Travere Therapeutics, Inc. Q1 FY2021 Earnings Call

Hello and welcome to the Travere Therapeutics First Quarter Financial Results and Corporate Update. My name is Brandon and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions. Please note this conference is being recorded. And I will now turn it over to Chris Cline. You may begin, sir.

Great. Thank you, Brandon. Good afternoon and welcome to Travere Therapeutics first quarter 2021 financial results and corporate update call. Thank you for joining us. I hope you all remain well. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg; Peter Heerma, our Chief Commercial Officer; and our Chief Financial Officer, Laura Clague. Dr. Bill Rote, Senior Vice President of Research and Development will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, May 6, 2021. And Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. Let me now turn the call over to Eric. Eric?

We remain dedicated to the key priorities that we believe will enable us to strengthen our position of leadership in the rare disease community. And the first quarter of this year was another example of our organization's ability to execute. For us this centers on developing our pipeline for potential first-in-class programs targeting rare diseases that have significant unmet need. Earlier this year, the Everylife Foundation published the national economic burden of rare disease study. The study found that on average it takes approximately 6.3 years for a person living with a rare disease to find a diagnosis and that patients typically see upwards of 17 specialists along their diagnostic journey. Overall the study estimated that the direct medical costs associated with rare diseases in the U.S. was more than $400 billion in 2019. This is especially relevant given the challenges the rare nephrology community faces due to the limited innovation over the past few decades for diseases like FSGS and IgA nephropathy. For example, FSGS is considered to have one of the worst prognoses among primary glomerular diseases. It is estimated that more than 50% of FSGS patients with persistent nephrotic proteinuria will reach end-stage kidney disease within 10 years. This translates to over 2,000 people each year reaching FSGS-related end-stage kidney disease in the U.S. Patients today have a long diagnostic journey, experience progressive loss of kidney function and become dependent upon transplant and dialysis. This is why we have great urgency in pursuing our goal of developing sparsentan to become a new treatment standard for FSGS and IgA nephropathy if approved. We remain encouraged by the interim proteinuria data that we reported from the DUPLEX Study in February. The data showed that treatment with sparsentan resulted in a 60% greater relative likelihood of achieving FPRE when compared to irbesartan. The data also showed that sparsentan has been generally well-tolerated and overall the safety profile between treatment groups in the study at the time of the analysis were generally comparable, which is encouraging. We are in the process of engaging with regulatory agents to discuss potential accelerated approval submissions for FSGS. As such, we will not be in a position to provide a regulatory update today, but remain on track to do so as planned before the end of the first half of the year. In parallel, our PROTECT Study of sparsentan in IgA nephropathy continues to advance and is nearing completion of enrollment. The study continues to receive broad support from the nephrology community and from patients and their families. Importantly, we remain on track for a topline readout from the interim proteinuria assessment in the third quarter of this year. And we look to the data from PROTECT we remain encouraged by the consistency with which sparsentan has demonstrated its ability to meaningfully reduce proteinuria throughout its development. We also continue to see additional trial-level analyses published in this space specifically in IgA nephropathy that clearly link the benefit of proteinuria reduction with beneficial outcomes in eGFR. Importantly these are consistent with how we have designed our PROTECT study and we are looking forward to those results coming up soon. We also continue to be excited about pegtibatinase, the new nonproprietary name for our TVT-058 molecule in development for classical homocystinuria or HCU. There are no approved treatments that specifically address the underlying genetic cause of HCU. The literature suggests that without control of HCU approximately 25% of patients by age 16 and 50% of patients by age 29 have thromboembolism, which can lead to heart attack and stroke. Available treatments are often inadequate and patients also face challenges with compliance and adhering to a difficult low-protein diet especially as they age. So we believe that there is a meaningful opportunity to help the more than 7,000 patients estimated to be living with classical HCU in the U.S. and Europe and in need of an effective treatment option. Our team is working with investigators and patients to advance the ongoing Phase 1/2 study and we continue to be encouraged by the potential to ultimately make pegtibatinase the first disease-modifying therapy for classical homocystinuria. We look forward to providing additional updates on the program later this year. Our leadership position in the rare disease community is also built upon our ability to consistently deliver our approved therapies to patients. In the first quarter, we experienced some challenges in new patient referrals from the ongoing pandemic but our commercial organization continued to deliver and the underlying strength of our business remains. Importantly, we have maintained consistent access and support for our approved treatments through the challenges over the last year. And while we had a slower than anticipated start for new patient starts in January and February as a result of the resurgence of COVID in the fall, we did see new patient referrals meaningfully increase in March and through April. This provides us with the confidence that we can achieve our full year guidance of mid-single-digit growth and ultimately draw upon our expertise and resilience to be successful in delivering sparsentan if approved. Let me now turn the call over to Noah for updates from the pipeline.

