Mind Medicine (MindMed) Inc

F:MMQ

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good morning, and welcome to the Mind Medicine Second Quarter 2024 Financial Results and Corporate Update Conference Call. [Operator Instructions] This call is being webcast live on the Investors and Media section of MindMed's website at mindmed.com and a recording will be available after the call.

I would now like to introduce Rob Barrow, CEO of MindMed. Please go ahead.

[Robert Barrow, executive]

Thank you, and good morning, everyone. Welcome to our second quarter 2024 financial results and corporate update conference call.

Today, we will be sharing highlights from the second quarter, along with the significant progress we've made with plans for our Phase III program in Generalized and Guiding disorder, or GAD, Additionally, I'm excited to share further specifics about the expansion of our R&D program for MM120 into major depressive disorder or MDD, both of which are further supported by the financing we announced last week.

The press release reporting our financial results and the presentation we will be using on today's call are both available in the Investors and Media section of our website and our quarterly report on Form 10-Q for the quarter ended June 30, 2024, was filed this morning with the Securities and Exchange Commission.

During today's call and outlined on Slide 2, we will be making certain forward-looking statements. including, without limitation, statements about the potential safety, efficacy and regulatory and clinical progress of our product candidates, our anticipated cash runway and our future expectations, plans, partnerships and prospects. These statements are subject to various risks such as changes in market conditions and difficulties associated with research and development and regulatory approval processes. These and other risk factors are described in the filings made with the SEC, including our annual report on Form 10-K and our Form 10-Q filed today.

Forward-looking statements are based on the assumptions, opinions and estimates of management of the date statements are made including the nonoccurrence of the risks and uncertainties that are described in the filings made with the SEC or other significant events occurring outside of MindMed's normal course of business. You are cautioned not to place undue reliance on these forward-looking statements, which are made as of today, August 13, 2024. MindMed disclaims any obligation to update such statements even if management's views change, except as required by law.

Let me begin by taking you through today's agenda on Slide 3. I'll start with our Q2 2024 business update and then Dr. Dan Karlin, our Chief Medical Officer, will join to discuss our R&D plans for MM120 oral disintegrating tablet, or ODT, in GAD and MDD. We are also pleased to be joined by Dr. Reid Robison, senior principal investigator, Cedar clinical research and [ adjunct ] faculty at the University of Utah. Dr. Robison is an investigator in our MM120 development program and will provide his views on our Phase III clinical trials. Following Dr. Robison, I'll discuss our second quarter financial highlights. Here are anticipated upcoming milestones, and then we'll conclude with a Q&A session, where we will also be joined by Dr. Francois Lilienthal, our Chief Commercial Officer, to answer your questions.

On Slide 4, I'm pleased to share our progress for the quarter and for the first half of the year. In June, we successfully completed a constructive end of Phase II meeting, the U.S. Food and Drug Administration, which supports the advancement of MM120 into pivotal Phase III clinical trials for GAD. We are on track to initiate our first Phase III trial for MM120 ODT GAD in the second half of 2024, which marks a major milestone in our development program. We are also excited to share with you our plans to expand our R&D program for MM120 into MDD with the initiation of the Emerge study, a registrational clinical trial for MM120 ODT and MDD which we expect to be initiated in the first half of 2025.

We also expect to conduct a second registrational study in MDD with a study design and timing to be informed by the Emerge study and additional regulatory discussions. The scope and sequencing of our clinical program for MM120 and MDD is being carefully executed to balance the exciting opportunity represented by MDD, while maintaining a cash runway into 2027. With this approach, we believe our cash runway will be sufficient to support operations for at least 12 months beyond our first Phase III readout in GAD.

In June, we announced the U.S. Patent and Trademark Office issued a new patent covering the formulation and manufacturing methods in MM120 ODT that extends our intellectual property protection for MM120 ODT through 2041, providing further runway for potential commercialization. We have also seen continued progress with our second lead program, MM-402, which is our proprietary form of the MM-402 [ (R(-)-MDMA) ]. We are currently evaluating MM-402 in a Phase I single ascending dose trial in healthy adults, intended to characterize tolerability, pharmacokinetics and pharmacodynamics.

