Atea Pharmaceuticals Q4 2024 Earnings Report

Atea Pharmaceuticals EPS Results

• Actual EPS: -$0.40
• Consensus EPS: -$0.35
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

Atea Pharmaceuticals Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Atea Pharmaceuticals Announcement Details

• Quarter: Q4 2024
• Date: 3/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, March 6, 2025
• Conference Call Time: 4:30PM ET

Atea Pharmaceuticals (NASDAQ:AVIR), a clinical-stage biopharmaceutical company, discovers, develops, and commercializes antiviral therapeutics for patients with viral infections. Its lead product candidate is AT-527, an oral antiviral candidate that is in Phase 3 SUNRISE-3 clinical trial for the treatment of patients with COVID-19. The company also develops bemnifosbuvir in combination with ruzasvir, which is in Phase 2 clinical trial, for the treatment of hepatitis C virus (HCV); and a protease inhibitor for the treatment of COVID-19. It has a license agreement with MSD International GmbH for the development, manufacture, and commercialization of Ruzasvir, an NS5A inhibitor, for the treatment of HCV. Atea Pharmaceuticals, Inc. was incorporated in 2012 and is headquartered in Boston, Massachusetts.

Atea Pharmaceuticals Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good afternoon, everybody, and welcome to Atea Pharmaceuticals' Fourth Quarter twenty twenty four 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 hand the call over to Jenea Barnes, Senior Vice President, Investor Relations and Corporate Communications at Atea Pharmaceuticals. Ms.

[Operator]

Barnes, please proceed.

[Jonae Barnes, Senior Vice President of Investor Relations & Corporate Communications at Atea Pharmaceuticals]

Thank you, operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals' fourth quarter and full year twenty twenty four 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. With me today from ATAYA are our Chief Executive Officer and Founder, Doctor.

[Jonae Barnes, Senior Vice President of Investor Relations & Corporate Communications at Atea Pharmaceuticals]

John Pierce Amadossi Chief Development Officer, Doctor. Janet Hammond John Babrika, our Chief Commercial Officer Doctor. Arantxa Horka, our Chief Medical Officer and Chief Financial Officer and Executive Vice President of Legal, Andrea Corcoran. They will all be available for the Q and A portion of today's call. Before we begin the call and as outlined on Slide two, I would like to remind you that today's discussion will contain forward looking statements that involve risks and uncertainties.

[Jonae Barnes, Senior Vice President of Investor Relations & Corporate Communications at Atea Pharmaceuticals]

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.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Thank you, Jeanette. Good afternoon, everyone, and thank you for joining us. I will begin on Slide three. We made significant progress last year advancing our HCV program with a regimen of Benfazbear and Risuzil. In December, we reported positive results from our global Phase II trial, which demonstrated a ninety eight percent cure rate in the primary efficacy analysis with a short eight week treatment.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

The very high SVR rate demonstrate the robust potency across HCV genotypes. We believe our regimen, if approved, has the opportunity to become a best in class hepatitis C treatment and disrupt the global HCV market of approximately $3,000,000,000 in annual net sales. The very positive Phase II results helped to support a successful end of Phase two meeting with the FDA, which occurred this past January. In addition to the substantial progress that we have In addition to the substantial clinical progress, business updates include recent step we have taken to further enhance shareholder value. This include the retention of Evercore, a global investment bank to assist us in the exploration of strategic partnership related to our Phase III HCV program.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

We also took cost cutting actions to enhance efficiency in the management of infrastructure expenditures, which Andrea will discuss in further details. In February, we announced the appointment of a new independent director, Arthur Kirsch, who brings decades of financial and strategic advisory experience to our Board of Director. Moving to Slide four. Based upon the encouraging results to date, together with the successful outcome of the FDA meeting, we are initiating the global Phase three program evaluating the regimen of Benfazirvir and risasvir and expect enrollment to begin next month. We believe that our Phase III program is derisked with a compelling value proposition.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Furthermore, robust Phase II results for antiviral therapies have historically led to a high probability of success in Phase III studies. In addition, we would be showing today results from a multi scale modeling approach that confirm the high likelihood of success of our Phase III program. With $454,700,000 of cash, cash equivalent and marketable securities as of 12/31/2024. We are in a strong financial position to execute and complete our Phase III HCV program as we anticipate our cash runway would expand into 2028. Moving to Slide five, HCVs continue to be a significant global healthcare issue despite the availability of direct acting antiviral for the past decade.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

