Trevena, Inc.
Q4 2018 Earnings Call Transcript

Published: 13 Mar 2019

[Operator:]

Good day, ladies and gentlemen, and welcome to the Trevena Incorporated Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to introduce your host for today’s conference, Mr. Bob Yoder, Chief Business Officer. Sir, you may begin.

[Bob Yoder:]

Thank you, and welcome, everyone. Thanks for joining us on this morning’s call. With me today are Carrie Bourdow, our President and CEO; Mark Demitrack, our Chief Medical Officer; and John Hamill, our Vice President of Finance. Before we begin, we wish to inform participants that we will be making forward-looking statements on this call, which are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including risks detailed from time-to-time in the company’s periodic reports filed with the Securities and Exchange Commission, and we undertake no obligation to update these statements beyond today. During today’s call, Carrie will recap our 2018 and recent corporate highlights and review our plan for executing in 2019. Mark will provide additional details on the work we’ve done to move oliceridine towards resubmission, as well as our short-term plan to continue developing our pipeline. John will then review our financial results followed by some time for questions. I’ll now turn the call over to Carrie.

[Carrie Bourdow:]

Thanks, Bob. Good morning, everyone. Thank you for joining us today. Over the past several months, I’ve talked about a plan to position oliceridine for approval, advance our pipeline and create value for shareholders. I am proud of the work we’ve done and how quickly we’ve been able to mobilize resources. We’ve put in place an experienced team, made measured investment decisions on the pipeline and appropriately managed our expenses. Today, what you’re going to hear from us is an update on oliceridine, which remains our absolute top priority. Bob will also going to spend some time talking about our plans for advancing the rest of our portfolio. We are well-positioned to build on our recent momentum, and I’m optimistic moving forward into 2019. Let me first highlight some of our key accomplishments from last year. We strengthened our executive leadership team with two key hires, Dr. Mark Demitrack was appointed as Chief Medical Officer in May of last year and Bob Yoder was recently promoted to Chief Business Officer. Mark has spent over 20 years in the industry and has a strong track record of leading numerous CNS programs to clinical development and approval. Bob joined Trevena in the middle of last year and brings over 30 years of industry experience, leading global business development and commercial functions, across a range of therapeutic areas including acute care. Both Mark and Bob have been instrumental in bringing the Company to this critical juncture. And I’m pleased to have their leadership and expertise as we prepare for the busy year ahead. We also announced licensing agreements for oliceridine with two hospital focused companies, PharmBio in South Korea and Nhwa in China. Both partners are well equipped to commercialize an innovative product like oliceridine and they continue to make steady progress with their programs. We advanced our early stage pipeline in efficient ways. We continued our collaboration with NIDA, the National Institute on Drug Abuse and announced the poster presentation of new non-clinical data on TRV734. NIDA is evaluating 734 for the oral management of opioid dependence. We also announced successful completion of our first time in human Phase 1 study of TRV250, a novel mechanism of action of the delta receptor for the potential treatment of acute migraine. Mark will provide detail later on the call and outline some of the work we plan to initiate this year to advance both TRV250 and our S1P assets. Early in 2019, we bolstered our balance sheet with a $10 million registered direct offering of common stock. This raise enabled us to extend our cash runway as we continue to make progress on oliceridine and our pipeline. And finally, in less than one month since receiving the Type A meeting minutes, we’ve submitted a protocol and stats plan for the healthy volunteer study to collect the QT interval data FDA requested as part of the CRL. This is a critical milestone and a testament to the team’s hard work and dedication. Before I turn the call over to Mark, I want to take a few minutes to comment on breakthrough therapy designation for oliceridine. FDA informed us last week that data from our Phase 3 program, under the conditions we studied, were not sufficient to support the continuation of breakthrough therapy. Couple of points here to consider. Breakthrough therapy status is awarded to early clinical programs to help expedite the drug development program. Based on where we are now in the oliceridine review process, breakthrough therapy will not impact the resubmission process or the timing of FDA's review of the oliceridine NDA. And let me add that we've learned a great deal from our Phase 3 program and from our discussions with the agency. And in fact, what we've learned is helping us think about the potential Phase 4 [ph] study plans we might like to pursue upon approval of oliceridine. We look forward to continue to engage with FDA as we prepare for the work ahead. And with that, I'll turn the call over to Mark.

