Trevena, Inc. (TRVN) Q3 2021 Earnings Call Transcript

Good day and thank you for standing by. Welcome to the Trevena Third Quarter 2021 Financial Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Barry Shin, Senior Vice President and Chief Financial Officer. Please go ahead.

Good morning and welcome, everyone. With me today are Carrie Bourdow, our President and CEO; Patty Drake, our newly announced Chief Commercial Officer; Bob Yoder, our Chief Business Officer and Head of Commercial Operations; and our Chief Medical Officer, Mark Demitrack. We are also joined by Dr. Paul Ryder from the University of South Alabama. Dr. Ryder will share his firsthand experience with OLINVYK, both as an investigator in our Phase 3 open-label safety study and in his colorectal surgery practice, where OLINVYK is approved for use. At the end of the call, we will open it up for questions. As a reminder, OLINVYK is approved in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. The important safety information, including the box warning and the full prescribing information are all available on olinvyk.com. Also, we will be making forward-looking statements within the meaning of federal securities law. These statements are subject to risks and uncertainties related to our business, including those covered in our filings with the SEC. We undertake no obligation to update these statements beyond today. I will now turn the call over to Carrie for an overview of our third quarter and recent business accomplishments. Carrie?

Thank you, Barry. Good morning, everyone and thanks for joining us today. Over the past quarter, we continued to make progress launching OLINVYK despite the pandemic and we have a number of exciting announcements to make today that we strongly believe will position us for success in 2022. First, as you may have seen in our press release last week, we are thrilled to announce that Patty Drake, a seasoned biopharma executive with over 30 years of sales and marketing experience, will be joining Trevena as Chief Commercial Officer. While at Merck, Patty led the successful launch of numerous hospital and specialty commercial products. Recently, Patty has been serving as a consultant to Trevena, partnering with Bob to assess the landscape and putting together a plan for commercial success. Key components of the plan include an accelerated focus on integrated health systems to drive formulary adoption, the addition of burn care as a target specialty, and optimizing the field sales organization. Patty is with us today and will speak in more detail about her plans. Importantly, Patty coming on board will allow Bob to focus on commercial operations for OLINVYK and our growing pipeline. We also announced today a new study designed to assess the impact of OLINVYK on cognitive function compared to IV morphine. We are initiating this study based on the positive feedback we continue to hear from physicians. And you will hear directly from one of those physicians today, Dr. Paul Ryder, who will share his experience as treating patients with OLINVYK. In addition, later on the call, Mark will provide details about the two ongoing OLINVYK studies we are conducting to further evaluate its clinical profile and the important progress we have made with our pipeline this quarter. With that, let me turn the call over to Patty to say a few words about the OLINVYK launch.

Thanks, Carrie and hello to all of you joining us today. I am thrilled to be joining the Trevena management team at this time. After a 32-year career at Merck, I have an appreciation for novel innovative advancements in medical care that deliver a differentiated patient experience and I certainly see that with OLINVYK. As Carrie mentioned, I have had the opportunity to spend some time in the field talking with customers and this is why I am optimistic about OLINVYK. What’s clear to me is that physicians who use OLINVYK are very happy with the results. The more we are able to get in front of physicians and formularies, the better position we will be. And I do believe that we are turning a corner here. There are early signs that face-to-face engagement maybe returning. Having launched dozens of products without the challenge of a global pandemic, I can tell you, it does take time. The Trevena team has done a great job of laying the necessary groundwork. The uptake in advocacy that we have built over the past few months represents important early progress. And we are now in a strong position to initiate the second part of our launch strategy. As part of the top-down approach to efficiently expand formulary adoption, we have begun to engage with leadership with integrated health systems and group purchasing organizations. This represents a significant opportunity for us to drive rapid adoption at the national level and facilitate expanded access to OLINVYK. We are still in the early stages of discussion, but I am confident that the positive reception we see from healthcare decision-makers about both our clinical profile and health economic data will support their interest in making OLINVYK available to their member hospitals. I am also thrilled about the opportunity to expand into burn care. In conversations with our customers, we have started to recognize that OLINVYK is an ideal match for use in burn patients. There are several key considerations when treating burn patients. The absolute top priority is achieving rapid and powerful pain relief. The HCPs we have spoken with appreciate OLINVYK’s rapid onset, duration of action, lack of active metabolites and no dosing adjustment needed for the renally impaired patients as ideal attributes for their practice. Approximately, 30,000 burn patients are admitted each year to the major burn centers. These patients, on average, have length of stay of 8 to 9 days and burn patients often have extended course of treatment. Physicians have told us that they are looking for an advancement in pain care to offset some of the known complications with current treatment options. Based on this early feedback, we believe there is a significant potential opportunity for OLINVYK as a new pain option in burn care. I am excited to be joining this experienced team with an innovative pipeline of products and I really look forward to updating you on our progress. And with that, I will turn the call over to my colleague, Bob.