The unrelenting high rate of HCV infections, which is outpacing the stagnant number of patients being treated, underscore the need for a new differentiated and optimized therapy. I would like to point out that we still have a very large number of untreated HCV patients of between two point four million to four million in The United States. And let's not forget that in The United States, Seventy Percent of liver cancer is a consequence of HCV disease progression. Therefore, the lack of treatment of these HCV patients has a profound impact not only on patients' life, but also with the associated healthcare hospitalization costs. On Slide six, the large burden of untreated HCV disease translate into a large untapped commercial opportunity.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Currently in The United States, out of the one hundred and sixty thousand new infections every year, only approximately one hundred thousand patients are treated. Last year, for example, these U. S. Treated patients resulted in approximately $1,500,000,000 net sales and globally the market continued to approximate $3,000,000,000 We believe that the best in class profile of our regimen together with the anticipated removal of access barrier and future government initiatives can dramatically expand the number of patients curing The United States from this severe viral disease. With that, I will now turn the call over to Janet to review the profile of our regimen and the global Phase III program.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Janet?

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Thanks, Jean Pierre. On Slide seven, our potential best in class regimen is the only one that combines the required attributes to treat today's HCV patient. Our regimen combines Benfostelier, which is the most potent nucleotide for HCV yet to have been developed and brucevya, which is a highly potent HCV NOx5a inhibitor. This regimen is differentiated from the approved treatment. It offers a highly potent pan genotypic therapy with a short treatment duration along with a low potential for drug drug interaction and can be taken with or without food.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

All these attributes address the needs of the prescriber and the patient. Slide eight illustrates that only our regimen has a preferred drug drug interaction profile. Since approximately eighty percent of HCV patients are taking concomitant medications, the drug drug interaction profile of HCV therapies is of particular importance to both patients and prescribers for ease of use. As detailed on this slide, the regimen of Benfosilir and Ruzuzir has the cleanest drug drug interaction profile with commonly prescribed medications such as oral contraceptives, statins and proton pump inhibitors. On Slide 10, I'm excited to share an update for our Phase three program.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

In January, we had a successful end of Phase two meeting with the FDA. Following the meeting and at the request of the FDA, we submitted the final Phase three protocol, which also will be submitted to other regulatory agencies. We're currently in the process of opening up clinical sites and we're targeting over two fifty sites worldwide. As JP stated earlier in the presentation, we're initiating the Phase three program and expect enrollment to begin in April. On Slide 11, our global HCV Phase three program consists of two randomized open label Phase three trials comparing the regimen of Benfosbuvir and Ruzasvir to the regimen of Tefosbuvir and Velpatasvir in patients with chronic HCV infection.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Each trial will enroll approximately 800 treatment naive patients, both with and without compensated cirrhosis. Patients will be stratified by genotype and cirrhosis status. And the patients with HIV co infection will be allowed. For non cirrhotic patients, which represent more than ninety percent of patients in The U. S, Eight Weeks of Benfossovere and Ruzuzir will be compared with twelve weeks of Sofosbuvir and ZELPATICIA.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

For cirrhotic patients, twelve weeks of Benfosbuvir and Ruzasvir will be compared with twelve weeks of Sofosbuvir and ZELPATICIA. The primary endpoint for both trials encompasses sustained virologic response twelve weeks after treatment or FVR12 in each arm and is HCV RNA less than the lower limit of quantitation twenty four weeks from the start of treatment. Measurement of twenty four weeks from the start of treatment is selected to ensure the primary endpoint occurs at the same relative time point from start of treatment in all patients. With that, I'll now turn the call over to Arantxa for a review of the global Phase II HCV study results.

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

Thank you, Jan. Thank you, Jan. On Slide 12, I would like to remind you that our global Phase two study was a single arm of five fifty milligrams of deliprosovere with one hundred and eighty milligrams of rosuzsevier once daily for eight weeks. This Phase II trial enrolled two seventy five treatment naive patients chronically infected with HCV, including patients with compensated cirrhosis. In this study, we have two efficacy populations.

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

The primary efficacy endpoint was in the treatment of the urine population. A secondary efficacy analysis assessed SDR12 in the same population, but also included non adherent patients. Of note, we had seventeen percent of patients who did not take the study medication or were non adherent in our Phase two study and this non adherent rate is similar to what was reported in our third party market research. Moving to Slide 13, the primary efficacy endpoint demonstrates a ninety eight percent SDR12 rate in all Adherent patients after eight weeks of treatment and a ninety five percent SDR12 rate was achieved in patients regardless of treatment adherence. This patient population also included cirrhotic patients where the SVR12 was eighty eight percent.

