Dogwood Therapeutics - Q3 2024

Transcript

Operator (participant)

Good morning and welcome to the Dogwood Therapeutics Incorporated third quarter 2024 earnings call. At this time, all participants have been placed on a listen-only mode, and please be advised that today's call is being recorded at the company's request. At this time, I'd like to turn the call over to Angela Walsh, Chief Financial Officer for Dogwood Therapeutics. Please proceed, Ms. Walsh.

Angela Walsh (CFO)

Good morning, everyone, and thank you for joining us on today's conference call. We are pleased to be with you today to discuss Dogwood Therapeutics' third quarter financial results and to provide a corporate update. Please note that our financial results press release is now available on our website. Before we begin, I'd like to remind everyone that statements made during this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties that can cause actual results to differ materially from the information expressed or implied by these forward-looking statements. For more information regarding such risks and uncertainties, please see the risk factors outlined in the company's filings with the SEC. Any forward-looking statements are made only as of today, and we disclaim any obligation to update these forward-looking statements other than as required by law.

For today's agenda, I will provide a brief financial update and then turn the call over to our CEO, Greg Duncan, and Chief Medical Officer, Dr. Mike Gendreau, to provide our corporate summary and highlights related to our recently announced business combination which formed Dogwood Therapeutics. Our financial results for the third quarter 2024 were published this morning in our press release and are available on our website. Therefore, I will just provide a brief summary of our financial status on today's call. As of September 30th, 2024, Dogwood Therapeutics cash totaled $2 million. On October 7th, 2024, we announced a business combination with Pharmagesic Holdings Incorporated, the parent company of WEX Pharmaceuticals Incorporated, to form Dogwood Therapeutics.

A key component of the combination was a concurrent $19.5 million strategic financing by an affiliate of CKLS, CK Life Sciences International Holdings Incorporated, a Hong Kong exchange-listed company, and an indirect parent company of Pharmagesic and WEX Pharmaceuticals. We have received $16.5 million in loan proceeds in connection with this financing, with an additional $3 million expected to be received in February 2025, resulting in approximately $23 million in working capital, including combined cash of the entities at the time of the combination. Based on our projections, this should fund research and operations through 2025 and through several key milestones, including the announcement of top-line results from the Long COVID phase II-A study expected in the middle of this month and the release of results from the Halneuron phase II-B interim analysis assessment expected in the second half of 2025.

We expect to file the Form 8-K/A with the combined entities' financial statements in mid-December of this year and look forward to keeping you updated on our progress. Now, it is my pleasure to turn the call over to our CEO, Greg Duncan, to provide our corporate summary. Greg.

Greg Duncan (CEO)

Thank you very much, Angela, and good morning, all. As Angela referenced, last month we announced the formation of Dogwood Therapeutics by the integration of Virios Therapeutics and WEX Pharmaceuticals. Given the proximity of this transformative transaction, we think today's earnings update represents an opportune time to share our thoughts on the key value creation opportunities that now reside within the expanded Dogwood Therapeutics pipeline. Mike and I will provide you with highlights on our three late-stage program, with a particular focus on the newest addition to this pipeline, Halneuron, our NaV1.7 modulator that will be the focus of the forthcoming chemotherapy-induced neuropathic pain phase II program we expect to commence in quarter one of next year. Mike and I will be making forward-looking statements through the course of our discussion today.

We'll have a Q&A at the end of our overview, and if you have additional queries post today's call, you can reach out to us directly at [email protected]. Before diving into the specific programs, I thought I might just summarize or refresh the highlights of the transaction to form Dogwood Therapeutics. Germane to this formation was an expansion of our pipeline to include Halneuron, currently projected to have interim data in the phase II-B program for chemotherapy-induced neuropathic pain in the second half of next year. As Angela referenced, the strategic financing by an affiliate of CK Life Sciences, a Hong Kong exchange-listed company, and existing cash provides us with working capital of approximately $23 million to fund operations to quarter four of next year. Importantly, this enables us to deliver interim results from the phase II-B program focused on Halneuron in this time period.