We expect the results from this trial will enable further clinical trials to characterize the effects of repeated daily doses of MM-402 and the exploration of early signs of efficacy in the autism spectrum disorder population. Lastly, I'm pleased to report that we just completed a successful underwritten public offering, raising approximately $75 million in gross proceeds before deducting transaction fees and other offering-related expenses. Based on our current operating plans, we believe that the proceeds from this offering, in addition to our cash and cash equivalents as of June 30, 2024, extends our cash runway into 2027, and in at least 12 months beyond our first Phase III clinical readout in GAD. Importantly, this funding demonstrates the continued enthusiasm towards our programs and strategy and allows us to rapidly advance MM120 in both GAD and MDD.

Here on Slide 5, is a look at our pipeline of three clinical stage programs, including our Phase III trials for MM120 in GAD and MDD. As I mentioned, we remain on track to initiate a pivotal Phase III program for MM120 in GAD in the second half of 2024. And we intend to initiate the first registrational study in our newly announced MDD program in the first half of 2025.

As detailed on Slide 6, MM120 has shown significant potential in addressing large unmet needs in brain health disorders. Our Phase IIb trial for MM120 in GAD demonstrated an effect size more than double that of the standard of care and a 48% remission rate 12 weeks after a single dose. We also observed significant rapid and durable effects on commoner depression symptoms in GAD patients. In the U.S. alone, there are 20 million adults with GAD and 31 million adults with MDD. Of these, $13 million and $18 million are treated annually for GAD and MDD, respectively. These two markets represent a substantial opportunity for effective treatments.

We believe that if approved, MM120 could offer patients a differentiating compelling options in both GAD and MDD which could position it to become best-in-class treatment option, targeting two of the biggest market opportunities in psychiatry.

Slide 7 outlines our overall program for MM120 and GAD and MDD which incorporates constructive feedback from our recently completed end of Phase II meeting with FDA. In the coming quarters, we anticipate initiating three registrational studies across the GAD and MDD programs including the Voyage and Panorama studies in GAD and the Emerge study in MDD. The initiation of pivotal study for MM120 truly represents a major milestone for MindMed as we strive to become a leader in developing novel treatments to address brain health disorders.

Before turning the call over to Dan to go over the details and designs of our Phase III study, I want to take a minute to address our approach to some of the major topics that have come in focus since the FDA pharmacologic Drug Advisory Committee meeting earlier this year and FDA's recent decision on Lyko herapeutics application from MDMA assistant therapy for PTSD.

Our development strategy outlined on Slide 8 is rigorous and thoughtful and continues to be appreciated by regulators, researchers, clinicians and research participants. We believe this will ultimately translate to [ confidence ] for patients and prescribers. Specifically, we have implemented several strategies to address key methodological considerations in this drug class including the use of central raters blinded to both treatment assignment and visit number, the inclusion of expectancy and blinding questionnaires and perhaps most importantly, the elimination of psychotherapeutic intervention in our clinical trials.

Additionally, our approach to safety monitoring follows well-established industry best practices and both through our Phase III clinical trials and dedicated clinical pharmacology trials, we intend to fully and robustly characterize the safety of the MM120. Our development of MM120 has been carefully designed to adhere to the highest clinical and ethical standards in alignment with FDA guidance. We believe that our well-designed Phase IIb trial for MM120 in GAD demonstrated compelling tolerability and efficacy data, which exceeds today's standard of care. Additionally, we continue to publish scientific research, backed by the robustness of our clinical data and our increasing body of evidence for MM120's potential as an emerging best-in-class product candidate, along with the growing unmet need to treat patients suffering from GAD, MDD and other brain house disorders.

As we embark on our pivotal development programs in MM120, we remain both appreciative and excited by FDA's commitment to advance research for the psychedelic drug class. This has been exemplified both through FDA's recent public statements which they indicated that they continue to encourage research and drug development that will further innovation for psychedelic treatments. In addition to the high degree of engagement and partnership that we have experienced and numerous interactions with the FDA over the course of the year.

Now I'd like to turn the call over to Dr. Dan Karlin, our Chief Medical Officer, to discuss our clinical development programs in detail. Dan?

[Daniel Karlin, executive]

Thank you, Rob. Turning to Slide 10. We believe MM120 has the potential to address large unmet needs in major brain health disorders based on the compelling results we shared from our Phase II trial for MM120 in GAD. In this trial, we observed a rapid onset of effect with a 1.8 point reduction in clinical global impression severity or CGIS, point in 24 hours in participant's treat with 100 micrograms, which was highly statistically significant with a p-value less than 0.0001.

