll until the DMC meets, but that full data set of -- [indiscernible] know how many patients enrollment has picked up quite a bit. We'll analyze health care utilization endpoints and secondary endpoints on that larger data set. And so that will give us more patients with those secondary endpoints. 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 efficacy.
We will take our next question from Andrew Tsai with Jefferies.
Congrats on the enrollment completion as well as other updates. So -- maybe an open-ended question for you guys. If an investor were to ask you what are maybe 1 or 2 things that keep you up at night with the Phase III RSE study? What things could have been done better or 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?
Yes. Thanks, Andrew. I'll take the second one. We will unequivocally update you all on should the DSMB suggest that we continue the study. So you should expect some update from us in the first part of the second quarter. I think one of the things probably in the last few weeks was keeping me awake these are very complex patients. In our Phase II, we had 1 patient who was on 100 different drugs and just collecting all of that data to me could create issues. I'm going to really give a shout out to our clinical team several months ago, started to create 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 are 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 finished enrolling the study at the end of January. We've now had several weeks to start cleaning the data. And so I feel what was keeping me awake at night was the integrity and the complexity, but I think the team has 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, Andrew.
So the last few weeks, the team has made great progress, and we are looking forward. This has been a 3-year project, the labor of love I think our clinical team has done an amazing job at enrolling the right type of patients for the 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 weekend I met with 5 investigators and there was a lot of excitement about the data set from the investigator team and I think they're equally excited to see the results as well.
We will take our next question from Charles Duncan with Cantor Fitzgerald.
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 stopping rules. And if you don't want to be all that granular, if you could just give us some guideposts. And then Also, I didn't hear anything about second-generation oral ganaxolone. Do you have any color on the progress there?
Thanks, Charles. I'm going to pass over the stopping criteria to Joe, but I'll just quickly say we didn't talk on this call. We were 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 prodrug program now being our lead candidate. We are doing IND-enabling work. We have a very high reason to believe that the [indiscernible] both ganaxolone and the [indiscernible] of the prodrug structurally looks incredibly safe. We will have that data over the summer, which, in my view, is a derisking event. For those of you who are not too familiar with what we talked about the prodrug program, the data looks to have a once-a-day dosing regimen, a blunted Cmax. We'll have new intellectual property. We'll have improved cost of goods and there are some other important business issues that we will talk about over the coming months on the prodrug 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 I think, quite honestly, that's going to align great with TSC data and the additional study that we're going to start in the fourth quarter in other refractory epilepsies. Joe, you want to talk about the stopping criteria?
Yes, sure. I mean, we're glad to share what the details of that are -- so the stopping criteria are 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, so both of those need to hit on the statistical significance independently. And the way the powering based on an alpha spending function, the p-value -- required p-value at the interim is 0.0293 and that -- with that p-value, we have over 90% power to detect a 40% treatment difference. With that said, if we get Deltas 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 endpoints at the interim, but the stopping rules depend on the co-primaries.
And we will take our next question from Joon Lee with Truth Securities.
Congrats on the enrollment as well. Good to hear that you're already planning for the launch of ZTALMY and IV ganaxolone next year. As you do the market research in preparation of launch, is there a specific extent profile that patients are looking for [indiscernible] docs are looking for? And is that consistent with your prespecified stopping criteria.
So I just want to be clear, the market research on the IV form of ganaxolone.
Yes.
Or ZTALMY for TSC, I wanted to be clear.
Both actually, but I think ganaxolone will be. Yes.
Christy, I'm happy to pass it to you.
Yes. As Scott mentioned, one of the things that keeps them 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 the the value that we believe that IV ganaxolone can bring is quite extensive because everything is confirmatory, everything that has been done in RAISE 1 to identify these patients is really what we've seen in real-world evidence as well. So they really mirror each other. And quite frankly, that's super supportive of the commercialization efforts that we're trying to build. Similarly, on the ZTALMY side of the business, I think that it is really important that we realize that this is the refractory patient population. And in TrustTSC, it is exactly what they have been doing there as well. little bit different from CDD, but again, it's super refractory patients. And so again, exactly who we'd be commercializing for.