Additionally, IMC-2, a combination of valacyclovir and celecoxib, is the focus of a phase II-A study run by the Bateman Horne Center, and we have data expected in the middle of this month. As part of the transaction, our Virios stockholders, as of record of October 17th, were granted a Contingent Value Right, or CVR, as you may know it, tied to potential future milestone payments associated with future partnering transactions for IMC-1 or IMC-2, particularly related to development or regulatory milestones. This team, the combined team of Virios Therapeutics and WEX Pharmaceuticals, that is now the Dogwood Therapeutics management team, has extensive experience in developing and commercializing several blockbuster drugs, including the pain medicines Celebrex, Lyrica, and SAVELLA. As you can see on slide number four, in addition to Angela, Mike, and myself, we'll be presenting today.

We have Ralph Grosswald, who's our Senior Vice President of Operations, and Meng Zhou, our VP of Manufacturing. You can see the companies the team has worked at have extensive training and experience, and you can see on the right-hand side of slide number four a number of drugs that we've been involved in, including pain therapeutics. And so we are really excited about the potential of Halneuron and the lifecycle opportunities in this new addition to our portfolio. Speaking of our portfolio, as you can see right on slide five, we now have the expanded Dogwood Therapeutics pipeline, which targets several areas of unmet medical need and has, in our opinion, very significant value creation potential. There are really two pillars to the pipeline. First is the NaV1.7 platform, the focus of which is Halneuron and specifically our phase 2b program in chemotherapy-induced neuropathic pain.

I will mention we are excited about data, some data that Mike will share with you in the next few moments, and Halneuron's potential to treat broader cancer-related pain. We also believe this mechanism has potential in acute pain and recently filed intellectual property protection for a unique contact lens formulation, delivery formulation of the NaV1.7 therapeutic. Really potential for this platform to deliver in many different areas of unmet need. The second pillar of the portfolio is our combination antiviral program featuring IMC-1, the combination of famciclovir and valacyclovir, and the Long COVID, or PASC, program, which features IMC-2, which is a combination of valacyclovir and celecoxib.

IMC-1 is poised to progress into phase III development, and as I mentioned earlier, and we'll speak more about this later in the course of today's presentation, we expect Long COVID phase II-A results in the middle of this month. So with that background, let me turn it over to Dr. Gendreau to talk a little bit about the mechanism of the NaV1.7 platform and some of the data that has us really excited about Halneuron's potential. Mike.

Mike Gendreau (CMO)

Thanks, Greg. So I'm going to first present the newest addition to our development stable, Halneuron. Halneuron is a voltage-gated sodium channel modulator. Sodium channels are integral to how neurons propagate electrical signals through them to the spinal cord and ultimately to the brain. And the particular NaV1.7 channel, which Halneuron is specifically targeted for, is very involved with peripheral pain. So there's nine known sodium channels, some of which are more involved with cardiac conduction and other parts of the body, but the NaV1.7, 1.8, and 1.9s are those that are most associated with pain and inflammation. So Halneuron, being a 1.7 modulator, has the ability to really change how pain is transmitted in the body, and we think it has potential for both chronic and acute pain, as we've talked about.

So let's go to the next slide, and we'll talk about the opportunities for what we think the applications for Halneuron would be. The prior work that was done by the predecessor company focused on two different areas. There was a phase II study looking at cancer-related pain. That is, they took people who had cancer, had pain from that cancer, and then treated them with injections of Halneuron to try and reduce the pain that they were experiencing subsequent to their cancer, their surgery, or their chemotherapy, whatever the cause of that pain was. And that study generated statistically significant reductions in pain in a study that enrolled 165 patients. That was encouraging to us, and we were specifically encouraged by the duration of the improvement we saw in some of those patients, which we'll talk about in a minute.

The other study that was done prior to our combination was a phase II-A signal-seeking study in chemotherapy-induced neuropathic pain, so that is the indication our next study will be focused on. What was done there was 125 patients who were recruited, and they were randomized to one of three different doses and two different dosing strategies, either once a day or twice a day, to determine what the optimal dose and dosing frequency would be to carry forward in a future study. That future study is the one we're planning right now, so given that background, we were very excited about the potential for Halneuron in treating pain secondary to chronic conditions like cancer-related pain. Next slide. This is data from that cancer-related pain I mentioned, where we had statistically significant results in terms of pain reduction due to Halneuron.