The response was durable showing a 21.9 point improvement in the Hamilton Anxiety Scale, or HMA, at week 12 in participants treated with [indiscernible] micrograms. This further improvement from week 4 indicates potential long masting effects. Importantly, the magnitude of response in participants given MM120 was such that 48% of participants who received from 100 micrograms remained in remission at week 12. This high remission rate is particularly encouraging for a chronic condition like GAD. The treatment also demonstrated a favorable safety and tolerability profile with most adverse events limited to the dosing day. which is crucial for patient acceptance and adherence.

Finally, these results were achieved with no additional therapy, highlighting the potential for MM120 as a stand-alone treament for GAD. These outcomes support our Phase III program in GAD.

I'll now discuss our Phase III development plan for MM120 and GAD on Slide 11. As Rob mentioned, in June, we completed a highly collaboratively constructive end of Phase II meeting with FDA, reaching alignment on our Phase III pivotal trials. This program will consist of two pivotal clinical trials the Voyage study and the Panorama study. Each trial will consist of two parts. Part A will be a 12-week randomized, double-blind, placebo-controlled parallel group study assessing the efficacy and safety of MM120 ODT versus placebo. Part B of each trial will be an open-label, 40-week extension study designed to provide important long-term data on the durability and potential retreatment profile for MM120.

Voyage is anticipated to enroll approximately 200 participants who will be randomized 1:1 to receive MM120 ODT 100 micrograms or placebo. Panorama is anticipated to enroll approximately 240 participants who will be randomized 5 to 2 to 5 to receive MM120 ODT 100 micrograms and then MM120 ODT 50 micrograms or placebo. In accordance with FDA guidance and our regulatory discussions to date, our clinical program for MM120 continues to utilize complementary study designs across our Phase II and III studies to address key methodological issues such as functional and blending.

In this regard, in the Panorama study, we were including a 50-microgram arm to confound participants' ability to accurately assess the dose condition to which they have been randomized. We believe that this approach builds on the evidence from our Phase IIb study in which we demonstrated that despite functional unblinding at all tested doses of MM120, the lower doses, 25 and 50 micrograms did not demonstrate a meaningful clinical response, supporting our view that the anxiolytic response to MM120 is independent of functional unblinding.

While we previously observed in almost 8-point improvement for MM120 over placebo at week 12 both Voyage and Panorama have been designed to have 90% power to detect a 5-point improvement over placebo based on certain statistical assumptions. Additionally, in both studies, we will use an adaptive design with an interim blinded sample size re-estimation, which allows for an increase in sample size up to 50% in each study. This approach allows us to adjust for variability in nuisance parameters with the goal of maintaining statistical power and enhancing the interpretability of our results.

Key elements such as inclusion and exclusion criteria will largely mirror our successful Phase IIb trial in GAD and both Phase III studies will recruit adults aged 18 to 74 with the diagnosis of GAD at a HAM-A score of 20 or greater. During Part B of the Phase III studies, investigators will closely monitor patients using electronic patient reported outcomes, central [indiscernible] HAM-As and clinician-administered scales. Participants will be eligible for retreatment with MM120 ODT, 100 micrograms if their HAM-A reaches 16 or higher with up to 4 treatments available through Part B.

Importantly, the design allows an assessment of the durability of the treatment effect, the need for and response to retreatment and long-term safety. Key outcomes from Part B would include time to retreatment or inefficacy. We will also assess safety data on repeated treatments, average treatments per year and response to retreatment. This information will be valuable in understanding the longer-term dynamics of MM120 ODT treatment in GAD patients.

Overall, both Voyage and Panorama are designed to be consistent with our successful Phase IIb trial, including using the HAM-A as our primary outcome measure with the primary endpoint of the Phase III programs being changed from baseline to week 12, which is consistent with the durability we observed in Phase II. Based on the data we collected in Phase II, we have also agreed with FDA to a reduction in treatment session duration from a minimum of 12 hours to 8 hours.

This is operationally advantageous in our research program and enhances MM120's practicality in real-world settings. We will continue to collect data on monitoring times and safe parameters for determining the appropriate timing for ending sessions using structured intentionally designed criteria to determine the time course and resolution of drug effects that could require monitoring. We are happy to say that we remain on track and expect to initiate our first Phase III trial Voyage in GAD this year.

