CERE (2021 - Q2)

Good morning. Welcome to the Cerevel Therapeutics Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the Q&A portion of the call. Please note that this call maybe recorded. I will now hand the call over to Mr. Matthew Calistri, Vice President of Corporate Strategy and Investor Relations. Matthew

Thank you. Good morning, everyone. We appreciate you joining us for our second quarter 2021 results call. On today's call, you will be hearing from Dr. Tony Coles, our Chairperson and Chief Executive Officer; Dr. Ray Sanchez, our Chief Medical Officer; Dr. John Renger, our Chief Scientific Officer; and Kathy Yi, our Chief Financial Officer. Please refer to our press release from this morning detailing our Q2 performance as well as our updated corporate presentation, both of which are available on our website. I would like to remind you that we will be making forward-looking statements that reflect our current views related to our financial performance, future events and industry and market conditions, as well as forward-looking statements, including the potential attributes and benefits of our product candidates and the format and timing of our product development activities and clinical trials. We strongly encourage you to review the information that we filed with the SEC regarding specific risks and uncertainties. I will now hand it over to Dr. Tony Coles, Chairperson and CEO of Cerevel to provide an overview of our achievements and outlook.

Thanks, Matt, and good morning, everyone. Thank you for joining us. This quarter has been a pivotal one for Cerevel as we began to deliver on our aspirations to become the premier neuroscience company. We were pleased to announce positive Phase 1b topline data for CVL-231, our M4-selective PAM in schizophrenia earlier in the quarter. The results were robust and very encouraging, and we believe this compound has the potential to truly transform schizophrenia therapy and improve the lives of millions of patients and their caregivers. In a moment, our Chief Medical Officer, Dr. Ray Sanchez will review the trial results in more detail. Following our positive data readout for CVL-231, we're proud to have completed a $350 million follow-on offering with approximately $328 million in net proceeds. With our continued focus on creative capital formation, including our tavapadon risk sharing deal and redemption of our public warrants, we have now raised a total of more than $800 million as a public company. The proceeds of this most recent raise will be used to fund the comprehensive Phase 2 program for CVL-231 and to advance several of our earlier stage programs. Together with proceeds from the redemption of our outstanding public warrants, we have strengthened our balance sheet and have the resources we need to advance our pipeline through multiple data readouts over the next three years. Specifically, we anticipate two data readouts for Darigabat in 2022 with data from our Phase 1 acute anxiety trial expected in the first half of the year and the readout from our Phase 2 focal epilepsy trial in the second half. Also in the second half of 2022, we expect a Phase 2 readout of CVL-871 in dementia-related apathy, an asset for which we recently received Fast Track designation from the FDA. And in 2023, we expect data from our Phase 3 program for tavapadon in early and late-stage Parkinson's. Finally, as I mentioned, we'll be advancing CVL-231 into a comprehensive Phase 2 program and we'll provide additional details on timing and design in the months ahead. So as you can see, we have a rich late-stage pipeline that is poised to deliver a number of potential catalysts in 2022 and 2023, and we look forward to sharing those results with you as they become available. We're also showing great progress in our earlier stage pipeline. During the second quarter, we submitted an IND for CVL-354, our Kappa Opioid antagonist. And we anticipate another IND submission for CVL-O47, our selective PDE4 inhibitor in the fourth quarter of this year. As we enhance our discovery capabilities, we continue to leverage enabling technologies such as gene editing and artificial intelligence at our new Cambridge Crossing facility to identify the most impactful drug targets for neuroscience diseases. I'd now like to ask Dr. Ray Sanchez, our Chief Medical Officer to provide the latest updates on our clinical development efforts. Ray?

