Earnings Call Transcript - TRVI Q4 2020

Operator, Operator

Good afternoon, and welcome to the Trevi Therapeutics Year End 2020 Earnings Conference Call. As a reminder, this call may be recorded. Various remarks that management makes during this 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 Risks Factors section of the company's most recent annual report on Form 10-K, which the company filed 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 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 views change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. Participating on today's call from Trevi are Jennifer Good, President and CEO; Chris Seiter, Chief Financial Officer; and Bill Forbes, Chief Development Officer. I would now like to turn the call over to Jennifer. Please go ahead.

Jennifer Good, President and CEO

Good afternoon, and welcome to our fourth quarter and year end 2020 earnings call. Joining me today on the call is Dr. Bill Forbes, Trevi's Chief Development Officer; and Chris Seiter, Trevi's Chief Financial Officer. Bill joined us at the beginning of February with a proven track record of success in developing drugs and getting them approved. Under Bill's leadership at Salix, he led the approval of 12 NDAs. I'm very happy to welcome Bill to the Trevi team, and he is available at the end of the prepared remarks for Q&A. 2020 was a challenging year for all of us on many fronts, but at Trevi, we remained focused on advancing enrollment in our clinical trials. We are motivated as a team to get to data readouts on our two lead indications in pruritus and cough, as we believe that the broad mechanism of action of Haduvio may be applicable to several other adjacent indications. Our lead indications include severe pruritus in prurigo nodularis and chronic cough in idiopathic pulmonary fibrosis, both serious diseases that cause significant quality of life issues for patients. We believe these diseases share common pathophysiology through the mu and kappa receptors, working both centrally and peripherally. Our most advanced program in clinical development is pruritus and prurigo nodularis or PN, which is a serious and debilitating skin disease characterized by papules and nodules on the skin as well as incessant and severe itching. There are currently no approved therapies for this indication. Prurigo nodularis is a chronic disease, and because of the repeated scratching, the papules and nodules spread and continue to worsen. We estimate the global prevalence of PN is approximately 730,000 patients, with 300,000 patients in the US and 430,000 in the rest of the world. We are currently conducting a Phase IIb/III trial in this condition, which we call our PRISM trial. The PRISM trial is recruiting in both the US and Europe, and to date, we have more than 60 sites activated. The primary endpoint in the study is a responder analysis based on the reduction in itch intensity as measured by the worst itch numerical rating scale after 12 weeks of blinded fixed dosing. We currently have randomized approximately 240 of the planned 360 subjects into the trial. Encouragingly, almost all of the subjects that have reached the end of the blinded dosing period have chosen to roll into the open label extension portion of the study, enabling us to get long term safety and efficacy data on these subjects. COVID-19 did negatively impact the enrollment in this trial from December 2020 through mid February 2021. As you likely saw in the news, many European countries were back on lockdown during this timeframe. And in the US, many people were staying home due to COVID rates being so high across the country. Starting in mid February, enrollment began picking up again, and to date, March has been a strong month, and we believe we are poised for continued momentum in this study. So I want to acknowledge the challenging past few months due to the impact of COVID-19 and know that to some extent this will be a headwind we will continue to have to navigate through the end of this study. However, based on feedback we are receiving from the sites and good March activity, we still believe we can complete enrollment in the third quarter of this year and report top line data by year end. We also continue to be active at various virtual dermatology meetings. In mid March, we have four abstracts/posters that were accepted. These included a discussion of the role of mu and kappa opioid receptors in pruritus, as well as posters on the Phase II clinical data in both pruritus and PN and uremic pruritus. Providing clinical evidence that nalbuphine ER may be important in managing chronic pruritus across a broad spectrum of conditions. We also plan to participate in both the American Academy of Dermatology VMX in April and the European Academy of Dermatology and Venereology Spring Symposium in May. We have submitted abstracts for both meetings and are waiting to hear if they have been accepted. Turning now to our second clinical program for chronic cough and idiopathic pulmonary fibrosis or IPF. IPF 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 approximately 70% to 85% of these patients and for which there are no approved therapies. IPF has an estimated worldwide prevalence in excess of 1 million patients. In the US, 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 their quality of life. Cough is considered one of the most bothersome symptoms to patients with this disease. We are conducting a Phase II double-blind crossover study with a 14-day washout period between each three-week treatment arm. The primary endpoint assessment is the main percent change in daytime cough frequency from baseline. The daytime cough frequency is measured by a digital cough monitor between the treatment and placebo arms. This trial is currently being conducted in the UK. And given that this patient group is considered high-risk if they contract COVID due to their lung impairment, this trial has been more impacted by COVID-19 restrictions than our PN study. This trial resumed enrollment over the late summer, but the UK again shut down in early December and issued a shelter-in-place directive to this patient population. Due to these restrictions, enrollment of new subjects was paused again. We understand that these restrictions will begin lifting at the end of this month, and we expect the trial to resume recruiting subjects in the UK in the second quarter of 2021. Additionally, Trevi is seeking regulatory and ethics board approvals to add study sites in Germany. The goal is to potentially accelerate enrollment and reduce the risk inherent with single country recruitment during the pandemic. So in closing, we are focused on completing the enrollment in both clinical trials this year and reporting out the data. These are both serious conditions with no approved therapies, and we are motivated by the stories of patients about how disruptive these diseases are to their lives. I will now hand it over to Chris Seiter, Trevi's Chief Financial Officer, to provide you with a financial update. But before I do that, you may have seen the 8-K we filed this week that Chris will be leaving Trevi in April. In Chris' prior life to becoming a CFO, he spent more than 20 years as an investment banker. So he has decided to take an interesting opportunity at a biotech fund, where he will utilize his skills learned both in banking and in operations. We will miss him for sure, but I wish him well with this next opportunity. With that, Chris, I'll turn it over to you for your final Trevi earnings report.

