Travere Therapeutics, Inc. Q2 FY2021 Earnings Call

Good afternoon, ladies and gentlemen, and welcome to the Travere Therapeutics Second Quarter 2021 Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Chris Cline. Please go ahead.

Great. Thank you, Jerome. Good afternoon, everyone, and welcome to Travere Therapeutics second quarter 2021 financial results and corporate update call. Thank you for joining us. 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, July 29, 2021. And Travere specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, I’ll now turn the call over to Eric. Eric?

Thank you, Chris, and good afternoon. At the outset of the year, we highlighted the progression of our pipeline as a key priority in order to strengthen our position in the rare disease community. At the heart of this priority is an organization-wide focus on positioning sparsentan to potentially become a new treatment standard for FSGS and IgA nephropathy, if approved. People living with FSGS and IgA nephropathy have gone decades without adequate treatment options and limited innovation. As a result, each year, thousands of patients with these disorders are advancing to kidney transplant or dialysis. It is a collective understanding of this significant unmet need that drives our organization every day to help pave the way for new therapeutic options for these patients. Being at the forefront of these efforts can come with both significant milestones and challenges that must be overcome. This was evident in the first half of 2021, where we generated positive results from the interim proteinuria assessment of our pivotal DUPLEX Study of sparsentan and FSGS, but subsequently heard from FDA that the interim data were not adequate to support an accelerated approval submission this year. Despite this, we remain undeterred in our commitment to ultimately deliver sparsentan as a potential new treatment standard for FSGS. We remain confident in the interim data generated by the DUPLEX Study, the largest controlled interventional study in FSGS to date. These data build upon the strong proof-of-concept from the Phase 2 DUET study and provide a consistent data package to further inform sparsentan’s profile. At our upcoming scheduled Type A meeting this quarter, we look forward to continuing our constructive dialogue with FDA in an effort to pursue accelerated approval submission in the U.S. next year. Outside of the U.S., I am pleased to share that we have made progress on our ongoing regulatory discussions with the EMA. Based upon our latest interactions, we anticipate submitting an application for conditional marketing authorization of sparsentan for the treatment of FSGS in Europe by the end of this year. Noah will go into a bit more detail shortly, but we believe that, if we continue to progress according to plan, sparsentan could be approvable for FSGS in Europe during the first half of 2023. We also remain excited about the potential for sparsentan to become an important new treatment option for patients with IgA nephropathy. IgA nephropathy is the most common cause of primary glomerulonephritis and the leading cause of end-stage kidney disease. If ultimately approved, we believe there to be between 75,000 and 120,000 addressable patients at launch in the U.S. and Europe, with room for greater patient identification through increased awareness and diagnosis over time. Our Phase 3 PROTECT study evaluating sparsentan in patients with IgA nephropathy is progressing well, and we remain on track for top-line data from the 36-week interim proteinuria assessment next month. The interim assessment is designed to support potential accelerated approval submissions in the U.S. and Europe, which could result in the first approval for IgA nephropathy as early as next year. Finally, in the pipeline, we are encouraged by progress made with the pegtibatinase program, where we remain on track to see preliminary data from the Phase 1/2 study later this year. We will also be working to lay the foundation for our regulatory pathway in HCU by leveraging both data from the Phase 1/2 and the ongoing natural history study. Lastly, I’d like to touch on our commercial portfolio. As we have talked about for the last several years, we believe our commercialization capabilities in the U.S. are a strategic strength for Travere’s ability to deliver our current product candidates, if approved. We have demonstrated a consistent ability to identify and treat new patients living with rare kidney and liver conditions. The second quarter is another example of our team’s resilience, as evidenced by the rebound in performance following the impact of the pandemic in the first quarter. We experienced year-over-year growth across all of our products, which speaks to the continued important role they play for patients. Looking ahead, we continue to expect underlying demand for our products, but we do anticipate that the recently announced generic version of the original formulation of Thiola will have an unfavorable impact on our net product sales growth in the second half of the year. At this time, we are not in a position to reliably estimate what that impact will be, but we plan to provide updates as we learn more about the evolution of the market. This is a scenario that has been part of our business planning for some time, and we remain committed to the cystinuria community. It also does not change our confidence in or plans to continue identifying and treating patients and building upon our commercialization capabilities to successfully deliver sparsentan, if approved. Let me now turn the call over to Noah for updates from the pipeline. Noah?