Thank you, Eric, and good afternoon, everyone. We continue to be encouraged by our engagement with the nephrology community, as we work towards the goal of developing sparsentan as a new treatment standard for FSGS and IgA nephropathy if approved. As Eric referenced earlier, there is a clear recognition that FSGS is a leading cause of end-stage kidney disease and subsequent kidney failure. Unfortunately, the incidence and prevalence of FSGS is believed to be on the rise. And there are no approved medicines indicated for this disorder. As a result, patients living with FSGS often require aggressive treatment options, such as immune suppressive therapy, dialysis and/or transplantation. Even if these treatments are successful, they come with challenges for people to go about daily living. This significant unmet need provides us with a sense of urgency each day, as we continue to advance our program. Following the announcement of the interim results from the ongoing pivotal DUPLEX Study of sparsentan in FSGS, our medical team has continued to receive broad support from the nephrology and advocacy communities. As we previously mentioned, sustained proteinuria reduction is recognized as a primary treatment goal among nephrologists in managing FSGS. This is driven by the well-accepted link among the nephrology community that lowering proteinuria results in improved kidney outcomes in this population. We are at the forefront of development with the first pivotal study demonstrating a meaningful reduction in proteinuria compared to currently available treatments. If approved, we believe that sparsentan can become an important new treatment option that physicians can use as the base of their treatment paradigm. As Eric outlined earlier, we are in the process of discussing our plans to pursue accelerated approval submissions for FSGS with regulators. And we continue to expect that we'll be in a position to provide an update on our regulatory pathway before the end of the first half of the year as planned. While we reached an important milestone with the DUPLEX Study, achieving its interim proteinuria endpoint, we still need to complete the confirmatory phase of the study. Our blinded DUPLEX team continues to engage sites and investigators to ensure patient retention and maintain high-quality trial conduct throughout the two-year eGFR endpoint of the study. I am very pleased with the progress of the study thus far. And we remain on track for top-line data from the confirmatory endpoint in the first half of 2023. Following the interim results from DUPLEX, enthusiasm amongst key opinion leaders continues for the upcoming readout of the Phase 3 PROTECT Study of sparsentan in IgA nephropathy. Much like FSGS, IgA nephropathy is also a leading cause of end-stage kidney disease. Notably, it is estimated to affect between 250,000 and 350,000 people in the U.S. and Europe combined. Similar to FSGS, inflammation, fibrosis and proteinuria play key roles in IgA nephropathy. Sparsentan, simultaneously and selectively, blocks the endothelin and angiotensin receptors, the areas believed to be responsible for the inflammation, fibrosis, and proteinuria in IgA nephropathy. Importantly, pre-clinical models of sparsentan have consistently shown the ability to prevent glomerular sclerosis and mesangial cell proliferation and reduce proteinuria in IgA nephropathy. And the importance of proteinuria as a treatment target, and its correlation to eGFR, continues to strengthen in IgA nephropathy as well. In IgAN, it has been well-established that the higher proteinuria one has at baseline generally translates to a faster progression of disease. And that reducing proteinuria is associated with improved outcomes. In a recent publication, from Dr. Inker, at Tufts University, amongst others, further strengthened the link between early reductions in proteinuria and effects on eGFR slope in IgA nephropathy. The analysis evaluated 12 studies of multiple interventions and found the treatment effects on proteinuria accurately predicted treatment effects on eGFR slope. Specifically, the publication cited that an observed treatment effect of approximately 30% reduction in proteinuria would confirm at least a 90% probability for treatment benefit in slope of eGFR at two years. These findings are consistent with the design of our PROTECT Study. PROTECT is also similar in many ways to the DUPLEX Study but there are some notable differences between the two. PROTECT enrolls patients with one gram per gram or more of proteinuria per day, compared to DUPLEX which included those with 1.5 or more. While one gram per gram in IgA nephropathy is progressive in nature, these values reflect the fact that FSGS tends to be a more heavily proteinuric disease. All patients are coming into the PROTECT Study on max dose ACE/ARB therapy and there is no wash out required for randomization. And finally, as the interim analysis in DUPLEX, we measured FPRE which is a combined endpoint that requires the patients to meet both a threshold of greater than 40% reduction of proteinuria from baseline and to get below 1.5 grams per gram of proteinuria per day. PROTECT is designed with an interim assessment of relative percent reduction of proteinuria after 36 weeks of treatment. The study is powered to show a 30% relative reduction in proteinuria for sparsentan versus irbesartan. A treatment effect of 30% will be expected to confer benefit on eGFR compared to irbesartan over two years, consistent with the comprehensive publications from trial-level analyses in IgA nephropathy to-date. Of note, we are on track to report top-line data from the interim proteinuria analysis in the third quarter this year. Enrollment in PROTECT remains strong. We recently closed screening in the study, and anticipate randomizing the last patient in the near future. Elsewhere in the pipeline, we have successfully completed the integration of the pegtibatinase program for HCU. As Eric outlined earlier, this is the newly assigned nonproprietary name for our TVT-058 molecule that we acquired late last year. Our optimism to potentially develop and deliver the first potential disease-modifying therapy for HCU continues to grow, as we spend more time with the program. We have been fortunate to engage directly with the HCU community and investigators. And we look forward to integrating their insights to optimize the program as we move forward. The Phase 1/2 dose escalation study to assess the safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects of pegtibatinase continues to advance. We have worked through some COVID-related challenges with the pegtibatinase program such as opening new sites, but we now have one site to enrollment of the final patient in the highest cohort that is currently planned. Assuming we remain on schedule, we will expect this to provide us with an initial look at how dosing and safety are progressing in the study later this year. This should provide us with the ability to determine if we have identified the optimal dose cohort or if the program could benefit from an additional cohort. In parallel, we continue to enhance the ongoing natural history study. We expect this to be instrumental in gaining a deeper understanding of the progression of HCU and to establishing the regulatory pathway for the clinical program. We anticipate beginning our dialogue with regulators for HCU later this year and look forward to providing additional insights as they become available. Overall, I continue to be very pleased with our clinical efforts and our progress in pursuing our mission of identifying, developing, and delivering life changing therapies to people with rare diseases. I’ll now turn the call over to Peter for the commercial update.

