Trevi Therapeutics Q4 2023 Earnings Call Transcript

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March 20, 2024

There are 8 speakers on the call.

Operator

Good afternoon, and welcome to the Trevi Therapeutics 4th Quarter and Year End 2023 Earnings Conference Call. At this time, all participants will be in listen only mode. Please note this event is being recorded. Various remarks that management makes during this conference call about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various factors, including those discussed in the Risk Factors section of the company's most recent quarterly report on Form 10 ks, which the company filed with the SEC this afternoon.

Operator

In addition, any forward looking statements represent the company's views only as of today and should not be relied upon as representing the company's views as of subsequent date. While the company may elect to update these forward looking statements at some point in the future, the company specifically disclaims any obligation to do so, even if its views change. I would now like to turn the conference over to Jennifer Goode, Trevy's President and CEO. Please go ahead.

Speaker 1

Good afternoon, and thank you for joining our Q4 year end 2023 earnings call and business update. Joining me today on this call are my colleagues Lisa Delfini, Trevi's Chief Financial Officer and Doctor. David Clark, Trevi's Chief Medical Officer. Lisa and I have some prepared remarks, then we will open it up for questions. The Q4 of 2023 and start of 2024 was a productive time for Trevy with the initiation of 3 clinical studies.

Speaker 1

Let me provide a brief update on each of these trials. I will begin with our Phase IIa RIVER trial in refractory chronic cough that was initiated in the Q4 of 2023. Refractory chronic cough or RCC is a debilitating disease that affects up to 10% of the adult population and is defined as a persistent cough lasting greater than 8 weeks despite a treatment for an underlying condition. RCC is caused by cough reflex hypersensitivity in the central and peripheral nerves and has a significant impact on patients physically, psychologically and socially. With multiple drug failures in the space and a lack of any approved therapies for RCC in the U.

Speaker 1

S, there continues to be a significant unmet and urgent need for new potential treatments. The key point of differentiation for HEDUVIO in refractory chronic cough is the mechanism of action, which works synergistically both centrally in the brain and peripherally in the lungs. We believe than peripheral only mechanisms like the P2X3 inhibitors. RCC patients have been stratified for clinical trial purposes into 3 categories of frequency: very high, greater than 20 costs per hour high to moderate, 10 to 19 costs per hour and low frequency coffers. The very high and high to moderate frequency coffers are all considered as having severe cough by the KOLs.

Speaker 1

The P2X3s to date have only demonstrated statistical significance in the very high cost counters and have not shown successful results in the cough frequency of 10 to 19 coughs per hour. We believe that based on the data from our IPF cough trial, which showed a strong drug effect across all baseline cough counts and the drug central and peripheral mechanism of action that HEIDUVIO has the potential to work in patients broadly across varying cough frequencies. When you look at the RCC patient distribution, 44% of the patients are estimated to have moderate to high cough frequency, whereas only 29% are estimated to have very high cough frequency. So there's potential, Hudubio may address close to 3 fourths of the RCC market, whereas P2X3s may only be effective in less than a third of the market. Onto the details of our RCC trial, which is a standard design across several cough trials run to date.

Speaker 1

The RIVER trial is a Phase 2a double blind randomized placebo controlled two period crossover study evaluating the reduction of cough in approximately 60 patients. These patients will be randomized with a one to one stratification between those with 10 to 19 costs per hour and those with greater than 20 costs per hour. Each treatment period will last 3 weeks separated by a 3 week washout period. Patients on HEDUBIO will have the dose titrated weekly from 27 milligrams up to 108 milligrams twice daily across the dosing period. The primary efficacy endpoint is the relative change in the 24 hour cough frequency at day 21 from treatment period baseline for HEDUVIO compared to placebo as measured by an objective cost monitor.

Speaker 1

The study will also explore secondary endpoints, including patient reported outcome measures for cost and quality of life. We are excited to have initiated this study and expect to have substantially all the sites activated by the end of this month. We continue to expect top line data from this study in the second half of this year. Next, an update on our lead program in idiopathic pulmonary fibrosis or IPF chronic cough. IPF is a serious end of life disease.

Speaker 1

Chronic cough is reported by approximately 85% of patients suffering from IPF and has similar significant physical, psychological and social impacts to that of RCC, but may also be a risk factor that plays a role in the progression of IPF. The constant lung injury, micro tears and potential inflammation caused by persistent coughing may lead to worse health outcomes for patients, such as increased respiratory hospitalizations, mortality or need for transplant. With no currently approved treatment options for chronic cough and IPF, patients and providers have an urgent need for new therapies. While there are a lot of ongoing development programs in IPF, current and in development therapies have not shown an impact on chronic cough, one of the primary complaints of these patients, elevating the unmet need. At the end of 2023, we initiated a Phase 2b study in chronic cough and IPF, the CORAL study.