Thank you, Eric, and good afternoon, everyone. We remain focused on developing sparsentan as a potential new treatment option for people living with FSGS and IgA nephropathy. And I’m pleased to report that our ongoing pivotal Phase 3 DUPLEX and PROTECT studies continue to progress as planned. During the second quarter, the independent Data Monitoring Committee, or the DMC, completed its sixth scheduled meeting to assess safety in both DUPLEX and PROTECT. The DMC recommended both studies proceed as planned, based upon their safety review. Looking first at FSGS, DUPLEX is continuing in a blinded manner to the study’s confirmatory endpoint, which will measure changes in eGFR after 108 weeks of treatment, and we continue to be pleased with its high-quality conduct. As many of you will recall, in February, we announced that the DUPLEX study achieved its interim proteinuria endpoint. The data showed that treatment with sparsentan resulted in a 60% greater relative likelihood of achieving the FSGS partial remission of proteinuria endpoint or FPRE when compared to irbesartan. And overall, the safety and tolerability profile between treatment groups in the study at the time of the analysis were generally comparable, which is very encouraging. We are working collaboratively with both FDA and EMA on the independent submission pathways to ultimately deliver sparsentan. In the U.S., preparations are progressing well for our upcoming Type A meeting. Our objective for the meeting is to further our dialogue from the pre-NDA meeting held earlier this year. We will look to align with the agency on providing additional eGFR data in the ongoing study with the goal of enabling an accelerated approval submission for FSGS in the U.S. next year. We look forward to continuing our constructive dialogue and providing an update in the coming months. During the second quarter, we had a productive interaction with our assigned rapporteur and co-rapporteur, representing the EMA for the sparsentan conditional marketing authorization process in Europe. As a result of that interaction, we are continuing to move ahead with our plans to submit a CMA application by the end of this year. Based upon these discussions, we are planning for a standard review time in Europe. We expect the standard review to allow us to utilize a planned clock-stop to supplement our submission with the same eGFR data that we are proposing to generate in the first half of 2022 for the potential U.S. regulatory submission. As you know, the EMA review process is different from the U.S., but we anticipate this could result in a potential approval in the first half of 2023. Our teams are working diligently to complete the CMA application by year-end. In parallel, we are also making meaningful progress on initiating the enabling studies to support the CMA submission and potential pediatric approval in Europe. Consistent with our pediatric investigation plan that was agreed to by EMA earlier this year, we expect to initiate our open-label EPIC study of sparsentan in children between the ages of 1 and 18 in the third quarter. Moving to IgA nephropathy. During the second quarter, we achieved completion of patient enrollment in our Phase 3 PROTECT study of sparsentan. Achieving this milestone ahead of schedule speaks to the execution of our clinical teams and the significant unmet need in this population. There are currently no approved medicines indicated for IgA nephropathy. And non-immunosuppressive steroid-sparing treatment options are desperately needed, given the long-term tolerability concerns amongst nephrologists and patients. Our Phase 3 PROTECT study is designed to determine the effect of sparsentan on proteinuria and renal function as compared to irbesartan, an angiotensin receptor blocker and a current standard of care in patients with IgA nephropathy. Proteinuria reduction in IgA nephropathy is well-established as the primary treatment goal by nephrologists, and data generation in the field continues to be consistent with the recognized literature. It clearly supports the utility of proteinuria reduction and its tie to clinically meaningful outcomes for kidney function. The interim assessment in PROTECT will evaluate the pre-specified primary endpoint, which is the ratio of geometric mean reduction of proteinuria from baseline to 36 weeks of treatment between sparsentan and irbesartan. Our goal for sparsentan is to demonstrate a statistically significant and clinically meaningful response on the proteinuria reduction compared to irbesartan. Ultimately, we are optimistic that this interim assessment will generate a data package that will support regulatory submissions in the U.S. and Europe. Similar to our interactions with the regulators on the DUPLEX Study, we anticipate that FDA and EMA will be looking at all available data, including eGFR, for determining the ability to submit for accelerated approval. There are some differences between the study designs that lead us to believe that should the PROTECT study meet its primary endpoint interim analysis, there may be a more developed data package compared to DUPLEX to potentially support an accelerated approval submission. Of note, we anticipate a significant number of patients to have at least one year of eGFR data at the time of the interim assessment. Also, the PROTECT study requires all patients come into the trial on a maximal tolerated dose of ACE/ARB therapy for at least 12 weeks prior to randomization. And there is no washout period. As Eric mentioned, we remain on track for top-line data from the interim assessment for PROTECT next month, and we look forward to providing an update for you and the nephrology community. We do expect limited data disclosure as patients will be continuing on a blinded basis out to two years, and we have a need to maintain integrity in this study through completion. We anticipate providing the outcome on the interim assessment of the primary endpoint of proteinuria reduction from baseline, but we do not anticipate being able to provide eGFR values. Lastly, from the pipeline, our pegtibatinase program achieved enrollment of the last patient in the highest currently planned dosing cohort. We look forward to gaining a more comprehensive understanding of the safety and tolerability profile of pegtibatinase and to determine if we have reached the appropriate dose to advance into a pivotal study or if the program gains from an additional cohort to maximize potential benefits. We anticipate providing either a qualitative or a quantitative update before year-end. Overall, I remain pleased with our development progress. We generated strong interim data, supporting the profile of sparsentan for the treatment of FSGS, and we have an excellent opportunity to further establish sparsentan’s utility with the PROTECT study top-line readout next month. I’ll now turn the call over to Peter for the commercial update. Peter?