This is a responder analysis where we looked at patients who had at least a 30% reduction in pain from their baseline before they were treated with Halneuron. What we saw was that there was a statistically significant increase in the rate of response in the patients treated with Halneuron versus those treated with placebo. Even though this was a relatively small study with less than 160-some odd patients, it was still statistically significant in terms of this responder analysis after three weeks of treatment. What was even more interesting in this, however, was the duration of response we saw from this treatment, which we'll talk about in a minute. Next slide. This shows now the duration of response. The curve on the top, where you can see these blue lines, this was the patients who were initial responders.

That is, at week three of the study, they had at least a 30% reduction in pain from their baseline. If they were a responder, they were continued to be followed on a weekly basis to see how long that pain improvement lasted. And as they continued to be followed, you can see that there were a number of patients who went out quite a long way. Some went over a year in terms of pain reduction. The bottom curve are those responders to placebo. You do get patients who improve on placebo, but you can see here the mean improvement in those who were initial responders was on the order of 10 days before they lost their effect. The mean change in the Halneuron group was over 50 days, and in some cases, it was beyond a year before the patient finally got tired of giving us data.

But you can see there's a very big difference between the duration of improvement we see with treatment versus placebo. And that really intrigued us and made us think that something special is going here because they were only treated for four days initially, and then we have this long response as a result. Let's go to the next slide, please. So I think, Greg, we're going to hand that back to you to talk about the potential.

Greg Duncan (CEO)

Sure. Mike referenced the second study, the chemo-induced neuropathic pain phase II-A study, the signal-seeking study, which assessed three doses and two different dosage regimens of Halneuron to treat specifically CINP. The results of this study are right on the left-hand side of slide number 10, very specifically.

Higher Halneuron doses delivered greater pain reduction as compared to lower doses, which we think is very consistent with the utility of this particular mechanism. We also noted that Halneuron, when dosed once a day, QD, provided comparable pain reduction to the BID dose twice a day, but exhibited a better tolerability profile. Halneuron pain relief was evident four weeks post-treatment in this particular study. The Halneuron high doses, in particular, delivered clinically meaningful pain reduction for 35%-40% of patients in this relatively small study. In CINP, we believe, represents a very significant market opportunity. Presently, there are no FDA-approved treatments for chemo-induced neuropathic pain. We know from our secondary market research data that more than half of the sales for the global pain market are actually prescribed for opioids.

I don't think I have to tell anybody on the phone here that that's a bad fact for any particular disease, given the abuse potential and the side effects that are associated with opioids. I think we'd all probably agree as well if we have something that can work to replace or reduce the utilization of opioids, we have something that's, commercially speaking, a winner. Over time, most patients get some form of neuropathic pain. If you look at the background data for chemo-induced neuropathic pain, one month after treatment, there's about 70% of patients who have some form of neuropathic pain. Three months, that drops down to 60%. But even at six months, you have 30% of patients exhibiting neuropathic pain. This is six months after the discontinuation of their chemotherapy. This is a bad fact.

In fact, if you look at just the big five markets in the EU, Japan, and the U.S., there are 1.7 million chemo-induced neuropathic pain patients in just those territories. When you add in developing markets and other potential markets across Europe, you have well north of 2.5 million patients that are actually suffering from chemo-induced neuropathic pain. The size of the opportunity, the heavy utilization of opioids, and the fact that this is impacting one in three patients who have chemotherapy six months after they stop their chemotherapy represents, in our opinion, a very significant commercial opportunity. To summarize, the Halneuron program, which we think represents a very novel non-opioid pain development opportunity, this is a novel 1.7 voltage-gated sodium channel inhibitor, highly differentiated from other pain therapeutics and specifically non-opioid in its particular mechanism.

This is a validated mechanism supported by both preclinical and clinical data. We've seen, as Mike and I just shared with you, reduction in both general cancer-related pain and chemo-induced neuropathic pain in human clinical trials. This is a large market opportunity, and this is a team that understands the pain space well, both from a development and a commercialization potential. So we are really excited to add Halneuron to the Dogwood Therapeutics pipeline and are very excited about the interim analysis we plan for the second half of next year. Now we turn our attention to the legacy Virios Therapeutics products, the combination antiviral therapies, which we believe are targeting two very significant areas of unmet medical need.

