Trevena, Inc. (TRVN) Q1 2020 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Trevena, Inc. First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Bob Yoder, Chief Business Officer. Thank you. Please go ahead, sir.

Good morning, and welcome, everyone. Thank you for joining us on this morning's call. With me today are Carrie Bourdow, our President and CEO; Mark Demitrack, our Chief Medical Officer; and Barry Shin, our Chief Financial Officer. Before we begin, we wish to inform participants that we will be making forward-looking statements on this call, which are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that forward-looking statements involve risks and uncertainties, including risks detailed from time-to-time in the Company's periodic reports filed with the Securities and Exchange Commission, and we undertake no obligation to update these statements beyond today. During today's call, Carrie will give some opening remarks on our progress of oliceridine and I'll provide an overview of our commercial launch strategy. Mark will then provide some additional details on our ongoing pipeline activities and Barry will review our financial results followed by some time for questions. I'll now turn the call over to Carrie.

Thank you, Bob. Good morning, everyone. Thank you for joining us today. I hope that you and your families are staying safe during these unprecedented and challenging times. I would like to open the call this morning by extending my many thanks to the healthcare professionals, our employees, and our business partners who help us move forward in our commitment to patients. Like a lot of you, we are watching the COVID situation closely and while our priority of course is on the health and safety of our employees and our communities, I am also very grateful that we've been able to remain resilient and focused on business continuity. And to that end, let me provide a few highlights on our lead asset IV oliceridine. As you all know, we have a PDUFA date for oliceridine of August 7, and it's clear to us that the agency is active in the review of our resubmission. I am very pleased with FDA's engagement, and we expect FDA's review of our application to continue on track. We are looking forward to receiving their decision in August. At the same time, we are working to ensure that after approval and DEA scheduling, we can make oliceridine available to hospitals and healthcare providers in the fourth quarter of this year. Our commercial manufacturing facilities, which are located in the U.S. are manufacturing drug product as we speak. We are also actively investigating collaborations and strategic partnerships to support the U.S. commercial launch of oliceridine and our current ex-U.S. partners are making progress on their regulatory timelines. Our top priority is getting oliceridine to acute pain patients and we are exploring all options to help us maximize shareholder value as we do this. So now let me turn the call over to Bob, who will go into more detail on our U.S. commercial strategy. Bob?

Thank you, Carrie. Well, this is certainly an exciting time for us as we continue preparations for the commercial launch of oliceridine, either by ourselves or with a partner. As you'll hear me layout, our strategy is built around focus and efficiency, targeting the right patient population, physician specialties and accounts in order to facilitate initial uptake. The market opportunity is large with approximately 45 million patients each year who receive drugs like IV morphine for acute pain. Additionally, the overall size of the market in terms of unit sold has remained relatively stable over the last 18 months, suggesting that potent analgesics such as IV morphine are still needed in the hospital settings. The product profile oliceridine when compared to IV morphine, it's differentiated in a number of key areas. Unlike morphine, oliceridine has a fast onset of two to five minutes, no known active metabolites and no dosage adjustment needed in elderly or renally impaired patient. Oliceridine offers a compelling set of attributes that address the unmet needs that still remain to both the inpatient and outpatient settings. We know that roughly 20% of the overall hospital patient population are considered high-risk for adverse effects, including patients with certain comorbidities, obese patients, those with renal impairment and the elderly. We refer to this subset as our core patients. Physicians continue to face particular challenges in effectively and safely treating these patients and those challenges have unfortunately been highlighted by the ongoing pandemic. In ATHENA, our open-label, real world safety study published last year, we studied many of these high-risk patients across a range of surgical settings. In fact, 30% of patients were over the age of 65 and 50% were clinically obese. You may recall during our last earnings call in March, Dr. Tim Beard, a colorectal surgeon practicing in Oregon described patient types very similar to those we study, who he felt might benefit from a drug such as oliceridine. Our launch strategy is focused and targeted. The core patients I described earlier will be our initial focus as those patients currently present the greatest difficulty in pain management. We also plan to concentrate initially on a subset of physician specialties, anesthesiologist, colorectal, orthopedic, and cardiothoracic surgeons. These specialties have a high volume of procedures in which multimodal pain management, protocols frequently required drugs such as IV morphine. These facilities are also treating a high number of our core or high-risk patients. Finally, we plan to focus on a subset of hospitals and outpatient surgery centers that have demonstrated early adoption of other branded agents in the past. Of course, we are closely monitoring the impact of the current pandemic and how that could change our thinking about our commercialization strategy. But we continue to hear about high-risk patients, the challenges these patients present in effective pain management and growing pent-up demand created by pauses and procedures considered to be elective surgeries and exacerbated by the current shortage of drugs like IV morphine. In closing, we are taking an approach to commercialization that is all about focus. The right group of patients treated by a targeted subset of physician specialties and within a group of hospitals and surgery centers where we believe the potential oliceridine is significant. Let me now turn the call over to Mark to provide some additional details on our pipeline activities.

