Trevi Therapeutics, Inc. Q4 FY2021 Earnings Call

Good afternoon, and welcome to the Trevi Therapeutics Q4 and Year End 2021 Earnings Conference Call. At this time, all participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Various remarks made by management during this call about the company's future expectations, plans, and prospects constitute forward-looking statements. Actual results may differ materially from those indicated by these statements due to various important factors, including those discussed in the Risk Factors section of the company's most recent annual report on Form 10-K filed with the SEC this afternoon. Any forward-looking statements represent the company's views only as of today and should not be relied upon as representing the company's views on any subsequent date. While the company may choose to update these statements in the future, it specifically disclaims any obligation to do so even if its views change. Participating on today's call from Trevi Therapeutics are Jennifer Good, President and CEO; Bill Forbes, Chief Development Officer; and Lisa Delfini, Chief Financial Officer. I would now like to turn the conference over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Good afternoon, and welcome to our fourth quarter 2021 and year-end earnings call and business update. Joining me today on this call are Lisa Delfini, Trevi's Chief Financial Officer and Dr. Bill Forbes, Trevi's Chief Development Officer. Lisa and I have some prepared remarks, then the three of us will be available for questions at the end. It has been an exciting few months at Trevi and I'm happy to share the progress we've made on advancing the development of both of our programs. We recently announced that our Phase 2 CANAL trial in chronic cough and IPF showed a statistically significant reduction in cough during an interim analysis that allowed us to stop the trial early. This news has gained a lot of external interest and allows us to accelerate our plans. Also, we completed enrollment as of January 31, 2022, in Phase 2b/3 PRISM trial in chronic pruritus and PN. These are important milestones in our clinical development for our lead programs, and allow us to shift our focus on preparing for the next stages in development. Our most advanced program in clinical development is in severe chronic pruritus and prurigo nodularis, or PN, which is a serious and debilitating disease characterized by papules and nodules on the skin, as well as incessant and severe itching. Haduvio is being studied in PN in our PRISM trial, which is a 14-week phase 2b/3 trial. We expect to report top line data in the second quarter of this year. We believe PN due to the refractory nature of the disease is neurologically mediated and potentially aligns well with the neuronal mechanism of our mixed agonist antagonist drug. With no approved therapies in this indication, we remain the lead oral therapy in development. Let me give you an update on our open label extension study for PN. The percentage of subjects continuing into the open label extension remains high at approximately 93%. This will provide not only long-term safety data, but also important efficacy data around skin healing and quality of life for these subjects. We believe that by reducing itch, an effective therapy has the potential to disrupt the itch scratch cycle leading to skin healing and resulting in disease modifications over time. We see a significant market opportunity and estimate the global prevalence of PN is approximately 730,000 patients with 300,000 patients in the U.S. and 430,000 in the rest of the world. Most of these patients have already tried and failed topical treatments and we believe they will be eligible for an oral therapy like Haduvio before turning to biologics. Turning now to our other clinical program, which is in chronic cough and idiopathic pulmonary fibrosis or IPF. This has been a very exciting couple of weeks for this program. We were happy to report a positive result from a pre-specified interim analysis, allowing us to end enrollment early, save money and accelerate into the next phase of development. In this interim analysis, Haduvio showed a 77% reduction from baseline at day 22 in daytime cough frequency as measured by an objective cough monitor, demonstrating a 52% difference from placebo. The p value on this analysis of 26 subjects was p less than 0.0001 and conditional power was 100%. These results were consistent regardless of baseline cough frequency and antifibrotic use, and we saw no impact from the treatment period in this crossover design. Patient-reported outcomes followed the same trend as the objective cough monitor and demonstrated a rapid response to treatment as early as the first week. Haduvio is the lead therapy in development and the only one to have shown positive results on the reduction of cough in this patient population. Haduvio was well tolerated in the study with only one FAE that was not deemed to be treatment-related, and the adverse events were consistent with what we have seen in Haduvio trials in other indications. We announced this week that the last patient was randomized in this study, and we expect approximately 40 subjects in total that will be evaluated. With the strength of the p value reported, we would expect to see similar results in the final data set, and we plan to announce top line data on the full set of subjects in the third quarter of this year. We will look to present the full results at a medical meeting in the fall. Bill and his team are also in parallel planning the next clinical study, which we intend to design as an adequate and well-controlled trial, as well as preparing for discussions with regulatory authorities. This dataset is exciting and is initial validation of our hypothesis of the mechanism of action in treating cough. As a team, we are determining our path forward not only in this indication but also other chronic cough indications. Chronic cough and IPF is an indication in a much larger opportunity for chronic cough, both in other interstitial lung diseases, as well as the growing opportunity in refractory chronic cough. This global chronic cough market is estimated to be approximately $10 billion. To give you more background on IPF, it is a progressive and severe condition in which there is scarring of the lung tissues. One of the leading debilitating symptoms of this disease is chronic coughing, which affects up to 85% of these patients and for which there are no approved therapies. In the U.S. we estimate that there are approximately 130,000 patients with IPF and an equal amount in Europe. Due to the high five-year mortality associated with IPF, prescribers and patients are not only looking to slow the progression of the disease but also improve the patient's quality of life. It has been a busy few months in both of our studies, but we still have a data-rich few months ahead of us. In the second quarter, we will complete the double-blind portion of our pruritus trial and PN and report top line data. We will also complete the dosing and the remaining subjects in our cough trial and IPF and report out the data on the full set of subjects in the third quarter. In parallel, we are actively preparing for the next stage of development for both of these indications, as well as planning for indication expansion in both chronic pruritus and chronic cough. One final comment before I turn it over to Lisa to review the financial results. We will be hosting a KOL call on Wednesday, March 30, from 8 to 9 a.m. Eastern time. On that call, Bill will review the interim results as well as provide additional new analyses. Importantly, we will be joined by Dr. Lisa Lancaster, who is a professor of medicine at Vanderbilt University Medical Center. Dr. Lancaster is also the Medical Director of the Interstitial Lung Disease Program at Vanderbilt University Medical Center and a medical advisor for the Pulmonary Rehabilitation Program at Vanderbilt. She has deep experience with patients with interstitial lung disease, including idiopathic pulmonary fibrosis, and will be helpful in describing the disease and suffering of these patients. We invite you to join us on that call. We will be issuing a press release in the next week with information on how to register. That is all I have on the business update. I will now ask Lisa to review our financial results and then we will open it up for questions.