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

This cirrhotic patients on treatment by our kinetics was slower, but it is important to note that 100% bio clearance was achieved at the end of treatment. Therefore, we can expect that twelve weeks of treatment in cirrhotic patients should lead to very high SDR rates. Slide 14 shows that the overall non cirrhotic treatment adherent population, SDR12 was almost one hundred percent with only one failure in one hundred and seventy nine patients. In GENO TEC3, it was one hundred percent which is a Genotype historically hard to treat. The robust potency and drug forgiveness was demonstrated in non cirrhotic patients regardless of drug adherence with the regimen achieving ninety seven percent SDR12 in the overall population and ninety eight percent in genotype three even with twenty percent of these patients being non adherent.

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

On Slide 15, the regimen of deniphosfodir and rosasvir was generally safe and well tolerated with no drug related severe adverse events or premature treatment discontinuation. Similarly, there were no trends observed in adverse events or safety laboratory parameters. Let's now review new modeling data on Slide 16. The Phase two data was further evaluated in a multi scale model of HCV infection and treatment to confirm the effectiveness of Beniphosbuvir and Rucosbuvir. A similar approach has been previously validated and published to evaluate other DAA regimens against HCV.

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

In this model, the population estimate for the time to achieve HCV RNA less than the lower limit of quantification in the plasma was approximately twelve to sixteen days, while the corresponding time to achieve cure was approximately seven to eight weeks. Therefore, this model provides further support for a high likelihood of success for the regimen being evaluated in Phase III with durations of eight weeks in non cirrhotic patients and twelve weeks in cirrhotic patients. I will now turn the call over to Andrea to discuss Atea's financials.

[Andrea Corcoran, CFO, Executive VP of Legal & Secretary at Atea Pharmaceuticals]

Thank you, Arendsa. As Jornea mentioned, earlier today, we issued a press release continuing our financial results for the fourth quarter and full year 2024. The statement of operations and balance sheet can be found on Slides eighteen and nineteen. In 2024, R and D expenses declined quarter over quarter, but increased year over year in 2024. The full year increase was primarily driven by higher 2024 external spend related to our COVID-nineteen Phase III SUNRISE III trial as well as our Phase II HCV trial.

[Andrea Corcoran, CFO, Executive VP of Legal & Secretary at Atea Pharmaceuticals]

For G and A, expenses in 2024 and 2023 were similar quarter over quarter and year over year. Interest income quarter over quarter and year over year decreased due to lower investment balances. In 2025, substantially all our external R and D spend will be related to the advancement of our Phase III program. As Jean Pierre mentioned, at year end 2024, our cash, cash equivalent and marketable securities balance was $454,700,000 Continuing our strong financial discipline, we project cash guidance runway into 2028. Moving to Slide 20.

[Andrea Corcoran, CFO, Executive VP of Legal & Secretary at Atea Pharmaceuticals]

As noted in our press release today, we announced a reduction of our workforce by approximately 20%, twenty five % in early January. This action is intended to enhance efficiency in the management of infrastructure expenditures and is expected to result in a cost savings of approximately $15,000,000 through 2027. Additionally, we also announced that Arthur Kirsch has joined our Board of Directors. His extensive financial and strategic advisory experience will further strengthen the Atea Board as we advance our strategic priorities. We believe that Arthur's proven track record of executing and overseeing transactions will be invaluable as we pursue opportunities to enhance shareholder value.

[Andrea Corcoran, CFO, Executive VP of Legal & Secretary at Atea Pharmaceuticals]

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

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Thank you, Andrea. In closing, we believe that our global Phase III HCV program is de risk with a high compelling value proposition. This is based on substantial preclinical and mostly clinical data, a well characterized regulatory pathway, optimized manufacturing processes, a durable multibillion dollar market and a long patent runway. We believe that the regimen of Benfazbear and Reslov, with its potential best in class profile for the treatment of hepatitis C if approved, provide an opportunity to become the most prescribed treatment and disrupt the global hepatitis C market of approximately $3,000,000,000 in annual net sales. Before opening the call to your questions, I would like to thank our talented and dedicated Ateria employees.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Our team at Lantus' pursuit of excellence drive our dedication to advancing oral antiviral therapeutics for patients worldwide affected by severe viral diseases. With that, I would turn the call back over to the operator.

[Operator]

Thank you. And our first question comes from the line of Bella Kamalj with JPMorgan. Your line is open. Please go ahead.