Chris Seiter, Chief Financial Officer

Great. Thank you, Jennifer. As a reminder, the full financial results for the fourth quarter of 2020 and the year can be found in our press release issued ahead of this call and our 10-K, which is on file with the SEC. For the fourth quarter of 2020, we reported a net loss of $9.5 million compared to a net loss of $6.5 million for the same quarter of 2019. R&D expenses were $6.6 million during the fourth quarter of 2020 compared to $4.8 million in the same period of 2019. The increase was primarily due to increased activity in our Phase IIb/III PRISM trial as well as an increase in expenses related to the purchase of clinical trial supplies. G&A expenses were $2.6 million during the fourth quarter of 2020 compared to $1.9 million in the same period of 2019. The increase is primarily due to an increase in stock-based compensation expenses and an increase in consulting fees. Now turning to the full year results. For the year ended December 31, 2020, we reported a net loss of $32.8 million compared to a net loss of $26.1 million in 2019. R&D expenses were $22.3 million during the full year of 2020 compared to $19.3 million in 2019. The increase was primarily due to increased activity in our Phase IIb/III PRISM trial as well as an increase in expenses related to the purchase of clinical trial supplies. G&A expenses were $10.2 million for the full year of 2020 compared to $7.3 million in 2019. The increase is primarily due to an increase in stock-based compensation expenses, an increase in consulting fees, as well as increased expenses related to being a public company. As of December 31, 2020, our cash and cash equivalents totaled $45 million compared to $57.3 million as of December 31, 2019. Subsequent to the end of 2020, we sold approximately $4.4 million of our common stock through our ATM facility. The current cash position is expected to be sufficient to fund operations into the second quarter of 2022 past the anticipated top-line results from the PRISM trial, which are expected in the fourth quarter of 2021. That is all for our prepared remarks. Now I'll turn the call back over to the operator for Q&A.