Turning to Slide 12. As Rob stated earlier, we are also excited to announce the expansion of our R&D program, MM120 into MDD. Data from our Phase II AD study led to our decision to pursue MDD as an additional indication for MM120, given the demonstrated potential of antidepressant effects. In the 100-microgram dose group, we observed an 18.7% from baseline in the Montgomery Åsberg depression ratings deal or MADRS score [indiscernible] 12. This represented a 6.4 point advantage over placebo, which was statistically significant with a p value less than 0.01. These results are particularly encouraging given that the study wasn't powered for this endpoint and that baseline MADRS scores were lower than we would expect in patients experiencing a major depressive episode, which appeared to create a ceiling effect on the response to MM120.

Slide 13 represents the Phase III development program for MM120 and MDD, which we expect will consist of two pivotal clinical trials. Our first trial, the Emerge study, like our pivotal trials in GAD will be comprised of two 2 parts. Part A, which is a 12-week randomized, double-blind, placebo-controlled parallel group study assessing the efficacy and safety of a single dose of MM120 ODT versus placebo. And Part B, which is a 40-week extension study, during which participants will be eligible for open-label treatment with MM120 ODT, subject to certain conditions for retreatment eligibility.

Emerge is anticipated to enroll at least 140 participants randomized 1:1 to receive MM120 ODT 100 micrograms or placebo. The primary endpoint in Emerge will be the change from baseline in MADRS score at week 6 between MM120 ODT 100 micrograms in placebo. We expect to conduct a second registrational trial in MDD in the future with the design and timing to be informed by the Emerge study and additional regulatory discussions.

As Rob mentioned earlier, our planned execution of the MM120 program in MDD will balance this exciting opportunity across two pivotal programs with our continued operational and financial diligence. With that, I am happy to introduce Dr. Reid Robison, who will provide his perspective on our Phase III trials.

[Reid Robison, executive]

I'm very excited about the Phase III development programs that you just shared, as I believe they stand to make a significant impact in the field of psychiatry. I've been personally thrilled with the results I've seen so far from MindMed's MM120 development program, the GAB Phase IIb results are truly impressive. With MM120 exhibiting rapid and robust efficacy, sustained 12 weeks after a single dose.

Equally impressive is the change in MADRS score from baseline to week 12 in the Phase IIb GAD trial participants showing improvement in comorbid depressive symptoms. For people suffering from GAD, including with comorbid depression, these trials offer a beacon of hope. And I've seen firsthand how debilitating both conditions are severely impacting quality of life.

Given that current standards of care falling short of meeting our patients' needs, it is vital that we develop and bring to market new effective treatment options. The things stand out about the Phase III development programs that are important from an investigator and physician perspective that I want to share with you today.

First, the Phase III programs are operationally efficient. Second, they enhance our ability to recruit patients. And third, the Phase II and III trials are similar in design, suggesting a high degree of read-through as possible. All of this will make our execution of these trials more seamless. I'll break all three attributes down further.

From an operational perspective, the key design elements of both Phase III programs make them efficient to run. This operational ease is crucial as it allows my team to manage the trials effectively, while maintaining scientific rigor. In the GAD trials, reducing treatment session monitoring from 12 to 8 hours is an example of this, making delivery of MM120 more practically feasible mirroring how I would expect to treat patients if MM120 is approved.

Another significant advantage of these trials is our ability to efficiently recruit and enroll patients. While the GAD program will start earlier than the MDD program, having both programs run concurrently, we can tailor recruitment efforts to match specific diagnoses. GAD and MDD have overlapping symptoms. And this approach improves our ability to put patients in whichever program is appropriate for their clinical presentation, thereby accelerating enrollment.

Lastly, the design of these trials directly builds on MindMed's Phase IIb GAD trial results. This continuity enables us to build on existing data, enhancing the ability to validate prior findings and the efficacy and safety of MM120 ODT with a high degree of consistency. In addition, the 12-week primary endpoint for the Phase III trials in GAD should provide evidence on durability, which I believe is utmost important to physicians and patients. I'm looking forward to getting these Phase III trials started.

They have the potential to pave the way for significant advancements in treating GAD and MDD. And I'm eager to see the results of MindMed can move forward with the development of MM120 and make a meaningful impact on patients' lives.

And with that, I'll turn the call back over to Rob.

[Robert Barrow, executive]

Thank you, Dr. Robison. We're excited to get started and grateful to be aligned on our pivotal programs with clinicians like you. I'll now turn to our financial results for the quarter ended June 30, 2024, which are highlighted on Slide 15. As of June 30, 2024, the company had cash and cash equivalents totaling $243.1 million compared to $99.7 million as of December 31, 2023. We believe that our cash and cash equivalents as of June 30, 2024, combined with the proceeds from our recently closed financing, will be sufficient to fund our operations into 2027.