Thank you, Noah. We are very pleased with the performance from our commercial organization in the second quarter, which resulted in approximately 13% organic growth over the same period last year. These underlying strengths of our business provided for us to make up some lost ground from the first quarter, and in the first half of the year was approximately 6% organic growth, in line with our expectations. During the second quarter, we continued to see demand and strong patient compliance across all approved products. We also experienced the normalization of our gross net deductions, which normally occur at the beginning of each year with insurance resets. Regarding our Thiola product, during the quarter, we continued to see new patient initiate therapy and further demand for our Thiola EC. We experienced minimal impact from the generic version of the original formulation that entered the market during this quarter. And as Eric mentioned earlier, we anticipate there will be an unfavorable impact on Thiola revenues in the second half of the year. Despite this, we currently anticipate being able to continue identifying and treating new patients for the foreseeable future. Our bile acid portfolio is providing an important treatment choice to pediatric hepatologists, and we continue to expect growth through the balance of the year. Within the pediatric hepatology space, we were pleased to see the recent approval of Albireo’s Bylvay, the first approved treatment for pruritus in all subtypes of PFIC. As part of our limited co-promotion agreement with Albireo, we look forward to leveraging our established expertise to help deliver these much-needed new treatment options for people living with this rare hepatic condition. We are also optimistic that our work on this launch will provide additional opportunities to engage with those specialists that treat with Cholbam. Overall, I am proud of our commercial progress in the first half of the year. We have maintained focus on identifying and treating new patients and further strengthening our capabilities. We continue to ready our organization by building upon the foundational pre-commercialization work to support sparsentan in both FSGS and IgA nephropathy with the goal of a successful first launch in the U.S. as early as next year. I’d like to turn the call over to Laura now for the financial update. Laura?

For the second quarter of 2021, we reported net product sales of $54.6 million from our commercial portfolio, compared to $48.4 million for the same period in 2020. We reported a GAAP net loss of $39 million for the second quarter of 2021. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $23.3 million for the second quarter of 2021. On a GAAP basis, R&D expenses were $51.8 million for the second quarter of 2021. The increase compared to 2020 is largely attributable to increased patient enrollment in the ongoing studies of sparsentan, as well as advancement of the pegtibatinase program in classical HCU. On an adjusted basis, R&D expenses were $48.7 million for the second quarter of 2021. Relevant non-cash expenses for the second quarter included $3.1 million of stock-based compensation and amortization. On a GAAP basis, selling general, and administrative expenses for the second quarter were $35 million, and is comparable to the same period in 2020. On an adjusted basis, SG&A expenses for the second quarter were $24 million. Significant non-cash adjustments for the quarter consisted of $11 million in stock-based compensation and depreciation and amortization. For the balance of the year, we expect gradual and modest increases in our operating expenses, primarily driven by continued clinical development of programs and activity to support potential launches of sparsentan. Our financial foundation to support this activity remains strong. For the second quarter, we were nearly neutral on cash use, as a result of receiving final tax refunds related to the CARES Act, which offset our operating cash use. Not including additional business development, our total cash balance of $522.8 million at the end of the quarter is expected to support our current operations into 2023. This takes into consideration the potential impact of the generic version of Thiola, as well as investments in sparsentan’s prelaunch and early launch activities and advancing the pegtibatinase program. I will now hand the call back over to Eric for his closing comments. Eric?