IMC-1 is poised to progress into phase III development as a treatment for fibromyalgia, a condition for which there's been nothing approved for the past few years, in fact, well over a decade. We have agreement with FDA based on our phase II-B study for a four-part phase III program. That program will consist of a pharmacokinetic and food effect study with a new formulation would progress into phase III development for fibromyalgia, two direct studies of 12 weeks' duration, one head-to-head study of IMC-1 versus placebo, and then a multifactorial trial of IMC-1 versus placebo versus the individual components that comprise IMC-1 as a combination therapy. Patients who have an interest can progress from study one or study two into our long-term safety extension, which allows us to collect the safety data required to submit an NDA to the Food and Drug Administration.

We're presently exploring phase III partnership opportunities, both to conduct the study as well as to develop an extended-release dosage formulation to extend the IP of IMC-1 beyond its current intellectual property protection. We'll report out on that sometime in the first half of next year, and then we have IMC-2, the combination of valacyclovir and celecoxib, the focus of a phase II Long COVID study. We had a proof of concept study complete in 2023. Mike will share the data with you that have us excited about this particular mechanism. That study allowed us to file new IP with patent protection if granted to 2044. Importantly, this study gave us the data to go to FDA and work out what the development requirements are for IMC-2 to treat Long COVID symptoms.

And in particular, we've now agreed with FDA that for the first time, to our belief, is the first time FDA has approved fatigue as the primary endpoint for a development candidate. There's a three-armed phase II investigator-initiated study ongoing right now, top-line data of which we expect in the middle of this month. And with that background on the two programs, I'm going to ask Mike to dive into the data from the proof of concept study we communicated out in 2023 as a refresher as we get excited about the release of the current study in the next week or so. Mike.

Mike Gendreau (CMO)

Sure, Greg. So we did have a proof of concept study previously run by the Bateman Horne Center. This was an investigator-initiated study where the first question was, was there any feasibility to show with applying this antiviral approach to a Long COVID patient population? The Bateman Horne Center has a Long COVID clinic where they had a number of patients they were monitoring and taking care of. And when they initiated this study, they recruited from that Long COVID population, and they enrolled 22 patients to be treated with the combination of valacyclovir and celecoxib to treat their Long COVID symptoms. This study was conducted open label. So these 22 patients were aware they were getting the antiviral treatment, and their results were compared to 17 matched controls drawn from the same population.

And they were matched for their gender, for their age, for how long they'd had Long COVID, whether they'd been vaccinated, and so on. So they were a well-matched group. And then the comparison was reduction in symptoms of Long COVID in the treated population versus the matched control population. It's interesting to note that the duration of Long COVID symptoms in this population was over two years in both groups. So this is a group of patients that had longstanding Long COVID, had been difficult to treat with other therapies, and then treated with this antiviral combination to see if we could really improve their symptoms. And as you can see on the slide with the study endpoints, there was fairly dramatic improvement in a number of symptoms in this patient population. The primary endpoint was fatigue improvement.

We see that this Long COVID population looks quite a bit like chronic fatigue populations, and the Bateman Horne Center is a specialty center in treating fatigue and pain conditions. They were very interested in seeing if we could improve fatigue in this population, and the NIH PROMIS Fatigue score was used as primary, and again, you can see, even though this was 22 patients compared to 17, it was highly statistically significant in favor of the antiviral treatment. Fatigue was also measured on a 0-10 numeric rating scale, sort of standard scale. It was improved on that as well. We saw some movement in pain. We asked a patient global impression of change question two different ways to ask the patients since they'd enrolled in the study how they were doing, and in both cases, the patients reported significant improvement in their quality of life.

We also had an assessment of orthostatic intolerance. This is the feeling that patients get when their autonomic nervous system doesn't respond quite properly. So when you go from sitting to standing or lying down to sitting, you might feel faint. You might feel like you're going to black out. That's orthostatic intolerance. It's common in the Long COVID population. And we saw significant movement on the orthostatic intolerance scales in this study as well. That was something the Bateman Horne Center was specifically interested in. It was new to Dogwood, but we were quite pleased with the results that we saw on this orthostatic scale. And we even saw some movement in mood disorders, probably because patients were feeling that their symptoms overall were improving. Now, as I said, this was an open-label study. The treatment was very well-tolerated.