Speaker 1

CORAL is a 4 arm Phase 2b dose ranging trial that will study 3 active doses of HEIDUVIO and placebo. The study is a 6 week trial in approximately 160 patients. We plan to conduct this study in multiple countries and sites to be able to complete enrollment in a timely manner. Site activations are moving along in multiple countries and enrollment is in early stages. We reconfirm our guidance for this study for top line data in the first half of twenty twenty five, assuming no changes from our sample size re estimation results, which are expected in the second half of this year.

Speaker 1

And lastly, we initiated dosing of the final part of the Human Abuse Potential or HAP study in January of this year. The final portion of the HAP study is a randomized double blind, double dummy, five way crossover design to determine the abuse potential of 3 doses of oral nalbutorphanol and placebo. The primary objective is to evaluate the likability of Nalbuphine as compared to both placebo and butorphanol and the primary endpoint is a drug liking VAS scale. Recall that parenteral nalbuphine is unscheduled by the DEA. This study is moving along nicely and we have passed the 50% enrollment mark.

Speaker 1

We continue to expect top line data from this study in the second half of this year as well. As you can see, it is a busy time clinically for Trevy and we believe the data from these trials will be important to inform the development path forward for Huduvio in chronic cost conditions. We are motivated by the potential to offer an effective treatment to patients with these serious conditions and chronic costs. I will now turn it over to Lisa to review our financial results, then we will open it up for any questions you may have.

Speaker 2

Thank you, Jennifer, and good afternoon, everyone. The full financial results for the 3 months ended December 31, 2023 can be found in our press release issued ahead of this call and our 10 ks, which was filed with the SEC today after the market closed. For the Q4 of 2023, we reported a net loss of $7,800,000 compared to a net loss of 5 $500,000 for the same quarter in 2022. R and D expenses were $6,500,000 during the Q4 of 2023 compared to $4,300,000 in the same quarter of 2022. The increase was primarily due to increased clinical trial costs in our Phase 2b CORAL trial and our Phase 2a RIVER trial, both of which were initiated in the Q4 of 2023.

Speaker 2

G and A expenses have remained essentially flat at $2,400,000 during the Q4 of 2023 compared to $2,300,000 in the same period of 2022. We take a very disciplined approach to cash management and as a result while R and D expenses increased as we are starting up for clinical trials, G and A expenses have remained consistent. Other income net was $1,100,000 in both the Q4 of 2020 3 2022 and primarily consists of interest income on our cash balances offset by any interest expense. We paid off our term loan in May of 2023, so interest expense was de minimis in the Q4 of 2023. As of December 31, 2023, our cash, cash equivalents and marketable securities totaled $83,000,000 compared to $120,500,000 as of December 31, 2022.

Speaker 2

Our cash runway guidance that we will have cash, cash equivalents and marketable securities into 2026 remains unchanged and we believe is enough to fund all of the trials Jennifer just discussed and gives us good cash runway after the last readout. In 2024, we expect average cash burn of about $9,000,000 to $12,000,000 per quarter and our fully diluted shares outstanding at December 31, 2023 is 114,500,000. This concludes our prepared remarks. I will now turn the call back over to the operator for Q and A.

Operator

We will now begin the question and answer Our first question comes from Leland Gershell with Oppenheimer. Please go ahead.

Speaker 3

Afternoon and thanks for taking our questions. 2 from us. First with respect to IPF, the CORAL design, just wanted to have clarity on the primary endpoints. You're testing 3 dose levels and then you have placebo. So will that primary endpoint in terms of 24 hour cough frequency be the aggregate cough frequency across all three doses versus placebo?

Speaker 3

Or would it be that analyzed on an individual basis with each dose level versus placebo? Thank you.

Speaker 1

Go ahead, David.

Speaker 4

So Leland, thank you very much for the question. So the analysis will be per dose level. So top dose, mid dose, low dose, all compared independently with placebo. It's important for us to get a good feel for dose response and that analysis allows us to do that.

Speaker 3

Okay, thanks. That's very helpful. And then my other question, just wondering maybe Jennifer and Tina, if you could comment on the recently published data from a short term trial of low dose controlled morphine used in the IPF offsetting, which has shown a 40% reduction in cough related to placebo. But in the context of the fact that it was only a 2 week trial and then of course morphine versus nalbuten? Thank you.