Thank you, Laura. In the first half of this year, we generated further evidence to support the value that sparsentan can bring to patients and to our organization. I’m incredibly proud of our team’s continued execution of our landmark studies in FSGS and IgA nephropathy and remain excited about our path ahead. We remain confident that we will ultimately be in a position to deliver sparsentan as a potential new treatment standard for patients with FSGS in the U.S., and we look forward to continuing our path for patients in Europe by submitting our CMA application by the end of this year. Furthermore, we have an exciting opportunity ahead of us with the PROTECT results coming next month, which have the potential to build upon the growing evidence supporting sparsentan as the first non-immunosuppressive innovation in decades for patients living with IgA nephropathy. Through the balance of this year, we will remain focused on the priorities that will enable us to deliver sparsentan and the rest of our pipeline to patients who desperately need new treatment options. Let me now turn the call over to Chris for Q&A. Chris?

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

And your first question comes from Joseph Schwartz with SVB Leerink.

Hi, everyone. Thank you for joining. I would like to understand your expectations regarding the potential negative effects on the Thiola franchise due to the recent approval of a generic version for the first-generation formulation. Is the expected impact solely from a decline in sales of the branded first-generation formulation? Or do you believe that patients might switch back from Thiola EC to the generic first generation? Additionally, how much of your Thiola franchise has already transitioned to EC? Can you provide any insights or commentary that could assist us in forecasting Thiola revenue over the next year based on any observed changes in prescription patterns?

Joe, thanks so much for the questions. I’ll start out by saying that at this time, it’s just really difficult for us to project reliably what erosion might take place, given that there’s been very little time. And we’ve actually seen very little uptick of the generics since that’s been available. That said, we do believe that things will evolve. And I’ll ask Peter to talk a little bit about how that might evolve and impact our business as well as your question around the split between Thiola and Thiola EC.

Yes. Thanks, Eric. And Joe, thanks for your question. I mean, we knew that at a certain time, we could be facing generic competition. So in that respect, we have been planning for this scenario. In the first half of the year, we have been very pleased with our continued performance, both in identifying new patients as well as allowing services for those patients that are having treatment already and to retain those patients. So to Eric’s point, we have seen limited impact so far. It doesn’t mean that there won’t be an impact in the second half of the year, but it’s early days. So, I think we have to better understand how the dynamics may play out. Also with regards to your question with regards to the original formulation and the sale that we see. Right now, we have less than 20% of the patients that are still on the original formulation but like I said, we have to get a better understanding of the dynamics with regards to formulary and how formulary will be adopting the new generic version, but we remain rather confident in our ability in the infrastructure that we have built over the last several years, most in identifying new patients as well as in providing support for those patients that are on the product. So it’s just to be seen, and we will be closely monitoring the impact at a later time point, and we will give additional perspective on what the impact may be.

That’s super helpful. And I was wondering also if you could talk about how you’re preparing for your upcoming Type A meeting with the FDA in order to make your interactions as persuasive as possible? And has this meeting been scheduled yet? Will you update investors after it occurs or you receive the minutes?

Sorry about that. I was on mute. So Joe, yes, we do have the meeting scheduled, and it has not yet occurred. So I’ll ask Bill to talk a little bit about the preparation. What I can say is that we certainly reinforce, and we believe FDA understands the high unmet need within this space. So very much, Bill will talk about what our goals are and how they’re preparing.

Certainly, Eric. The process of preparation begins with submission of a briefing book and outlining our positions going into the meeting and providing the agency with detailed information about our plans moving forward. Coming out of the pre-NDA discussions, one of the specific asks from the agency was around just give us the specifics of your proposal for a second look at eGFR in the first half of next year. How would that work specifically, give us the details around the statistical analysis and efforts made and how are you preserving the integrity of the study, given that this is an ongoing study that runs out to two years for each of the patients. So that’s been the bulk of the preparation, and we look forward to having those discussions with the agency this quarter.

Thanks, Bill. And just to close out on the other part of your question, Joe, we will plan to provide a public disclosure on these regulatory interactions once we receive written minutes, just to make sure that we’re in full alignment and understand the FDA’s thinking after the meeting.

