Earnings Call Transcript - TRVI Q3 2023

Operator, Operator

Good afternoon and welcome to the Trevi Therapeutics Q3 2023 Earnings Conference Call. At this time all participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Various remarks that management makes during this conference call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of the company's most recent quarterly report on Form 10-Q, which the company filed with the SEC this afternoon. In addition, 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 as of any subsequent date. While the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so even if its views change. I would now like to turn the conference over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Jennifer Good, President and CEO

Good afternoon, and thank you for joining our third quarter earnings call and business update. Joining me today on this call are my colleagues, Lisa Delfini, Trevi's Chief Financial Officer; and David Clark, Trevi's Chief Medical Officer. Lisa and I have some prepared remarks. Then we will open it up for questions. We have continued to advance our clinical development plans for Haduvio in both of our chronic cough indications, including idiopathic pulmonary fibrosis and refractory chronic cough as well as the human abuse potential study. Let me provide a brief update on each of these programs. I will begin with our Phase 2a refractory chronic cough study that was recently initiated. We have named this the RIVER study. Refractory chronic cough, or RCC, affects up to 10% of the adult population and is defined as a persistent cough lasting greater than eight weeks despite treatment for an underlying condition or when no cough associated conditions can be identified. RCC is caused by cough reflex hypersensitivity in the central and peripheral nerves and has a significant impact on patients physically, psychologically, and socially. 72% of high and moderate coughers report their cough being uncontrolled. There are currently no approved therapies for RCC in the US, EU, or UK. The key point of differentiation for Haduvio in chronic cough is the mechanism of action, which works both centrally in the brain and peripherally in the lungs. We believe Haduvio's central and peripheral mechanism has the potential to work in more patients than peripheral-only mechanisms like the P2X3 and potentially provide a stronger response and cough reduction. When we look at the competitive landscape in RCC, a number of other mechanisms have been studied with little success. Even the P2X3 inhibitors have mixed results, but there are two P2X3 therapies in late stages, one being reviewed by the FDA and the other in Phase 3 trials. However, importantly, both of these compounds have been shown to have non-statistically significant effects in RCC patients with moderate cough frequencies of 10 to 19 coughs per hour. We believe that based on the data from our IPF cough trial and the drug's mechanism of action that Haduvio may work in both the moderate and high cough frequencies. When you look at the RCC patient distribution, 44% of the patients are estimated to have moderate cough frequency, whereas only 29% have high cough frequency. So there's a potential Haduvio may address close to three-quarters of the RCC market, whereas P2X3s may only be effective in less than one-third of the market. The RIVER trial is the standard Phase 2a crossover design that has been run in all the cough trials. It is a double-blind, randomized, placebo-controlled, two-period crossover study, evaluating the reduction of cough in approximately 60 subjects. These subjects will be randomized with a 1:1 stratification between those with 10 to 19 coughs per hour, moderate frequency coughers, and those with greater than or equal to 20 coughs per hour, high-frequency coughers. Each treatment period will last 21 days separated by a 21-day washout period. Subjects on Haduvio will have the twice-a-day dose titrated weekly from 27 milligrams up to 108 milligrams across the dosing period. The primary efficacy endpoint is the relative change in the 24-hour cough frequency at day 21 from the treatment period baseline for Haduvio compared to placebo as measured by an objective cough monitor. This study will also explore secondary endpoints, including patient-reported outcome measures for cough and quality of life. We are excited to have initiated this study and expect to report top-line data in the second half of next year. Next, a brief update on our lead program in idiopathic pulmonary fibrosis, or IPF, chronic cough. IPF is a serious end-of-life disease. Chronic cough is reported by approximately 85% of patients suffering from IPF and has similar physical, psychological, and social impacts to that of RCC but may also be a risk factor that plays a role in the progression of IPF. The constant lung injury, micro tears, and potential inflammation caused by persistent coughing may lead to worse health outcomes for patients, such as increased respiratory hospitalizations, mortality, or need for transplant. With no currently approved treatment options for chronic cough and IPF, patients and providers have an urgent need for new therapies. We are planning to conduct two studies in parallel during this next phase of development in our IPF chronic cough program. The first is a four-arm Phase 2b dose-ranging trial that will study three active doses of Haduvio and placebo. We are planning for a six-week trial in approximately 160 subjects. We plan to conduct this study in multiple countries and sites to be able to complete enrollment in a timely manner. We are on schedule with our regulatory interactions and have received approvals to proceed in some of our planned countries. We expect this trial to be initiated in the fourth quarter of 2023 and will provide top-line guidance when we announce the trial. In parallel, we are planning for a Phase 1b respiratory physiology study in IPF patients that have varying levels of disease severity. The purpose of this study is to determine if we see clinically significant impacts on respiratory depression in any subgroups. This study will help define the patient population for our pivotal program and ultimately the label. We expect to initiate this study in the first quarter of 2024. Finally, we're able to make progress on reinitiating the human abuse potential study, which is required for the NDA filing. Recall that we had two hurdles we had to clear. The first was getting the FDA's agreement with the proposed IV butorphanol dose we plan to dose in the likability portion of the study. We received that agreement from the FDA during the quarter. Second, we were working to secure supply of IV butorphanol from the single-source supplier in the US, which we were also able to do. The final portion of the HAP study is a randomized, double-blind, active, and placebo-controlled five-way crossover design to determine the abuse potential of three doses of oral nalbuphine relative to the selected dose of butorphanol and placebo. The primary objective is to evaluate the likability of nalbuphine as compared to both placebo and butorphanol, and the primary endpoint is a drug-liking VAS scale. We expect to begin dosing this study in the first quarter of 2024 with data expected in the second half of 2024. As you can see, it is a busy time clinically for the company bringing up these four studies. And we look forward to conducting and reporting results on all of these trials. I will now turn it over to Lisa to review our financial results. Then we will open it up for any questions you may have.

