Atea Pharmaceuticals Q3 2023 Earnings Call Transcript

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November 8, 2023

There are 12 speakers on the call.

Operator

Afternoon, ladies and gentlemen. Welcome to the Atea Pharmaceuticals Third Quarter 2023 Financial Results and Business Update Conference Call. At this time, all participants are in a listen only mode. Following the formal remarks, we will open the call up for your questions. I would now like to turn the call over to Janae Barnes, Senior Vice President of Investor Relations and Corporate Communications at Atea Pharmaceuticals.

Operator

Ms. Barnes, please proceed.

Speaker 1

Thank you, operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals' Q3 2023 Financial Results and Business Update Conference Call. Earlier today, we issued a press release, which outlines the topics we plan to discuss. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at ir. Ateyopharma.com.

Speaker 1

With me today from ATAYA are our Chief Executive Officer and Founder, Doctor. John Pierce Amadose Chief Development Officer, Doctor. Janet Hammond Doctor. Rancho Harga, Chief Medical Officer Andrea Corcoran, Chief Financial Officer and Executive Vice President of Legal and our Chief Commercial Officer, John Babrika. They will all be available for the Q and A portion of today's call.

Speaker 1

Before we begin the call and as outlined on Slide 2, I would like to remind you that today's discussion will contain forward looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we encourage you to read. Our actual results may differ materially from what is discussed on today's call. With that, I'll now turn the call over to Jean Pierre.

Speaker 2

Thank you, Jonae. Good afternoon, everyone, and thank you for joining us. Since the beginning of the year, we made great progress across our COVID-nineteen and HCV program. So as you can see on Slide 3, for our COVID-nineteen program, enrollment in Sunrise, our global Phase 3, reflect the inflection rates occurring globally and the study global footprint. Supported by clinical data, including Favorable efficacy, safety and lack of drug interaction profile of Beneposgovia, we are pleased with the progression of Sunrise 3 study and we look forward to several important milestones in 2024.

Speaker 2

Our goal for this program is to deliver an effective treatment to the millions of patients for whom the current standard of care is not adequate. KARVET is here to stay and the area where there is great vulnerability is the urgent need for additional oral We believe that venifosbuvir has the potential to address the key limitations of current COVID-nineteen therapies, including safety and drug drug interactions. New, safe and well tolerated Oral therapies are also needed to keep up with the evolution of the virus. The SARS cultivars Indeed, it's accumulating mutations with amino acid substitutions faster than any other endemic RNA virus. To prevent the emergence of cross resistance, we need a broader and more diversified arsenal of Oral Antivials with various distinct mechanism of action.

Speaker 2

As part of a multi pronged approach against COVID-nineteen, We continue to also make progress with our discovery program focused on the 2nd generation protease inhibitor that is highly differentiated For our HCV program, we are very pleased with the substantial progress made in our Phase 2 combination study of Benifrostbergen and Wazersbergen. We have quickly completed enrollment of the 60 patient Leading cohorts and initial results are expected in early 2024. Our goal for this program is to substantially enhance the current standard of care by offering an 8 week, pangenotypic, For the ACE III treatment option for HCV patients. Despite treatment options indeed, There remain a large underserved HCV patient population that continues to grow dramatically Even in the United States, due to the opioid crisis, injection drug use and HCV reinfection. For both our COVID-nineteen and HCV program, which are each multibillion dollar commercial opportunities, We are well capitalized to achieve key inflection points with a cash runway well into 2026.

Speaker 2

As of September 30, we had $595,100,000 of cash and cash Equivalents and Andrea will go over the details with you. I will now turn the call over to Janet for an update on our COVID-nineteen program.