Thank you, Jennifer, and good afternoon everyone. As I always need to remind you, the full financial results for the 3 and 12 months ended December 31, 2021, can be found in our press release issued ahead of this call and our 10-K which was filed with the SEC just a few minutes ago. During the fourth quarter, we raised $14.8 million in financing, which enabled us to end the year with a cash balance of $36.8 million. As Jennifer noted, we were able to end enrollment in our CANAL trial early which provided cost savings that will help us accelerate the planning for the next clinical trial for chronic cough and IPF. For the fourth quarter of 2021, we reported a net loss of $8.5 million, compared to a net loss of $9.5 million for the same quarter of 2020. R&D expenses were $6.2 million during the fourth quarter of 2021 compared to $6.6 million in the same period of 2020, primarily due to decreased purchases of clinical trial supplies, partially offset by increased activity in our CANAL trial, as well as an increase in personnel-related expenses due to increased headcount. G&A expenses were $2.1 million during the fourth quarter of 2021, compared to $2.6 million in the same period of 2020, primarily due to decreased market research costs. This concludes our prepared remarks and I will now turn the call back to the operator for Q&A.

Our first question is from Annabel Samimy with Stifel. Please go ahead.

Hi, thanks for taking my question. So I have a couple. The first was on the CANAL program. So I'm curious to know what your expected development path to be from this point forward? And I asked because there are a couple of other chronic cough studies going on in the P2X3 space and I know it is not specifically related to IPF, but I'm just curious to know if you believe that there's productivity or applicability for your program? Is there the same broad applicability of those P2X3 inhibitors to move into IPF? So I'm just curious to know how the landscape plays out? Thanks.

Thanks, Annabel. I'll answer that and I'll let Bill jump in if he wants to add anything. Yes, so we have always believed that our mechanism could work broadly in cough. I mean as you and I have discussed, opioids have been known to work in cough for a long time. IPF cough, I think is considered a very severe and serious form of cough. As a matter of fact, some of the P2X3s have been studies in IPF cough, such as gefapixant, and actually failed there. So we feel that the fact that we work there is a good sign. We are considering both refractory chronic cough and other interstitial lung disease cough as we move forward. I think once we read out all our trial data, we'll probably step back and think of the best way to build out the company. But I do feel that the mechanism could be broadly applicable to cough.

Okay, sorry go ahead.

No, not necessarily to that, but just kind of getting to CANAL and kind of next steps, I think we started there, Annabel. One of the things that we're obviously anxious to do is complete this study and report out the top line results. At the same time, we're going to be moving things forward on the regulatory front. And we're also starting up discussions with ILD centers around the United States. So we anticipate the next study will be in both the UK and the US. So, you know, obviously, we're anxious to get in with the FDA and talk to them about next steps and what we need to do. I anticipate that that meeting with the FDA will take place in Q3, and then we'll try to get things up and running soon thereafter.

Okay, and I guess the reason why I asked is, you've got $36.8 million in cash, and these are relatively large markets that can potentially be very costly to develop. So trying to think about how you might fund this program going forward, especially in light of some key studies that have shown some failure in IPF, but there's others that have shown success in chronic cough and perhaps have a better profile than the ones that have failed. So I'm just a little bit curious, the extent to which you might have to invest in this of my soap.

Yes, so Annabel you are right. I mean, there's a lot of indications here, which could get very expensive, I should just comment that IPF costs and PN will be our priority in the data, assuming that they are both successful. Those are both serious unmet patient needs and we're committed to sort of finishing what we start, where we move into, part of the consideration will be the cost of the programs, the overall pricing, the unmet need, all those kinds of things. And we'll have to do that mindfully. I mean, we're definitely mindful of where our stocks are at in the market capital. I think there's opportunity to do that. It's something we'll revisit. I know, Lisa, you may want to add something about cash runway planning?