We know that valacyclovir has very little interaction with mammalian cells, so it's very well-tolerated. Celecoxib is the best tolerated of the nonsteroidal anti-inflammatories. So it really was not a surprise that it was well-tolerated. We've seen that before with the other antivirals. But nonetheless, it really suggested this could be a first-line treatment if it continues to do well. Being open-label, we wanted to confirm this in a more classic double-blind placebo-controlled study. So we did approach Bateman Horne Center about doing a follow-up study, which would be the placebo-controlled double-blind study and so on. So that study has been run at the BHC. They've enrolled 45 patients that they randomized three arms, one to one to one, a high dose of the antiviral combination, low dose antiviral combination, and a placebo arm. That result is still blinded.

We will be getting those results shortly, but we're looking forward to seeing if we can replicate the results we saw in the proof of concept study. Primary endpoint, again, is fatigue reduction. We'll be looking for improvement in sleep, orthostatic symptoms, anxiety, depression, and overall health when we get the results from this study, and as we've already mentioned, the top-line results are expected in the next few weeks, so with that, that's our antiviral platform and where we stand on that. I'll turn it back to Greg to wrap up.

Greg Duncan (CEO)

Sure. Just one word about Long COVID and the opportunity. Data are pretty clear that this is a major global event. Estimates from CDC suggest that Long COVID has impacted around 400 million individuals across the globe and has an annual economic impact of approximately $1 trillion. That's equivalent to about 1% of the global economy. Why is that? Well, there's a higher incidence in adults 18-64 as compared with 65+. If we think about acute COVID, the primary issue there is the elderly. When it comes to Long COVID and what we believe is the reactivation of secondary viruses, it's actually more prevalent in the working population, hence the economic impact associated with this particular illness. In the U.S., we estimate that 6.5% of the non-institutionalized U.S. adult population has experienced Long COVID since the introduction of COVID back in 2019 or 2020.

As you're probably aware, there's nothing approved to treat Long COVID by the Food and Drug Administration. And to date, therapeutic research has exhibited very little progress. Notably, Pfizer's PAXLOVID, which people had high hopes for, failed in its one Long COVID trial. We think that's rational because we don't think Long COVID is associated with the SARS virus, which is the focus of PAXLOVID. We believe it's the reactivation of secondary herpes viruses, which are delivering the symptoms and the sequelae that are associated with Long COVID illness. The BHC results are shortly forthcoming. And we believe one of the unique benefits of the formation of Dogwood is that it enables us ample time to consider the value-enhancing development pathways that sit before us, both traditional financing and non-dilutive funding options to advance IMC-2 into phase II-B development for the treatment of Long COVID illness.

And really, just to summarize on our next updates, we believe this pipeline has very significant value creation potential. The Long COVID data are due in the middle of this month. We're very excited to report that out in the next week or so. The fibromyalgia program, IMC-1, is poised to progress into phase III, and we'll do an update on partnership in the first half of next year. And as Mike went through very nicely, we have the phase II-B interim data from the Halneuron CINP program due in the second half of next year. With that background to the program, let me open it up to questions. So back to you, Ali, as our operator.

Operator (participant)

Thank you. At this time, we'll be conducting our question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue, and you may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question is coming from Jason McCarthy with Maxim Group. Your line is live.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Hi, guys. Thanks for taking the questions. Greg, maybe you guys could talk a little bit about the Halneuron, a little bit more, rather, durability of response when patients stop taking drugs. How far out did that go? Kind of what do you—and is there a dose response, high versus low, that's associated with that? And what do you hypothesize might be the reason for it?

Greg Duncan (CEO)

Jason, thank you for joining today. I'm going to turn the question over to Dr. Gendreau, who's best placed to answer that question for you.

