Atea Pharmaceuticals, Inc. (AVIR) September 2026 Conference Transcript

Great. Hello, everyone. I'm Max Skor, a biotech analyst with Morgan Stanley. And before we get started, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com forward slash research disclosures. I'm very happy to welcome the Atea team. Maybe we go through. We have a few people on the stage. J.P.?

Sure. Good morning. J.P. Samadalsi, founder, chairman, and CEO.

Hello. I'm Jonathan Hammond. I'm Chief Development Officer.

I'm John Vavrica, Head of Commercial Operations.

And I'm Marantza Horga. I'm the Chief Medical Officer.

So, first I would like to thank Morgan Stanley for the current invitation. I appreciate the opportunity to give an update today of our programs. As you know, we recently disclosed the successful first Phase III trial for our treatment against hepatitis C was achieving the FDA-agreed primary endpoint on our SDR-12. and we are obviously very excited to have non-inferiority statistical significance with the pure and standard of care with EPCRUSA. We believe that we have a best-in-class regimen with a short duration. What's important, obviously, in that phase three, which was performed in North America, predominantly in the U.S., and let's not forget that we were comparing an eight-week treatment against a 12-week treatment for a plus a non-serotic patient, which represented about 90% of the patient in the U.S., and we performed very well from an efficacy and safety standpoint. We look forward to have our ex-US trial see forward, releasing data very early in Q1 next year. We are fully enrolled. Almost all patients actually have achieved now week 12, which is when they have completed the full treatment. and this second trial will allow us to support the first trial but also to expand the robustness of the number of patients with genotype 1B, mostly in Western Europe, genotype 3, 4, 5, and 6, which are the rare genotype And a label is essential today as no one is doing genotyping before treatment. We have also a second program where we are very excited. With hepatitis C, we are in the process to complete the single ascending dose. We like the PK. We see the drug exposure and the safety so far. We will complete the multiple ascending dose for the end of the year, and we will be in the proof of concept next year for hepatitis C. So next year will be a very important year because that will be when we anticipate in Q2, very likely June, the filing of our regimen for hepatitis C with the FDA. So, again, thank you for allowing us to share those updates. And then the team, Janet, John, and Arantz, I can go in details on the questions.

That's great. Thank you very much. A lot of exciting things happening at Atea. Maybe we just start with the seaford results. Would the team like to highlight the top-line results, key takeaways, ways, any secondary endpoints or safety commentary.

So the C-Beyond trial, our U.S. trial, we recently have data released from it, and we were very excited to see very robust efficacy with rates in 94, 95 percent with only an eight-week regimen as compared to the standard of care, which was a 12-week regimen, and this is with the attributes of what people are expecting today in the hepatitis C landscape, so that's a short treatment duration, low probability of drug-drug interactions, no food effect, and we saw a good tolerability profile, so that's what people are looking for today. In terms of C4 WorkMax, the trial is very well positioned to be a confirmatory trial of what we saw in C-Beyond, and it's a trial that, as JP said, is running ex-US in multiple countries, over 17 countries, and it has a broad global population and also viral genetic diversity with different genotypes, as JP mentioned. So we think that that is going to be a confirmatory trial that is very likely to reproduce the excellent results that we saw in C-Beyond for two reasons. One is the trial design is closely aligned to C-Beyond, so basically they have the same primary endpoint, they have a very aligned statistical analysis plan, the same power assumption, so this makes it very likely to reproduce what we saw in C-Beyond, but also the strength of C-Forward is that we are going to be seeing the primary endpoint in two populations, like we see in C-Beyond, in the population which is the MITT population, so that's everybody that received one dose, and that's the FDA preference, and we met the primary endpoint there, but also in the per-protocol population, which is the population that is a subset, that is the population that adheres to the regimen and to the protocol. And that was the preference of the EMEA. And so we think that in that way, because we met both in C-Beyond, we have a lot of confidence that we're going to be seeing the same results in C-Forward.

