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) is a clinical-stage biopharmaceutical company focused on the discovery and development of oral antiviral therapeutics targeting RNA viruses. The company’s lead program, AT-527, is a direct-acting nucleotide prodrug licensed from Roche and is being evaluated as a potential treatment for coronavirus disease 2019 (COVID-19). In addition to its COVID-19 efforts, Atea’s pipeline includes other small-molecule candidates for hepatitis C virus and emerging RNA pathogens, leveraging its proprietary nucleotide chemistry platform to address significant unmet medical needs in infectious diseases.

Founded in 2014 and headquartered in Cambridge, Massachusetts, Atea operates research laboratories in the Greater Boston area and conducts clinical studies across North America, Europe and parts of Asia. Through strategic collaborations with pharmaceutical partners and research institutes, the company enhances its R&D capabilities, optimizes clinical development pathways and positions its therapies for potential global commercialization.

Atea’s leadership team brings extensive experience in antiviral drug discovery, clinical development and regulatory strategy. Under their guidance, the company has advanced multiple development candidates from preclinical stages into human trials. Atea continues to expand its scientific platform through in-licensing opportunities and collaborative research, with a goal of delivering safe and effective antiviral treatments to improve patient outcomes and respond to evolving public health challenges.

Atea Pharmaceuticals Q4 2024 Earnings Call Transcript

Key Takeaways

• In a global Phase II trial, the eight-week regimen of benfosbuvir and risasvir achieved a 98% cure rate in treatment-adherent HCV patients and 95% overall, including non-adherent subjects.
• Atea is launching a global Phase III program comprising two open-label studies enrolling ~1,600 treatment-naïve patients to compare its eight- and 12-week regimen versus sofosbuvir/velpatasvir, with enrollment set to begin in April.
• With $454.7 million in cash, cash equivalents, and marketable securities as of December 31, 2024, Atea expects its funding to support operations into 2028 and complete the Phase III HCV program.
• The company announced a workforce reduction of approximately 20–25%, targeting $15 million in cost savings through 2027 to enhance infrastructure efficiency.
• Atea positions its benfosbuvir/risasvir regimen as a potential best-in-class therapy to address a $3 billion global HCV market with 2.4–4 million untreated US patients and significant unmet needs.

Presentation

[Operator]

Good afternoon, everybody, and welcome to Atea Pharmaceuticals' Fourth 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 hand the call over to Jonae Barnes, Senior Vice President, Investor Relations and Corporate Communications at Atea Pharmaceuticals. Ms. Barnes, please proceed.

[Jonae Barnes, SVP of Investor Relations and Corporate Communications at Atea Pharmaceuticals]

Thank you, Operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals' Fourth Quarter and Full Year 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 Investor section of our website at ir.ateapharma.com. With me today from Atea are our Chief Executive Officer and Founder, Dr. Jean-Pierre Sommadossi, Chief Development Officer, Dr. Janet Hammond, John Vavricka, our Chief Commercial Officer, Dr. Arantxa Horga, our Chief Medical Officer, and Chief Financial Officer and Executive Vice President of Legal, Andrea Corcoran. They will all be available for the Q&A portion of today's call.

[Jonae Barnes, SVP of Investor Relations and Corporate Communications at Atea Pharmaceuticals]

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 risk 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.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Thank you, Jonae. Good afternoon, everyone, and thank you for joining us. I will begin on Slide 3. We made significant progress last year advancing our HCV program with a regimen of bemnifosbuvir and ruzasvir. In December, we reported positive results from our global Phase 2 trial, which demonstrated a 98% cure rate in the primary efficacy analysis with a short eight-week treatment. The very high SVR12 rate demonstrated a 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 billion in annual net sales. The very positive Phase 2 results helped to support a successful end of Phase 2 meeting with the FDA, which occurred this past January.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

In addition to the substantial progress that we have, in addition to the substantial clinical progress, business updates include recent steps we have taken to further enhance shareholder value. This includes the retention of Evercore, a global investment bank, to assist us in the exploration of strategic partnerships related to our Phase 3 HCV program. 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 directors. Moving to Slide 4, based upon the encouraging results to date, together with the successful outcome of the FDA meeting, we are initiating the global Phase 3 program, evaluating the regimen of bemnifosbuvir and ruzasvir, and expect enrollment to begin next month.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

We believe that our Phase 3 program is diverse with a compelling value proposition. Furthermore, robust Phase 2 results for antiviral therapies have historically led to a high probability of success in Phase 3 studies. In addition, we would be showing today results from a multiscale modeling approach that confirms the high likelihood of success of our Phase 3 program. With $454.7 million of cash, cash equivalent, and marketable securities as of December 31, 2024, we are in a strong financial position to execute and complete our Phase 3 HCV program, as we anticipate our cash runway will extend into 2028. Moving to Slide 5, HCV continue to be a significant global healthcare issue despite the availability of direct-acting antivirals for the past decade.