Thank you, Tony, and good morning to all of you. I'd like to start by spending a few minutes reviewing the recent Phase 1b data for CVL-231, our M4-selective positive allosteric modulator or PAM in schizophrenia. CVL-231 is designed as a once-daily oral medication that is highly selective for M4 over other muscarinic receptors. We believe this selective targeting enables CVL-231 to drive antipsychotic effect while avoiding serious GI extrapyramidal, akathisia and metabolic side effects that are commonly observed with non-selective muscarinic agents and/or approved antipsychotic agents. As a reminder, the Phase 1b trial was designed in two parts. Part A was designed to evaluate the safety and tolerability of multiple ascending doses up to 20 milligrams twice-daily. The results of Part A informed the dose selection for Part B, which was a placebo-controlled double-blind pharmacodynamic assessment to detect trends in the antipsychotic potential of the compound over six weeks of treatment in addition to evaluating the pharmacokinetic safety and tolerability profiles of two doses. Both doses of CVL-231 demonstrated clinically meaningful and statistically significant antipsychotic effects with no meaningful differences in gastrointestinal side effects, extrapyramidal symptoms or weight gain compared with placebo. The antipsychotic effect observed after six weeks of treatment was truly remarkable given that Part B of the trial was only 59% powered to show a 7-point different from placebo on the PANSS total score. The 30 milligram once-daily group demonstrated an absolute improvement versus baseline of 19.5 points, while the 20 milligram twice-daily cohort showed an improvement of 17.9 points on the PANSS total score. And relative to placebo, both treatment groups had statistically significant reductions of 12.7 and 11.1 points, respectively. These results were further supported by statistically significant and clinically meaningful improvements in the PANSS negative subscale for both doses. The 30 milligram once-daily group resulted in a 3.1 point improvement over placebo with a p-value of 0.009 and the 20 milligram twice-daily group showed a 3.7 point improvement over placebo with a p-value of 0.002. We also observed clinically meaningful improvements on the PANSS positive subscale for both doses with 30 milligram once-daily group demonstrating a statistically significant reduction of 4.3 points versus placebo. While there were no clinically meaningful differences on the Brief Assessment of Cognition in Schizophrenia Symbol Coding Test changes in the CGIS were consistent with other metrics with the 30 milligram two-day dose showing a clinically meaningful and statistically significant improvement of 0.9 versus placebo at Week 6 and 20 milligrams twice-daily cohort also achieving a clinically meaningful outcome. With respect to safety and tolerability, CVL-231 was overall well tolerated in the trial. Treatment emergent adverse events were similar across all three arms and very low rates of gastrointestinal AEs were observed. Importantly, CVL-231 was not associated with extrapyramidal side effects, akathisia or weight gain. Cardiovascular AEs were observed in only a few patients with -- and the details can be found on Page 55 of today's accompanying presentation. These six subjects had asymptomatic cardiovascular changes reaching the pre-specified thresholds, including three in the placebo group, and three in the active treatment groups. No events were clinically significant or associated with other reported AEs. As expected, we did see modest elevations in heart rate and blood pressure with CVL-231 compared with placebo, which are described on Page 56. These increases attenuated over the six-week course of treatment. At Week 6, the average systolic blood pressure increase relative to placebo was 1.2 and 0.9 millimeters of mercury with the 30 milligram once-daily dose and the 20 milligram twice-daily dose respectively as measured two hours post morning dose. There were no meaningful differences in diastolic blood pressure at Week 6. Heart rate increases at Week 6 relative to placebo were 4.4 and 5.3 beats per minute for the 30 milligram once-daily and 20 milligram twice-daily doses respectively, also as measured two hours post morning dose. All cardiovascular effects were asymptomatic and the increases were not clinically significant. We are highly encouraged by the safety and tolerability profile for CVL-231. Given the very strong antipsychotic activity observed, we're eager to advance CVL-231 into Phase 2 development for the treatment of schizophrenia. We also plan to evaluate the potential of the M4 mechanism and other populations, such as dementia-related psychosis. This is an important step in the execution of our pipeline, and as Tony mentioned, we believe CVL-231 has the potential to be a transformative treatment for psychosis. We're taking a deliberate and thoughtful approach regarding next steps in the development of CVL-231 and we are exploring every avenue to bring this therapy to market as rapidly as possible. Our next expected data readout will be for Darigabat, our alpha-2/3/5-selective GABAA receptor PAM in acute anxiety. Darigabat is currently being studied in a Phase 1 randomized positive and placebo controlled proof-of-principle trial in healthy volunteers. This trial utilizes a well-established Hypercapnia or carbon dioxide inhalation model to evaluate the potential of Darigabat in acute anxiety. Acute inhalation of 35% carbon dioxide can reliably trigger a transient acute emotional response and symptoms that resemble a naturally occurring panic attack in both panic disorder patients and healthy volunteers. This model has been shown to be sensitive to pharmacological treatments by a range of drugs used to treat anxiety disorder, including benzodiazepines and SSRIs as well as emerging new treatments with novel mechanisms of action. Recently, it was used as a proof-of-principle study by Johnson & Johnson with their Orexin-1 receptor antagonist to support advancement of the molecule into clinical development for major depression with anxious distress. Our ongoing hypercapnia trial is carefully designed to assess the anxiolytic activity of two doses of Darigabat administered over eight days. The trial is a two-period, two-sequence crossover design with three cohorts comparing Darigabat at high doses of 25 milligram BID, a low dose of 7.5 milligrams BID and a positive control treatment alprazolam extended release 1 milligram BID versus placebo. Importantly, only individuals who are found to be sensitive to the anxiogenic effects of CO2 inhalation at screening will be eligible for randomization. Participants in each cohort will be randomly assigned to one of two sequences and exposed to build an active arm and placebo. The primary endpoint for the trial is a change in the panic symptoms checklist score. This trial is being conducted at the Center for Human Drug Research or CHDR, which is a single specialized site in the Netherlands, and is therefore, uniquely affected by National Dutch Regulations related to the ongoing COVID-19 pandemic. In July, Dutch government authorities reimposed restrictions due to rising Delta variant cases in young un-vaccinated adults, which have impacted the recruitment timelines for this trial. While the trial remains ongoing and actively recruiting, we now expect data in the first half of 2022 and we'll continue to closely monitor the evolving COVID-19 guidance from the Dutch authorities. The results from this acute anxiety trial will inform how we advance this compound in one or more anxiety related indications. We are also dosing Darigabat in our Phase 2 global proof-of-concept trial in focal epilepsy, now known as the REALIZE trial as well as its corresponding open label extension trial. Data in focal epilepsy continues to be expected to readout in the second half of 2022. Meanwhile, our Phase 3 global TEMPO program for tavapadon in Parkinson's disease is ongoing. We continue to dose in all three of the Phase 3 trials. TEMPO-3 in late-stage Parkinson's and TEMPO-1 and TEMPO-2 in early-stage Parkinson's. In addition, we're also dosing both rollover and de novo patients in TEMPO-4, our 58 week open label extension trial. We expect data from TEMPO-3 in the first half of 2023 and data from TEMPOs 1 and 2 in the second half of 2023. Now, that I've reviewed the updates to our three lead clinical programs, Dr. John Renger, our Chief Science Officer will provide updates on the rest of our pipeline. John?