Speaker 3

Good afternoon, everyone. As Jean Pierre just stated, COVID-nineteen variants are continuing to evolve at a very rapid pace. On Slide 5, you can see how as quickly as every 2 weeks, the variant proportions in the United States are changing Based on genomic sequencing results, these rates are faster than reported for any other RNA virus. And you can see why it isn't surprising that there are so many new variants circulating and it isn't possible to predict how these variants might further evolve In terms of which mutations come next and the associated rates of infectivity and ability to cause severe disease. The CDC is currently monitoring 35 variants of which HV1 is the latest to be the dominant strain, But there are 100 more that haven't yet reached the level of community spread to appear on their radar.

Speaker 3

Not showing up on this slide yet It's the variant of Omicron BA286 and its new mutation which is called JN1, which contains a further 41 As you can see, as a result of this, we are caught in a perpetual game of catch up With continued attempts at updated vaccines that are often outdated before they become available, each new variant introduces mutations that can impact Vaccine Efficacy and Durability. On top of this, 1st generation monoclonal antibodies have quickly become obsolete with authorizations revoked due to waning efficacy. Alarmingly, it is apparent that some recently circulating variants All of this underscores the important role for direct acting oral antivirals, which are effective independent of new mutations. Importantly, Sembifossovera has a high barrier to resistance due to its unique mechanism of action, maintaining potency against all variants tested to date. And we anticipate that this will be the case as new variants continue to emerge.

Speaker 3

Turning to Slide 6. Supported by our extensive global footprint, we're seeing promising enrollment trends in our SUNRISE three trial. We have strong patient enrollment in the U. S, Our clinical sites are being responsible for approximately 50% of the patients to date. The majority of patients globally continue to be enrolled in the monotherapy Despite the awareness and availability of current oral antiviral options, this clearly highlights The ongoing important unmet medical need, which continues due to safety concerns, tolerability and potential drug drug interactions, which limit the use of the currently available agents.

Speaker 3

Heading into this winter, forecasts from the U. S. CDC suggests that this respiratory season should be similarly high to last year, where hospitals were more full than at any other time point in the pandemic and worse than pre pandemic years. It's predicted that COVID-nineteen will likely account for approximately half of those hospitalizations with Flu and RSV combined accounting for the other half. There's a very low COVID-nineteen booster uptake with the latest vaccine at approximately only 7% of U.

Speaker 3

S. Adults, which leaves many susceptible to the virus without a suitable treatment option. The most vulnerable to severe COVID infection are the elderly, the immunocompromised and those with underlying risk factors for severe infection. Turning to Slide 7. As a reminder, Sunrise 3 is focusing on high risk patients and its primary endpoint There are 2 planned interim analyses for DSMB review at approximately 650 patients and begin at 13 50 patients in the supportive care monotherapy arm with initial top line data also anticipated next year.

Speaker 3

Please note, the DSMB's review, we do not expect to report efficacy results as these analyses are primarily geared towards safety and futility. In April, we were granted Fast Track Designation for bendifosbuvir, which reflects the recognized unmet medical need that remains for COVID-nineteen patients. We believe that the compelling profile of bemifrostrivia is differentiated both clinically and preclinically With its low risk for drug interactions and its good tolerability profile, as well as the absence of musagenicity and embryo fetal toxicity in the preclinical study. Our goal for COVID-nineteen is to deliver a safe, tolerable and effective treatment to the millions of patients for whom this current standard of care is not a suitable option. I'm now going to hand the call over to John to review the COVID-nineteen commercial opportunity.

Speaker 4

Good afternoon, everyone. On Slide 9, let's discuss the COVID-nineteen As you can see, SUNRISE 3 is the only Phase 3 program in the U. S. That is evaluating a new oral antiviral exclusively for the treatment of high risk patients. Turning to Slide 12 I'm sorry, turning to Slide 10, the The demand for oral antivirals to treat COVID correlates with the infection rates.

Speaker 4

The demand for oral antivirals in 2023 has been considerable and shows that the U. S. Is averaging approximately 580,000 scripts per month, January through September. Turning to Slide 11. As of November 1, The market for COVID-nineteen oral antivirals began transitioning to the traditional payer markets, such as Medicare, Medicaid and Private Commercial Insurance.