Okay, so strong efficacy, clean safety profile. Maybe if we can just drill down a bit more on C-Forward. So it includes a broader geographic and genotype mix than C-Beyond, which you've noted. How could these population differences affect the results?

So we see that as a strength. I think C-Forward gives us a population that gives us additional strength for the program. One is because of the genetic diversity of the virus. So we'll see multiple genotypes, and we already have experience in vitro that we are pan-genotypic. We can treat all genotypes the same, but further, we also saw pan-genotypic efficacy in our Phase II trial, where we treated 275 patients, which is quite a lot for a Phase II trial, spread across genotypes, and included genotype III, which is the hardest to treat genotypes. And there we had efficacy rates of about 100% if you took the population that was compliant with the drug. And so C-forward is enriched for genotype 3, and that should translate into very strong efficacy as well. So that's from the viral perspective. From the population perspective, C-forward is a more manageable population from the clinical trial perspective. They are more likely to come back, to follow up, less likely to have early treatment discontinuations as compared to the United States. We had to do, obviously, a C-B-YON, a clinical trial in the United States because that's a big medical need. But the population in C-B-YON in the United States had a lot of issues and challenges. For example, over more than half of them had a history of IV drug use. They had a history of, or they had actually concomitant medication use. Ninety percent of them, 89 percent of them had concomitant medication use. They had psychiatry disorders. Over 10 percent of them didn't come back or had early discontinuation rates for a variety of reasons. Sometimes incarceration, sometimes they just didn't come back for follow-up. So that was a very challenging population for us to do a very rigorous test in the United States. But C4 World has a population that is easier in that sense with less of those challenges. So that should decrease the noise, the statistical noise in the trial. And if the data has less variability because you don't have all that noise, so that should really be able to help us highlighting our unique profile.

Okay, that's great. So I'll press a little bit on this, but what would C4 need to show for the combined analysis to support a compelling superiority claim rather than confirming non-inferiority?

That's a great question. I think that we power these trials for non-inferiority, but I want to remind you, non-inferiority, so the efficacy is matched with the CLUSA, but we do it in eight weeks. And in order to power for non-inferiority, we needed almost 1,000 patients per trial, which is pretty big for a Phase III program. And the cure rates are around 95%, 94%, 95%. So to demonstrate statistical superiority above 95% cure, you will need thousands of patients, and that is really not realistic in a Phase III program. And so our goal is really not so much to demonstrate incremental superiority, efficacy superiority, but to have a superior profile overall with this, as you mentioned, lower risk for drug-drug interactions, which is very important for physicians, no food effect, and short regimen, which is very important for patients because they really have a hard time even making it to eight weeks, much worse to 12. And so when you put all that together, that's the strength of the program because it leads to a simple, practical regimen that physicians can prescribe.

So looking forward, assuming that C4 is successful, you move on to submission, can we talk a bit about the label and, as you noted, the differentiating factors from the two approved therapies, what really resonates with physicians?

From a regulatory perspective, as JT mentioned, we're aiming to file the NDA mid-next year, and we're already actively preparing for that regulatory submission with drafting documents, drafting the label, and discussing things with physicians. And I think what we've heard distinctly from everybody has been that a short treatment regimen is the most important factor for achieving cure in patients, and this is what they're looking for above all else. But what is also important is a low potential for drug-drug interactions, and we have that also. The other factors which are important are that the regimen should be pan-genotypic. We don't have a protease inhibitor, which helps, and the regimen obviously needs to be safe and well-tolerated. And all of that we are able to demonstrate. And so we're in the process of actively working out how to draft a narrative for the regulatory submissions, assuming C4WD is positive, which will highlight that and provide simple prescribing information.

And just to add that we are preparing, as you know, Max, we will need just to complete the package for the EMA. It's closely similar, but actually they request some additional environmental and other packages that we are preparing. and we anticipate to file with the EMA end of 2027, so it's about six months after we will have filed with the FDA.

Okay. Can we talk about potential label scenarios? How should we be framing expectations?