Thank you, Ray. Good morning, everyone. Let's begin by updating everyone on CVL-871, which is our D1/D5 partial agonist in Phase 2 development for the treatment of dementia-related apathy. As you will recall, apathy is among the most common neuropsychiatric comorbidities associated with dementias and remains a devastating condition without a currently approved treatment option. Given the seriousness of the condition and the significant unmet patient need, the FDA has expressed strong interest in the development of a treatment for apathy in dementia patients. In June of this year, we announced that we were granted Fast Track designation for CVL-871 for the treatment of dementia-related apathy. This designation by the agency has a potential to enable early and more frequent interactions with the FDA as well as a potential option for rolling and priority review of our NDA. This is a particularly exciting opportunity for us to work more closely with the agency as we have begun screening in our exploratory Phase 2a trial for dementia-related apathy. We anticipate clinical trials to be available in this novel indication in the second half of next year 2022. Based on the results of this trial, we are looking forward to interacting closely with the FDA in determining the best clinical development strategy for bringing forward a treatment in this novel, but impactful indication. As announced today, we will be hosting an R&D event on October 7th to discuss the scientific background of our CVL-871 program in greater detail along with updates on CVL-231 in schizophrenia and other programs. I hope you will all be able to join us. Now, moving beyond CVL-871; we're also advancing CVL-936. This molecule is our D3-preferring dopamine receptor antagonist for the treatment of opioid use disorder. As we can all acknowledge, this is an incredibly challenging area of unmet patient need and Cerevel is excited to be progressing a potential treatment in this important area where there has been a concerning expansion of overdose and overdose-related deaths due to opioid misuse. We plan to initiate a non-clinical safety pharmacology study in support of continuing a Phase 1 single and multiple ascending dose trial with CVL-936 to evaluate this compound, safety and tolerability profile. As we guided previously, in the second quarter of this year, we submitted an IND for CVL-354, a selective Kappa Opioid Receptor Antagonist, also known as a KORA lead molecule which has a potential to be a novel mechanism of action in a much-needed differentiated treatment option and potentially addressing major depressive disorder or MDD. We intend to initiate our Phase 1 first-in-human single and multiple ascending dose trial in healthy volunteers for CVL-354 in the third quarter of this year. Furthermore, in the fourth quarter of this year, we continue to plan to submit an IND for CVL-047. This compound is subtype selective PDE4B inhibitor. We are particularly excited about this clinically validated anti-inflammatory mechanism of action where clinical development of brain-penetrant molecules has been hindered by dose-limiting side effects, which we believe are related to non-selective action of prior compounds that acted equally across all PDE4 subtypes. By selectively sparing inhibition of PDE4D subtype, we believe CVL-047 has a potential to address symptoms of both MDD and schizophrenia. At Cerevel, we are in the midst of building a robust world-class drug discovery engine in our newly opened research labs at Cambridge Crossing. We are leveraging our differentiated understanding of neurocircuitry and world-class chemistry to develop and explore the potential of highly sophisticated small molecules. Currently, we are positioned to be a scientific leader in identifying and progressing selective muscarinic compounds, and as such, we are actively working through a range of additionally highly potent and M4-selective agonist and modulators to potentially advance into the clinical setting alongside CVL-231 to expand on the clinical utility that we have demonstrated with that lead molecule. Complementing our medicinal chemistry molecule optimization approaches are cutting edge combination of neuroscience research enabling technologies, including chemistry, gene modification approaches, AI-based compound screening and DNA-encoded library screening activities are all designed to enable us to rapidly and efficiently validate some of the most promising new drug targets and lead us to identify candidates to address the underlying processes and debilitating neuroscience disease. We believe the discovery engine we are creating will allow us to maintain a regenerative pipeline in novel therapeutics. It will continue to fuel Cerevel's goal of becoming the premier neuroscience company. We're looking forward to updating you on the ongoing progress of our extensive early and late-stage pipeline in the months to come. I would like to now turn it over to Kathy Yi, our CFO to review our financial performance for this quarter. Kathy?

