Earnings Call Transcript - TRVI Q3 2021

Operator, Operator

Good afternoon, and welcome to the Trevi Therapeutics Third Quarter 2021 Earnings Conference Call. At this time, all participants will be in listen-only mode. Please note this event may be recorded. Various remarks the 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 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 it 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. Please go ahead.

Jennifer Good, President and CEO

Good afternoon, and welcome to our third quarter 2021 earnings call and business update. As mentioned, joining me today on this call are Lisa Delfini, our CFO; Bill Forbes, our Chief Development Officer. Lisa and I have some prepared remarks, then the three of us will be available for questions at the end. As we head into the end of the year, we are excited to share the progress we've made on enrollment for both of our trials. I will give you a bit more color on the progress and how we're preparing for the next stages of development. Our most advanced program in clinical development is in severe chronic pruritus in 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. There are no approved therapies for this indication. Prurigo nodularis is a chronic neuro-inflammatory disease, and because of the repeated scratching, patients are stuck in a hard-to-break itch-scratch cycle. Due to the scratching, the papules and nodules continue to develop and worsen across the patient's body. We 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. We believe in the potential and utility of our mechanism of action in this indication, along with the benefit of being an oral candidate in late-phase development. This positions us with an important competitive advantage and a potentially valuable option for patients in a space where the majority of compounds in development are biologics. We are currently conducting a Phase 2b/3 trial in this condition which we call our PRISM trial. The PRISM trial is recruiting in both the U.S. and Europe, and today we have more than 60 sites activated. The primary endpoint in this study is a responder analysis defined as a four-point reduction from baseline, as measured by the Worst Itch Numerical Rating Scale. The blinded study includes 14 weeks of dosing. We currently have randomized approximately 90% of the planned 360 subjects and are excited to be getting to the end of enrollment and closer to top-line data. The percentage of subjects continuing into the open-label extension remains high at also approximately 90%. 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 treating the symptomatic endpoint of 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 are taking photographs at certain sites in the study and continue to hear good success anecdotes from patients on long-term therapy who we know are on the drug and our open-label extension. There is also an investigator-initiated study in Germany, which is tracking the return of itch for subjects who have completed one year of therapy on Haduvio. The investigators are studying subjects for a year once they complete therapy for the return of itch, the use of concomitant medications, and the overall health of the skin. This will provide valuable data for clinicians about the disruption of the itch-scratch cycle, regional healing, and how long those benefits last. Turning now to our second clinical program, which is in chronic cough in 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 up to 70% 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. Chronic cough in 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. Both are markets we will consider for further clinical development with positive data in IPF cough. We are conducting a Phase 2 double-blind crossover study with a 14-day washout period between each three-week treatment arm. The primary endpoint assessment is the mean percentage 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 U.K., and because of the lung impairment associated with this disease, this trial has been more significantly impacted by COVID-19 restrictions than our PN study. However, the restrictions were eased over the summer and continue that way. This study is designed to enroll approximately 60 subjects, with a goal of getting 44 completed. We have reopened 10 of our targeted 15 sites in the U.K., and we are pleased to see those sites screening and enrolling subjects. We have seen steady activity which has continued into November. We will continue to work closely with our remaining qualified sites in the U.K. to get them up and enrolling as well. Top-line data for this study is expected in the first half of next year. We are coming upon a very important period of clinical data for the company. Over the next few months, we believe we will complete enrollment in both the PN and IPF cough trials and report data on both. These indications are large market opportunities, and the potential for indication expansion in both pruritus and chronic cough is significant. In addition to the focus on completing our trials, the team has also been active in preparing for the next stage of development for both of these indications, as well as evaluating other potential indications for future development. We are also actively publishing our data and participating in conferences. In the past few months, we took part in Pulmonary Fibrosis Awareness Month during September alongside Action for Pulmonary Fibrosis. We also attended Fall Clinical in Las Vegas, the 11th World Congress on Itch, which took place virtually, and Bill spoke at a panel discussion. We were active in the Bio Europe conference. So it has been a busy time at Trevi. That's all I have on the business update for the quarter. I will now ask Lisa to review our financial results and then we will open it up for questions.

Lisa Delfini, Chief Financial Officer

Thank you, Jennifer and good afternoon everyone. As a reminder, the full financial results for the three and nine months ended September 30, 2021 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 2021, we reported a net loss of $7.3 million compared to a net loss of $7.4 million for the same quarter of 2020. R&D expenses were $4.7 million during the third quarter of 2021 compared to $4.8 million in the same period of 2020. This was primarily due to decreased purchases of clinical trial supplies as we near the end of our trials, partially offset by an increase in personnel-related expenses as a result of an increase in our R&D employee headcount. G&A expenses were $2.2 million during the third quarter of 2021, compared to $2.4 million in the same period of 2020. This was primarily due to decreased market research costs and lower stock-based compensation expense, partially offset by higher legal and other professional fees. Other expenses also increased by approximately $161,000, representing a full quarter of interest expense on our term loan with SVB which was executed in August of 2020. As of September 30, 2021, our cash and cash equivalents totaled $29.3 million compared to $45 million as of December 31, 2020. Subsequent to the end of the quarter, we raised $14.8 million through the sale of common stock and warrants to both a new investor and NEA, an existing investor who also chose to participate. The proceeds will be used to fund the development of Haduvio and company operations. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A.