So I think our expectations are that the label should reflect that the regimen is an eight-week regimen for non-serotic patients, 12 weeks for patients with cirrhosis. There are minimal drug-drug interactions. The safety and tolerability are generally excellent, and we are looking for a pan-genotipic regimen, and I think the label should reflect towards that.

Okay, and then moving on, I know I'm not going to press you on a price, but how are we thinking about pricing this regimen?

So right now we haven't released anything on pricing, but we plan to be competitive within the pricing regimen. closely matching to what the two competitors currently are.

Okay. But I think a question for myself is just understanding the broader market. Can you speak to the market research that you're doing internally, what you're hearing from KOLs, and how that's evolving over time?

Sure. So we've done initial market research directly with the highest prescribers in the U.S. based off of our Phase II data. What they have told us is that when they looked at the profile that Janet and Arantxa so elegantly described, that they showed great preference. As a matter of fact, over 80% said they would be interested in writing it, and the fact that the majority of their patients they would like to prescribe it to. When you start to ask them why, what they begin to address is the exact profile, to have something that's very potent, less likely to cause drug-drug interactions, and to be the shortest possible course of therapy. So from that perspective, that's how we're looking at the market. I just want to point out that when we start looking at our launch strategy, it really is grounded in the fact that we are looking at the diagnosed and treated patient population. In other words, historically the number of patients that have been treated. However, we believe that with this profile, we really have the opportunity to address a lot of those patients who are diagnosed but do not seek treatment. And, you know, it kind of ties into what physicians are doing themselves. What are they doing to get more patients treated? Because it is a problem, and that's when they're coming up with their test-and-treat model of care. Simply put, a patient is diagnosed and treated at the same time. To provide some historical perspective, a typical patient who's diagnosed and might not receive treatment for months. And it kind of explains why you may have 160,000, you know, new patients each year diagnosed but only half of them are being treated. So if you do this new test-and-treat model, what most KOLs will tell you is that they can try to get more of those patients treated. The one thing that may have been holding them back in the past is the profile of what's currently available. You really do need a drug where the physicians feel comfortable prescribing. It's not likely to see DDIs, and also something really convenient for a patient to take. And so we're really confident that as the U.S. moves towards the test-and-treat model, model, our drug will really have the best profile for that.

And can you talk about the incidence population or the prevalence population both in the United States and then Europe?

Well, so, you know, for the U.S., what I can tell you is just some general numbers. It's estimated that you have roughly 4 million people that are infected in the United States. That number continues to grow. It's estimated, as I said, around 160,000 new chronic infections each year. with only half of them being treated. So the number continues to grow. It is becoming even more of a growing health concern because eventually a large percentage of those patients will go on to develop a hepatocellular carcinoma if they're not treated. So hence the interest in the government to start to take a look at that, the interest in physicians to try to treat more of those diagnosed patients.

And how should we think about the cirrhotic versus non-cirrhotic patients?

Well, I'll let my colleagues talk about that, but from a commercial perspective, by far the majority in the United States, you know, they're a typical average type patient and they're not cirrhotic patients.

I think that what I'd like to add also is, and that's why the C4 would be very important. As you probably know, Max, compensated cirrhosis, genotype 3, are the most difficult patient to treat. And we are excited with our regimen. We are also evaluating patients with resistant mutation. So this type of patient will tell us if we are doing probably there is no sufficient power. Sorry about that. to look for superiority. But we will have a pretty good idea how we compete in terms of the cirrhotic GT3 against Ecclusor. And Marivet physicians don't like to put compensated patients on Marivet for many reasons, you know, in terms of the presence of protease inhibitors. So we believe that that also will be one of the major advantages of our regimen.

And when can we get an update around that?

When we have the C4WD data, very likely we can disclose that C4WD, almost 50% of the C4WD patients are genotype 3, and with a lot of C4WD in genotype 3.

That's helpful. And maybe if you can just walk us through, specifically in the United States, where are these patients located? Are they concentrated at specific treatment centers? How should we think about the rollout? And ultimately, I'm asking about a potential sales score.