[Mark Demitrack:]

Thank you, Carrie, and good morning, everyone. I'd like to start by providing some additional context on the recent progress we've made to address the oliceridine CRL and define a clear path forward to resubmission of the NDA. Over the past several months, we've had many productive discussions with the agency. In January, we reported the outcomes of our recently completed Type A meeting, which provided us with a roadmap to answer each of the agency's questions. As you may remember, from that call, the most significant topic raised by FDA in the CRL was a request for additional QT interval data. We're very pleased with the outcome of our discussion with the agency on this point. Specifically, the agency indicated that the study can be conducted in healthy volunteers over a 24-hour period and should include placebo and positive control arms. The necessary total sample size for statistical analysis will be determined once we receive feedback on our submitted protocol. However, in the oliceridine cohort, FDA asked for at least 20 subjects to be exposed at a cumulative dose of 27 milligrams, which is a proposed maximum daily dose over a 24-hour study interval. FDA also indicated that no additional safety data was necessary to support the proposed 27-milligram maximum daily dose. The clarity that the agency provided in the CRL in general, and on this specific topic, has enabled us to move forward rapidly. We prepared a healthy volunteer study protocol and an accompanying statistical analysis plan, both of which have been submitted to FDA for their feedback. We'll continue to work closely with the agency to help them complete their review as quickly as possible, recognizing that they are under no set timing obligations and we expect to initiate the study in the first half of this year, following receipt of FDA’s feedback. We're very excited about the swift progress we have made to answer FDA’s questions and I'm especially grateful for the strong team we have at Trevena and for our external partners as we prepare for the upcoming healthy volunteer study. We have some important work in front of us. However, we believe we have a clear path forward to address the CRL and refile our NDA for oliceridine. Before I move on to discuss our pipeline, I'd like to remind everyone that we continue to assemble a strong and compelling peer reviewed published data set that is foundational for the future commercialization of oliceridine. As we announced earlier this week, I'm pleased to report that our Phase 3 APOLLO 1 data has been accepted for publication in The Journal of Pain Research. This is the first publication to emerge from our Phase 3 clinical development program. And the data showed that oliceridine provided effective pain relief with a rapid onset of action and a favorable safety and tolerability profile. Notably, the size of the treatment benefit on respiratory safety events associated with oliceridine was consistent with the magnitude seen in our Phase 1 and Phase 2 trials. These data will be an important addition to the robust set of published evidence that will be available to formulary decision makers upon commercial launch. And we are working hard to get our remaining Phase 3 study data from the APOLLO 2 and ATHENA clinical trials published in peer reviewed scientific journals. As Carrie mentioned earlier, we have also made incremental progress on our other pipeline asset past [ph] year. To be clear, our focus remains on positioning oliceridine for resubmission and ultimate approval. However, there are many exciting activities we hope to pursue with our other pipeline opportunities. We believe these assets represent an important investment into the future of Trevena. So, I’d like to take a few minutes to walk through some of the approaches we’ve identified to enable us to continue progressing these development compounds. We’re working on TRV250, our novel delta receptor ligand aimed at the potential treatment of acute migraine as an initial target. Migraine remains an area of unmet medical need. Recent estimates report over 600 million migraines treated annually in the U.S. and approximately 25% of patients are unable to achieve relief with currently available options. Despite significant efforts directed at this pharmacologic target, there have been no selective delta receptor pharmaceuticals that are progressed beyond early stages of clinical development. One of the key development hurdles that has hindered a better understanding of this area has been the concurrent risk of seizures associated with activation of the delta receptor. In June, of 2018, we announced successful completion of our Phase 1, first time in human study, which yielded safety, tolerability and pharmacokinetics data supporting advancement of this compound into Phase 2. Based on our work, we believe that our discovery efforts have resulted in the development of the first delta receptor ligand that because of its intrinsic biased pharmacology has the potential to allow clinical testing of this receptor target without the risk of seizures in the expected therapeutic dose range. We plan to move forward with the proof of mechanism study, presuming continued success in hitting our milestones for refilling the oliceridine NDA. The preclinical and clinical data collected thus far suggests the potential for TRV250 to be the first selective delta receptor modulator in the acute migraine treatment landscape. And I am looking forward to beginning to lay the groundwork to support this new mechanism of action in the clinic. In our S1P receptor program, we have recently identified a lead candidate, which we have designated as TRV045 and that we believe holds promise as a new mechanism of action for the treatment of chronic pain and other CNS conditions. Modulation of the S1P receptor system is an established target for the treatment of neuro-immune conditions. A unique characteristic of our compound is that it retains efficacy at the S1P receptor target, but does not result in the immune comprising activity typically seen with this class of compounds, namely lymphopenia and immunosuppression. This presented opportunity for us to explore a novel, non-opioid based mechanism for the treatment of a number of chronic pain conditions. With our success in identifying a lead candidate in this area, I am excited to announce that we plan to initiate additional in vivo pharmacology work later this year and we’ll be evaluating a path forward for progressing this asset to IND, either through a potential partner or by ourselves. Lastly, TRV734 is our orally available new chemical entity with a functionally selective mechanism of action similar to that of oliceridine. Phase 1 data show a favorable pharmacokinetic profile and strong non-clinical data demonstrate G protein selective agonism at the new opioid receptor with reduced constipation and no evidence of opioid-induced hyperalgesia. Over the past year we have been working actively with the Intramural Research Group at NIDA who have been very interested in the use of this compound as a potentially promising addition to the armamentarium treatments used in oral maintenance therapy for opioid use disorder, in large part, because of its potential for an improved safety and tolerability profile. Our collaboration with NIDA has been fruitful with new data from animal models recently presented at the annual meeting of the American College of Neuropsychopharmacology in December. Their presentation highlighted data showing that TRV734 reduced drug seeking behavior in a rat model of opioid relapse, suggesting it may provide a new treatment option for patients undergoing maintenance therapy for opioid use disorder. NIDA is planning to begin preliminary studies of TRV734 in patients later this year. And we look forward to supporting their work in tackling this urgent and critical facet of the opioid crisis. I’d now like to turn it over to John for a review of our full year financials.