Speaker 1

Yes, it's a good question. The PASIFY trial, which was run-in the UK, I think, Leland, our takeaway was it wasn't surprising at work. We believe in the mechanism. We think the opioid pathway works, but we also believe that the synergistic effect of working at both kappa and mu of our drug is important. And I think that's why you see a 40% reduction 76% reduction or 74% reduction on nalbuphine.

Speaker 1

So we always thought it would work and we thought our drug would likely work better. I think the other challenge morphine has just practically is because of the respiratory So that's always going to sort of hinder where they can go with that.

Speaker 3

Okay. Thanks very much for the added information.

Speaker 4

Thank you.

Operator

The next question comes from Thomas Smith with Leerink Partners. Please go ahead.

Speaker 5

Hi, this is Nat Chiran Sook on for Thomas Smith. Congrats on the progress you made in 2023. We have a couple of questions. So the first one, you plan to conduct a sample study estimation for the CORALA trial. Can you walk us through the rationale and the process behind the sample size estimation?

Speaker 5

And can you also remind us again on the number of targeted clinical sites and the split between the U. S. And ex U. S. Sites?

Speaker 1

Yes. I'm going to let David do this.

Speaker 4

Yes. Thank you very much for the question. So the rationale is really to protect the study. We believe we've seen a very clinically relevant effect as we've described in the Phase 2a study. So we want to be protected from the situation where the estimates that we have for the effect size going into the CORAL study, we've assumed a 36% effect size.

Speaker 4

We believe we've been appropriately conservative compared to the placebo corrected more than 50% effect size from that we saw in the Phase 2a study. But we wanted to protect ourselves from the situation where the effect size could still be clinically relevant because, as you know from experts in this field, 20% to 30% effect size on objective cough is believed to be clinically relevant. So if we have what we've done with the powering and the SSRE supports this is if we have an effect size, which is not as large as we saw in the Phase IIa, but it's still clinically relevant, for example, 25 percent. We can detect that with an increased sample size.

Speaker 1

Yes. I would just add too, David. There hasn't been a lot of work done in this area, right? There was one other good sized study in our small canal study. Everything else has failed or been too little.

Speaker 1

So you're powering with not a lot of information. So it made sense, I think. Do you want to take this question too, number of targeted sites and UX, ex UF?

Speaker 4

Yes. So we'll be approximately 60 sites or so planned for the CARL study. And right now, the majority of those sites, they're ex U. S. So they're primarily in the EU and the U.

Speaker 4

K. We also have sites starting up in Australia in other regions. So Australia and Chile and Canada, those are the main regions and countries we're in at present time

Speaker 5

and planning. Got it. Very helpful. And one last question. Do you have an NFV2 meeting with the FDA for Hantibio in Oregon or Gilaris?

Speaker 5

And what's the feedback from the meeting and the progress on partnership discussion? Thank you.

Speaker 1

No, we have yes, no, it's a good question. We have not yet filed a request for an end of Phase 2 meeting. As you can tell from late in the year, David and his team were sort of flat out getting these studies up and running. We've got one more we want to get running. And we're sort of buttoning down all the reports and writing what we need to.

Speaker 1

But sometime this year, we'll file for an end of Phase 2 meeting. It just hasn't been a priority. So eventually, we'll get there. We have not done so yet.

Speaker 5

Got it. Thank you so much.

Speaker 1

Yes. Thank you for the questions.

Operator

The next question comes from Serge Belanger with Needham and Company. Please go ahead.

Speaker 6

Hi, good afternoon. Thanks for taking my question. I guess for Jennifer and David, just curious what kind of takeaways or KOL feedback you've gotten following the FDA adcom for Merck's P2X3 candidate and their second CRL. Just curious if there's been any change regarding the approach to clinical development or how they view the market opportunity for refractory chronic cough? Thanks.

Speaker 1

David and I are looking at each other because we can both answer this. I'll give couple of comments and then let David comment. I mean fundamentally I think at the end not only sort of what everybody saw in the briefing book and listening to the meeting, but we also followed up with KOL, our own advisory board to make sure we weren't missing something. I think fundamentally the Merck drug just didn't have good enough efficacy to clear the hurdles and got hung up in the primary endpoint didn't correlate with the PROs, etcetera. So I think at the end of the day, that was it.

Speaker 1

I would say, and then I'll let David comment. The other takeaway that I certainly had from listening to the AdCom was just how compelling the patient stories were about how disruptive RCC is to their lives. That made a huge impact on me. And I think you heard it from the panel and you heard it from the FDA say that they recognize that that is a it's a serious disease. Having watched that journey over the last 5 years when there was some debate about was this a real sort of condition, I think that ship's clearly sailed.