Lisa Delfini, Chief Financial Officer

Thank you, Jennifer, and good afternoon, everyone. The full financial results for the three months ended September 30th, 2023, can be found in our press release issued ahead of this call and our 10-Q, which was filed with the SEC today after the market closed. For the third quarter of 2023, we reported a net loss of $7.7 million compared to a net loss of $8.3 million for the same quarter in 2022. R&D expenses were $6.3 million during the third quarter of 2023 compared to $5.8 million in the same quarter in 2022. The increase was primarily due to start-up costs and consultant services associated with our chronic cough programs as well as an increase in personnel-related expenses. These increases were partially offset by a decline in clinical development expenses related to our completed Phase 2b/3 PRISM and Phase 2 CANAL trials as well as decreased purchases of clinical trial supplies. G&A expenses were $2.7 million during the third quarter of 2023, essentially flat compared to $2.6 million in the same period of 2022. Offsetting these increases in expenses was an increase in other income net, which was $1.3 million in the third quarter of 2023 compared to $100,000 in the same period of 2022. This change was primarily due to an increase in interest income and reduced interest expense due to the payoff of the SVB term loan in May of 2023. As of September 30th, 2023, our cash, cash equivalents and marketable securities totaled $88.9 million compared to $120.5 million as of December 31st, 2022. We expect cash burn to ramp a bit over the next several quarters as we conduct the trial that Jennifer discussed today. Our cash runway guidance that we will have cash, cash equivalents and marketable securities into 2026 remains unchanged and we believe is enough to fund all the trials Jennifer just discussed and gives us good cash runway after the last readout. This concludes our prepared remarks, and I will now turn the call back over to the operator for Q&A.

Operator, Operator

We will now begin the question-and-answer session. The first question comes from Annabel Samimy from Stifel. Please go ahead.

Annabel Samimy, Analyst

Hi. Thank you for taking my question. First, regarding the RCC trial, what do you consider a typical ramp-up time for RCC? How competitive is the enrollment landscape in this area outside of the trials you mentioned? Similarly for IPF, as you prepare to start these trials, are you noticing any competing developments that could potentially pull patients away and slow down enrollment?