Speaker 4

Oral antiviral therapeutics for COVID-nineteen are expected to remain A multi $1,000,000,000 opportunity for years to come, projected annual COVID-nineteen oral antiviral U. S. Demand Using IQVIA Retail Prescriptions suggests an estimated annual global market opportunity of approximately $10,000,000,000 As to our knowledge, this is one of the has become one of the largest, antiviral markets, Concentrated with only 2 products that have key limitations. We believe there is still an unmet need with critical gaps And there is an opportunity to expand this market to patients where paxlovid tolerability and drug drug interactions is a concern. In addition to the safety concerns with Ligabrio.

Speaker 4

I'll now turn the call over to Arantxa to review our Phase 2 HCV program.

Speaker 5

Thank you, John. Moving now to Slide 13, let's discuss our Phase 2 Hepatitis C program, A novel combination of beniphosfobia and rosuzevir. We recently achieved an important milestone and we completed enrollment of the 60 patient leading cohort. In this cohort, we are evaluating the combination of eniphosfovir and russasvir for safety, tolerability and sustained biological response or SVR at week 4. The primary endpoint of the study remains at SVR week 12, But as you may know, there is an accepted correlation between SVR at weeks 4 and 12 and utilizing this correlation allows us to accelerate the study.

Speaker 5

Patients will complete treatment this quarter and factoring in the timeline for data analysis, we expect to announce initial results early 2024. We are expanding the study geographical footprint to approximately 50 clinical sites in 15 countries and we plan to reinitiate enrollment after we review the results from the leading cohort. We are receiving global regulatory approvals for the remainder of the trial and our broad investigation Network will help to lay the groundwork for the anticipated initiation of a global Phase 3 trial, which is expected in the Q4 of 2024. Slide 14 outlines our Phase 2 open label Patients are administered 5 50 milligrams of Benifosporin in combination with 180 of Rucasvir once daily for 8 weeks. The primary endpoint of the study are safety and sustained biological response or SBR week 12 post treatment.

Speaker 5

Other biological endpoints include biological failure and viral resistance. We believe that the combination of Beniphosfoveir and Russafir has the potential to substantially improve upon the current standard of care by offering a protease inhibitor free 8 week duration option for hepatitis C patients with and without cirrhosis. I would like to note before I hand Over the call to Andrea that we will be presenting 2 posters at the 2023 Annual Meeting of the American Association for the study of liver diseases later this week. They include supportive data for Benifosbuvir and roosusvir, highlighting the potential to use these 2 drug candidates together as a novel treatment for Hepatitis C. And with that, I will now turn the call over to Andrea to summarize AdeA's financial position.

Speaker 6

Thank you, Arrenza. As Jonae mentioned in her introductory remarks, earlier today we issued a press release containing our financial results for the Q3 of 2023. The statement of operations and balance sheet are on Slides 1617. For the Q3 2023, G and A expenses remained relatively consistent with the Q3 of 2022. There was an increase in R and D year over year 3rd quarter related to the advancement of our COVID-nineteen and HCV clinical programs.

Speaker 6

We do anticipate that R and D expenses We'll continue to increase in a measured way as these programs continue to advance. We are exercising focused financial discipline to manage spend as we invest in both of these programs. At the end of the Q3 of 2023, Our cash, cash equivalent and marketable securities balance was $595,100,000 Based on our current plans, We are reiterating our cash guidance with a runway well into 2026. I'll now turn the call back over to Jean Pierre for closing remarks.

Speaker 2

So in closing, we have made great clinical and operational progress across our COVID-nineteen and HCV programs so far this year. We have also published and presented significant scientific and clinical evidence in support of the potential of our clinical programs Among an audience of leading virologists and infectious disease specialists at several scientific conferences this year. We will continue to highlight the potential of our programs at upcoming scientific conferences, including ASLD later this week and through the publication of our data. We know that clinical data are very important And the number of interim analysis and data readouts starting in early 2024, We believe that next year will be transformational for Atea. As always, we thank you for your continued interest and support For Viteas, together, we strive to address the unmet medical needs of patients with serious bowel diseases.