Thank you, Noah. Our team has begun the year with great motivation to deliver our approved therapies and to prepare for the potential futures for central launches. The commercial organization has performed well through a challenging period and has provided a solid foundation for us to build upon throughout 2021. During the first quarter, we saw new patients initiate therapy for all three of our approved products. However, COVID-19 related dynamics resulted in flat year-over-year net product sales performance. At the onset of the pandemic in the first quarter of last year, we experienced increased demands from patients who have product performance. This is over in a revenue above expectations of approximately $1.5 million to $2 million in the first quarter of last year. As expected, this did not mature in the start of this year. Another important dynamic is a cumulative effect that COVID-19 has had from patients visiting their physicians. And surprisingly, when COVID-19 cases accelerated in the fall and in the beginning of 2021, we did see fewer patient referrals for our approved products. This industry-wide trend has impacted our January and February demand and created a modestly slower-than-expected start to the year. That said, in March we started to see stronger new patient referrals than the first two months of the year. And we have seen that momentum now continue for April. So we are encouraged by the underlying strength that is present. Also during the quarter, we experienced a higher gross to net factor, driven primarily by the insurance resets in the beginning of the New Year. This is expected in our business and consistent with previous years and we anticipate this to return to our normal levels for the remainder of the year. Taking all of this into account, we believe we are in a sound position to identify and treat new patients through the balance of the year. As Eric mentioned before, we continue to expect mid-single-digit growth for our approved products in 2021. We are also continuing our work to prepare for launches in FSGS and IgA nephropathy if sparsentan is ultimately approved. We continue to strengthen our understanding of the patient journey and what it will take to provide broad access to therapy. We are continuing to do the foundational work to put the pieces in place to launch a product in a space that has seen limited innovation over the last few decades. We are confident that our established commercial infrastructure ecology, our rare disease expertise and our ongoing insight generation and longstanding preparations will ultimately enable us to be successful in delivering sparsentan to people living with FSGS and IgA nephropathy if approved. I'd like to turn the call over to Laura now for the financial update.