[John Hamill:]

Thanks, Mark. We disclosed key financial measures earlier today in our press release and will file our 10-K this morning. For now, I'll summarize the headline numbers. For the fourth quarter of 2018, we reported a net loss attributable to common stockholders of approximately $8 million or $0.10 per share, compared to approximately $14.7 million or $0.24 per share for the fourth of 2017. For the full year ending December 31, 2018, we recorded a net loss attributable to common stockholders of approximately $30.8 million or $0.42 per share, compared to approximately $71.9 million or $1.21 per share for the year ending December 31, 2017. This decrease in net loss and net loss per share is driven primarily by the recognition, collaboration revenue associated with the licensing agreements for oliceridine and by lower expenses. Specifically research and development expenses were approximately $15.8 million for the full year 2018, compared to approximately $49.0 million in 2017. This decrease was largely attributable to the Phase 3 clinical trials and open label safety study that were conducted and completed in 2017, and a decrease in personnel related expenditures resulting from the October 2017 restructuring and reduction in force. General and administrative expenses were approximately $19.0 million for the full year 2018 compared to approximately $19.6 million in 2017. As part of our recent registered direct offering in January, we issued 10 million shares of common stock and receive net proceeds of approximately $9.2 million. Cash, cash equivalents and marketable securities were approximately $61.5 million as of December 31, 2018. We expect this amount combined with the $9.2 million in net proceeds from our recent register direct offering together with interest income will fund our operating expenses and capital expenditures into the third quarter of 2020. This amount includes operating cost estimates over this time period, including the oliceridine healthy volunteer study, limited spending on TRV250 and TRV045 and the repayment of our debt which will be paid off in the first quarter of 2020. We will now open the call for questions, after which Carrie will provide, some closing remarks. Operator?

[Operator:]

[Operator instructions] And our first question comes from Jason Butler, from JMP Securities. Your line is open.

[Jason Butler:]

Hi. Thanks for taking the questions. First one, I know it’s still a little early here ahead of starting the study. But can you can you give us any at least broad sense of when you can target NDA resubmission at this point? Thanks.

[Carrie Bourdow:]

Good morning, Jason. How are you? Thanks for the question. So, the only thing that we're talking about as it relates to timelines is that we do expect to start the study in the first half of this year. When we get the protocol back from the agency, we’ll tighten up those timelines we'll have a better sense of resubmission. We’ll provide that information to everyone.

[Jason Butler:]

Okay, great. And then, just a couple of follow-ups. First, for the S1P targeting drug, can you talk about the different receptor subtypes that you think that you're hitting here? And then, just broadly, with the focus on pain, any initial indications that you're considering? And then, just finally, as you think about both -- this program, 734 -- the all of your pipeline programs, you said you're still primarily focused on oliceridine. Do you plan to seek potential partners for any of these programs earlier in development, or are these still things that you want to hold through to a later stage development or through to commercialization? Thanks.

[Carrie Bourdow:]

So, I'll start and then I'll hand it over to Mark. So, one of the things that might have been a subtle change that you may not have noticed is that -- and I talked about this when I talked about Mark joining the Company. Having someone like Mark here that is looking out our pipeline and certainly looking at oliceridine, maybe in different ways than what we have in the past. It's helping us to expand our mission really beyond pain into the CNS, -- other CNS-related disorder. So, Mark is going to talk about S1P, but he's also going to talk about not just pain, but beyond pain some of the other areas that we're interested in. As it relates to partners, we're certainly interested in partnering, and we don't have an update on that yet. But, you know how this works, Jason. We're also very interested, as Mark said, in these assets and want to carry them forward. So, we're taking part of the financing raise that we just accomplished and putting that on the pipeline. Let me turn it over to Mark, to talk about S1P.