And your next question comes from Carter Gould with Barclays.

This is Justin, on for Carter. First one on PROTECT, just sort of understanding that you need to maintain the integrity of the study, but given that you’re going to have a substantial amount of patients with the year’s worth of eGFR data when it reads out next month. Can you characterize how much freedom you’re going to have to potentially give qualitative messaging around those eGFR trends? And sort of if you’re thinking that has changed at all with your ongoing discussions with FDA.

Sure. So Justin, thanks so much for the question. I’d say that we are aiming to be as consistent as possible with the disclosure from the DUPLEX interim. And since then though, we’ve learned quite a bit from the FDA and our interactions on Duplex and I believe that we may be able to provide some type of qualitative update on what we’re seeing that may be helpful to understand the status of the trial. But ultimately, that’s going to be based on the data as well as any guidance that FDA provides on our disclosure practice, just to make sure that we’re in alignment with how they view the maintenance of integrity of the ongoing trial.

Okay, great. I have a quick question about DUPLEX. Since you plan to file in the EU first, is there any additional information you’ve shared or intend to share with them prior to that filing? Or was this decision primarily influenced by the mid-review stoppage meeting expected to take place next year?

So, I will turn that question over to Bill.

Yes. The EMA reviewed the same interim data package that we submitted to the FDA. We also informed them about the progress of our discussions with the FDA and our plans to share additional eGFR data in the first half of next year. The EMA expressed interest in reviewing that eGFR data as well, and there is a procedural clock stoppage that aligns with this timeline. We can incorporate that data into the review at that time.

Great. And congrats on the progress.

Your next question comes from Liisa Bayko with Evercore ISI.

Good quarter. Can you comment on the possibility of a generic Thiola EC? And what implications are there if you do get patents for that? Can you walk us through that scenario?

Sure. I can take that one, Lisa. There is a possibility of a generic for Thiola EC. It’s something we will keep an eye on, but we’re not aware of any immediate activity. However, it is certainly a possibility. We continue to engage with the patent office regarding the Thiola EC patent, and if it is granted, it may allow for continued exclusivity of that newer formulation. At this point, since it has not yet been granted, I would suggest viewing any potential patent coverage as an upside to the existing business.

Okay, great. I'm really excited to see the data coming up for PROTECT. I have a question regarding the period of maximum tolerated standard of care. I understand it's 12 weeks ahead of time and how that will assist the study. In the case of FSGS, I noticed there was an 8-week treatment period for the placebo group before they crossed over. What should we make of that? There was a significant decline in eGFR that seemed to take about 40 weeks to recover. Can you discuss how you interpret that observation in relation to the run-in period?

Sure. And I think, Lisa, just to make sure that I’m clear on the question, you’re referring to that 8-week crossover and the eGFR acute dip is from the DUET study.

Yes.

Okay, great. So Noah, do you want to take this question?

Sure. It's a great question, Lisa. Just to remind you, the DUET design was different because we had three doses: 200, 400, and 800. Some patients on the lower doses may have contributed to that dip. We believe that starting with the maximally tolerated ACE/ARB and then moving directly to irbesartan could help us more clearly demonstrate the effect of adding ERA on top of angiotensin blockade. It's a slightly different design to address your question.

Sorry, how does the dose relate? I didn’t quite make the link.

In the DUET study, it’s important to note that the transition was not simply from angiotensin blockade to irbesartan, but also involved an increase in dosage from lower levels of sparsentan to higher doses during the crossover period. This suggests that there is a significant impact from the dosage changes. Additionally, the variability of patients entering the DUET study and the differences in doses will introduce further variability when assessing the effects of sparsentan and the endothelin blockade in conjunction with what patients can tolerate.

As I remember, the doses were like you started 200 and then you might have gone to 400 and 800. So I guess that took some time, and that probably lengthened out that hemodynamic effect, right?

Yes, I think so. That’s what I’m saying.

Okay. And then just the last question for me. For 058, what are you looking for in the data? That’s a product we don’t think about as much, but you kind of mentioned you’re going to be looking for the highest dose to determine to get another dose cohort. What exactly are you going to be looking at? If you could just give us an understanding there?

Sure. Thanks, Lisa, for that question because we are really excited about this program as well. And I’ll ask Bill to talk a bit about what we’re planning to evaluate in that Phase 1/2.