Jennifer Good, President and CEO

Thank you, Annabel. I'm going to let David go ahead and answer that since he's leading this charge.

David Clark, Chief Medical Officer

Thank you, Jennifer. That's an important question. Regarding the ramp-up for the RIVER study in RCC patients, we are on track to have all 14 studies operational by early in the first quarter. Additionally, many sites are expected to be active by the end of the fourth quarter. There are challenges since it's a small study with only 60 patients. However, several principal investigators involved are also engaged in other Phase 3 RCC studies, and they do not foresee competition affecting our ongoing recruitment. As we've publicly stated, the enrollment strategy will utilize a 1:1 enrichment approach, with at least half of the participants having a cough frequency of 20 or more per hour and the other half falling within the 10 to 19 range. This factor should assist in our recruitment efforts for this study, and we do not expect any issues there. Does that answer your question about the RCC before I proceed to discuss the CORAL study?

Annabel Samimy, Analyst

Yes, it does.

David Clark, Chief Medical Officer

So for the CORAL study, can you reiterate, Annabel.

Jennifer Good, President and CEO

She wanted the same question, basically. Yes.

David Clark, Chief Medical Officer

Yes. For the CORAL Phase 2 study involving IPF cough subjects, we plan to have most study centers operational by the end of the first quarter. As we have previously announced, we will begin initiating the study soon in Q4, with the majority of centers active in Q1. We have engaged in discussions with many investigators for this study, and feedback from them indicates that recruitment for an IPF cough study is generally more favorable than for an IPF disease-modifying program study. Therefore, we are not anticipating significant recruitment challenges compared to other disease-modifying programs. In fact, we expect enrollment to be higher than in those programs.

Jennifer Good, President and CEO

Yes. And Annabel, I would just add, I think we've been really thoughtful, having struggled with difficult-to-recruit conditions in the past, of having plenty of sites. We have about 60 sites for IPF to enroll 160 patients sort of spread across 10 countries. So I hope that we've got sort of some good strength behind it to be able to get enrollment done in a timely manner.

Annabel Samimy, Analyst

Okay. Great. And if I could just ask a follow-up. On the PN program, we saw the safety data from the OLE and the comment that the patient continued to see benefit on the WI-NRS score. Is there any magnitude that you can share with us? And do the placebos have any chance to cross over in this trial? I can't remember if that was one of the components. And can you share whether there is any healing evidence?

Jennifer Good, President and CEO

So that was just a brief preview about the efficacy. To clarify, at the conclusion of the double-blind study, everyone transitioned to the drug, allowing the placebos to enter the study. In a future meeting, we will present the efficacy data, which will include skin healing results. We have some images and quality of life data to share. As you can imagine, when people experience consistent relief from itching over the course of a year and continue the treatment, other measurements, as seen in our double-blind study, usually improve as well. However, we decided not to disclose this information at this meeting and plan to address it in a future session.

Annabel Samimy, Analyst

Okay. And are you close to an end of Phase 2 meeting now with the FDA?

Jennifer Good, President and CEO

So as you heard, we've been very busy. So I would say the end of Phase 2 meeting slipped a bit where we plan to request that in the first quarter, but we want to make sure we have a full briefing document ready to go when we do that request, which will also actually drop on questions we may have even related to our cough program because the underlying molecule is the same. So we anticipate requesting a meeting in the first quarter, and it takes roughly 70 days to get a meeting from there.

Annabel Samimy, Analyst

Okay. Great. Thank you.

Jennifer Good, President and CEO

Yeah. Thank you, Annabel.

Operator, Operator

The next question comes from Rohan Mathur from Oppenheimer. Please go ahead.

Rohan Mathur, Analyst

Hey, everyone. Thanks for the update. I'm speaking for Leland Gershell. Just two questions for me. As you see Haduvio advance in IPF chronic cough, how should we think about where Haduvio will fit in the IPF patient treatment regimen? And also, could you maybe remind us if there are any differences between the results in moderate versus severe cough observed in the CANAL trial? And if so, did these data points more likely benefit in moderate and severe cough in refractory chronic cough? Thanks.