Gary Nachman, Analyst

First, my best to you, Chris, and welcome to Bill on joining Trevi. So a couple on PRISM, any additional sites you think you'll need to add in order to complete the study in the third quarter given the COVID headwinds? And I don't know if you want to be specific about that number, Jen, where you are right now? And then follow up, how have the discontinuation rates been, anything out of the ordinary that you're seeing and how are the AEs looking so far I guess, broadly across the entire study?

Jennifer Good, President and CEO

I'll go ahead and let Bill answer that since he's sort of fully at the helm here of the study. Go ahead, Bill.

Bill Forbes, Chief Development Officer

Let me share a few thoughts. First, we anticipated questions about our confidence in meeting the timelines. We're closely monitoring the PRISM trial, and we feel the impact of COVID may be diminishing, especially in Germany where our PRISM study is showing good enrollment. Germany has been a focus due to discussions about potential lockdowns, so we remain cautiously optimistic regarding COVID's impact on these centers. Over the past month, as Jennifer mentioned, we've seen positive activity. We believe we're in a strong position in terms of competition, as some competitors might be exiting, while others are slower to initiate. Our centers are primarily focused on the PRISM study. We continue to ensure that we provide our investigators with the necessary resources and support, and they feel confident about meeting the timelines we’ve set. In response to your question about adding more centers, we are indeed in the process of adding a few high-quality centers. We're being very selective about these additions at this stage, ensuring they can effectively contribute within the time frame we have. Regarding the study disposition, I won’t comment specifically, but I can say that the adverse events we’ve observed are consistent with those from ongoing studies, such as nausea, headaches, dizziness, and somnolence, which are known to be associated with nalbuphine.

Gary Nachman, Analyst

And if I could just squeeze another quick one in. Did you say, Jennifer that I want to make sure I got this, that in chronic coughing, you still think you can have that data by the end of the year as well despite all the challenges there?

Jennifer Good, President and CEO

So we pulled our formal guidance, as you probably remember when COVID hit. We've never put it sort of formally back up again because to be honest, I don't think at any point we've ever felt we sort of made our way through that yet. Internally, we are striving to get this enrolled by year end. It's not a big study. It's up to 60 patients with 44 completers. So we'll see. We'll just keep updating you on that. We didn't sort of put up formal guidance again, but we are striving internally to try to get that done by year end.

Operator, Operator

Our next question comes from Annabel Samimy from Stifel.

Annabel Samimy, Analyst

Congratulations, Chris, on your move. Just a couple of quick ones for me. Just I know you didn't really color on the discontinuation rate, but the strategies that you have put in place to manage that discontinuation rate? Are they at least working the way you expected them to work? And have you been able to maintain patients on treatment in a way that you had expected? And then in terms of those patients going on, what is the longest the patient has been on therapy during that trial? And then separately, in IPF, is there any thought to expanding it to sites outside of Europe? It seems like Europe is pretty tough right now with the lockdowns and the restrictions. Any thoughts to bringing it over here to the US where things are a little bit more open? There have been a few IPF, some more IPF trials that have stopped or have discontinued, so maybe there's more availability here.

Jennifer Good, President and CEO

So I'm going to go ahead and answer this, and you feel free to add color at the end if you want. So Annabel, as you know, we had talked early on about there are various levers built into this around managing discontinuations, which really have to do with education at the site, at the patient level, if things early on up here we'll sort of follow back up on things. I would say all those are active and appear to be working. I mean the hard thing and I think why Bill doesn't want to get into any commenting. It's really hard in a blinded study to know what's going on. But yes, there's nothing there that's overly alarming. I think it's something we always have to manage through. But yes, I think the things we put in place seem to be working. As far as open label, I think your question was what's the longest that we've seen patients on. We have a lot of patients in excess of 50 that have gone through a year of treatment. So there's a nice job of building our safety database. There's a lot of efficacy data there. I think one of Bill's priorities is to get in and start sort of mining that open label data. But we've had really good success with the rollover into the open label and with people continuing on throughout that portion of the study. And as far as moving IPF in the US, we went to the UK because there's very good expertise there. I think that's still the case. So we haven't looked at that at this point. I think we think we can get it done in Europe, and that's still the strategy to try to follow through on that. Bill, anything you want to add to those comments?