Thank you, Bob. Let me start with some additional comments on oliceridine. I am pleased to report that we've continued to add to the body of peer-reviewed literature, which is an important element supporting the launch strategy that Bob just outlined. We recently announced the publication of a comprehensive review of the non-clinical and clinical data for oliceridine. In addition, I would like to highlight the online publication of a poster in association with this year's ASRA meeting. The poster is titled Low Incidence of Opioid-Induced Respiratory Depression in High-Risk Elderly Obese Patients. This report summarizes the findings of a post-hoc analysis of data from an ATHENA study. We compared the incidence of clinical indices of respiratory depression across two patient subpopulations in that study. Those considered high-risk and those considered low-risk. High-risk patients were those individuals who were over 65 years old and had a BMI greater than 30. As Bob mentioned earlier, these patients were a large proportion of the study population. Low-risk patients were defined as the opposite, those younger than 65 with a BMI less than 30. The results were very interesting to us. The incidence of respiratory depression was similar in both groups, despite the high-risk group being defined by two characteristics known to raise the risk of respiratory complications during treatment with conventional medications like IV morphine. These data are consistent with feedback we received from investigators during the ATHENA study on their assessment of oliceridine's distinctive clinical profile. These data will serve as an important point of departure for our thinking about future research. Beyond oliceridine, we continue to make good progress with our pipeline for TRV045, our novel S1P receptor modulator. Our collaboration with NIH is ongoing and productive. They've initiated the first round of non-clinical studies in their epilepsy screening program and we look forward to reporting on that work in the future. Most of us announced this morning that NIH plans to begin evaluating TRV045 within another screening program. This one designed to study novel non-addictive treatments for pain. This program is based on the longstanding epilepsy screening program, which is viewed as a highly successful partnership model and also features a rigorous evaluation process for entry. The program includes assays and models of acute, inflammatory and neuropathic pain, all of which were funded by NIH. The fact that TRV045 has received such interest from NIH, I believe speaks to its exciting promise as a novel approach to treating a variety of CNS disorders. I look forward to working closely with NIH to further explore the therapeutic potential of this asset. In parallel with these activities, we continue to make progress on our own IND-enabling work with this compound, and I am very pleased to announce that we are now planning on filing an IND application for TRV045 in the first half of 2021. I'd now like to turn it over to Barry for review of our Q1 financials. Barry?

Thanks, Mark. We issued a press release. We filed our Form 10-Q with our full financial results. For now, I'll summarize the headline numbers. For the first quarter of 2020, we had a net loss of $5.7 million or $0.06 per share, compared to $5.2 million or $0.06 per share for the first quarter of 2019. This increase in net loss is mainly due to higher R&D expenses associated with a TRV250 acute migraine proof-of-concept study and activities to support the NDA resubmission for oliceridine. As of March 31, 2020, we had cash and cash equivalent of $28.1 million, which reflects the full repayment of our term loan on March 2. We continue to expect that this amount will fund our operations and capital expenditures into the first quarter of 2021. This includes the expected approval of oliceridine in August and post-approval activities to ensure oliceridine as commercially available in the fourth quarter of 2020. We'll now open the call for questions, after which Carrie will provide some closing remarks. Rachel?