Jennifer Good, President and CEO

Yes. So I'll take the first part. David, you want to comment on the second part?

David Clark, Chief Medical Officer

Sure.

Jennifer Good, President and CEO

The treatment regimen is quite interesting. Over the last summer, we conducted extensive research involving patients, healthcare providers, and insurers to address this specific issue. Antifibrotics can be difficult for patients, as many discontinue treatment early due to gastrointestinal side effects. Additionally, patients often struggle to recognize that their progression is slower. Although it's been demonstrated that these treatments extend life, there is still a decline in health, making it challenging for patients to identify that their decline is at a slower rate. Many investigators noted that the dramatic response observed in our trial may lead healthcare providers to begin treatment with our drug, helping patients feel better and cough less. This initial success might increase the likelihood of keeping patients on the antifibrotic. Coughing is a persistent symptom in this disease from the start until the end, so our treatment is expected to be used early and continued throughout the disease's progression. I’ll let David explain the cough counts and why we believe it could be effective for both moderate and severe cases.

David Clark, Chief Medical Officer

Happy to do that. So in the CANAL study, in the IPF cough subjects, what we basically looked at post-hoc analysis looking at those baseline cough frequency affect the efficacy signal and there was not a relationship. So even those subjects who fell into the lower baseline cough frequencies had the same efficacy signal as the higher baseline cough frequency subjects. That was one of the rationales when we were looking at the enrichment strategy that we've just disclosed for the RCC RIVER study, why we're going for the 1:1 enrichment, so that we can, in essence, assess both the moderate cough frequency population of 10 to 19 and the high cough frequency that are being focused on with the P2X3 programs equally. We really want to get a good look. And that lack of baseline cough frequency to efficacy effect in CANAL, we think, is supportive of that approach.

Jennifer Good, President and CEO

And we think because the drug works centrally at the brainstem, which mediates coughing and breathing, that it really should work across cough counts as long as you get to some minimum level where there's not so much variance.

Rohan Mathur, Analyst

Thanks so much.

Jennifer Good, President and CEO

Thank you, Rohan.

Operator, Operator

The next question comes from Thomas Smith of Leerink Partners. Please go ahead. Hello, Thomas. Are you there? The next question comes from Sean Kim of JonesTrading. Please go ahead.

Sean Kim, Analyst

Hi. Thank you for taking my questions. I guess the first question that I have is on the RCC trial. So given that you are stratifying for moderate versus severe, just curious to hear the potential statistical plan for those two groups, whether you're going to be seeking statistical significance in moderate and also severe individually and also combined. And beyond the statistical significance, what do you think will be clinically meaningful reduction, especially for the moderate group? Thank you.

Jennifer Good, President and CEO

Yes. David?

David Clark, Chief Medical Officer

Thank you for your question. With the completion of the 60 subjects in the RIVER study, we have targeted a 45% treatment effect using nalbuphine. This represents a 25% improvement over the placebo effect we anticipate to be around 20% in the study. This estimate is for the total group of 60 subjects, and we consider it a conservative approach. We observed a much higher separation from placebo, even doubling that in the CANAL study within the IPF population. Thus, we feel our estimates are prudent. Should we achieve a treatment effect exceeding 25% compared to placebo, we would have 80% power in both subgroups of approximately 30 subjects each. Does that answer your question?

Sean Kim, Analyst

Yeah, definitely.

Jennifer Good, President and CEO

And David he also asked about clinical meaningfulness, what was defined as clinical meaningfulness.

David Clark, Chief Medical Officer

Yes. Experts generally agree that a reduction in cough frequency of 20% to 30% is clinically significant. This is one of the reasons we designed the study to involve 60 subjects and to detect a 25% effect size, which is considered clinically relevant for patients according to field experts.

Sean Kim, Analyst

Okay. Great. Thank you very much.

Jennifer Good, President and CEO

Thank you, Sean.