Yes. And only I'll add to Christi's comments is that, I mean, the literature is quite clear that IV anesthesia leads to increased morbidity and mortality. And I think we designed that Phase III 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, is exactly what physicians told us they wanted. And certainly, I think it's going to be critical for the IV launch. Thanks for the question, Joon.
We will take our next question from Marc Goodman with Leerink Partners.
This is [indiscernible] on for Marc. I had a question regarding RAISE. So if RAISE is successful and ganaxolone is approved in RSC, how much of label use would you expect in the SE and RSE settings? And along the same lines, what you mentioned that their 10% of ZTALMY sales are coming from offlable use. Would you expect this percentage to stabilize or to increase.
Well, let me start with the second question, and then we'll work our way to the first. Look, I think we, as a company, will never predict nor give specific estimates about off-label use. It's -- our sales organization is 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, I mean 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 ZTALMY or second-generation and Jif label expansion over the coming years. But I think it's pretty clear that there is a significant number of patients with needs in the refractory epilepsy population. So I think -- it's great to see that physicians are asking payers to try ZTALMY. It's great that payers are reimbursing, and we're seeing about the same discontinuation rates in CDKL5 patients of 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 3 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 worse or outcomes the longer status patients are in status, the worst their outcomes, and we have good justification for moving up the treatment paradigm, starting with Raise 2, but other studies that 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 U.S. today suffering from super-refractory status. The typical eIND patients that we are seeing today are spending about 30 days in the ICU as physicians ask to use our drug on a compassionate use basis.
We continue to get 1 to 3 requests a month. We've had 2 more requests this month as eINDs -- and I think our -- a critical goal for us is to go back to the FDA and align on a dosing strategy, which would change from the raise dosing of 30 milligrams and 50 grams of captizole to a daily dose of about a little over 1,000 milligrams of ganaxolone and 63 grams of Captisol. 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?
Honestly, Scott, I think you hit on all points wonderfully. Thanks.
Good. Thanks so much. Thanks for the question.
And we will take our next question from Douglas Tsao with HC Wainwright.
Maybe starting with ZTALMY, just given now we're entering our, I guess, a third year of commercialization, I'm 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 the IV franchise.
Christy, do you want to jump in?
Absolutely. Thanks for the call, Doug. Over time, we launched this drug in September of 2022, and there were a couple of interested things to start. But after we really leveled off, 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 local or community physicians on a regular basis. And so we tend to see great involvement from pediatric neurologists or pediatricians and some slower function around these patients throughout. So what we do know is that 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 tick, if you will, and it's a little bit more robust for 2024, and 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 broad going into 2024, and there's no wild shifts on who's writing for the drug.
Okay. Great. That's really helpful. And then just to understand a little bit what you're trying to do in SRSE, Joe, you spoke about and Scott as well about getting alignment with the FDA in terms of the higher dosing. 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 because in theory should be on label to what your label will be in terms of RSE. Would it just be labeling to give specific guidance for that 1,000 milligrams dose for an SRSE patient? Or would it just be sort of providing loose language that you can dose up to 1,000 milligrams a day.
Let me kick it off and then Joe, I'll pass it to you. Yes, I mean we're expecting our label is going to be the raise regimen, which is that 830 milligrams over 24 hours, which contains 50 grams of gaptizole. So we wanted unequivocally align with the agency at that higher dose can be studied safely. We don't think there'll be an issue. Almost all of these EIND patients have gotten [indiscernible]. We have not seen a renal signal. We've never asked the agency because we never had to go that high for raise. So want to get their buy-in. And along with that buy-in, 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. I think 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 it. And I think we also want to really create a more robust data set for the drug outside of simply our raise and raise 2 populations. Joe, you want to talk about what you're thinking about for a trial design? .
Yes. We've been working on this with Henry Bebitus 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 -- the dosing regimen is different. It's -- whereas raise is 48 hours, it's been several days. This dosing regimen we've implemented more recently for the emergency INDs and without as much of a [indiscernible] 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 a dose of total -- high daily doses 1,050 milligrams per day. And as Scott mentioned, was 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 INDs with 100% certainty, but it looks like it's having an effect beyond the regimen that we had used previously, which was basically the raise regimen. So we really want to make sure that if docs are going to use it, that they use it appropriately. It's not anything we promote, but I do think potentially they use it. And so the dosing regimen is different, and we want to get some data on that from a clinical trial.