Thank you, Peter. For the first quarter of 2021, we reported net product sales of $47.4 million from our commercial portfolio, which was comparable to the same period in 2020. We reported a GAAP net loss of $53.9 million for the first quarter of 2021. After adjusting for non-cash expenses and income cash, we reported a non-GAAP net loss of $31.2 million for the first quarter of 2021. On a GAAP basis R&D expenses were $47.9 million for the first quarter of 2021. The increase compared to 2020 is largely attributable to increased patient enrollment in the ongoing pivotal DUPLEX and PROTECT studies of sparsentan as well as the integration and advancement of the pegtibatinase program in classical HCU. On an adjusted basis R&D expenses were $44.7 million for the first quarter of 2021. Relevant non-cash expenses for the first quarter included $3.3 million of stock-based compensation and amortization. On a GAAP basis, selling, general and administrative expenses for the first quarter were $36.8 million. The increase over the same period in 2020 is largely attributable to increased compensation expense to support the growth of our organization and initial investment in launch preparation activities. On an adjusted basis, SG&A expenses for the first quarter were $26.3 million. Significant non-cash adjustments for the quarter consisted of $10.5 million in stock-based compensation and depreciation and amortization. Looking ahead, we expect our operating expenses to increase modestly from Q1 levels. This may be uneven quarter-to-quarter but is expected to occur throughout the balance of the year as we continue to support the ongoing pivotal DUPLEX and PROTECT studies of sparsentan, which will advance as planned to their respective confirmatory two-year endpoints. It also accounts for investing in the success of the pegtibatinase program in classical HCU and preparing our organization for potential commercial launches. Our financial foundation to support this activity remains strong. We ended the first quarter with $520.9 million in cash and cash equivalents. Notwithstanding additional business development, this total cash balance is expected to support our current operations beyond the next two years. I will now hand the call back over to Eric for his closing comments.

Thank you, Laura. Execution remains a core strength for our organization and I would like to thank all of our team members and partners for their continued commitment to our mission. We have started off the year well. Our performance is in large part driven by the sense of urgency that is created by listening to patients' perspectives and the clear need for new treatment options. We will channel this as we continue our work with leaders in the rare nephrology community to break new ground in the pursuit of bringing the first innovation in decades to people living with FSGS and IgA nephropathy. And it will continue to drive our efforts to further develop and deliver the potential first disease-modifying therapy for classical HCU. Let me now turn the call over to Chris for Q&A. Chris?

Great. Thanks, Eric. Brandon, can we please go ahead and open up the line for Q&A?

Yes. Thank you, sir. We will now begin the question-and-answer session. And from SVB Leerink we have Joseph Schwartz. Please go ahead.

All right. Thank you so much for all the insightful commentary and for taking my questions. I guess my first one is just – you referenced a lot of the continuing literature that supports the use of your analysis that you'll be doing in PROTECT in IgA nephropathy. And I know you worked really hard to hammer out a variation on that in FSGS years ago with the FDA. So I'm just wondering just given it seems like there is a continuous string of surprises from the agency due to various reasons, such as personnel shifts or maybe the same people looking at things differently now than years ago, and some unknown reasons granted. I'm wondering if you could just characterize for us how much commonality is there between like the personnel that you're dealing with now and how they might look at things versus when you establish the analysis plan in FSGS? Thanks for hearing my long question.

Thanks, Joe. Very clear question. And I'll have a few comments and then I'll ask Bill to provide further information. So I'd say that overall, as we look at our programs how they were designed years ago and where we are today in a very innovative trial design looking at proteinuria 36 weeks and eGFR in the longer-term over two years, the literature to support that link has only grown. And as you mentioned, certainly, so for IgA nephropathy with some of the recent analyses. And I think that FDA certainly recognizes that; I don't want to speak for any regulators, but we believe they understand on top of the literature. Bill, do you want to provide further comments on how things have evolved with the agency from your perspective?

Certainly, and thanks for the question, Joe. I've been on these projects for almost 4.5 years, and the group across the table from us at cardiorenal has been relatively quite consistent. There's been very little change in turnover. We've seen some members in the team be seconded to other areas of the agency for COVID specific tasks, and then return after a period of six to nine months. And the agency in that period shuffled the way they allocated statistical professionals and that resulted in a change in some of the people on the team. But from the medical and leadership positions within the review division, we've been dealing with pretty much the same people the whole way through.