You want to do? Oh, John.

So we're fortunate coming to market, being third to market, would have its advantages. One is we know where the current prescribers are. We know, for instance, that you have less than 8,000 physicians write 80% of the market. We know geographically where they're distributed. We know, for instance, for the highest writers, what patients are they seeing? Is it Medicare? Is it Medicaid? Is it commercial? Which commercial plans? So there's a wealth of data in which you can mine. And as we begin to launch, we know at least from the perspective of the numbers that we will be able to be very competitive with a sales force of around 100, including managers, MSLs, to cover that concentration. And we've been working with IQVIA to actually begin to size the sales force for all of that coverage. We'll choose the exact locations based off of how we choose to penetrate and where we get our market share from. But that will be done closer to launch, but we've already laid the groundwork for what we need to do.

And can you just discuss the competitive landscape in regards to the two regimens that are approved? How are sales going there? And how do you expect to, I would say, take market share?

Well, you know, the product is over a billion dollars in the U.S., and you have some fluctuations up and down within the quarters. You know, it's interesting. You have an eight-week regimen. You have a 12-week regimen. And they roughly have 50-50 share, market share. The two companies historically have played very well together when it comes to that. Historically, when you go back and you look at specialty care products and you look at what does a third entrant come in generally do, it's very different than traditional form of hypertension and other types of retail products. They usually generally equalize around the third to 35% coming in. We have noticed, for instance, that a lot of the, I would say, the competitor activity has moderated now as they move on and promote other assets. Again, it strengthens our position that a company of our size with a relatively small sales force can compete with share of voice. It also tells us that we were able to get that share of voice in a very efficient manner. So those are kind of the dynamics that exist today. And I also want to go back to the fact that as the market will move to a test and treat, you know, our profile is best suited for that type, both from a physician's willingness to prescribe and from a patient's convenience to take it.

Can you go a bit deeper into that test and treat model and how that differs from the current dynamic?

Yeah, so as I said, so traditionally it's been that a patient is diagnosed, it may be months before they actually get treatment. They're doing a lot to minimize that. that they're not requiring genotyping anymore, different scans are not required. But still, it's multiple visits to get those patients back. When you talk to most KOLs, that is what they say explains the fact you're only treating 50% of those that are diagnosed. So with the test and treat, it is relatively straightforward where these centers are able to diagnose them and to treat them on the spot, and they feel that you will get many more of those patients. treated that have been diagnosed. It's a fact that both Congress and the White House are spending considerable resources now to try to fine-tune what would a test-and-treat model look like if it was ever broadcast out. I don't think it's imminent this year or next year, but I think within the first five years, you're likely to see some sort of federal initiative to address this ongoing problem. And what they're at least appearing to right now, both sides are looking at a test-and-treat model.

And in regards to potential strategic partners, what are your plans for ex-US?

So we will partner ex-US. Whether we'll be a sole partner or we'll be multiple partners, we have already interested parties. The only major market where we are not going to fund with regulatory authorities in Japan but we have some interest there in terms of partnership with this company. We have two other interested parties already. We plan to wait to see forward. We want to have the full package filed with the FDA as well to allow us to be in a position of strength for negotiation and to have strictly a commercial deal as a partnership. as we anticipate, as I've said, that we will file in the major territories, the EMA, Switzerland, UK, Canada. And so we look forward to have a significant, I would say, return on ex-US territories as well.

Okay, that's helpful. And then over the next 6 to 12 months, we've talked about the Seaford readout, but should we expect additional updates at medical meetings? How should we think about that?

Oh, absolutely. We are preparing some abstract for Koi, actually. We will share data on the animal model with hepatitis E. We are very excited about the program. We think we have a winner. we like what we see in the phase one in terms of drug exposure and safety we are going to go into multiple ascending dose now end of the year will be completed and going to proof of concept obviously the brunt will be our hepatitis C program we felt that But we want to have the two Phase III completed to allow us to hopefully publish in the top journal the two Phase III at the same time, and in the same time to go to major scientific meetings beginning of 2027.