Bill Forbes, Chief Development Officer

No, I think you covered it. I mean, obviously, the titration phase, I think, as we look at it. To Jennifer's point, it's blinded. It's hard to really know how these patients are divided between the treatment groups, obviously. But I think we're encouraged by what we're seeing at this point in time as far as how the patients are progressing through the double blind. You get into the open label, and I have had a chance to take a closer look at that data, and that's very encouraging as well. So I mean, obviously, in a blinded study, it's hard to make comments, but I think for the most part, this thing is behaving the way that we expect it to.

Operator, Operator

Our next question comes from the line of Serge Belanger from Needham & Company. I think we're encouraged by the progress of the patients in the double-blind study. Looking at the open-label data more closely is also very encouraging. While it's challenging to comment on a blinded study, it appears that things are progressing as we anticipated.

Serge Belanger, Analyst

A couple of questions on PRISM for me. Well, I guess first, congratulations and good luck to Chris with the new opportunity. For the PRISM trial, I think last time we spoke, you talked about maintaining a monthly enrollment pace of 20 to 30 patients. It sounds like that dipped around the holidays and late in the year due to COVID, but do you think you can get back to those levels as soon as March and going forward? And then second question, with the delays with the IPF trial, does that change how you think about the LID program and whether you would think of advancing it forward? Thanks.

Jennifer Good, President and CEO

So I'm going to let Bill definitely comment on enrollment. I would just say there's 120 subjects left. So trying to get there by Q3, that's roughly 20 sort of over the next six months. So I'll let Bill comment on that. But Bill, let me finish for the lid, and then I'll turn it over to you. So Serge, I think as we've talked about before, when COVID hit particularly, we made the decision here that we're going to bear down on our two lead programs and get to data on those. We still very much are interested in the LID program and have done some good work to get ready for a Phase II program. We've written a protocol. We selected a CRO, but we won't pull the trigger on that study until we actually see data on both of these studies. So still very much interested, but we want to get to data on both these programs. I think mostly because, I mean, you can sort of understand the thinking. We want to basically pursue the best optionality. If the data is strong in PN, we want to make sure whatever we're adding as another indication makes sense with PN. If the data is super strong in IPF cough, we may want to look at other cough indications. So all those things will sort of be laid against each other. So we'll wait until we have that, we know what we've got, and then we'll make those decisions. Bill, I'm going to let you just comment on sort of enrollment and numbers and what he thinks we can achieve.

Bill Forbes, Chief Development Officer

No, I think you're right, Serge, that we are looking at 20 to 30 per month. We feel confident right now with what we're seeing as February wrapped up and then March, of course, seemed to be a very strong month for us. If we can continue this momentum at this point in time, and that's why I made some comments about what we thought of the situation broadly around PRISM when Gary asked his question earlier in the call. So I feel like those are the types of numbers that we're targeting, somewhere in the 20 to 30 range. And obviously, we hope that we can exceed those and we can move forward on this. But we're cautious on this. And as I said, we're looking at a number of things. If we look at the COVID situation, as I said, it seems to be easing itself. And so that's certainly helping quite a bit. And along with all of our initiatives that we're doing at the centers and adding a few centers, I think that we should be able to accomplish those.

Operator, Operator

Thank you. I'm not showing any further questions. I would now like to turn the call back to Jennifer Good for closing remarks.

Jennifer Good, President and CEO

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 of the subjects who continue to participate in our clinical trials during this challenging time. We look forward to continued progress and updating you again in May. Thank you.

Operator, Operator

Thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.