Certainly. In any Phase 1/2 study, which is the initial human study for this molecule, our main focus is on safety and tolerability. Additionally, we are interested in the efficacy as measured by biochemical markers. Specifically, we want to see how these markers change in a dose-dependent manner over time in response to repeated doses of pegtibatinase. One key measurement is the concentration of homocysteine in the plasma. These patients typically have very high levels of homocysteine and low levels of methionine. We aim to determine how much we can reduce the elevated homocysteine levels in their plasma, as well as assess the variability of response both between and within patients and the durability of that response over time. In future studies, an important aspect will be our ability to predict long-term clinical benefits for these patients and also evaluate whether a significant reduction in plasma homocysteine allows for any dietary flexibility. Currently, these patients must follow a very low protein, methionine-poor diet that is hard to maintain and unappetizing, regardless of age. If we can lower homocysteine enough to improve their dietary options, even partially, it would significantly enhance their quality of life.

Okay. Great. That’s really helpful.

Your next question comes from Tim Lugo with William Blair.

Following up on the expected homocysteine reductions in the pegtibatinase data by year-end, how much of a decrease will contribute to the cognitive function improvements and some of the ocular health endpoints you are assessing? Can you provide any insights based on the natural history data?

Sure, Tim. I’ll give a high level and then have Bill turn over. I mean, there’s been some early data linking homocysteine levels and really trying to get what is considered under the threshold of 100 or 50 for these patients, which are incredibly challenging for many patients, but there is a link there. But I’ll ask Bill to talk about the work that we’re doing on the national history study to really help bolster our understanding of that link.

Yes. Thanks for the question, Tim, and it’s a really challenging question because what’s out there in the literature are retrospective studies that look at essentially treated and untreated individuals. The treated individuals don’t see a huge drop in homocysteine, but they’re certainly better off than those that are not diagnosed until they’re older. In that comparison, you do see differences in cognitive development, in IQ scores, in rates of thrombosis and rates of lens dislocation, et cetera. The question, I think, that you’re asking is how much homocysteine reduction do you need to see in order to prevent future clinical events because treating a patient today is not going to do anything about historical changes that have already occurred. Cognitive changes that have already taken place are probably the most difficult to reverse. But that’s part of the program going forward. There’s a certain element of clinical investigation here. We know that lower is good, and we know that the treatment guidelines in the past have been to try and get these patients below 100 micromolar, but normal is down in the teens. So, are we able to drive it lower and keep it lower? And if so, what’s the benefit from there? We’ll be working on that based on all the aspects of data and what kind among them is the natural history study.

Okay. Could you broadly discuss the data for sparsentan after your interactions with the EMA? Was the data you presented to the EMA essentially the same as that given to the FDA, or were there any changes in how it was presented? Is this more about the timing of the submission rather than a different perspective from the EMA compared to the FDA?

Bill, do you want to take this one?

Certainly. I can easily answer the first part of your question. Both agencies evaluated essentially the same data package, as they had access to the full interim data cut presented in the same manner. However, the processes for filing and review differ between them. The EMA team was informed about the discussions we had with the FDA and understood our intention to include additional data in the first half of next year. This knowledge influenced their decision-making and allowed us to propose that those data would be provided as supplementary information during the clock stop.

Okay, understood. And can I, I guess, quickly ahead to PROTECT. I’d love to hear your thoughts around kind of the competitive Phase II data that we have seen, I guess, relatively recently from some of the larger players out there?

Sure. I’ll ask Noah to give some thoughts on the other treatments in development.

Yes. I think there are several ongoing studies, which is exciting. The key points are that most of the work being done is currently within an immunosuppressive ISP camp, and even some lower-dose steroids still fall under that category. One of the strengths of sparsentan is that it is a non-immunosuppressive therapy, presenting a significant opportunity for its use in non-immunosuppressive treatment. Steroid and immunosuppressive treatments can raise concerns about tolerability and long-term safety. In the future, we will definitely observe the long-term safety considerations. Sparsentan has the potential, with its efficacy and safety profile, to be a standard of care treatment. Additionally, we have seen sparsentan used alongside immunosuppressive therapy, achieving incremental effects. Therefore, we believe sparsentan can be used complementary to those treatments, which does not change our approach. We are well ahead in this area, and ultimately, we think these different mechanisms will hopefully work well together for patients.

Your next question comes from Greg Harrison with Bank of America.