Thank you, John. Good morning, everyone, and thank you for joining today's call. We issued a press release earlier today that included a financial update, which I will briefly summarize. Our total operating expenses were $50.5 million for the second quarter of 2021, which includes R&D expense of $37.3 million and G&A expense of $13.2 million. Relative to the second quarter last year, R&D expense increased by $15.1 million and the second quarter results included $2.1 million of equity-based compensation. The increase was primarily driven by the advancement of our late-stage and early-stage programs, as well as increased infrastructure cost to support the progress of our pipeline. We expect R&D expenses to continue to increase as we advance our 11 clinical and preclinical assets. General and administrative expenses for the second quarter of this year were $13.2 million relative to $13.0 million for the same period last year. G&A for the second quarter included equity-based compensation of $3.1 million. To-date, we have maintained a slower growth in G&A expenses relative to R&D, but we do expect a modest G&A increase over the coming quarters as we support the expansion of our programs in general infrastructure of the company. Moving to our cash position. As of June 30, our cash and cash equivalents were $327.1 million. This cash position does not include the approximately $328 million of net proceeds from our recent follow-on offering in July. In addition, we've recently announced the redemption of our outstanding public warrants, which could provide up to approximately $57 million of additional capital, assuming full exercise. With our current balance sheet, we're well positioned to advance our lead programs, including mid to late-stage clinical trials in Parkinson's, epilepsy, dementia-related apathy and schizophrenia, as well as pursue other earlier stage programs such as Darigabat in anxiety, KORA and PDE4. Overall, we have multiple opportunities for value creation milestones for the next few years and Cerevel is in a very strong financial position to fund these programs to the next inflection point. Finally, we expect our current balance sheet to fund our operations into 2024. I like to now hand the call back over to Tony to conclude.

