Atea Pharmaceuticals Q2 2024 Earnings Call Transcript

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Provided by Quartr
August 7, 2024

There are 8 speakers on the call.

Operator

Good afternoon, everyone, and welcome to Altea Pharmaceuticals Second Quarter 2024 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 Jonae Barnes, Senior Vice President of Investor Relations and Corporate Communications at Atea Pharmaceuticals. Ms.

Operator

Barnes, please proceed.

Speaker 1

Thank you. Good afternoon, everyone, and welcome to Atea Pharmaceuticals' 2nd quarter 2024 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. Atayapharma.com.

Speaker 1

With me today from ATEIA are our Chief Executive Officer and Founder, Doctor. John Pierre Samedosi Doctor. Arun Shah Horka, Chief Medical Officer Chief Development Officer, Doctor. Janet Hammond Chief Financial Officer and Executive Vice President of Legal, Andrea Corcoran and our Chief Commercial Officer, John Gabriica. 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 the call today. 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. The first half of twenty twenty four was marked by strong operational execution and significant clinical progress. We completed patient enrollment in both the global Phase 3 SUNRISE 3 study of benifozrevir for the treatment of COVID-nineteen and the global Phase 2 study evaluated combination of binefosbuvir and rozasvir in treatment naive HCV infected patients. As you know, COVID is now endemic.

Speaker 2

And as new variants continue to evolve, they are likely to continue to cause recurrent surges of cases. Following the winter surge of infections caused by the variant JN1, we are now experiencing a summer wave across the U. S, Europe and global location, largely driven by new KP and LB1 variants. There is a continued unmet need for suitable therapies leaving the most vulnerable people at risk for severe outcomes from infection, such as the elderly, immunocompromised and those with underlying risk factors. We look forward to potentially delivering bifosbuvir to millions of patients and we expect to report results from Sunrise 3 in the second half of twenty twenty four.

Speaker 2

Turning now to our Phase 2 program for HCV. In June, at EASL, we showcased a potential best in class profile of Benafosbuvir and risasvir and the promise of this combination to address the unmet needs of today HCV patients. The demographic of HCV patients has changed over time. Today, patients take multiple concomitant medication and those at the highest threshold HCV are also likely to be poorly adherent with their medications. We believe that our combination with the low risk of drug drug interactions combined with a short treatment duration has the potential to address these unmet needs.

Speaker 2

We look forward to reporting the full results from our ongoing Phase II study during the Q4 of this year. We are currently preparing for the initiation of the Phase 3 program. I am pleased to report today that we have selected a fixed dose combination tablet that achieved comparable drug exposure to individually administered Benafrasirvir and risasir. This new tablet allow us to decrease the daily pill burden from 4 tablets to 2, which is a more convenience obviously for the patient. This new tablet will be used in the Phase III program as well as for subsequent commercialization.

Speaker 2

And Lorenzo will review the data in detail for you. Lastly, with $502,000,000 of cash, cash equivalents and marketable securities at June 30, We are in a strong financial position to execute our strategy and we anticipate our runway will extend in 2027. With that, I will now turn the call over to Lorenza for an update on our global Phase 2 HCV program.

Speaker 3

Thank you, Jean Pierre. Let's now review our HCV program and recent highlights. Turning to Slide 5, HCV continues to be a recognized healthcare crisis in the U. S. With between 2,000,000 to 4,000,000 people living with HCV and new challenges continue to hinder progress toward eliminating it globally.

Speaker 3

With the incidence of new infections annually outpacing the rate of those being treated with direct acting antiviral, it is clear that there are still unmet medical needs. Moving to Slide 6, the U. S. HCV treatment demand grew roughly 5% in 2023 based on the number of patients treated. The share of the 2 key treatment options at Cloussamabirate remains stable.

Speaker 3

Given the current limitations and prescription trends, we believe a best in class profile together with anticipated future government initiatives and improved patient access will increase the number of patients treated. We believe that the profile of Benifosfibir and rosuzvir has the potential to drive the future standard of care. Moving to Slide 7, the profile of the patient has changed since the introduction of direct acting antivirals. Today, most U. S.

Speaker 3

Infected patients are younger in age and infections are highest among the age group between 30 to 39 years old. They are recently infected unless are 10 unless than 10% are cirrhotic. A high proportion of the current patients take multiple concomitant medications including HIV medications, antipsychotics, statins, proton pump inhibitors. And in addition, populations at the highest risk for HCV are frequently poorly adherent to their medication due to substance abuse disorders, including opioid use or other drugs and mental health disorders. For this patient profile, a direct acting antiviral with low risk of drug drug interactions combined with short treatment duration and no food effect would address these unmet needs and treat more patients successfully.