[Operator Instructions] Your first question comes from the line of Jason Butler. You may begin.

Thanks for taking the questions. First one on oliceridine, can you just give us any color around manufacturing inspection? Did you have a pre-approval inspection during the first cycle NDA review? And do you expect that any additional inspections to be needed by FDA before your PDUFA date?

Good morning, Jason. Thanks for the question. We did not have previously an inspection, but the – so I mentioned the sites are in the U.S., the API and drug product sites are in the U.S., which we think is a good thing. And they have been inspected last year for other products, didn't have any issues, no 483, so we're not anticipating manufacturing is going to be a problem at all for us.

Okay. Great. You ran through some of the patients you're targeting – the high-risk of adverse events and the physicians as well. As you think about the beginning of a resumption of elective procedures, where is the overlap and how do you think about the dynamics of which procedures could ramp sooner and where we could see a prolonged proponent procedures and ultimately are you looking to refocus any of your launch strategy in response to these dynamics? Thanks.

Yes. So I'll let Bob address this. But let me just say that we're talking with a lot of our key opinion leaders across the country and it's not necessarily, which procedures may start kicking in sooner. It's really based on geography in some cases. Our core areas, as Bob mentioned, cardiothoracic, colorectal, orthopedic, certainly cardiothoracic, we believe will start happening sooner, and of course, like everyone are sort of thinking through what our launch strategy will look like. Let me just brag on Bob really quickly before I turn it over. So one of the reasons we asked Bob to join Trevena is that he has a lot of experience in non-personal promotion launches, launching with more of a digital focus. I think that's going to serve us well when we sort of think through our launch strategy. But Bob, any additional comments?

Sure, yes. Hi, Jason. Thanks for the question. So one thing I'd say about the procedures piece of it, is the things I'm reading at least say as an elective procedures that were paused or canceled or coming back online. What I've been reading is that the patient type that they're looking to prioritize are typically those higher risk patients because often times that profile just gets riskier with time. So they're trying to in many cases push those high-risk patients to the front of the queue as those procedures come back. Around the strategies, obviously we're watching very closely what the pandemic is doing to HCP engagement. In this case, I think the early trends seem to suggest that physicians are engaging remotely a little more. They're open to that more. Digital channels are getting more robust as well. So I think, overall, an effective engagement on the future of what we're going to be thinking about is likely, the flexibility to dial up or dial back a wider array of channels, digital channels, non-personal promotion and things like that. Certainly, until we see what will happen with traditional face-to-face access with HCPs over time. But definitely we're going to keep an eye out and think creatively about how we're going to engage with HCPs and what – I guess will be the new normal going forward.

Great. And then just one more for me on 045, obviously the work being done at NIH, can you discuss or point to any additional preclinical work that you guys need to do in-house to support the IND filing in the first half of next year? Thanks.

Yes. Thanks, Jason. Mark, you want to talk a little bit about…

Sure, Jason. So our [indiscernible] activity really revolves around much of the conventional components with any IND that we need to be assembled. So we have to obviously proceed with the necessary tax work and the manufacturing readiness that we needed for the formulation that we would bring into human use. So those programs are proceeding as I mentioned on plan at this time.

Okay. Great. Thanks for taking the questions.

Thanks, Jason. Any other questions operator? Rachel?

Your next question comes from the line of Douglas Tsao. You may ask your question.

Good morning, Doug.