And so Joe, just as a final clarify. So would you anticipate having that new dosing regimen on the label itself? Or would it just be to get the higher dosing limits sort of on the label?
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. We really need to see 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.
No, I think you're right on target, Joe. I think, Doug, after we have this data, we'll go to the FDA, the team is 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. .
And we'll take our next question from Jason Butler with Citizens JMP.
Just one about the proof-of-concept study for oral ganaxolone and Lennox-Gastaut and the other rare epilepsies. Can you maybe just 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, the prodrug formulation or when would be the first time that you could bring that formulation into this patient population?
Joe, let me 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 a ZTALMY study. And I think, quite honestly, 5 years ago, I would have felt crazy to run this study. But given now what we understand about 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 by the -- and when we finish the TSC study, we'll be happy to share some of the -- we haven't seen the 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 DEs, but I would not expect this study that we will kick off to really include that second gen. We'll 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 through the SAD, MAD studies and hopefully, those will align in terms of what we want to do with the prodrug program. And I think we have the luxury of a little time to get this right, to be thoughtful. We've got 2 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?
What you're thinking about the trial design?
Yes. So again, this would be the initial trial is 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 X. I mean I think there are a lot of things we can get out of such a study besides signal finding. I mean we look at signals based on the genetic etiology, seizure phenotype, the type of seizure. We can also get information on non-seizure outcomes, some preliminary PK/PD data and also information to inform other pieces of a study design, selection of the clinical endpoints, even how we collect the data, 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. The general comment would be if everything -- if overall, we get a good effect and 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 GABAergic 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 haven't done the statistical powering on that yet. . A lot of the statistical descriptions in the study will be truly descriptive statistics without a priority statistical powering.
Thanks for the question. Operator, we're going to take 1 more question from the call in, and then we're going to have to cut the call. .
We will take our final question from Brian Skorney with Baird.
I just wanted to ask a question also on RAISE sort of the powering assumptions that [indiscernible] originally powered for 40% health and I think you've been talking about as low as 30% reach that site. I'm just wondering how to trying to think about that 30% delta. Is that based on blinded response rates overall in the study, just kind of going through the powering analysis and how different results wind up hitting [indiscernible] at 83 patients. So I don't know, is that informed at all by a blinded analysis? Or is that consistent with the original analysis? And can you review any of the statistical assumptions underpinning the [indiscernible] analysis. That's a secondary endpoint since it's not binary outcome? Just what sort of separation you need to see there to be statistic?
Joe, let me kick off and then I'll turn it over to you. 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 the study. I think it was very clear enough. So once we started the study and we added a protocol amendment, and we had our physicians really screening every patient -- our confidence continues 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 that the average patient in this study is not -- it's failing 3.5 drugs. 3.5 drugs. They are being observed for 24 hours compared to about 8 hours for our Phase II, giving us a lot of confidence that that physicians have run out of options. And our clinical team has pressed every enrollment every physician on enrollment making it crystal clear that if a patient wants to be enrolled, the physician had to feel comfortable that IV anesthetic was an extra of choice. Now that being said, there are still going to be some placebo patients that probably or drug patients that still are having epileptiform activity and are not getting IV anesthesia. Physicians are not perfect [indiscernible], but we feel quite confident that the placebo rate will come in lower than our original assumption of 30% to 40%. 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 -- this study progressed. 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, do you want to talk about the secondaries and then we're going to wrap.
Yes. Yes, yes. Just real quick about -- I mean, the power calculation, the hardest data we had was from a survey of the investigators. When they -- when we presented them with the profile based on the inclusion criteria, they said that they would advance to IV anesthesia 70% of the time within 2 hours. And so 70% advance, that gives the 30% not advanced, there's there would be basically what we would translate to the placebo rate, 30%, 35%.
In terms of the secondaries, the TIME-2 status cessation, we expect that actually to be -- it's a continuous variable, so even more robust than the responder analysis on the primary. And the way status would stop in the Phase II, it was a median of 5 minutes in the ganaxolone group. Patients in the placebo group aren't going to stop spontaneously. When they'll stop, it's when they're treated. And so that's going to be a period of hours probably in most cases. And so that continuous variable is extremely robust in terms of statistical power.
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.