Great. That's super helpful. Thanks for the color. And then you mentioned – actually, Laura, I think that mentioned the starting to build out enhanced commercialization capabilities on top of what you already have. Can you just parametrize that for us both in the US? And then at what point do you think that it might make sense to build outside the US if ever given you don't currently have much of a presence there, but this could be a global brand?

Certainly, our plan for sparsentan is to commercialize in both the US and Europe. The approach we take in Europe is still being evaluated, considering whether to proceed independently or through a partnership. I will ask Peter to discuss the efforts that the team is making to prepare for commercialization.

Yes. Thanks, Eric. So to start with the latter part of the question with regards to Europe. So we think the unmet need in Europe is equally high as in the US, but the dynamics in Europe are quite different. So what we are really focusing right now is to get a good understanding of the addressable patient population in Europe as well as what is the burden of disease and what does it take what is the requirement to gain approval. And we're making the disciplined investments right now and I think we are quite pleased with the progress. And as Eric said, we haven't made a public statement on if we will commercialize ourselves. With regards to the first part of your question what are we doing from a commercialization perspective. Well last year and we gave a little bit of a display of that during our R&D Day. We invest mainly in insight generation, patient journey, addressable patient population and the value framework. And this year we are continuing that looking also on field force sizing certain patients to ultimately say, like what is the field force required. We also look at the distribution model and what is the best way to bring the product to patients as well as educational initiatives both to patients as well as physicians, because FSGS is an underserved disease and I think educational efforts are needed to really gain understanding of the study that we conducted but also FPRE is our endpoint.

Thanks again for insights.

Thanks, Eric.

Hey, guys. Thanks for taking the question. Question is on the DUPLEX Study. Will there be an opportunity to see additional data from that study particularly eGFR? And is this something that there could be periodic updates for or medical conference presentations planned before you were to get an accelerated approval?

So Noah, why don't you take that one with regard to additional data and also any potential presentations?

Yes, that's a great question. In terms of the overall data for DUPLEX, we have had to provide minimal data to protect the study's integrity. We are currently in the two-year confirmatory endpoint phase and understand the interest in seeing more data, but we do not have any plans at this moment to publish further. We are continuing to explore potential opportunities that would not introduce bias and would be acceptable to regulators. We will keep you updated as we progress.

Yes. Thank you, Noah. The only thing that I would say, Greg, in addition is that we have the approach that we're taking with DUPLEX to do exactly what Noah said, which is to maintain the study conduct through to the end and to maintain the study blind, which is of utmost importance to us. I want to share a little bit about how we're doing that and making sure that as we think about additional data, there is no plan for any additional unblinding at this point. And so there's a very small team that is working on those data to support the regulatory filings, but beyond that there is nothing else that we have planned until we complete the studies.

Got it. That makes sense. I have another question. I know it may be a bit early, but if you can't provide specifics, could we discuss the factors you would consider regarding sparsentan's pricing? I'm interested in your thoughts on how you plan to balance the pricing for the value provided to patients with the need for broad access, especially since you've mentioned that it will likely be used in conjunction with other treatments as new therapies are approved. I would like to hear your perspective on this.

Sure. So I think it is too early for us to talk specifically about pricing, but what I can say is that our goal is to make sure that we have broad access to this innovation. So many patients have been waiting and we want to make sure that does not become a barrier for these patients and that includes the potential to combine with other therapies. And we know that that may be a concern for payers. But I can say that Peter and his team are very much focused on making sure as he mentioned earlier on the value framework for access. Peter, anything else that you'd want to add?

I think you mentioned it at all. I think it's good to take a step back and say like if you think about FSGS disease it comprises about 125,000 patients in the US and the costs associated is about $50 billion. So these patients are among the most expensive patients for society. And if you look then at FSGS and IgA nephropathy they are almost fast that of progression and they are disproportionately represented in that end-stage kidney disease patient population. I think there's a good base in that respect for to come up with like a solid value proposition and that's the work that we're doing right now.

Great. Super helpful. Thanks for taking the question.

Thanks, Greg.

Yes. Hi. This is Justin on for Carter. Thanks for taking our questions and congrats on all the progress. Just a couple from us on PROTECT. Can you remind us of the data and the decision-making process that inform the selection of the 400 milligram dose? Sort of what gives you confidence that that's the dose level that will be sufficient to drive a benefit? And then just to confirm given how quickly you had enrolled should we still expect the interim read to be around 280 patients, or could it possibly exceed that number?