Okay. You jumped the gun on me there. I was going to ask about hepatitis E. If you can introduce this opportunity, that would be great.

So I'm going to let Janet, after, to discuss our phase one and what we foresee for proof of concept. This is a first-in-class. It's a candidate that we have discovered internally. It is, I think, with the number of organ transplants increasing constantly in the U.S. and Europe, about 3 percent of those immunosuppressed individuals are at risk of hepatitis C. If infected, they can develop cirrhosis within three to five years. We have only ribavirin. Ribavirin is an old antiviral drug that is a major toxicity, as you know. It's used basically all the time when you don't have anything else. And so we believe that this can be another blockbuster. Obviously, orphan designation, interesting pricing when we see what companies are charging for hepatitis delta, for example, where here you have a patient population with lifelong of screening, actually, infectious disease. So we are very excited. Jared, you can share where we stand in terms of phase one, what we have done so far, and what we foresee to go to proof of concept as well.

So we're currently in phase one in healthy volunteers, looking at single and possible ascending doses. And really, this study, I think, is the threshold for our taking the program forward. And what we're seeing so far is very pleasing safety and tolerability. And also, what we're looking for are sustained pharmacokinetic exposures, which allow for a practical dosing regimen that achieve levels that are adequate against hepatitis E from what we've seen from the pre-clinical model. And to date, that's what we're seeing. And we look forward to taking the program forward, but obviously with a disciplined approach in terms of prioritizing high-value activities as we prioritize the HCV launch coming up, too.

And maybe if we can just touch on the current financial position, how are you thinking about cash runway, et cetera?

Look, we have, end of June, we had almost $220 million. on our balance sheet. We have sufficient runway until the end of 27, early 28. We are going to be opportunistic. As I said, we definitely will have a partnership at US, which we'll have a significant upfront as well. And we will be opportunistic. And so we want to make sure that we'll have a solid balance sheet for the launch in mid-2028 and based on our forecast we will be very rapidly profitable here. We have, I think we shared before, low cost of goods with the deal we have, the licensing deal with Merck. We basically have a pretty high margin on our regimen. So we feel pretty good where we are from a cash balance standpoint.

Okay. Before I move on to a couple macro questions, what are you just hoping investors take away from this discussion today? You have a lot of exciting things happening, a positive phase three, a second one coming soon. Anything else that I missed?

No, I think, look, it's always These are, to me, exciting to have new drugs on board. We have seen, I think, the best view, feedback we can get from both patients that were enrolled in our clinical trials and investigators, DSMB, is that we enroll over 1,000 patients per trial in eight months. That tells you that there is a major appetite for a new regimen. The other two, okay, they cure a patient, which is great, But astounding that 10 years ago, we had 2.5 million infected individuals in the United States. We have 4 million today. So something is not working yet. So that's why we believe that our regimen is going to expand the patient population that we are going to be able to cure and avoid, I could tell, an explosion of hepatocellular carcinoma in the United States in the next five to ten years. So that's what's exciting to us. And the second program is exciting to us as well. And look, we can never predict, but we think that we have tremendously de-risked our programs, and so we look forward to launch those two products as soon as possible to all the patients and investigators.

Okay, then one macro question, if you mind. Given the rise of, I would say, China innovation, the competitive dynamic, how is it changing your competitive positioning or maybe your R&D or BD strategy?

Yeah, look, it's interesting that we have not seen anything in the field of anti-infective anti-viral from China. We are working, actually, extensively with some Chinese colleagues, actually, in cloning, expressing enzyme targeting. For example, the hepatitis C polymerase has not been cloned and expressed until now. We need to have the molecular mechanism there. So we have been always working in tandem with Chinese research organization and labs. But from an innovation standpoint, we have not seen much in our field, to be honest with you. Okay.

That's very helpful. Well, I think with that, we'll close up. Thank you very much, Atea team. Great seeing you, everyone.

Again, thank you so much. Thank you.