Based on our current operating plan and anticipated R&D milestones, we expect this cash runway to extend at least 12 months beyond the top line data readout for our first Phase III trial in MM120 in GAD. For the 6 months ended June 30, 2024, net cash used in operating activities was $36.6 million compared to $27.2 million for the same period in 2023. We Research and development expenses were $14.7 million for the quarter ended June 30, 2021, and compared to $14.8 million for the same period in 2023, representing a decrease of $0.1 million.

The decrease is primarily due to decreases of $0.5 million in expenses related to our MM120 GAD program and a decrease of $2 million in expenses related to preclinical activities partially offset by an increase of $1 million in internal personnel costs as a result of increasing research and development capacity and an increase of $1.4 million in expenses related to our MM-402 program.

We do anticipate R&D expenses to ramp up in the second half of this year and in 2025 as we get the Phase III studies in GAD and MDD up and running. General and administrative expenses were $9.8 million for the quarter ended June 30, 2024, compared to $14.4 million for the same period in 2023, a decrease of $4.6 million. The decrease was primarily attributable to professional services fees and expenses during the 3 months ended June 30, 2023, relating to the proxy contest in connection with our 2023 Annual General Meeting of Shareholders. partially offset by increased stock-based compensation expense.

The company's net loss for the quarter ended June 30, 2024, was $5.9 million compared to $29.1 million for the same period in 2023. The decrease was primarily due to changes in the fair value of 2022 U.S. dollar financing warrants of $15 million. This is an exciting time for us at MindMed with many key catalysts coming up over the next couple of years, as you can see highlighted on Slide 16.

We anticipate initiating Voyage our first Phase III trial in GAD in the second half of 2024. In Panorama, our second Phase III trial in GAD in the first half of 2025. We also expect to initiate Emerge, our first Phase III clinical trial in MDD in the first half of 2025. We're projecting top line Part A readout for these pivotal trials starting with Voyage in the first half of 2026 and then Panorama and Emerge in the second half of 2026. These anticipated milestones represent significant value inflection points for our company and could potentially bring us closer to providing novel and highly differentiated treatment options for patients with GAD and MDD.

We believe that the evidence generated to date on MM120 validates our scientific understanding of MM120's mechanism of action and shows the potential for an emerging best-in-class product profile compared to today's standards of care. We are excited to advance our pipeline and to be on the cusp of moving forward with our pivotal development programs for MM120 in both GAD and MDD with strong loss protection and IT strategies, and a cash runway into 2027 and 12 months beyond our first Phase III readout, we are well positioned to execute on our strategy.

As we conclude, I want to extend my sincere appreciation and gratitude for the critical work and careful execution that has brought MindMed ever closer to realizing our mission. I would like to thank our highly talented and deeply committed team. our research collaborators and clinical investigator teams, our investors and many other individuals who have been supported, especially our patients and their families. We are working tirelessly to deliver on the therapeutic potential of our pipeline and to transform the treatment landscape for the many individuals living with brain health disorders. With that, I'd like to thank you all again for joining us today.

And the team and I are happy to take any questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Charles Duncan with Cantor.

[Elaine S. Kim, analyst]

This is Elaine Kim on for Charles. This is a 2-quarter, driven first question. Is the open-label 100-microgram dose to help maintain response or remission rates versus having patients continue the 50-microgram dose in the 40-week follow-up? And for my second question, is for reduction of the treatment session duration to 8 hours from 12 hours, what information enabled this decision to be agreed by the FDA and what requirements for patient care following the 8-hour treatment session, what requirements will be implemented?

[Robert Barrow, executive]

Yes. Thanks so much, Elaine. To the first question, so when we're designing the Phase III program, continuing patients on -- I think two things are worth pointing out with the open label Part B portion of the study, I should say, the extension part B of the study versus that -- would be really thoughtful about how we analyze and think about the extension phase of the study because until patients actually receive open-label treatment in that part B of the study, they remained in a blinded status until someone has actually received open-label drug, while it's an extension study with open-label opportunities for treatment they haven't actually received anything which is unusual here.