Speaker 2

With that, operator, we will now open the call up to your questions.

Operator

Thank you, Our first question comes from the line of Eric Joseph with JPMorgan. Your line is now open.

Speaker 2

Good evening. Thanks for taking

Speaker 7

the questions. I guess just having pushed out the timeline for the first interim analysis here a little bit for SUNRISE 3, can you talk about The pace of enrollment in the study and ultimately your level of confidence in being able to fully enroll the trial Should the interim analysis support and I guess with respect to the interim analysis itself, other than for fertility ruling that out, How does the interim sort of derisk the study from an FDA perspective? Can you speak to that a little bit? So,

Speaker 2

Eric, related to the timelines, I'd like to remind you that on our last Earning call for Sunrise 3, we said our first interim analysis will be around year end 2020 3 or Q1 2024. And we are just planning for Q1 2024. So I don't think that we change any time line and we are on track with this time line. Related to the detail For the interim analysis, what the DSMB will do and our projection, Janet, can you address The rest of the question, please.

Speaker 3

Sure. So first of all, thanks for the question, With regards to the pace of enrollment, I think the pace of enrollment is very commensurate with what one is seeing worldwide in terms of surges. There was, I think a perception and I think a great hope by everybody really that towards the beginning of summer that COVID-nineteen actually at last be getting away. I think we all experienced the fact that there was a huge surge at the end of July into August early September. I think this is somewhat subsided now, but we are starting to hear reports of the next surge really starting up in Europe and we anticipate that there will be There will be a considerable surge as we head into the holiday season unfortunately.

Speaker 3

So we have a very broad geographical footprint for this trial. And so we have, as was mentioned, I think previously, we have The anticipation of having in excess of 300 sites across the world available to enroll patients as these surges occur. So we're pretty confident that we can, assuming all else goes well, as you mentioned with regard to the DSMB, enroll the trial. And unfortunately, it does seem that 1 third is going to follow another. I think with regard to what the DSMB can answer In regards to things other than futility, I think it's primarily going to be around the safety profile being acceptable for us to continue to enroll patients.

Speaker 3

And that we're not doing anybody any harm by continuing to keep the trial open from that perspective. But with regard to efficacy, no, we won't have any readout from them. In that regard, just that it's safe to proceed.

Speaker 7

Okay. That's helpful. I guess, could you similarly frame the 2nd interim as well in terms of What that might inform from an efficacy perspective, if not the first interim?

Speaker 3

So I think those interim analyses are really designed primarily towards ensuring that the study is able to achieve its primary endpoint of hospitalization And that these hospitalizations are being distributed in a way where we should be able to continue the trial and achieve a readout at the end. But beyond that, And we will not have any efficacy information. So they will just allow us to proceed assuming it's not futile.

Speaker 2

Okay, great. Thanks for

Speaker 7

taking the questions.

Operator

One moment for the next question. Your next question comes from the line of Maximo Hukor Good morning, Morgan Stanley. Your line is now open. Great.

Speaker 8

Thank you. So I'm trying to put Sunrise 3 in the context Given lower hospitalization rates in the competitive landscape, specifically Gilead announced that their oral Phase 3 trial is fully enrolled with 1900 participants at standard risk. I think their data is expected in early 2024. So have you thought about revisiting standard risk Thank you.

Speaker 2

Janet, do you want to address the question? Thank you, Amelie, for the question. Yes?

Speaker 3

So yes, thank you for the question. And yes, of course, we have considered that. But we actually do believe that hospitalization is probably the most important benefit that can be achieved from using direct oral and sial. And I think there are some important differences between our trial and that. And you'll recall that Gilead had 2 trials ongoing.