Mike Gendreau (CMO)

Sure, Jason. So in terms of durability response, the study that was conducted that had durability information was that cancer-related pain study we showed. The median response time, or actually average response time, was 57 days for the Halneuron group and 10.5 days for the placebo group among responders. So if they were initial responders at three weeks, they were followed to see how long that response lasted. Now, that's from a single cycle of four days of injections, twice a day for four days. We will not necessarily plan in long-term to only use this for four days. If it's an analgesic, it can be repeated. And one of the questions we will be looking at as we progress development is how often should this treatment be repeated, how many injections do you need subsequently, and so on.

We see hints of durability well beyond four days. Whether it needs to be a week, two weeks, four weeks, eight weeks, how long it needs to last before we repeat is one of the questions we'll be looking at. In terms of your question about dose response, in the chemotherapy-induced neuropathic pain study, three doses were looked at. There was a quite low dose, a mid dose, and a high dose. The results were best with the high dose. We did see a dose response, both in terms of efficacy and adverse events. That result has led us to go with that high dose, which is what we're taking forward into the II-B study that's being planned right now.

Greg Duncan (CEO)

Yeah, Jason, all I would add is we do think there may be something structurally or some kind of reset going on with the nerve transmission, and that is something we're exploring right now to see if we can't tease that out through further research. But it is pretty clear this effect is doing something that's providing a very durable effect, and hopefully, we can find out a way to show that through either preclinical work, animal work, or human clinical trials, and we'll endeavor to do so.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Just in terms of the safety profile, I think I caught it earlier. From the BID to the QD, it was a better tolerability profile. I know there are unrelated mechanisms between opioids and Halneuron, but are any of those tolerability issues related to respiration or breathing difficulty?

Mike Gendreau (CMO)

We did not see a respiratory adverse event signal in these studies, so we're using quite low doses, so the doses we're employing do not appear to be sufficient to cause major respiratory suppression as you would get with a very high dose. In terms of going from twice a day to once a day, we did see a better tolerability profile with once a day, and we didn't see any meaningful change in efficacy with once-a-day dosing versus twice, so it became a pretty obvious choice to go with once-a-day dosing.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Just last question, quick. Oh, sorry, guys.

Greg Duncan (CEO)

No, not at all. I was going to just add to Mike's comments that one of the things that was attractive to us about Halneuron is its specific focus on the 1.7 modulator as opposed to other NaV targets. There are NaV targets spread throughout the body. As Mike said, 1.7, 1.8, and 1.9 are primarily focused on pain signaling. And so that actually pulls through when you take a look at the tolerability data. I didn't mean to cut off your follow-on question.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

No, no, no. Go ahead. Last question, really quick. You had mentioned that 50% or so of CINP patients do use opioids because there is nothing else. Does FDA ask, or do you think they'll ask for any information coming out of your trial on any reduction in the scripts for opioids or maybe opioid-based rescue for any patients that might be having more severe pain?

Greg Duncan (CEO)

They will be interested to see if you have a reduction in rescue with treated patients versus controlled patients. We don't, at this point, plan to pursue an opioid-sparing claim, and if you don't pursue a sparing claim, then they're not going to insist you show a reduction in usage. That's a very complicated issue to chase because the reasons people change opioid doses are complicated. It's not just your treatment, and from a clinical trial standpoint, it's better to try and keep all the ancillary treatment medications constant throughout your study. This is going to be a four-week study, so we're going to try and keep, if they're on opioids, we're going to keep those constant as much as we can. If they need rescue, we're going to use a different rescue than a straight opioid.

We're going to try and not have opioid be a major variable in interpreting the results we get once we treat patients with Halneuron.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Got it. Thank you, guys.

Greg Duncan (CEO)

Thank you, Jason. We appreciate you joining this morning.

Operator (participant)

Thank you. Our next question is coming from David Bautz with Zacks Small Cap Research. Your line is live.

David Bautz (Senior Analyst)

Hey, good morning, everyone. I was wondering if you could provide a few details on the phase II-B trial for Halneuron, anything you can provide in that regard, and then what are the steps that you need to go through, if any, before that trial can get going underway?

Greg Duncan (CEO)

David, good morning. This is Greg. Thank you for attending this morning. I'll turn it over to Mike, who's spearheading not just the clinical piece of this, but the regulatory piece as well, to talk through a little bit about the process we're undertaking before we start dosing patients in quarter one, which is our goal.