It certainly wouldn't be the case of [indiscernible] extension of a daily medicine. The selection of 100 micrograms is because it is the clinical dose of interest, relying on our Phase IIb results. We believe 100-microgram dose is our go-forward dose and our modeling from the Phase IIb results in the MCP model analysis we conducted there suggests that it is the dose to take forward and the efficacious dose we should be studying whereas the 50-microgram dose, is there simply as a functional mask is an additional control to aid in addressing the concept of functional unblinding. That's the rationale.

We're not we're not interested in 50-micogram, the clinical dose to take forward or to be submitted at this time. The is to characterize what happens in a more real-world-like setting or patients who have the opportunity for retreatment upon the reemergence or the continued in efficacy after the initial phase of the study.

Part your question or the second part of your question, we presented data. So from very early on. I know this has been a point of discussion since the advisory committee earlier this year. We have been very intentional about designing structured criteria for when patients would be allowed to end their monitoring session. in Phase I, we -- went to the extreme conservatism and used the DSM-5 definition of hallucinogen intoxication.

So patients had to be cleared by meeting effectively no signs of hallucinogen intoxication. As we've continued our regulatory discussions and our thinking is further evolved and been informed by the data, we have refine that checklist to be much more modeled around what we would expect to be representative of a real-world [ RINs ] like checklist for [indiscernible] after a dosing session.

So we presented data, we collected a time course of those assessments in our Phase IIb study to characterize exactly the sort of temporal curve of when patients would be able to be -- is part of a clinical dosing session and use those data to present to FDA and make the argument that shorter duration of monitoring is appropriate. And as we go forward in the Phase III, Dan mentioned that the minimum required duration of monitoring in the Phase III will be 8 hours, but we'll also be assessing the readiness for departure from a dosing session as early as our five so that we'll be able to characterize again that response starting earlier than even the required monitoring here.

But the ultimate goal, we believe that in a real-world setting and when we think about labeling in the [ RMs ], there should be a required monitoring period if there is one that's at the far left tail of the spectrum, physician discretion should be able to be employed. And so minimizing the fixed duration of required monitoring is something that is of interest to us that we're continuing to build a structured base around to ensure that we have data in hand to make data-informed arguments to the agency.

[Operator]

That's very helpful. Our next question comes from the line of Brian Abrahams with RBC Capital Markets.

[Brian Abrahams, analyst]

And really appreciate all the detail on the trial designs. Two questions from me. I guess, first off, can you elaborate on the degree of follow-up and retreatment data that is going -- that you think will be required prior to filing and potential approval in GAD. Is there a bar for the durability that you need to demonstrate beyond 12 weeks and/or a certain proportion of patients who will need to be retreated and then had a following.

[Robert Barrow, executive]

Yes. Thanks so much, Brian. So our expectation is that because we are limited in the extent of randomized in full period of studies, we got rerun to pragmatic ethical issues if we keep patients with severe anxiety on no background treatment after a single placebo intervention, for instance, beyond 12 weeks.

So we run into a sort of limitation on how long we can do randomized controlled parallel group study. So in that -- because of that, we've aligned around a 12-week duration. And even FDA's guidance talks about a 12-week duration to establish the response. We believe those data are sufficient to demonstrate the durability and that in terms of initial application, we would use the extension phase in the study to inform the characteristics of dynamics of retreatment that would be informative in labeling, but we certainly are focused on our primary endpoint in our [ endo ] Phase II meeting really had good discussion with the agency, and we believe reached alignment around that 12-week primary endpoint being the most important outcome of the study to demonstrate that durability of response after a single treatment.

[Brian Abrahams, analyst]

Okay. Got it. And then how much dose dependence will you need to demonstrate between 50 and 100 micrograms in order to address the potential regulatory questions about functional unblinding, you need to show a statistical separation between those two arms or just a trend?

[Robert Barrow, executive]

Yes. This is a great -- a really interesting question and one that we have both thought about extensively and internally as we design our Phase III program and discussed extensively with the agency.

Our view is that the 50-microgram control is simply there as a control. It is not a statistical interest to us. our Phase II study was intentionally designed to establish dose response. That was the primary analysis of the Phase II study, which we did with a high degree of statistical significance. As part of the MCP mod analysis, we come away with characterization of what we believe is the minimum clinically effective dose to achieve kind of clinical outcomes we're pursuing.