Thanks, Kathy. As you can see, we've made tremendous progress here at Cerevel in just a few short months. As you've heard this morning, we're advancing our extensive pipeline in order to bring novel therapies to patients faced with some of the most challenging neuroscience diseases. We believe that neuroscience is the last great frontier in medicine and we're at the forefront of that frontier. Over the next three years, we anticipate important data readouts across a range of vaccine neuroscience diseases, including anxiety, focal epilepsy, dementia-related apathy and Parkinson's. And we will move successful programs ahead with speed and determination as we're going to do with our Phase 2 program for CVL-231 in schizophrenia. And to a robust early discovery program, we expect to bring forward successful novel compounds in other disease areas as we continue on our mission to unravel the mysteries of the brain. Thank you for being on this journey with us, and I hope you'll be able to join us for our October 7 R&D Event where we will focus on CVL-871 and dementia-related apathy along with updates on CVL-231 in schizophrenia and other programs. In addition, as I always do, I want to thank our employees who are dedicated to our mission to improve the lives of millions of patients suffering from neuroscience diseases. And of course, I want to give my heartfelt appreciation to the participants and investigators in our clinical trials for their continued courageous contribution to the development of our therapies. We could not do this without you. With that operator, we can now open the floor for questions.

Your first question comes from the line of Paul Matteis from Stifel. Your line is open, please ask your question.

Hey, thanks so much for taking my questions. I appreciate it.

Good morning.

Hey, good morning, Tony. Thank you. On the CVL-231 development path, I was wondering if you could expand a little bit upon the press release talking about a comprehensive Phase 2 development program since the 1b results were pretty robust. And I guess my question is really, why not start into Phase 3 of that? And then, on the safety data that you shared, thank you for giving more color there. I just wanted to clarify about the heart rate data, is it supine or standing, and whether or not that even matters in your view to kind of interpretation? Thanks so much.

Okay, sure. So I think Paul, can I ask Ray to address both of those questions? John Renger may have some additional comments. But Ray, why don't you start? And we'll go from there.

Sure. Hi, Paul. Good morning. Two good questions. So the first one in terms of our comprehensive approach, as you can imagine, we're quite excited about the data that's been generated today and we're looking at all possibilities of trying to accelerate and getting this medication to the patients as quickly as possible. We're in the process of developing that program now and plan to initiate it sometime next year. Our comprehensive approach not only addresses the clinical aspects, but also the non-clinical aspects of the full program that we are also looking at accelerating so that we can get the medication to patients as soon as possible. So in the months to come, we will provide more clarity and more detail on what that path looks like. But for now, we are working on understanding the data and putting together that program along with the rest of the team. And Paul, can you please clarify your second question again, please?

Yes. Thank you, Ray. I appreciate it. Yes I -- look -- and again, thanks for the additional color on heart rate and blood pressure. It was very helpful. I just was wondering if the heart rate data are standing or supine and if that at all matters to kind of the interpretation of it? I think we've seen it presented both ways. So which way?

Yes. No, it's supine and it was done one time in the morning and one time in the evening. But as you could see that we're quite encouraged by what we've observed really over the -- as you know, over the long term is really what's clinically meaningful and the clinic and the changes that we've seen over the long term, meaning over the six weeks, as you could see are quite encouraging. So we'll continue, of course, to monitor that as we move forward in development.

Yes, makes sense. Thanks, Ray.

Thanks, Paul.

Thanks, Paul. Operator, we'll take the next question.

Your next question comes from the line of Michael Yee from Jefferies. Your line is open, please ask your question.

Hi, good morning. Great to hear your voice, Tony.

Good morning.