Speaker 3

Slide 8 reviews our potential best in class regimen, which combines the most compelling attributes of current HCV drug treatments. It is protease inhibitor free with a short 8 week treatment duration. Our combination also has a low risk of drug interactions and there is no food effect. Slide 9 reviews the data for the selected fixed dose combination tablet of Benifosfovir and brusasvir that we will be using in our Phase 3 program and for subsequent commercialization. This new tablet allows us to decrease the daily pill count from 4 tablets to 2, which is more convenient for the patient.

Speaker 3

As you can see from the two graphs, the fixed dose combination drug exposure is comparable to individually administered veniphosphorvir and rucosamine. In addition, there is no food effect. In slide 10, we outlined our Phase 2 single arm open label study of 5 50 milligrams of Benefosfover in combination with 180 milligrams of rosuzevir once daily for 8 weeks. I will discuss the results shortly. In this Phase II trial, which is currently ongoing, we enrolled 275 treatment naive patients, including the leading cohort of 60 patients.

Speaker 3

The primary endpoint of this study is SVR at week 12 post treatment and safety. Moving to Slide 11, as a reminder, the leading cohort of 60 patients were comprised of non cirrhotic patients only. However, 10 patients had an advanced stage of fibrosis, F3, which is borderline with cirrhosis. This slide shows the on treatment viral kinetics of individual patient data from the leading cohort. As you can see, there was a rapid reduction of viral load in all patients within the 1st week regardless of baseline viremia and genotype.

Speaker 3

By week 4 on treatment, all 60 patients in the leading cohort had a viral load near or below the lower limit quantification and the virus was undetectable. Therefore, this very rapid kinetics across all genotypes support an 8 week regimen and compare favorably to Maviret, which is the only approved 8 week treatment for HCV. Turning to Slide 12. In June, we presented data at EASL from the leading cohort of 60 patients. We are pleased with the results, which showed a high SDR12 rate of 97% with a short 8 week duration treatment.

Speaker 3

Importantly, the only 2 patients with post treatment relapse or failure demonstrate the challenge of drug adherence in this patient population, which I'm going to review in further detail. On Slide 13, results from the leading cohort also show a SDR12 rate of 100% in all 13 patients infected with Genotype 3, a historically difficult to treat genotype of HCV. Data also showed a 98% SDR 12 rate in 43 out of 44 patients with Genotype 1. Turning to Slide 14. As mentioned earlier, 2 subjects that were Genotype 1b and Genotype 2b experienced post treatment labs in the leading cohort.

Speaker 3

This slide shows the viral kinetics, plasma drug levels and resistance sequencing data of the Genotype Ib patient. The viral relapse or failure was due to treatment non adherence and not due to viral resistance as indicated by the lack of new mutations. This was demonstrated by low plasma and inadequate drug levels at week 6 week 8 and similar viral mutations at baseline and 12 weeks post treatment. And on Slide 15, we see the viral kinetics, plasma drug levels and resistance sequencing data of the genotype IIb patient. Once again, low plasma and inadequate drug levels at week 6 week 8 combined with similar viral mutations at baseline and 12 weeks post treatment.

Speaker 3

The lack of new mutations indicate that the observed relapse or failure was due to treatment non adherence rather than viral failure due to resistance. These data further outlined the challenge of drug adherence in the current patient population and reinforce the need for short treatment duration and convenient therapy. On Slide 16, we see yet another example showing that poor drug adherence in this population remains a challenge. However, in these two patients that were poorly adherent, the high potency of our combination still led to a positive outcome of achieving SDR12 or cure. On the next slide, Slide 17, the combination of Benefosfibir and rucosfibir was generally safe and well tolerated in the leading cohort.

Speaker 3

There were no drug related serious adverse events, no discontinuations and adverse events were mostly mild. Turning to Slide 18, to summarize our HCV efforts, in June, we completed enrollment of 275 patients. The study is ongoing and we expect to report complete SDR12 results in the Q4 of this year. We have selected the fixed dose combination tablet, which will be used in the Phase 3 program and for subsequent commercialization. We are on track with activities to initiate the Phase 3 program around the end of this year.

Speaker 3

And pending discussions with regulatory agencies, we expect to conduct 2 studies with at least one having an active comparator. We are excited about the significant progress and the positive results we have achieved for the HCV program and look forward to providing more updates throughout the rest of this year. And with that, I will now turn the call over to Janet to discuss our COVID-nineteen and the global Phase 3 SUNRISE 3 trial.

Speaker 4

Thanks, Arantxa. Good afternoon, everyone. Turning to Slide 20. COVID-nineteen continues to evolve. And as Jean Pierre mentioned earlier, we're now experiencing summer wave across the U.

Speaker 4

S, Europe and other global locations, which is largely being driven by the new KP and LB1 variant. Varro wastewater modeling suggests the current U. S. COVID wave currently is around 900,000 new daily infections. High risk populations such as the elderly, those who are immunocompromised and those with underlying risk factors are more likely to become severely ill with COVID-nineteen.