Speaker 3

They had one which they terminated In high risk patients and then they have a standard risk patient population where they're looking for a reduction in symptoms. And our study is a bit more like the one which they terminated, but the study which they terminated, Unlike us, we're not enrolling in the U. S. And as I mentioned in my remarks, what is striking to us is that we About 50% of the patients that we are enrolling in our trial are coming from the U. S.

Speaker 3

And I think that's partly due to the fact that I think throughout there have been substantial, perhaps more substantial education and availability of testing for patients and I think an awareness of COVID in high risk vulnerable patient populations in the U. S. And so, we continue to believe that our study should be able We are obviously Continuing to watch and understand what others are able to observe and we'll continue to evaluate and assess What adjustments are needed to be made? But at the moment, we believe that this is the patient population where the need is the greatest And also that because of our geographical footprint, it is something that we should be able to achieve.

Speaker 8

Okay. Thank you.

Operator

One moment for the next question. And your next question comes from the line of John Miller with Evercore. Your line is now open.

Speaker 9

Hi, guys. Thanks for taking my question. I guess given that we're not going to get efficacy in the interim looks, Do you have any sense at this point when you anticipate having a good sense for efficacy when that could be communicated to us out of Sunrise 3? I'm aware it's based on event rate, but do you have any sense based on your expectations for curves And for surges, when that could happen?

Speaker 2

Janet? Thank you, John, for the question. Janet?

Speaker 3

So John, I think probably the answer is unfortunately no. I think that's the difficulty with COVID is that I think the searches are somewhat unpredictable and the study needs to remain blinded in order for us to be able to take it across the finishing line.

Speaker 9

Fair enough. Maybe transitioning to that novel PI that we'll get an update for in the first Do you expect to have a candidate at that time? Will there be preclinical data for us to talk about? I'm just trying to get a sense for what you might be communicating in that update.

Speaker 2

Well, John, it would be preclinical data. And to be honest with you, as the profile will be very different from any PI that Has been approved or is it clinical development? We like to keep A little bit more time before we will release this information because there is a lot of Competitive Intelligence, we are concerned that, That will open a field that we believe we are going to be pioneer there. So it's not going to be the standard Either peptidumabenik or small molecule once or twice a day and Mostly all costs resistant to PAXLOVATE. So it's really a new generation and also with a very different Target profile that we are working on.

Speaker 2

So For competitive reasons, we have to hold for now and share With you, we feel that we have a little bit more secure the field and make A little bit later, I would say more progress and more into the preclinical development.

Speaker 9

All right. Thank you very much.

Operator

One moment for the next question. And your next question comes from the line of Rona Louise with Leerink Partners. Your line is now open.

Speaker 10

Thanks, operator. This is Rosa Chun on for Roni Reeves at Leerink Partners. Just a quick one on COVID and then a follow-up on your HCV program. So do you have a sense for how much your recent trial amendments

Speaker 2

Janet, do you want to address the question?

Speaker 3

So the amendment is achieving regulatory approvals And we are seeing in the places where the regulatory approvals have been achieved that we are certainly admiring patients with a Thank you, broader profile than initially, but I think we have yet to see the full benefit of it, as it takes a little while in some cases And for the approvals to come all the way through. I think we certainly benefited from the surge we can see and also I think from the fact We have as many sites open as we do. And so we're well positioned, I think, to take advantage of these surges now as they come And we're seeing enrollment moving forward quite well. Thank you.

Speaker 10

Thanks so much. And regarding HCV, can you remind us who are the early adopters that you're hoping to target in the market? And Separately, do you see your combination as differentiated enough from what's currently available to be able to possibly take larger market share in the future if launched?

Speaker 2

John, you want to address the question?

Speaker 4

Yes. So thank you for the question. As you know, the global net sales market for hep C is quite large. And in 2022, I think the net sales is approximately $3,530,000,000 So with the U. S.