Justin, thanks for the questions. And I'll answer the second one and that is the planned analysis is when the 280th patient gets the 36-week visit. And because we've got complete enrollment it will be plus or minus 280 depending on what enrollment was at that time. And as I mentioned we're on track to be able to provide that analysis in the third quarter of this year. And I'll turn it over to Bill to talk about dosing in PROTECT.

Thanks for the question, Justin. We believe that the data from DUET show us and also now from DUPLEX that 800 milligrams is the right dose for the FSGS population. As you recall both 400 milligrams and 800 milligrams were used in the DUET study and they had largely overlapping results. When we looked at the PK/PD curves we also saw a high degree of overlap. Essentially, the 400 and the 800 are both at the top of a sigmoidal dose response curve. So while you have a larger numeric difference between the two, the effective difference isn't doubling between 400 and 800. Specifically to IgA nephropathy and FSGS, they are different diseases and they present differently. Starting with FSGS, it's a highly proteinuric disease and has a high degree of nephrotic proteinuria. With that comes a loss of albumin and other plasma proteins and sparsentan is highly protein bound in circulation. So when you lose protein, you're also losing sparsentan. The 800 milligram dose in FSGS patients is designed to compensate for that potential loss. Contrast that to IgA nephropathy patients where proteinuria is lower and the rate of nephrotic proteinuria is much less. And so we don't see the need to have a higher dose there to compensate for that event. That along with our modeling and where those two doses fall on the sigmoidal dose response curve give us confidence that 400 is the right dose for the IgA nephropathy patients.

Okay. Thank you so much for your color there.

Hi, everyone. Congrats on the progress and thanks for taking my questions. I know you mentioned you're not providing a regulatory update, but I'm wondering if you can clarify if you had an initial pre-NDA meeting and you're now in a back and forth dialogue, or is the ongoing engagement related to preparation ahead of a formal meeting scheduled for 2Q? And then as a follow-up can you comment on potential scenarios for outcomes from the regulatory engagement?

Thank you for your questions, Maury. Our usual practice is to avoid sharing specific dates for our regulatory interactions. However, as we have mentioned before, we are currently engaging with both the EMA and FDA and expect to provide an update on those discussions by the end of this quarter. Regarding your second question about potential scenarios, I must say we're not in a position to speculate on that just yet. We will provide updates on these interactions and any business implications later this quarter.

Fair enough. Understood. Okay. And then maybe one other question just on IgAN and PROTECT. You mentioned it's close to fully enrolled. Can you comment on baseline proteinuria range or anything else on baseline characteristics and whether it's in line with expectations? And if you can remind me if you expect greater proteinuria improvement in patients with higher proteinuria at baseline, or how do you think about that in IgAN?

Sure. Noah, would you like to take that one?

Sure. Great question, Maury. Our approach is mindful that the PROTECT Study is currently blinded. Therefore, any analysis we are conducting involves blinded evaluations for both groups. We are ensuring that the data we are analyzing is of high quality and aligns with our expectations for baseline factors. That's about all I can share regarding the baseline characteristics. Was there another aspect of your question, Maury?

Yes. Just your expectations for patients with higher proteinuria at baseline, do you expect them to have a greater magnitude of benefit or improvement?

Yes, I would like to add that in IgAN, you would expect a slightly lower level of proteinuria initially. Regarding the overall reduction, we observed a decrease in proteinuria in both DUET and DUPLEX studies, both above and below the product range. However, the reduction was somewhat less significant in the higher group compared to the lower group, which aligns with our expectations. It's important to note that in IgAN, we are dealing with a population that has less proteinuria than in FSGS, so the impact may not be as significant as we initially predicted. We will have more definitive data in August to clarify this.

Thanks very much for taking the question. Apologies if this was already asked, but I know you mentioned the Inker publication. I just wanted to circle back with one on PROTECT. So, one of the limitations mentioned in the Inker paper was the heterogeneity of the trial data that they examined. And so, I was just wondering if you could talk to how you've tried to address that with the PROTECT Study and also maybe your assumptions around statistical powering. Thanks.

Thank you, Laura. Bill, I'll ask you to take this one.