[Jean-Pierre Sommadossi, CEO 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, or between 2.4-4 million, in the United States. Let's not forget that in the United States, 70% 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' lives but also with the associated healthcare hospitalization costs. On Slide 6, the large burden of untreated HCV disease translates into a large untapped commercial opportunity. Currently, in the United States, out of the 160,000 new infections every year, only approximately 100,000 patients are treated.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Last year, for example, these U.S.-treated patients resulted in approximately $1.5 billion net sales, and globally, the market continued to approximate $3 billion. We believe that the best-in-class profile of our regimen, together with the anticipated removal of access barriers and future government initiatives, can dramatically expand the number of patients cured in 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 3 program. Janet?

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Thanks, Jean-Pierre. On Slide 7, our potential best-in-class regimen is the only one that combines the required attributes to treat today's HCV patients. Our regimen combines bemnifosbuvir, which is the most potent nucleotide for HCV yet to have been developed, and ruzasvir, which is a highly potent HCV 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. All these attributes address the needs of the prescriber and the patient. Slide 8 illustrates that only our regimen has a preferred drug-drug interaction profile. Since approximately 80% 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.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

As detailed on this slide, the regimen of bemnifosbuvir and ruzasvir 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 3 program. In January, we had a successful end of Phase 2 meeting with the FDA. Following the meeting, and at the request of the FDA, we submitted the final Phase 3 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 250 sites worldwide. As JP stated earlier in the presentation, we're initiating the Phase 3 program and expect enrollment to begin in April.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

On Slide 11, our global HCV Phase 3 program consists of two randomized open-label Phase 3 trials comparing the regimen of bemnifosbuvir and ruzasvir to the regimen of sofosbuvir and velpatasvir in patients with chronic HCV infection. 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 patients with HIV co-infection will be allowed. For non-cirrhotic patients, which represent more than 90% of patients in the U.S., eight weeks of bemnifosbuvir and ruzasvir will be compared with 12 weeks of sofosbuvir and velpatasvir. For cirrhotic patients, 12 weeks of bemnifosbuvir and ruzasvir will be compared with 12 weeks of sofosbuvir and velpatasvir.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

The primary endpoint for both trials encompasses sustained virologic response 12 weeks after treatment, or SVR12, in each arm, and is HCV RNA less than the lower limit of quantitation 24 weeks from the start of treatment. Measurement at 24 weeks from the start of treatment is selected to ensure the primary endpoint occurs at the same relative time point from the start of treatment in all patients. With that, I'll now turn the call over to Arantxa for a review of the global Phase 2 HCV study results.

[Arantxa Horga, CMO at Atea Pharmaceuticals]

Thank you, Janet.

[Arantxa Horga, CMO at Atea Pharmaceuticals]

Thank you, Janet. On Slide 12, I would like to remind you that our global Phase 2 study was a single arm of 550 milligrams of bemnifosbuvir with 180 milligrams of ruzasvir one day before eight weeks. This Phase 2 trial enrolled 275 treatment-naive patients chronically infected with HCV, including patients with compensated cirrhosis. In the study, we had two efficacy populations. The primary efficacy endpoint was in the treatment-adherent population. A secondary efficacy analysis assessed SVR12 in the same population but also included non-adherent patients. Of note, we had 17% of patients who did not take the study medication or were non-adherent in our Phase 2 study, and this non-adherent rate is similar to what was reported in our third-party market research.

[Arantxa Horga, CMO at Atea Pharmaceuticals]

Moving to Slide 13, the primary efficacy endpoint demonstrates a 98% SVR12 rate in all adherent patients after eight weeks of treatment, and a 95% SVR12 rate was achieved in patients regardless of treatment adherence. This patient population also included cirrhotic patients where the SVR12 was 88%. In these cirrhotic patients, on-treatment viral kinetics was slower, but it is important to note that 100% viral clearance was achieved at the end of treatment. Therefore, we can expect that 12 weeks of treatment in cirrhotic patients should lead to very high SVR rates. Slide 14 shows that the overall non-cirrhotic treatment-adherent population SVR12 was almost 100%, with only one failure in 179 patients. In genotype 3, it was 100%, which is a genotype historically hard to treat.

[Arantxa Horga, CMO at Atea Pharmaceuticals]

The robust potency and drug forgiveness was demonstrated in non-cirrhotic patients regardless of drug adherence, with the regimen achieving 97% SVR12 in the overall population and 98% in genotype 3, even with 20% of these patients being non-adherent. On Slide 15, the regimen of bemnifosbuvir and ruzasvir was generally safe and well tolerated, with no drug-related severe adverse events or premature treatment discontinuations. 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 2 data was further evaluated in a multiscale model of HCV infection and treatment to confirm the effectiveness of bemnifosbuvir and ruzasvir. A similar approach has been previously validated and published to evaluate other DAA regimens against HCV.

[Arantxa Horga, CMO 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 12-16 days, while the corresponding time to achieve cure was approximately 7-8 weeks. Therefore, this model provides further support for a high likelihood of success for the regimen being evaluated in Phase 3, with durations of eight weeks in non-cirrhotic patients and 12 weeks in cirrhotic patients. I will now turn the call over to Andrea to discuss Atea's financials.