Speaker 1

I left that call feeling that the FDA has bought in and the patients did a really good job of making the case. So David, as a drug developer, what did you hear?

Speaker 4

I agree with what you've said. The only pieces I would add, two points. I think effect size, what we hope will be a differentiating factor for our program is the effect size. If we get a translation from the effect size we saw in the IVF cough population in the RCC population when we will see in Phase 2a and hopefully subsequent studies. So we think that will be a differentiator really protecting us for us for what happened to that Merck program as you said Jennifer.

Speaker 4

The only other piece I'd add, there are so many learnings You are aware of it from the Bellis, now GSK program that are in place. I think also as a field, a lot of the KOLs were reflecting to us. A lot of lessons have been learned from these multiple programs being run, which we can utilize. Hopefully, we're successful in Phase 2a in RIVER and we're expanding into the larger studies. There's a lot of good learnings to be which are to our advantage.

Speaker 1

Yes. It's never easy to be the 1st guy over the wall in a new condition. So but it makes our job easier for sure.

Speaker 6

Thank you.

Speaker 1

Thank you, Serge.

Operator

Our next question comes from Mayank Mamtani with B. Riley Securities. Please go ahead.

Speaker 7

Hi, yes. This is actually William on for Mayank. Thank you for taking our questions and congratulations on the nice year and quarter. On your Phase IIa RIVER and HAP trials, do you plan on announcing full enrollment or last patient dose give some refinement at the timeframe expectations surrounding these readouts? And should we expect the HAP trial to readout first given that it's already over 50% enrollment?

Speaker 7

I have

Speaker 4

a couple of follow ups.

Speaker 1

Yes. Thank you for the questions, William. I think what you should expect is we'll let people know when the study initiates. We'll give guidance around what we think the top line data readout is. I think we'll also let people know when we hit the 50% enrollment mark so that investors and analysts will know whether we're on sort of the front end of enrollment or back end of enrollment.

Speaker 1

And we would announce last patient in, that's a pretty big milestone. So what we're going to avoid doing is update by update of sort of where we are in enrollment. That just gets painful all around for everybody. So that's our current thinking.

Speaker 7

That's helpful. And a quick follow-up on that. With these falling potentially so close to each other, the readouts both in second half twenty twenty four, What are your plans on meeting with the FDA to discuss next steps? And specifically for the HAP trial, do you and possibly having some discussion on REMS or some of the regulatory sort of put into place given the readout here, how should we be looking at that? And would that be one meeting?

Speaker 7

And then will those and I'm assuming those will be sort of incorporated into the next trials going forward?

Speaker 4

Correct. So our current thinking is we're doing the preparations right now with experts in the abuse liability field so that we are ready when that data comes in to really expect to interrogate it with them and get their expert opinion. And then with that, you're quite right, then make our decisions. Okay. What do we think is the logical next steps for any further discussion with the regulators?

Speaker 4

So that's what we're currently planning.

Speaker 1

And probably, David, goes into at a minimum the end of Phase 2 discussion around IPF, right? That will be a defined meeting. I think whether we choose to do something separate from that, it's probably really only relevant if there's something in the data we want to flag. So I would expect William at the end of Phase 2 meeting for IPF will bundle all that up and probably discuss it then.

Speaker 7

Okay. No, that's helpful.

Speaker 1

I didn't answer your question. By the way, I remember that you had asked which we thought would come first. And you're right, but I think with the HAP study only needing 56 subjects and we're more than 50% enrolled, I imagine that trial will report out first.

Speaker 7

Okay. Appreciate that. And then maybe last, just on the RIVER trial that it's stratified, obviously, as you said, the primary endpoint with reduction of cost. Should we be expecting that breakdown at the time of top line to better understand the efficacy in these subpopulations? Or I guess it's just some better color on what we should be expecting at the top line readout when that occurs?

Speaker 7

Thank you.

Speaker 4

Yes. No, you are correct in that assumption. We would plan we're doing the overall population and also these 2 subpopulations. That would be that's what we will be analyzing and would plan to announce those results with the top line data readouts.

Operator

I am not showing any further questions. This concludes our question and answer session. I would like to turn the conference back over to Jennifer Good for any closing remarks.

Speaker 1

Thank you. We are expecting a milestone year with regards to our clinical trials data for HEDUVIO. We see an exciting road ahead for Trevi and look forward to focusing on execution of our clinical trials to get to data in these important indications beginning in the second half of this year. We would like to thank everybody for participating in today's call and are available after the call for any follow-up questions you may have. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Trevi Therapeutics Q4 2023
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