Good morning. Just you maybe first touch on a little bit and obviously you've spoken about sort of some of the delays and sort of the backlog and intellective procedures, just sort of the context of the shortages that seem to be taking place for a lot of IV pain medications, just given the demand placed on hospitals because of COVID, and does that affect your launch strategy in anyway? And then also and I might have missed it, a lot going on in the household this morning.

Yes.

Just in terms of the pause for TRV250 and when you might be able to get that started again?

Yes. So let me handle that first and then I'll turn the question over to Bob around some of our additional commercial strategy. So on TRV250, as you mentioned, we are on pause. That study is being conducted in the UK. And like everyone, we're sort of watching and having conversations with the clinical site in the UK. So as soon as they feel comfortable to get moving again, we'll be doing that, but we don't have any additional guidance on that. We removed the timing guidance on TRV250. But we are having active conversations with the clinical site. So it's good. Bob, do you want to – I know you talked a little bit about the commercial strategy in COVID and COVID patients, but any other additional comments you want to make certainly with the focus around high-risk patients in COVID? We've always been focused in high-risk patients, but there's a heightened sensitivity of what happens when those patients get sick in the hospital. So I don't know if you want to talk a little bit more about that.

Yes. Hi, Doug. I mean, I think you're right. You're pointing out definitely that's the – there's many unfortunate things around the pandemic and certainly one of them is [indiscernible]. We've all seen now that these high-risk patients present a lot of challenges in clinical management. Specific to your question around the shortage too, I mean, I think, there is some data out there publicly [indiscernible] talked about at least within March, maybe the first part of April even that there is a pretty significant shortage. I think fill rates were hovering in the 70% range for IV opioids-driven. I think a lot I use in COVID patients, incubated patients. But the other impact of that is that that leaves – that’s available for use in post-surgical moderate to acute pain – moderate to severe pain. So I mean, I think, I don't know beyond what I said before Doug in terms of change of strategies, it certainly tightens our urgency to be prepared for a really successful launch and get the product out there. So that compelling profile is in the hands of our physicians and they can use it where it's indicated, where they see fit.

And maybe as a follow-up, I know it's still obviously very early days, and you're sort of limited in what you can do in terms of gauging with clinicians at this point. But just curious if you've gotten feedback from people sort of anxious to get it, because obviously I think the COVID-19 crisis has really sort of exposed the vulnerability of the American Healthcare System from a capacity standpoint. Are you getting feedback that sort of greater interest in oliceridine because that's certainly one of the attributes of the product is really to sort of help improve efficiency of the system, which perhaps I think we probably took for granted before this sort of took place.

Yes. It's a really good point. I mean, I think we've talked before about the – in particular the investigators that were involved in ATHENA are interested in getting oliceridine, having oliceridine has an alternative. We're three months away from PDUFA date. So I think that's – they're excited about that potential opportunity of having oliceridine here relatively soon. I do agree with you. I think, as I mentioned earlier, in particular the high-risk patients, right. Well we've talked about, you've heard us talk about is when these patients get sick, they stay even longer in the hospital. They put a lot of cost into the hospital system, some of the hardest, most difficult patients to treat. So it's been a focus of ours since the beginning to focus on those patients. That's where we think we'll get the initial use for oliceridine. Beyond that, as it relates to COVID, I think we're all sort of watching things and staying focused on getting oliceridine approved by the agency.

Okay. Great. That's it for me. Thank you.

Thank you, Doug. Appreciate it.

I am showing no further questions at this time. I would now like to turn the conference back to Carrie Bourdow, CEO.

Great. Well, thank you all. I appreciate all of the questions this morning. And as you can hear, we are optimistic and excited about oliceridine and PDUFA date that is quickly coming up. We are also excited about TRV045 and the NIH interest in 045 and also the progress that we've made in our IND capabilities and the ability to have an IND hopefully in the first half of next year. So thank you again for the time despite all the craziness that we're all dealing with. As you hear, we are passionate about our mission in developing novel medicines for patients in need. Thank you again for joining us this morning.

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