Operator, Operator

The next question comes from Serge Belanger from Needham & Company. Please go ahead.

Serge Belanger, Analyst

Hi. Good afternoon. Thanks for taking the questions. I have two. I guess first, on the cough program. Can you maybe talk about the pathology differences between IPF cough and refractory chronic cough and whether you think Haduvio's mechanism of action to be more effective in one disease or another? And then on the PN program, just curious if you've had any discussions about partnering and how you would describe the level of interest for that program. Thanks.

Jennifer Good, President and CEO

David, why don't you take the first one? I'll take the second one.

David Clark, Chief Medical Officer

Yes. No, it's a really important question. So cough hypersensitivity is a key driver in both IPF and refractory chronic cough, as you know. So there's a similarity in terms of underlying what is driving both of these conditions even though the pathophysiological initiation is different in these two conditions. But it leads to the same sort of degree of cough hypersensitivity. I mean our key differentiation factor, as Jennifer talked about during her presentation that you've heard from us before, is the key here. So we've got peripheral activity, which is good. We also have the central activity, which differentiates us. And in essence, it's that activity suppressing modulary, so brain basal cough reflex center and the cerebral, the higher level cerebral control of it. That is the key differentiation so that, in essence, we believe that central activity and its ability to be independent of what the triggering mechanism is going to drive effects in both of these indications and other cough indications.

Jennifer Good, President and CEO

Thank you, Serge, for the PN partnering question. Yes, we continue to be in touch with parties interested. Our colleague Farrell was off at BIO-Europe this week, continuing those discussions. So we're clear on where the interest lies here, who's interested. As we've always said, we would like to get through the FDA meeting and be clear about the path forward and what's left, and then we'll make decisions at that time about whether we license the drug or not at that time. So yes good interest still.

Serge Belanger, Analyst

Thank you.

Jennifer Good, President and CEO

Thank you.

Operator, Operator

The next question comes from Mayank Mamtani from B. Riley Securities. Please go ahead.

Mayank Mamtani, Analyst

Good afternoon, Team. Thanks for taking my questions. So I appreciate the helpful comments on the RCC landscape. I was just curious what you might be looking for at the FDA adcom coming up closer to the end of the year or one of the P2X3 inhibitors that you mentioned. And then the second question was on the IND filing, if you could sort of remind us where we are with that process.

Jennifer Good, President and CEO

Yes. So the adcom is a great question. And David, you should add any color. I'm going to watch the whole day. I think it will be really telling what the FDA or how they focus on with gefapixant. As you know, it was a small sort of placebo-adjusted change, but they did have statistical significance. They were required to go back and do some work. So my expectations are the drug likely gets approved. Merck is certainly putting a lot of resources behind getting ready to launch it. But I think we'll be watching it just to learn sort of what the position is, how people view it. I don't know, David, if you have anything else regulatory-wise you're looking for.

David Clark, Chief Medical Officer

No. Similar to what you've said. I mean certainly, I would just add my own personal comment from listening to a lot of experts in this field. I certainly share your view. I hope they get approved because of the medical need in this field.

Jennifer Good, President and CEO

IND, you want to take that one? Where are we with getting an IND open?

David Clark, Chief Medical Officer

So the IND is progressing for the respiratory physiology study. So we would expect to make an announcement on that and timing for that in the near future. But we are on track for having that submitted in the near future.

Mayank Mamtani, Analyst

Got it. And maybe just one quick runway question. If you could clarify if that assumes any incremental spend on CN or any cash inflow you may have from a prudential partnership discussion?

Lisa Delfini, Chief Financial Officer

No. The cash runway includes our existing cash. So no additional cash influx assumed or inflow.

Mayank Mamtani, Analyst

Okay. Thanks for that clarification. Appreciate you taking my question.

Jennifer Good, President and CEO

Yeah. Thank you, Mayank.

Operator, Operator

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

Jennifer Good, President and CEO

We would like to thank everybody for participating in today's call. We will be attending the Stifel Conference next week and we hope to see some of you there. Thank you.

Operator, Operator

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