[Isabella Camaj, Equity Research Analyst at JP Morgan]

Hi. This is Bella on for Eric. Just two questions from us here. First, following your meeting with the FDA, are there any specific callouts that they've guided for in the Phase III trial design? And then second, what can we expect in terms of the scope of your Phase II readout later this half?

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Janet, do you want to address the first one and then Arantxa will address the second questions? Janet?

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Thank you, JP. Yes. So with regards to our meeting with the FDA, no. I don't think really any specific call out. They are fully aligned with our approach of going forward with two open label Phase III trials.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

I think it's somewhat unconventional to run open label trials, but I think given the circumstances of the different properties of the drugs in the population that we are studying, this is completely in agreement with them and they didn't really have any substantive comments around the conduct of the trial.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Arantxa?

[Arantxa Horga, Chief Medical Officer at Atea Pharmaceuticals]

Yes. I think the question from Bella was about the Phase II readout. So we're expecting to present data this summer at Aesholis in May. And so you'll have additional data there in terms of the resource and safety and all the other details of the protocol of the study.

[Isabella Camaj, Equity Research Analyst at JP Morgan]

Great. Thank you.

[Operator]

Thank you. And one moment for our next question. Our next question comes from the line of Andy Hsieh with William Blair. Your line is open. Please go ahead.

[Andy Hsieh, Research Analyst at William Blair]

Great. Three questions from us, if you don't mind. One is on the trial design for the Phase three program. I'm curious, you have an estimated number of cirrhotic patients across those two trials. Are they going to be strictly controlled or this is kind of an estimation based on global and U.

[Andy Hsieh, Research Analyst at William Blair]

S. Epidemiology? So that's question number one.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Let's do by one question at a time, if you don't mind. So Janet, just last question, please.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

So yes, so there are estimates. We have target numbers of cirrhotic patients that we'd like to see enroll in the trial. But the number of cirrhotic patients, I think, generally worldwide has declined with the advent of direct acting antiviral therapies. I think particularly, sir, in The U. S, that's harder to find than I think they were when the earlier direct acting antiviral trials were conducted.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

But we do anticipate seeing somewhere in the order of just north of ten percent probably in our trial and that's what we're aiming for.

[Andy Hsieh, Research Analyst at William Blair]

I see. Is there an ability for you to adjust that number if you're seeing maybe a little bit lower or a little bit higher as the trial is enrolling?

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Yes, I think so. As I said, we're having we're setting targets not absolute numbers. So we do have some flexibility in there.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

And

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

obviously, if we can achieve more and get greater experience, I think that will be important. But I don't think there are absolute requirements around that. We want to have sufficient patients in ROSISTA versus to be able to justify having that population in our label. But I think we're certainly going to do the best we can to have enough, but there is flexibility there.

[Andy Hsieh, Research Analyst at William Blair]

That's helpful. Second question has to do with the modeling, which is very unique on Slide 16. So I'm curious, if you were to plot this with EPCUSA, would you expect that those two lines to be right shifted for EPCUSA across

[Andy Hsieh, Research Analyst at William Blair]

the non

[Andy Hsieh, Research Analyst at William Blair]

heurotic and xerotic population?

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

This model has been developed by Doctor. Alan Pelson from Los Alamos. And please check there is publications with other antiviral direct antiviral for HCV.

[Andy Hsieh, Research Analyst at William Blair]

Okay. Okay. Okay. That's helpful. Okay.

[Andy Hsieh, Research Analyst at William Blair]

That's actually sorry for the confusion. There's just two questions from us, but thanks for your input.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

You're very welcome. Thank you for the questions.

[Operator]

Thank you. I'm showing no further questions and I would like to hand the conference back over to Jean Pierre for closing remarks.

[Jean-Pierre Sommadossi, Founder, Chairman, CEO & President at Atea Pharmaceuticals]

Thank you for all of you for joining our fourth quarter twenty twenty four earnings conference call and thank you for your continued support.

[Operator]

This concludes today's conference call. Thank you for participating and you may all disconnect. Everyone have a great day.

Participants

Executives

• Jonae Barnes, Senior Vice President of Investor Relations & Corporate Communications
• Jean-Pierre Sommadossi, Founder, Chairman, CEO & President
• Janet Hammond, Chief Development Officer
• Arantxa Horga, Chief Medical Officer
• Andrea Corcoran, CFO, Executive VP of Legal & Secretary

Analysts

• Isabella Camaj, Equity Research Analyst at JP Morgan
• Andy Hsieh, Research Analyst at William Blair