That, coupled with the reality that in our Phase II study, we saw a high degree of functional unblinding or unmasking across all active doses of drug, but that only the two high doses achieved a clinical response. Our belief is that 100-microgram is the go-forward dose and that any other dose groups we include are not there to reestablish the dose response. They're there to try to confound patient expectancy, there's been a good degree of confusion, I think, in the field about what the methodological things like an intermediate control group are there to do. And there's been a lot of confusion about the differences and similarities between expectancy bias functional and blinding in these studies.

Our view is that 50 micrograms is a dose that overlaps with 100-microgram dose of clinical interest in terms of its perceptual effect, such that patients coming into the study would -- if the story were ultimately trying to develop here is that when a patient comes into the study, with obviously a degree of expectancy because patients only enroll in clinical trials if they expect something to happen, we'll be able to inform patients that if they feel the effects of a drug during a treatment session, they may be receiving a dose that is "the active dose of drug" or they may be receiving a dose that they will feel with a similar effect but that has been shown in previous studies to not be clinically active.

And so we're trying to mitigate the expectancy buy it. The reality is that after a patient receives a dose, whether it be placebo, 50 micrograms or 100 micrograms, they will have the new knowledge of the feelings of the effect of that drug. And we fundamentally believe that the feeling of the drug is the mechanism of the drug, as is very often the case in psychiatry. And so we do not intend or believe is necessary to analyze statistically the 50-microgram dose. Our intent is to compare 100 micrograms versus placebo, which has been the regulatory standard for virtually all approved drugs, but certainly all approved drugs for GAD and for MDD. And again, that 50 micrograms controlled in is simply there as an additional aid in functional blinding and to prove out the robustness of the 100-microgram dose effect across three different study designs and three different allocations.

[Operator]

Our next question comes from the line of Rudy Lee with Leerink Partners.

[Unknown Analyst]

Congrats on the progress. Regarding the regulatory pathway in GAD, did you confirm with the FDA that the Phase IIb can be used as one of the pivotal trials? Or do you still means both Phase III trials to file NDA? And quickly, just a follow-up to Brian's question. With the first Phase III GAD starting in the second half of the year, what will be the rate-limiting step for filing considering the 40-week of label retention trial?

[Daniel Karlin, executive]

Thanks. In terms of regulatory pathway, the Phase IIb study that we conducted is not a pivotal study. We intend to file with two Phase III studies, which are planned, the Voyage and Panorama studies.

[Robert Barrow, executive]

Secondly, in terms of the rate limiting, of course, we have come away with in Phase II with a high degree of alignment. Always there's the caveat that many of the final decisions about what is going to be required for an MDA or reserve for discussions of a pre-MDA meeting. But our belief at this stage is that the completion of the Part A of Voyage and Panorama studies is the rate limiting factor to demonstrate two well-controlled studies that demonstrate the staging efficacy of the drug.

And that while we have an ongoing clinical pharmacology program, we will have Part B of the study that will be informative in that process, we believe a data cut from Part B of our Phase III studies would be adequate to enable submission.

[Operator]

Our next question comes from the line of François Brisebois with Oppenheimer.

[Unknown Analyst]

This is Dan on for Frank. I guess related to some of the questions that have been going on. Could you talk a little bit more about the end of Phase II meeting, especially considering the Lykos AdCom, whether there were any issues or concerns that were raised during the meeting. And thanks for all the color around the strategies that you've taken, but was there any surprises during the meeting. Anything you want to add to?

[Robert Barrow, executive]

Yes. Thanks so much for the question, Dan. In the Phase I, we got fortunate in the sequencing of the regulatory events that have happened this year. So we had our end of Phase II meeting very shortly after the Lykos Advisory Committee, which we thought it was a great benefit because it allowed us to integrate the thinking and feedback and obviously the public conversation from the Lykos AdCom into our discussions with the agency and something that we greatly valued to us to be able to learn from other happenings in the field to make sure we're pursuing a strategy we're really confident.

And so we had a great discussion with the agency. I think we came away with a high degree of alignment there are no surprises. There's certainly a shared dialogue around trying to solve complex issues. And I think we're incredibly appreciative of the agency in terms of their willingness to engage in those conversations, the willingness to be pragmatic and to tackle these complex issues in a way that doesn't slow down development.

Our view coming out of that meeting is that with the plan we have designed. We'll have a strong case to be made both to at the agency and to any commentators or observers or whether that be an advisory committee or and peer-reviewed publications and the broader narrative that we can go over the compelling argument for both the value proposition and the safety and efficacy of the drug that would allow us to then proceed to a submission. So no surprises. I would say that we had a very constructive dialogue and I came in with a ClearPath Forward.