[Mark Demitrack:]

Sure. Thanks, Carrie. And so, Jason, to answer your question about the compound itself, as you know, the S1P receptor family has a range of five different receptors, and one of the most interesting is the S1P 1 receptor target. And so, our compound has a particular activity and interest targeted there. We’ve used -- in terms of clinical targets that we'd aim towards, it's obviously early in development, and we've used a variety of models in our initial screening. But, what I can say is that the broad interest in both inflammatory as well as neuropathic pain targets, are sort of high on the list of things that would be of interest to us. But as you well know there's a variety of very-interesting opportunities with S1P modulation overall. And we're looking beyond those two.

[Operator:]

Thank you. And our next question comes from Ed Arce from H.C. Wainwright. Your line is open.

[Tom Yip:]

Hey, good morning, everyone. This is actually Tom Yip asking couple of questions for Ed. So, first question regarding the healthy volunteer QT study for oliceridine. It sounds like this study will enroll about 20 healthy volunteers. Is there anything other than this study that will be included in the CLR response?

[Mark Demitrack:]

Yes. So, let me answer that question. The answer to the second part of your question is no, there's no other study. It's a specific healthy volunteer study that is responsive to the FDA’s request for additional information on the QT interval. With regards to the sample size, that's one of the key pieces of information obviously that we expect to receive feedback from the agency. They've been clear with us that they are requiring an exposure of at least 20 subjects who have achieved 27 milligrams through 24 hours. However, for purposes -- given the variability in the outcome measure, that doesn't mean that the sample size is 20. So, we've presented a proposal for what we believe would be a sufficient sample size statistically to be able to distinguish our endpoints, which is going to be slightly larger than 20 subjects overall to achieve that. Just to give a rough sort of comparison, when we do a study like this -- and you can look at our thorough QT study as an example. That's a single dose version, if you will, of a similar type of design. And that study involved 58 subjects. So, within that general range, that's the kind of information that's been presented in our stat plan and in the protocol to the agency. And as Carrie was mentioning, again, as we’ve talked about, we were hopeful to get feedback fairly promptly from the agency on that and at which point we can provide more clarity about timing and progress moving forward.

[Tom Yip:]

Okay. That sounds good. Thanks for clarifying at this point. And then, I'll switch gears as a financial question. So, related to the Jiangsu and PharmBio partnerships, can you remind us what are some potential milestones that we could expect in the first half of 2019? And also thus the third quarter 2020 cash runway projection, does that include these potential milestone payments?

[Carrie Bourdow:]

Hi. So, on the milestones, I mean, certainly, I think what we talked about publicly is the approval in the U.S. of oliceridine is one of the milestones. We’ve got -- I mean, we're talking about timing around that as separately from milestone. And then, there are some other things that we’re there working through on their end that relates to the milestones that the royalty payments are included in the early, say, upfront payments were included in the cash runway that we talked about earlier.

[John Hamill:]

That’s right. So, we have that cash in hand that’s obviously incorporated into our cash balance. I believe the next relevant milestone will be after approval, FDA approval.

[Carrie Bourdow:]

Yes.

[Tom Yip:]

Okay. That sounds good. And one very small -- just want to make sure. So, the new early candidate TRV045, is this a program that is wholly owned by Trevena?

[Carrie Bourdow:]

It is, yes. All of our programs are wholly owned by Trevena, new mechanisms of actions wholly owned by Trevena.

[Tom Yip:]

Okay. Thank you again for taking my questions. And looking forward to a good 2019.

[Carrie Bourdow:]

Great, we are as well. Thank you.

[Operator:]

Thank you. And that does conclude our question-and-answer session for today’s conference. I’d now like to turn the conference back over to Carrie Bourdow for any closing remarks.

[Carrie Bourdow:]

Thank you. And thank you everyone for joining us this morning. As you heard from the team, we’re looking forward to a very busy year. We’ve made significant progress over the past several months to gain clarity from FDA and we are executing against the plan, and I outlined earlier to bring oliceridine towards resubmission and approval. I have to say that I have the utmost confidence in this team and also our partnerships with external clinical and regulatory experts that are also supporting us in our refilling efforts. We continue to maintain our financial discipline. As you heard John talk about earlier, our cash runway now extends into the third quarter of 2020. And oliceridine remains our top priority. We are looking forward to receiving feedback from FDA on the healthy volunteer study protocol. Trevena is positioned to build value in 2019. And, I will continue to share updates with you as the year progresses. We remain committed to developing and delivering innovative medicines for patients suffering from pain and CNS condition. Thank you again for joining us today.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a wonderful day.