We had a couple of nuance questions on CVL-231. I mean, I had a broader question on the development of your pipeline. On CVL-231, can you just talk about the, I guess, disclosure and timing of the PET data, how important is that data into your development plan, and would you consider both doses being taken forward? How do you think about that because you look at the 20 mg and the 30 mg, they're quite close, on one hand, one is more convenient and maybe a little more efficacious, but maybe there is some slightly different cardiovascular data. So maybe just talk about that a bit in terms of your decisions for doses going forward. And then on the other question, it's around the update around the anxiety data timing and COVID. Can you speak to whether other studies are enrolling in areas that need to be watched? How do you think about that? And how are you just managing COVID and in the geographies that you're involved in? Thank you.

Yes. Okay, I'm going to ask JR to take the questions regarding the PET receptor occupancy data and the dosing as well, and then Ray will come back on the anxiety study and the update on the COVID impact. So JR, if you could start with the receptor occupancy data timing and importance on the dosing.

Yes, sure. Thank you, Tony. And thank you, Michael for the question. Yes, so the PET receptor occupancy studies are ongoing. They are important for us in comparing the efficacy data that we've achieved and reported upon and relating that to the PK exposures, and what we understand between the BID and the once-a-day dosing. And so what we have to pull together is the receptor occupancy data, the PK data, the efficacy data and all of our safety and tolerability data and really help us firm up what the decision will be around the doses going forward. And so that data is rolling out. We will be increasing our understanding of where we're at with that through the next couple of months as we put together the plans for our next set of studies. But we'll have all of the information that we need to make an informed decision about the doses to take forward into late development by the end of this year. Does that help?

Yes. Do you think the R&D Day is a reasonable timing?

No. So, we have a number of study -- yes.

No, I think we may indeed have some of the oral data by that time, Mike, but I think what we want to do is study it as we always do comprehensively, and if we've got clear direction and a compelling set of answers, we will be able to provide that. But look, this is one of the top priorities to get both the dosing right and then the design for the next stage of development for CVL-231. So as quickly as we complete our thinking and finalize our plans, we'll let you know. But we do expect to provide some updates at the R&D Day event in later this year. So standby and stay tuned, but it will all depend upon when those days are completed.

Perfect. And then, on COVID and other impacts? Thank you.

Yes, sure. Ray, if you could take that one, that would be great.

Yes. Michael, good morning. How are you? So yes, we are monitoring the COVID situation quite closely. As you know, because the anxiety trial, as I mentioned, is being conducted at this one site, the Center for Human Drug Research in the Netherlands. That's a one site that has the capabilities to do that type of trial, but because of the Dutch regulations, that trial was impacted accordingly. To-date, we've not seen any other impacts to any of our other programs. As you know from other calls, we do have contingency plans that are built into the protocols to address some of those challenges, if those were to occur. We're monitoring it closely. But, no changes to our enrollment fortunately at this juncture beyond the anxiety trial.

Got it. Thank you.

Great. Thanks, Mike. Okay. Operator, we'll take the next question.

Your next question comes from the line of Matthew Harrison from Morgan Stanley. Your line is open, please ask your question.

Good morning, everyone. This is Kostas on for Matthew. One question about dementia-related psychosis. Can you talk a little bit about your view of the landscape here and how are you thinking about the clinical development in this population? Thank you.

Okay. Ray, if you would take that question. That would be great. Obviously, we're very excited about CVL-231, not just in schizophrenia, but possible other indications and dementia-related psychosis is one of those potential opportunities for us. But, Ray, if you could expand on the clinical relevance and significance of that syndrome, I'd appreciate it.

Sure, Tony. Good morning, Matt. Thank you for that question. I mean, as you know, there is quite a need for treating dementia-related psychosis over a decade ago. A lot of the antipsychotics are currently available, attempted trials in that population and FDA did a meta-analysis that resulted in a black box warning for cardiovascular CV stroke effects and deaths. And so there is a great need. There is a drug called pimavanserin that you may be familiar with, which is used for psychosis related to Parkinson's disease, but there is really nothing really available beyond the current antipsychotics to treat patients, and of course, with those associated risks. So the need remains to have therapies that can effectively treat psychosis in the population. We are going to be pursuing that population. But we will be going to the FDA with the pre-IND meeting to get clarity in terms of what the regulators believe is the path forward to seeking an indication in that population. So stay tuned for that.