Another one on pegtibatinase. Just wanted to get your thoughts on the commercial potential that you see for this asset? And if you can talk a little bit about how it fits into your portfolio and what considerations you would take into account when it comes to future BD activity. I know the focus was kind of sparsentan now, but just wanted to get your sense of what may happen in the future as far as BD and what size of deals you’d consider?

Sure. Greg, thanks so much for the question. With regard to the commercial potential in plasma homocystinuria, if we look at the U.S. and Europe, there’s about 3,000 to 3,500 patients that we believe are currently addressable. We think that that underestimates the real opportunity to help these patients, given that many of them go undiagnosed for years despite having homocystinuria as part of the newborn screening in many states. And that’s just because of the methodology that’s used, oftentimes, these patients go undetected. We think through increased awareness and the availability of potential therapeutics and clinical trials that that will only increase. So there’s a real opportunity in the U.S. and Europe there. We think that it fits very nicely into our portfolio. It’s a rare disease that is oftentimes, these patients. If they are diagnosed early are treated under the care of a pediatric geneticist and oftentimes across different specialties at tertiary care centers that focus on rare diseases. And we have through our CHOLBAM business, a very strong team that has relationships and capabilities in navigating the diagnostic odyssey and helping clinicians treat and diagnose patients currently with bile acid disorders for CHOLBAM, but we think that it’s going to be very similar with the efforts around plasma homocystinuria if pegtibatinase is approved. We think that that serves as a nice example of how we might think about business development, where we’re going to continue to stay focused in rare diseases. Within rare disease therapeutically, we’re going to be looking at that rare renal, hepatic, or metabolic where we will be able to leverage our late-stage development and commercialization footprint. In terms of size of a deal, that certainly can evolve over time. It’s going to be something that we will continue to look at, but it’s not something that I’d be able to provide more specifics at this point.

Okay. That’s helpful.

Your next question comes from Michelle Gilson with Canaccord.

I guess one clarifying question. So, from your discussion around your EMA interaction, it sounds like the key difference between, I guess, what was discussed with the FDA and the EMA, it was really in this, I guess, interim look that you guys I guess, second interim that you guys may take in the first half of next year. Am I gathering this correctly or is there some other, I guess, driver behind the EMA’s willingness to allow you to file? I don’t know, like greater reliance on proteinuria as a surrogate or more comfort in the eGFR data that you showed them? Or if it’s a conditional, I guess, mechanism for approval that they have as an option. And then I do have a follow-up.

Okay. Bill, would you like to take that?

Certainly, it's challenging to compare the two agencies and their responses because they follow different processes. While they serve the same purpose, they review the same data independently. They were aware of the strategy we proposed, which included the supplementary eGFR data for next year. This was the main distinction. The focus was on how to incorporate that into the review process and the mechanics of what additional data can be submitted, as well as when and under what types of reviews this is permissible. That was the key difference.

Got it. Regarding TVT-058, I know there's been significant interest in pegtibatinase. I'm curious if you could clarify your confidence in either this dose or the next dose being the effective or go-forward dose. Is that confidence based on blinded data or are there other factors at play? Additionally, are you observing any safety concerns that would hinder you from increasing the dose to meet the target product profile you're aiming for?

I wouldn’t interpret it as certainty regarding the dose. We are confident in the decision-making criteria we are applying. The design was well structured, and we have fully enrolled the latest dose cohort. On a blinded basis, as Bill mentioned, we are observing results that align with our expectations and hopes. Our focus now is to ensure we continue executing effectively and making the right decisions as we assess whether this is the appropriate dose or if we should consider escalating it. That's how I would describe our perspective. Everything we observe is very consistent with much of the preclinical data and the hypothesis that guided the development program.

Congrats on the quarter.

Your next question comes from Maury Raycroft with Jefferies.

Congrats on the progress. I was wondering for the IgAN Phase III, you’re enrolling patients without washout for the study, and so they switched over to irbesartan from their optimized RAS inhibitor treatment. So can you talk more about if these patients have worsening UPC when they are starting in the Phase III or is their eGFR stable? And then secondly, what are your latest expectations on how irbesartan will perform in PROTECT based on irbesartan outperforming in DUPLEX?

Maurice, thanks so much for the questions. Noah, I’ll pass this one over to you.