Mike Gendreau (CMO)

Sure, so Halneuron has been used in CINP before in that dose-ranging proof of concept study I mentioned. We are going to use that as a background. The study we're designing, the II-B study we're designing, is significantly larger. We are using the high-dose dose once a day. So it's a somewhat different design than we've used before, but it's actually consistent with what the FDA has seen before, and we think going to once-a-day dosing actually will be attractive in terms of, since we see better tolerability with once a day versus twice a day, arguably, we're going to go in with a trial design that FDA is going to think is better tolerated, potentially safer. In terms of the study itself, it's a four-week-long study. We will be dosing. We'll be given the same eight doses that have been used historically.

In the past, it was four days of twice-a-day dosing. We're going to go to once-a-day dosing for eight days. It'll be spread over up to two weeks. So the same amount of total drug delivery will happen just in a different dosing format. Primary endpoint will be at week four, at which point patients will exit the study. It'll be one-to-one randomization against placebo, so traditional design, with an interim analysis, as we have talked about, scheduled for the second half of 2025. We anticipate we'll have roughly 40%-50% of our targeted enrollment in the study for that interim analysis. Again, the primary endpoint is going to be reduction in pain over time. We'll be looking at what fraction of patients have significant improvement and how long it lasts within the context of the four-week study.

That's to set us up for a phase III program, where we already have some agreements with FDA about what a phase III would look like in this indication. But this is our really proof of concept to do proper power calculations and get a handle on what it would take to get this through the approval process.

Greg Duncan (CEO)

Yeah, I should mention, Dave, as we do with all this stuff, that's obviously subject to FDA input, but I think there's a very good logical flow for the transition to this particular study, and we have very high hopes for Halneuron as a really important new treatment.

David Bautz (Senior Analyst)

Okay, great. Appreciate the details there. And lastly, what are, if any, the conditions that need to be met to get that second tranche of money in February of 2025?

Greg Duncan (CEO)

There are really no material obligations to meet to get that money in quarter one. I'm sure the intention is certainly to do so. As long as we maintain good, consistent listing standards and all those other things that are required as a public entity, we don't see any impediments to getting the additional $3 million.

David Bautz (Senior Analyst)

Okay.

Greg Duncan (CEO)

Ultimately.

David Bautz (Senior Analyst)

Thank you.

Greg Duncan (CEO)

Yeah.

David Bautz (Senior Analyst)

Oh, go ahead.

Greg Duncan (CEO)

CKLS is very excited about this program. I don't think it's too much to say that having a very good, stable institutional shareholder, strategic in its own right, as one of our large and soon to be our largest shareholder, is anything but a good fact, and so they're very committed to the asset and look forward to moving that asset forward.

David Bautz (Senior Analyst)

All right. Great. Thanks for taking the questions.

Greg Duncan (CEO)

Thank you, David.

Operator (participant)

Thank you. As we have no further questions in queue at this time, I'd like to turn it back over to Mr. Duncan for any closing remarks.

Greg Duncan (CEO)

Yeah. First off, thank you for those of you who joined this morning. Hopefully, you can tell, we believe the formation of Dogwood Therapeutics last month represents a very transformational event for us, and in particular, the expansion of our pipeline to include Halneuron as a complement to IMC-1 and IMC-2. The concurrent strategic financing by CKLS's affiliate, the former owner of WEX Pharmaceuticals, provides us with this nice tranche of operating capital to get through the end of next year, inclusive of the readout for the Halneuron phase II-B study, the interim readout specifically. It is our view that this is a win-win for legacy Virios shareholders and CKLS shareholders, with both short-term and medium-term potential value creation opportunities associated with the forthcoming Long COVID phase II data for IMC-2 and the phase II-B data next year for Halneuron.

We look forward to updating you on all of our progress in a very timely manner, starting with sharing results from our recently completed BHC Long COVID phase II study in the next week or so. We want to thank you for your time and attention today.

Operator (participant)

Thank you. Ladies and gentlemen, this concludes today's conference, and you may disconnect your lines at this time, and we thank you for your participation.