Speaker 4

There's a continuing unmet medical need and our goal for COVID-nineteen is to deliver a safe and effective treatment that addresses the key limitations of current available therapy. Slide 21. Benefosbuvir has a robust target profile with a low risk for drug drug interactions, favorable safety and tolerability and a distinct mechanism of action with a high barrier to treatment resistance. We've completed several studies evaluating Benafosbuvir for COVID-nineteen. In the MorningSKY trial in outpatients, the risk of hospitalization was 71% lower for Benifosbuvir versus placebo and 82% in patients over the age of 40 years.

Speaker 4

In addition, in a Phase 2 study in hospitalized patients, there were no deaths in patients administered Benifosbuvir in comparison with 3 deaths in the placebo group. Moving to Slide 22. The global Phase 3 SUMMARIZE 3 trial enrolled only high

Speaker 5

risk

Speaker 4

was 5 or less days before randomization. This Phase 3 study was randomized, double blind and placebo controlled. The study drug, eitherbenifosbuvir 5 50 milligrams twice a day or placebo was administered concurrently with the locally available standard of care, including other compatible COVID-nineteen antiviral drugs at the discretion of the investigator. The primary endpoint of the study is all cause hospitalization or death through day 29 in the supportive care monotherapy population. Turning to Slide 23.

Speaker 4

In summary, we enrolled 2,221 patients in the monotherapy cohort and only 74 patients in the combination cohort. The high rate of enrollment in the monotherapy cohort shows a clear preference by investigators for a new therapy and highlights the major unmet medical need for new oral COVID-nineteen treatment options for these high risk patients. We look forward to providing the results from our Phase III trial during the second half of twenty twenty four. I'll now turn the call over to John to discuss the COVID-nineteen market opportunity.

Speaker 6

Thanks, Janet. Moving to Slide 24, the U. S. Prescription demand for oral antivirals to treat COVID-nineteen highly correlates with the infection rates. Of note, there was an increase of 32% in COVID-nineteen oral antiviral prescriptions for June 2024 versus June 2023, correlating with the early summer wave related to the KP and LV1 variants.

Speaker 6

We are confident the market opportunity for oral antiviral therapeutics for COVID-nineteen will continue to remain a multi $1,000,000,000 opportunity for the long run. This is supported by IQVIA's retail prescription data indicating between $4,000,000,000 $5,000,000,000 of annual revenues between the 2 currently available oral antiviral products. Between feedback from patients and physicians and the available data, it's clear there is a significant unmet need for an antiviral treatment option that addresses the limitations related to drug drug interactions tolerability with PAXLOVID and safety concerns with LIGOVRIO. We believe in veniposavir and its potential to meaningfully improve the COVID-nineteen treatment paradigm and bring tremendous value to patients and physicians. I'll now turn the call over to Andrea to discuss Atea's financials.

Speaker 5

Thank you, John. As Churnae mentioned in her introductory remarks, earlier today, we issued a press release containing our financial results for the Q2 of 2024. The statement of operations and balance sheet can be found on Slides 2627. As you'll note, in the Q2 of 2024, there was a market increase in research and development expenses compared to the prior year period. This increase was related to the advancement and subsequent completion of patient enrollment for both our Phase III SUNRISE III COVID-nineteen clinical trial and our Phase II HCV trial.

Speaker 5

For general and administrative expenses, there was a decrease in the quarter compared to the corresponding period in 2023. This decrease was attributable to incurring lower professional fees in the Q2 of 2024. Interest income in the Q2 of 2024 decreased compared to the Q2 of 2023 due to lower investment balances. During the remainder of 2024, we expect our R and D spend to vary as our SUNRISE III and our HCV studies complete and with further activities to initiate the HCV program in the Q4 of the year. As Jean Pierre mentioned, at the end of the Q2 of 2024, our cash, cash equivalent and marketable securities balance was $502,200,000 Maintaining our strong financial discipline, strategically focused investment, we project our cash guidance runway into 2027.

Speaker 5

I'll now hand the call back to Jean Pierre for closing remarks.

Speaker 2

So in closing on Slide 29, I'm very pleased with the significant clinical progress we have made this year across both programs. The multiple key milestones for both program expected throughout the remainder of 2024 have the potential to drive significant shareholder value and positions us there for an exciting rest of the year. For our COVID-nineteen program, we expect to report top line results from Sunrise 3 in the second half of 2024 and we are targeting the NDA submission around the year end. Additionally, we continue to also make progress with our early stage discovery program focused on the highly differentiated second generation protease inhibitors, and we will provide an update later this year. For HCV, the data presented at EASL demonstrate a potential best in class profile that combines, as Lorenzo mentioned, the most compelling attributes of current HCV drug treatment through the innovative combination of Benfarsen and ResusVya.