[Unknown Analyst]

Great. And just as a quick follow-up, the dose relationship being -- going after 50-microgram and 100-microgram. Does the FDA generally agree with that approach that's demonstrating a dose relationship just address the expectance we buy or a functional blinding issue?

[Robert Barrow, executive]

I think I understood your question. So we presented our view and our logic and our strategy, we in the Phase II meeting and in our Phase III protocols, and we're certainly confident in the path forward and our plans to address these issues. I think it's really important to -- for us to highlight the reality is that this is a very common issue in psychiatry, while there's been a sort of spotlight shown on the matter of expectancy and functional unblinding. This is how psychiatry drugs work, particularly for mean anxiety disorder. 2 milligrams of Xenex is fully functionally unblinded and based on historical research, even SRIs have something like a 70% incidence of patients being able to correctly guess they're on SRI, it's only that under 5% of historical studies of SRIs that actually asked the question or appeared to look.

So while this is being scrutinized in our field, it's not unusual and in that, we believe that we should follow the well-established precedents for evidence required to establish the safety and efficacy of drugs, which is demonstrating statistically and clinically significant improvement over placebo. That's what our program is designed around. And while we include many, many aspects to try to mitigate and address the questions around expectancy and functional unblinding, we have a line that we believe with the agency on the path forward.

Again, this is just something that is not all of that new even though it's been highly talked about over the last couple of months.

[Operator]

Our next question comes from the line of Joel Beatty with RW Baird.

[Unknown Analyst]

This is Christopher Chen on for Joel. In terms of 120, I know your primary focus is the domestic market, but have you started at all analyzing ex U.S. opportunities? And if so, how would you characterize that analysis?

[Robert Barrow, executive]

Yes. Thanks much, Christopher. We have started to analyze ex U.S. markets and engage in certainly some dialogue about those opportunities, we do not, at this time, intend to develop a sales force or launch the drug in most ex-U.S. markets, our focus would be on the U.S. markets, and we're certainly open to engaging and discussing collaborations and partnerships ex U.S. when it makes sense about commercialization on those markets.

But obviously, the dynamics of, for instance, launching a drug in Europe and the pricing and various considerations there would be we think a lower return on investment than our focus on launching the drug in the U.S. primarily.

[Operator]

Our next question comes from the line of Sumant Kulkarni with Canaccord Genuity LLC.

[Sumant Kulkarni, analyst]

Do you have any specific targets for prior use of LSD or other psychedelic inclusion criteria in your Phase III trials? And in the open-label portions of your studies, how do you ensure integrity is maintained to make sure that any potential durability of effect is more purely attributable to MM120 versus other treatments or therapy?

[Robert Barrow, executive]

Yes. Thanks so much, Sam. I'll turn that over to Dan Karlin to address that one.

[Daniel Karlin, executive]

Yes. So thanks, Sumant. For prior second psychedelic exposure, we have explicit exclusion criteria related to recent use and any heavy use over a number of years, preceding enrollment. So while we don't specify beyond that from an English and exclusion perspective, we certainly want to be sure that we're getting folks who aren't currently using or recent heavy users.

We also will in Phase III track use history, of course. And what we found in Phase II was, in essence, with these criteria because we're moving into Phase III very much with the inclusion exclusion mirroring Phase II. What we found was about a 15% to 20% historical usage in the population we ended up enrolling, which interestingly aligns almost exactly with epidemiological findings on used in the general population.

So as ever, we want to get a population that is representative of the overall GAD population as possible. we do in Phase II and we think we did that in Phase II, and we'll continue to do that in Phase III. As far as data integrity attribution of efficacy, the extension phase that we discussed and that Rob expanded on a bit in a prior question, is really going to be run very much the same way that the blinded phase is run.

So that in all of our studies, we watch people out of background therapy if folks are engaging in psychotherapy outside of the trial, that has to be stable and unchanging for a period of time before and through the trial. And we'll continue to enforce those same restrictions on outside treatment, other treatments, new the [indiscernible] therapy through the entire extension phase. So while we do give folks the opportunity to get either dosed for the first time if they started in a placebo arm or a control arm, the expectation is that the only treatment that they're receiving the only new or change treatment that they're receiving and the only pharmacological treatment that they're receiving through the entire extension phase is MM120.

[Operator]

And I'm currently showing no further questions in the queue. This does conclude today's conference call. Thank you all for joining, and you may now disconnect.