Thank you.

Thank you for the question. Operator, we'll take the next question.

Your next question comes from the line of Greg Suvannavejh from Goldman Sachs. Your line is open, please ask your question.

Hey, good morning. It's Greg Suvannavejh. Thanks so much for taking my questions and thanks for the update. Can I just maybe focus on the Darigabat Phase 1 results that you're expecting now in the first half of '22, and as I'm looking at Slide 27, and the trial design, realizing that it's a small study. Maybe could you walk us through what the expectations should be. And I'm just trying to get a sense of realizing that it's just a Phase 1 study. But as it relates to, I guess, the primary endpoint being the panic symptoms list, could you just walk us through kind of how we should think about the data when it comes out, what would look good? And also in terms of the trial, even though it's well established, as you alluded to in your prepared comments, what are the perhaps features around the trial that we should watch out for in case there are certain pressure points within the study or trial design that might impact kind of the outcome of the data?

Okay. Ray, would you respond to that one, and any preamble, just talk a little bit about the currently available therapies for anxiety and where we think Darigabat could play a role, if it shows, talk a little bit about that .

Sure. Thank you, Tony. And good morning. So available therapies now to treat anxiety are really somewhat limited in terms of opportunity, but also in terms of efficacy. The SSRIs and when SNRI are approved for generalized anxiety disorders or panic disorder, not all of them, but some of them are, and of course, the benzodiazepines because of their issue with tolerance and addiction, so forth and all the side effects that are really driven by alpha-1 really limit their chronic use. So our hope is that, we have this novel compound that has selectivities at alpha-2/3/5 but importantly at alpha-2/3 that what we believe drives anxiolysis and you can still have patients with sedated or somnolence, but we're still anxious and we see that clinically frequently. So our hope is that we have this compound that can actually become an effective therapy for treating anxiolytic events, not just acutely, but also chronically and potentially even preventively over the course of our indication-seeking development program. So, our first step is really to understand if there is a signal in terms of Darigabat's potential to actually be an effective anxiolytic. And if you look at this design that is the two-period, two-sequence crossover design, looking at the two doses of Darigabat 25 BID, which has about 80% receptor occupancies and we've learned preclinically that you need higher receptor occupancies to achieve anxiolysis. We also test -- are reviewing a lower dose of 15 milligrams or 7.5 milligrams BID to understand the minimum effective dose. That's about 50% to 60% receptor occupancy. But also importantly, the alprazolam extended release 1 milligram BID was included as an active comparator. Because that's what was used in the J&J study with their Orexin-1 inhibitor to allow them to make a decision to prosecute their compound, based on seeing differences from placebo and both of those doses in that compound. So what we've done is we've -- are working with a group of advisors who understand this model well, understand the anxiety landscape well. And while we don't have any predetermined thresholds or assumptions in terms of what the data should read like, in other words, it's not statistically powered, it's designed to give us an understanding of the extent of a signal of Darigabat in this healthy volunteer population that we've induced panic symptoms, the experts as well as having juxtaposed with the -- not only the J&J data, but also the data that has been generated by other compounds, it will allow us to make a collective decision in terms of the next step forward and the signal that we will detect with Darigabat in this population. But there is no specific predetermined specification of what that data should look like.

Okay. Thank you.

Very good. Thank you, Ray for that. Operator, we will take the next question.

There are no further question at this time. You may continue.

Okay. Well, I think this brings us to the end of the call. Thank you guys for joining us this morning. It really was a terrific quarter, and even in the phase of ensuring with the capital raise and some of the other things that we've been able to achieve. So we are focused on advancing the pipeline, very focused on CVL-231 as a priority, but importantly on the rest of the pipeline where we're making really significant progress. We'll look forward to speaking with everyone on October 7 for our R&D update and we'll bring you additional information on dementia-related apathy and why that's so important and what we plan to do with CVL-871. So, thank you guys for joining this morning. Enjoy the rest of the summer; Happy Labor Day. And we will see you in the fall. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.