Speaker 2

And we look forward to reporting the full results in 275 patients for our Phase 2 study during the Q4 of this year. As a relatively small organization, I'd like to remind with fewer than 80 employees, I'm extremely pleased with the effort and the achievement of the team with successful execution on 2 global studies in multimillion dollar market opportunities and still being very financially responsible. We believe that our product candidate are highly differentiated and have the opportunity, if approved, to address significant unmet medical needs in the current treatment landscape and both have strong blockbuster potential. With that, I will now turn the call back over to the operator. Thank

Operator

And our first question comes from the line of Maxwell Skor with Morgan Stanley. Your line is open.

Speaker 7

Great. Thank you for taking my questions. Can you just walk me through the payer dynamic for hep C? What percent of chronic hep C patients are on Medicaid? And are these patients prescribed generic Eplusa in general?

Speaker 7

Thank you.

Speaker 2

John, you want to address the question?

Speaker 6

Sure. So, for Hep C, C, the government supported programs with Medicaid and Medicare, as you would expect, comprise the larger majority from the payer perspective and then followed up by commercial lives. Your question with regard to from Iclusiv, whether it's the brand or authorized copy, both of those, both the authorized copy and the brand are still selling products and pretty much are dictated by the dynamics of the various payers. Some are have their financial incentives driven off of the wholesale acquisition cost, others look at just direct net discounts. But both of them do exist depending on the models that the individual payers have.

Speaker 2

Just to add, Matt, to John, we are talking about authorized copy, not generics. Actually, we all know or maybe I can share that the IP so far that we are that is public, both Marivat and Ehrlich will go at least until 2036. So we don't anticipate the entry of so called generics before 2,036 for both approved drugs.

Speaker 7

Okay. Thank you.

Operator

Thank you. And our next question comes from the line of John Miller with Evercore. Your line is open.

Speaker 7

Hi, guys. Thanks for taking the question. I recently noticed that Pfizer has a next gen PAXOLIVID in development with no metallic taste, no ritonavir, higher potency at target. So a lot of the same things that we've been talking about preventofosirvir in the COVID space. So do you I assume you've seen their paper.

Speaker 7

Do you still expect to have a competitive edge versus that sort of a program? And what are your plans to commercialize in the space next to like versus a major player like Pfizer?

Speaker 2

Okay. So thank you, John. Great question. Janet, do you want to address the first part and then John will do the commercial from a commercial standpoint?

Speaker 4

Certainly. So thank you very much for the question. It is an interesting one. Obviously, they've got a long way to go. And we look forward to seeing how the program progresses.

Speaker 4

Certainly, we believe that having more than one mechanism

Speaker 2

of action available for patients is

Speaker 4

going to be mean, I know that it could mean, I know that it could be a lot higher when you look at the number of cases. But as John mentioned, with the commercial uptake that we see, there is significant use of PAXLOVID With use of protein inhibitors, there's a potential for the generation of resistance, and this is much less likely with the nucleoside analog. So we believe that there's certainly scope for both in the marketplace. And I think were there to be more agents, it would be of benefit to everybody. But we're confident of the profile as we've seen with our drug and we look forward to seeing more about that.

Speaker 2

John? And as far as

Speaker 6

to look sure. From a commercial perspective, although we don't comment on partnering discussions that for the U. S. For our COVID-nineteen programs, we plan to co promote with a pharmaceutical company and the criteria for them would have primary care and managed care capabilities and of course a commercial infrastructure. So from a competitive standpoint, we would feel very confident from a future partner standpoint.

Speaker 7

Makes sense. Thanks, guys.

Operator

And I'm showing no further questions at this time. I would now like to turn the call back to Jean Pierre for closing remarks.

Speaker 2

So thank you all for joining our Q2 2024 Earnings Conference Call and thank you as well for your continued support.

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Key Takeaways

  • Completed patient enrollment in the global Phase 3 SUNRISE 3 trial of benifosbuvir for COVID-19, with topline results expected in H2 2024 and an NDA submission targeted by year-end.
  • Lead cohort in the Phase 2 HCV study of the fixed-dose combo of benifosbuvir and rosasvir achieved a 97% SVR12 rate in an 8-week regimen, including 100% in genotype 3 and 98% in genotype 1 patients.
  • Selected a 2-tablet fixed-dose combination for HCV that matches exposure of individual agents, reducing daily pill burden ahead of Phase 3 initiation and commercialization.
  • Reported $502 million in cash, cash equivalents and marketable securities at June 30, providing runway into 2027 to fund R&D and upcoming clinical milestones.
  • With fewer than 80 employees, Atea has executed two global clinical programs targeting large-market opportunities for COVID-19 and HCV while maintaining financial discipline.
A.I. generated. May contain errors.
Earnings Conference Call
Atea Pharmaceuticals Q2 2024
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