Yes. Our cash will allow us to navigate through the data readouts in both clinical trials and prepare for the next trial. We recognize the need to raise funds for the upcoming clinical trial, and we will be exploring options for that. We believe we have increased the company's value due to these cost results, and we will take that into account as we review the results at the year's end.

Okay, and then just really quickly on the side effect profile I know that from I guess, from the mechanism, there was the nausea and vomiting that you had initially tried to address in terms of titrating patients that are getting to the right level, did you find that the patients in the CANAL study had just as much issue with that titration period and nausea and vomiting, would it be something that could exacerbate that population giving that their condition already puts them kind of in a vulnerable state as far as nausea and vomiting? I'm just curious how you balance the early stage side effects with the actual condition itself?

Yes, just a couple of comments. I mean, the obvious patient population does an awful lot of coughing and so vomiting is actually an issue with this patient population. You can imagine if they're up to 90 times per hour that you might get into some of that. But, we've reported that from a blinded perspective, we had 5 AEs that dropped from this study. We don't know what treatment arm they were in when they dropped, but one was anorexia, one depression, one nausea and vomiting, one insomnia, fatigue, and one agitation, anxiety dyspnea. I think overall, we've been very happy with the tolerability that we've seen in this study. We dose titrated up as we do in the PRISM study. So as I said, I think overall we're happy with what we see. The other thing is, with the anti-fibrotic, there are a lot of GI side effects with anti-fibrotics also. And we know that just short of 50% of the population was on anti-fibrotics in this study. So with that we understand that there's already a side effect profile from one of the leading therapies in the area.

Okay, great. Thank you.

Thank you.

Thank you.

The next question is from Serge Ballinger with Needham and Company. Please go ahead.

Hi, good afternoon. Couple of questions from me. The first one is a follow-up to just the previous question here. Did you use the same dose and titration protocol in the CANAL trial, as you're using in the PRISM study?

It was altered a little bit in the CANAL study. We did 27 mg to 54 milligrams in the CANAL study and then continued to dose escalate up to 108 and then to 162. We ended at the same dosage of 162 b.i.d.

And Bill, you might want to mention why we did that; you were trying to get some dose data, right? It really wasn't to do with tolerability.

Yes, no, that's an important point. Originally when this study was designed, we got baseline recording and then week one, two, and three. So when the study was designed, we tried to get some dose response at each of those trying to get to the 54, the 108, and then the 162 at the VitalChek recording. So that's why it was altered a little bit. Unfortunately, we had to drop the VitalChek recordings at weeks one and two because of COVID and we could not have the in-patient visits that we wanted to, but we did maintain the VitalChek at baseline in week three. So hopefully that answered your question, Serge.

Yes. And secondly, just thinking about the timing of the PRISM trial readout as we get closer, only a few weeks into the second quarter here, I think in the past, you've talked about around a four-month period between the last patient enrollment and potential readout, is that a right way to think about it?

Yes, I think you should look at it at the end of Q2 as when our readout will come.

The next question is from Nathan Weinstein with Aegis Capital. Please go ahead.

Good afternoon, Jennifer, Lisa, and Bill. Thanks for taking my questions and congrats on the progress, including particularly the strong interim analysis from CANAL. Actually, my first question just on Haduvio for severe pruritus patients with PN, and I think you mentioned during the prepared remarks that potential to be utilized in the protocol prior to biologics. Could you share a little bit more about that in terms of what that might mean, either compare or contrast to that class or what the ramifications could be for share capture?

Yes, it's a good question. I mean, biologics are obviously important. They're not for everyone. I think there's an opportunity from a payer perspective depending on where we choose to price the product to maybe become the step-through therapy. I also think orals are generally easier for patients; it’s generally a preferred method. So we are thinking about that aggressively, how it's good for the patient and from a payer perspective, there's probably less expense compared to the biologics.

Okay, great. Fair enough. And then maybe just one follow-up from me. Obviously, you've mentioned that IPF cough and PN, those are the focus, but you have a pretty deep pipeline that could be some attractive indications outside the lead. What's on the table could partnering via strategy or can you just speak to what you might pursue there strategically?

Yes, so we have been in partnering discussions, really getting people ready for the data over the past years. And I would say our focus in partnering is around geographic territory. So clearly, Asia, Japan, and China, and sort of related territories and also Europe. We're a small U.S.-based company. And I think we feel we can do well here and I think comfortable developing in Europe, but certainly finding a partner in Asia to help advance the drug and a marketing partner in Europe are things that would be advantageous here for the company and the asset. So that's the focus of our conversations.

Okay, thanks, awesome. Thank you so much for the thoughtful answers. I'm looking forward to progress during the rest of the year.

Thank you, Nathan.

I'm not showing any further questions. So this concludes our question-and-answer session. I would like to turn the conference back over to Jennifer Good for any closing remarks.

We would like to thank everybody for participating in today's call. I'd also like to thank the Trevi team, our study investigators, and all the subjects who have participated in our clinical trials. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.