[Andrea Corcoran, CFO and EVP of Legal at Atea Pharmaceuticals]

Thank you, Arantxa. As Jonae mentioned, earlier today, we issued a press release containing our financial results for the fourth quarter and full year 2024. The statement of operations and balance sheet can be found on Slides 18 and 19. In 2024, R&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-19 Phase 3 Sunrise III trial, as well as our Phase 2 HCV trial. For G&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&D spend will be related to the advancement of our Phase 3 program.

[Andrea Corcoran, CFO and EVP of Legal at Atea Pharmaceuticals]

As Jean-Pierre mentioned, at year-end 2024, our cash, cash equivalent, and marketable securities balance was $454.7 million. Continuing our strong financial discipline, we project cash guidance runway into 2028. Moving to Slide 20. As noted in our press release today, we announced a reduction of our workforce by approximately 20%-25% 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 million 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. I'll now turn the call back over to Jean-Pierre for closing remarks.

[Andrea Corcoran, CFO and EVP of Legal at Atea Pharmaceuticals]

Thank you, Andrea. In closing, we believe that our global Phase 3 HCV program is diverse, 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 multi-billion dollar market, and a long patent runway. We believe that the regimen of bemnifosbuvir and ruzasvir, with its potential best-in-class profile for the treatment of hepatitis C, if approved, provides an opportunity to become the most prescribed treatment and disrupt the global hepatitis C market of approximately $3 billion in annual net sales. Before opening the call to your questions, I would like to thank our talented and dedicated Atea employees. Our team's relentless pursuit of excellence drives our dedication to advancing all antiviral therapeutics for patients worldwide affected by severe viral diseases. With that, I will turn the call back over to the operator.

[Operator]

Thank you. To ask a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. Our first question comes from the line of Bela Camaj with J.P. Morgan. Your line is open. Please go ahead.

[Bela Camaj, Research Analyst at J.P. 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 3 trial design? What can we expect in terms of the scope of your Phase 2 readout later this half?

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Janet, you want to address the first one, and then Arantxa will address the second question. Janet?

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Thank you, JP. Yes. With regard to our meeting with the FDA, no, I do not think really any specific callouts. They are fully aligned with our approach of going forward with two open-label Phase 3 trials. I think it is 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 did not really have any substantive comments around the conduct of the trials.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Arantxa?

[Arantxa Horga, CMO at Atea Pharmaceuticals]

Yes, I think the question from Bella was about the Phase 2 readout. We are expecting to present data this summer at EASL, which is in May. You will have additional data there in terms of the details on safety and all the other details of the protocol of the study.

[Bela Camaj, Research Analyst at J.P. Morgan]

Great. Thank you.

[Operator]

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

[Andy Shea, VP and Equity Research Analyst at William Blair]

Oh, great. Three questions from us, if you don't mind. One is on the trial design for the Phase 3 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.S. epidemiology? So that's question number one.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Yeah. Let's do one question at a time, if you don't mind. Janet, you'll address the first question, please.

[Janet Hammond, Chief Development Officer at Atea Pharmaceuticals]

Yes. They're estimates. We have target numbers of cirrhotic patients that we'd like to see enroll in the trial. The number of cirrhotic patients, I think, generally worldwide has declined with the advent of direct-acting antiviral therapies. I think particularly so in the U.S., they're harder to find, and I think they were when the earlier direct-acting antiviral trials were conducted. We do anticipate seeing somewhere in the order of just north of 10%, probably, in our trial, and that's what we're aiming for.

[Andy Shea, VP and Equity 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 setting targets, not absolute numbers, so we do have some flexibility in there. Obviously, if we can achieve more and get greater experience, I think that will be important. I don't think there are absolute requirements around that. We want to have sufficient patients enrolled with cirrhosis to be able to justify having that population in our label. I think we're certainly going to do the best we can to have enough, but there is flexibility there.

[Andy Shea, VP and Equity Research Analyst at William Blair]

That's helpful. Second question has to do with the modeling, which is very unique on Slide 16. I am curious, if you were to plot this with Epclusa, would you expect those two lines to be right-shifted for Epclusa across the non-cirrhotic and cirrhotic population?

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

This model has been developed by Dr. Alan Perlson from Los Alamos. Please check his publications with other direct-acting antivirals for HCV.

[Andy Shea, VP and Equity Research Analyst at William Blair]

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

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

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

[Operator]

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 11 on your telephone. I am showing no further questions, and I would like to hand the conference back over to Jean-Pierre for closing remarks.

[Jean-Pierre Sommadossi, CEO at Atea Pharmaceuticals]

Thank you for all of you for joining our fourth quarter 2024 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, SVP of Investor Relations and Corporate Communications
• Arantxa Horga, CMO
• Janet Hammond, Chief Development Officer
• Jean-Pierre Sommadossi, CEO
• Andrea Corcoran, CFO and EVP of Legal

Analysts

• Bela Camaj, Research Analyst at J.P. Morgan
• Andy Shea, VP and Equity Research Analyst at William Blair