Operator, Operator

Today's first question comes from Annabel Samimy with Stifel. Please go ahead.

Nick Rubino, Analyst

This is Nick Rubino on for Annabel, thanks for taking our question. We're just trying to get a sense of expectations for the upcoming PRISM readout. So you've made several adjustments to hopefully improve the PRISM design from Phase 2, is the benchmark the Phase 2 results where you saw a 15% delta in the MITT and a 30% delta in the Completer groups? Or do you have improved expectations for the percent of responders for the four-point reduction? And then just kind of separately, where does LID sit currently? Thank you.

Jennifer Good, President and CEO

Bill, I'll let you take on the PRISM answer and then I'll comment on LID.

Bill Forbes, Chief Development Officer

Hi Nick, this is Bill. Thanks for your questions. We conducted an interim analysis that was performed by an independent statistician. Regarding the sample size, we have estimations on PRISM, but we are not aware of the specific results; however, they indicated a promising conditional power zone as outlined in the protocol. Therefore, we are confident that the study continues to perform as intended. The current PRISM study, as designed and powered, should yield positive results based on that interim analysis. I hope this addresses your question about the difference between the active and placebo groups.

Nick Rubino, Analyst

Yes, that's definitely helpful. I guess, in terms of you provided kind of a Phase 2 look at what we saw. In terms of -

Bill Forbes, Chief Development Officer

Oh, you're referring to the previous study?

Nick Rubino, Analyst

Yes.

Bill Forbes, Chief Development Officer

Yes, in the previous study, there were just over 60 patients split into three treatment groups, while our current study includes 360 patients across two treatment groups. We are confident that we have the statistical power needed to demonstrate a difference between the active treatment and placebo based on those results from the previous study. Right now, it's all about execution. I can share that the centers are eager to complete this study. October was a strong month for them, and screenings in November have been promising as well. We hope to maintain this momentum and reach the analysis phase soon. The study includes a 14-week double-blind period, so we expect to be able to share results sometime in the first half of next year.

Jennifer Good, President and CEO

Great. Nick, that was a crystal ball question we all ask Bill every week. But unfortunately, he doesn't know. But I'm glad you asked it. Your question on LID, it's an indication we still continue to be quite interested in. We've got the IP rights around that. What I would say is we've communicated that we're focused on these two indications. Depending on the data in both, we've looked at other opportunities to expand within pruritus and cough. Also, sort of the opportunity for LID, I think there'll be a good strategy decision based on final results from both trials regarding where we head next and what we can absorb and afford. So I would say it's still on the table, but it will be evaluated against other opportunities in the pruritus and cough space as well.

Operator, Operator

Our next question comes from Rohit Bhasin with Needham & Company. Please go ahead.

Rohit Bhasin, Analyst

This is Robert on for Serge. Thanks for taking my question. What are your thoughts on the recent two picks and Phase 3 results in PN and where do you see that product fitting in the treatment paradigm for PN?

Jennifer Good, President and CEO

Yes, that's a good question. So we looked at the results. I generally try to not comment on others. I think the good news is it's a tough condition. They had statistical significance which is obviously good for the patient. I mean, everybody knows to pick them; it's a good drug they've done great with it. The results weren't so daunting, though, that I think that they're beatable, if you will. So I think that is a good opportunity for us. This is a market that's become pretty biologics and trend. So my own feeling on it, this is a personal opinion, I was glad the drug works, but I was glad it was not overwhelming results either. Because I think that puts us in a really good position as an oral therapy to be in that treatment paradigm. So we obviously have our eye on the ball about how we become step-through therapy to the biologics. But it will depend on our own results and our own label to be able to do that.

Rohit Bhasin, Analyst

And just as a follow-up, was the enrollment in the PRISM trial affected at all by the Dupixent trial?

Jennifer Good, President and CEO

Not so much Dupixent because they had a lot of sites in different countries: China, Russia, and kind of around Europe. We crisscross with them in a couple of sites, so I would not say we were so affected by Dupixent. I think they finished enrollment in their second trial, so they're out of the way. But we did not run into them all that much in the field.

Operator, Operator

Ladies and gentlemen, this concludes your question and answer session. I'd like to turn the conference back over to Jennifer Good for any 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 the subjects who continue to participate in our clinical trials. We will be at several conferences over the next three months, starting with the Stifel Healthcare conference next week. We hope to see you there. Thank you.

Operator, Operator

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may disconnect your lines and have a wonderful day.