Speaker 4

Representing roughly 50% of that, so there's definitely room for more than just 2 players. But for our profile that we believe that we should be hopefully be able to achieve, it's going to be pangiantipic, protease free, Protease inhibitor free and also to have no food effect and being an AV therapy, it should be able to compete Quite well within that market per share. And obviously, how much share will depend on the final clinical profile that is demonstrated. But we feel very confident that A market of that size can easily accommodate 3 products.

Speaker 3

That's helpful. And if I could with a follow-up, Do you have

Speaker 10

a sense for what the FDA is looking for in your Phase 3 trial design? Because previously you mentioned the combo has the Potential to be less than 8 weeks of treatment, which would be quite a differentiating factor. Is that something you'll build into the Phase 3 trial design to be able to see that?

Speaker 2

Well, look, first, we never say that we are going to go to unless we say that we have the potential Possibly. So we don't have even the data right now. So let's await the data. We feel as John As indicated, I share with you that there is not, I would say, bluntly an Epclusa for 8 weeks, which is considered Today is the standard of care. When we know it's a very different market as John also indicated as compared to 10 years ago We're with patients with Garage now.

Speaker 2

They are new patients. Compliance is a major actually It's a major issue, mostly IV drug abuses, opioid, so the opioid crisis, Reinfection, shorter time is highly differentiated, especially 8 weeks. We'll see if we later on in parallel to the Phase III, we will go to the potential 6 weeks. But definitely, We anticipate that for Phase 3, we will go 8 weeks as we said as a head to head against Epclusa, which we believe Consider and agree by all the hepatologists and ID specialists, they understand of care. At this time, I don't think that we can share with you Any of the interaction beyond the Phase 2 with the regulators And when we do, we will share with you.

Speaker 2

But right now, it's too early. Let's see the date of the Phase 2. And then after as we mentioned, we'll go head to head in one of the Phase 3 against Epclusa. And then let us discuss with the regulators about how they see this study design, Phase 3 study design.

Speaker 10

Appreciate the color. Thanks so much.

Operator

And your last question will come from Tim Lugo with William Blair. Your line is now open.

Speaker 11

Hi, Tim. This is John on for Tim. Thanks so much for taking our questions. I was just wondering if you could remind us on what you'll announce for the interim DSMB analysis in the Q1. Will you just announce that the DSMB Either recommended continuing or stopping the study or will you provide some initial safety data as well?

Speaker 2

Janet, you're going to address the question.

Speaker 3

I think we have just really announced that we can continue or not. Yes.

Speaker 11

Okay. That's very helpful. Thanks.

Operator

And we have no further questions at this time, I will now turn the call back over to Jean Pierre Seungagiosi.

Speaker 2

Thank you again for joining us today. This is the end of our earnings call. Thank you.

Speaker 3

This concludes today's conference call.

Operator

Thank you for your participation. You may now disconnect.

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Key Takeaways

  • In the Phase 3 SUNRISE 3 trial of besnivifosbuvir for high-risk COVID-19 patients, Atea expects two DSMB safety/futility reviews—with the first interim analysis around Q1 2024—while enrollment remains robust, particularly in the U.S.
  • Atea completed enrollment of the 60-patient lead cohort in its Phase 2 HCV study combining benifosbuvir and rosuzevir, with initial SVR-4 results due in early 2024 and a global Phase 3 planned for Q4 2024 to test an 8-week, protease-inhibitor-free regimen.
  • As of September 30, 2023, Atea held $595 million in cash and reiterates a cash runway into 2026, funding continued R&D investment in both COVID-19 and HCV programs.
  • The COVID-19 oral antiviral market remains a multibillion-dollar opportunity—estimated at ~$10 billion globally—with roughly 580,000 U.S. scripts per month in 2023 and significant unmet needs due to safety and drug-drug interaction limitations of existing therapies.
  • Atea is advancing a second-generation SARS-CoV-2 protease inhibitor in preclinical development, designed to overcome resistance and provide a novel mechanism distinct from current oral antivirals.
A.I. generated. May contain errors.
Earnings Conference Call
Atea Pharmaceuticals Q3 2023
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