The challenge with the Inker paper is common in the rare disease community, where there are limited clinical trials available. In a cardiovascular analysis, one might draw from 75 studies and narrow it down to 50 that are significant. For the Inker publication, they aggregated all treatment and interventional studies on IgA nephropathy. If they excluded certain studies due to various differences, they would end up with too small a sample size. Consequently, the data they worked with was quite diverse. They acknowledged this diversity as a potential weakness in their analysis, which also leads to greater uncertainty when interpreting correlations and fitting a regression line. However, when considering the overall signal and the consistent findings from various analyses, including our internal work with registry data, it's evident that reductions in proteinuria correlate with the preservation of renal function. Therefore, I don't view the heterogeneity mentioned in the Inker paper as a significant concern. While it accurately reflects their input data, the overall message is quite clear.

And Bill, to the question around powering?

We are powered at 90% to demonstrate a 30% relative reduction in proteinuria based on the interim analysis endpoint. We believe this represents a significant clinical reduction in proteinuria, which importantly suggests a meaningful reduction in eGFR loss or maintenance of eGFR slope. This is how our study is powered. Additionally, regarding your first question about heterogeneity, our study includes specific criteria designed to manage heterogeneity at the entry point, allowing us to achieve a more uniform patient group with similar baseline characteristics.

That's great. Noah, is there anything else that you wanted to add on that one?

Yes. I think I agree with everything that Bill said, and I think when you're in the setting of a clinical trial randomized Phase 3 study, we have the opportunity here to take patients with specific inclusion/exclusion criteria. So having UPC greater than one, enriches us on doing things like having an irbesartan standardized control is critical to ensuring that we have a stringent interpretation of the results. In that studies the backgrounds and standards of care are different and they're variable. So I think by providing that standard of care, standard irbesartan dose for every patient and by enriching again with UPC and getting a population, it's a little more uniform. I think we feel like we're in pretty good shape. If you compare across the DUPLEX, we felt we were going into after shift it was a much more diverse population, heterogeneous population. And we were able to show the similar numbers in effect. And so I think the size of the study is also important to point out having 380 patients gives us that ability. A lot of those studies that Bill cited are really smaller studies. And so I think those are some of the keys.

Hi everyone. Thanks for taking my question. I was hoping that you could go over your expectations for what the FDA is looking for just during these interactions. Back when you or the company had the end of Phase 2 meeting and the FDA ended up requesting a Phase 3 study they confirmed that proteinuria reduction is potentially approvable endpoint, but they wanted a longer treatment duration. What drove that? Are there other aspects of the interim data that they are specifically interested in like safety or eGFR turn?

Do, let me take this one and I'll ask Bill to provide any further comment. The expectation that we have for a regulatory submission on FSGS is a clinically meaningful statistically significant reduction in proteinuria which we provided in February. As we mentioned, the confirmatory endpoint will be on eGFR. And certainly, we believe that they're going to be looking at safety and the totality of evidence. And I think because in many ways we're charting a new path in the use of proteinuria in this trial design, this is why very much we're engaging with them and sharing with them the data so that we can align on what they need to see for accelerated approval. I think at this point that's as much as I would be able to say in terms of expectations, but I'll ask Bill to provide anything further from his perspective.

Eric, I agree with everything that you say. I think the only color that I would add to that is in this situation with accelerated approval being based off of the surrogate endpoint in addition to the totality of the data, the agency is going to need to see or want to see enough evidence that provides a clear picture of the prediction of reduction in proteinuria to a preservation of eGFR that would be significant at the two year endpoint. And that's part of why we're currently engaged with the agency making sure that the submission that we put forward meets their needs.

Could you provide some additional color on the quarter-over-quarter step-up in R&D expenses? Is it broadly from all the clinical studies, or is it primarily from the addition of the HCU program? Hi, Do. Yeah, really it's a combination of all of that. So yes, you're correct. As far as the pegtibatinase program this is the first full quarter that we've had that program here at Travere. And then in addition, it's the continuing study progression for DUPLEX and PROTECT. And just recall that those studies continue on to their eGFR endpoints in 2022. So there's continued monitoring assessment so that requires continued investment. So it is across those programs that you mentioned.

Thanks, Do.

Great. Thank you, Brandon, and thank you all for joining us today. This concludes our call for the first quarter. We look forward to providing you updates on our progress in the near future. Thank you and have a great rest of the week.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.