Yes. I believe the first question was about the lack of a washout period in PROTECT. When patients enter the study, they are required to be on maximally tolerated doses of ACE or ARB treatment. The idea is that they will switch to irbesartan, but we are currently blinded to the outcomes for those patients. The assumption is that maintaining maximum tolerated doses without a washout could help demonstrate the difference when combining ERA with angiotensin treatment. If the patients are not on optimal doses, this could create some confusion regarding the results. What was the second question again?

Sorry, I was just going to add. The question was around irbesartan but before we go to that, I think the other aspect is just important is the inclusion/exclusion criteria for PROTECT, which really does reflect that despite these patients being on max tolerated ACE or ARB, they still are considered at risk. They’re based on their UPC and presumably their eGFR. So these are patients that would not be considered well controlled by treatment guidelines here by the nephrology community. So, we would fully expect that there would be a continued decline in their renal function over time, just as a background of what we understand about this disease. So sorry, Noah, I thought that was an important point to mention, and then we can go into Maurice’s question around what to expect in the irbesartan.

In terms of irbesartan, the literature indicates that we can expect a reduction in proteinuria in the range of 10% to 30% with angiotensin blocking. However, in a controlled setting, the latest analog showed a difference of about 5%. It’s likely that we will see a similar outcome of around 5% or something between that and the other studies. Importantly, we've reached the maximally tolerated dose, which is close to the optimized dose of irbesartan. We anticipate that this will lead to less variation and allow us to effectively test the ERA in conjunction with the angiotensin II hypothesis, which is ultimately our objective.

Got it. That’s helpful.

And I’ll add one more thing, Maurice. We’ve accounted for all those scenarios in our plans, and we have all that covered.

Your next question comes from Laura Chico with Wedbush Securities.

We've received this question often from investors, so I wanted to clarify. It's concerning the disclosures about eGFR from DUPLEX and how they compare with information from others, like your competitor. I'm curious about the insights you gather from their filings regarding IgAN in relation to your own, specifically regarding the FDA's stance on surrogate endpoints and your eGFR disclosure strategy. I also have a brief follow-up.

Sure. Laura, thanks so much for the question. I’ll take this one. I’d say, first, the trial designs are different. And so while other companies have disclosed eGFR data from IgAN trials, those disclosures in those analyses are based on the completion of the treatment phase of the trial. And so they are not ongoing blinded studies in the same way that PROTECT and DUPLEX are. There’s just a slightly different way of managing the disclosure of data from an ongoing trial. I think that, that certainly has been informed by our continued engagement with regulators. Now, with regard to how any potential read-through, I mean, first and foremost, it’s great to see the innovation and the positive results within the space that have just been lacking for decades. Whether that’s going to be incrementally confidence building for the FDA or not, I’m not quite sure. We certainly cannot speak for them. Reflecting the conversation that we had with top nephrologists, it certainly is incrementally confidence building. All of the data that’s come out in this space that continue to show that interventions that improve proteinuria are also improving eGFR over time. So that’s certainly what we’re hearing from the nephrology community. I think we’re optimistic, and we’ll continue to work on the data package that will demonstrate that with sparsentan with regulators. Hopefully, that answers your question.

It does, Eric. I have a follow-up question that is more strategic regarding sparsentan. Would you still seek approval for FSGS if an accelerated filing cannot be completed? Also, you will have more insight on where the agencies stand after your Type A meeting. Would you consider pursuing a similar strategy for IgAN if an accelerated filing isn’t feasible right after the interim assessment?

Yes. Thank you for the question. I think when I said that we’re undeterred in whatever challenges we face, I think that certainly extends to the scenario that you just laid out. If for some reason, we cannot gain alignment with the FDA in our Type A meeting, we’re going to continue this trial out through the confirmatory endpoint, and we’ll have the data on PROTECT next month. We’re so blinded, but once we see the interim, we’ll be able to see how clear that accelerated pathway is or if we need to have similar types of conversations with them and the opportunity for accelerated approval, but we’re committed to the space. I continue to hear from the patient community how important these programs are, and we’re not going to let any of these aspects of the programs deter us.

I’m showing no further question at this time. I would now like to turn the conference back to Chris Cline.

Great. Thanks, Jerome, and thank you all for joining us today. We look forward to speaking with you again when we have top-line results from the interim proteinuria assessment and PROTECT study next month. I hope you all have a great rest of the week. Thank you.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation, and have a wonderful day. You may all disconnect.