Thank you, Patty. We are thrilled to have you on board. And I look forward to partnering with you over the coming months. As Patty said, physician interest in the clinical value prop of OLINVYK remains high. OLINVYK is currently approved at 41 institutions and at various stages of formulary review in over 125 institutions or accounts. And we have also expanded our list of target accounts to approximately 700 hospitals, representing nearly 60% of the IV opioid market. Like many of our peers, COVID has impacted our ability to access our customers and provide on-the-ground support for the formulary process. The surge of the Delta variant over the summer significantly affected many hospitals. Not only did many institutions restrict access, but physician head space was once again dominated by COVID patient care or related impacts such as staffing shortages, which hindered advocacy development and the formulary process. We do believe this is changing and bringing Patty on board at this time will allow us to leverage the momentum we have built. The feedback from the field and positive trends across many of our launch metrics continue to give us confidence in the OLINVYK value proposition. On that note, I’d now like to introduce Dr. Paul Ryder, a colorectal surgeon at the University of South Alabama. Dr. Ryder was one of our investigators in the ATHENA open-label safety study and has been using OLINVYK in his practice for the past 7 months. Dr. Ryder?

Thank you, Bob, for the introduction. Good morning, everybody. I am pleased to be here this morning that I will provide my firsthand experience regarding OLINVYK’s use in my practice. By way of disclosure, I am a paid consultant with Trevena and I was an investigator as part of the Phase 3 ATHENA open-label safety study. The views that I will be expressing today are my own and I am not speaking on behalf of the University of South Alabama. Let me share with you a little bit about my practice. I have served as the Chief of Colorectal Surgery division here at the University of South Alabama for 9 years. I focused primarily on complicated and last resort cases as a safety net hospital that serves roughly 1.5 million in the mobile metropolitan and surrounding areas. Many of our patients are complicated, may require complex procedures that can yield a high magnitude of pain. While we try to provide least invasive intervention possible, the types of procedures I do result in postoperative pain that requires judicious and meticulous treatment. Typically, we try to adhere to opioid-sparing concepts, but we see many cases where we can’t forgo them entirely. In fact, it’s uncommon for our patient and my practice to not need any IV opioids in the postoperative setting. The clinical care of these complex patients can be challenging due to their medical comorbidities such as advanced age, obesity, renal disease, placing them at a higher risk for side effects. To combat this, we often utilize concomitant medications in an advanced recovery after surgery protocol, which is generally considered to be a standard practice as a part of multimodal therapy. However, that introduces yet more risk for complications from additional side effects of these additional medications, while further increasing the complexity and the cost of their care. To me, OLINVYK offers a new treatment option. The two pivotal trials provide evidence that simply stated works and it provides a powerful means to control the postoperative pain in my patients who have acute pain severe enough to require an IV opioid. In addition, the data from the ATHENA open-label safety study provided important insight into the safety and tolerability of OLINVYK. Most notably, in these challenging patients, I just described as the lack of active metabolites and no need for dose adjustments in patients with kidney disease that make me believe that OLINVYK is an overdue advancement in the IV opioid pharmacotherapy. I’ll add that when I participated as an investigator in ATHENA, my favorable personal experience was what compelled me to submit OLINVYK or formulary review of my institution. OLINVYK was added to our formula in April of this year. I’m currently using OLINVYK in my elective procedures and my experience has continued to be very positive. This real-world performance is paralleled the outcomes I observed during the ATHENA study. One recent case comes to mind. This was a female with end-stage renal disease on dialysis who underwent surgery. He had an extensive past surgical history and actually had a very similar procedure done 18 months prior, where she experienced significant challenges with pain control. This time around she experienced what I would consider to be truly maximal benefit from OLINVYK, effective pain management and a favorable safety profile that yielded a positive postoperative experience. She even commented that not only did our pain field under control, but she also didn’t feel as fully headed as she remembered from her previous surgery. Based on my experience, I’ve encouraged Trevena to further explore the possible favorable effects on cognitive function in a clinical study, and I’m excited that they are now exploring this in two post-approval studies because it’s something that significantly impacts both patients’ recovery and their satisfaction. I look forward to seeing what the data generate. To close, I’m extremely happy with my experience with OLINVYK. I’ve seen how my patients have benefited from this novel therapeutic and I believe that it will continue to demonstrate a favorable profile in my practice. Thanks for your attention, and let me now turn it over to Mark.

Thank you, Paul. We appreciate your clinical insights on OLINVYK. I’d like to spend some time providing a few updates on the progress we are making with OLINVYK’s post-approval research plan. As you just heard from Dr. Ryder and this echoes what we heard from other physicians, observations from our ATHENA study suggests that OLINVYK may have a potential differential effect on cognitive function, although this has not been evaluated in clinical trials to date. That’s why I’m pleased to be embarking on a new study designed to be a rigorous clinical investigation of this intriguing observation. We’re partnering with the Center for Human Drug Research, a world-class facility in the Netherlands that has a wealth of study experience with CNS therapeutics. This will be a randomized, double-blind, placebo-controlled study and will investigate the effect of OLINVYK and IV morphine on cognitive function and pain thresholds. A broad array of cognitive outcomes will be evaluated, including motor performance, attention, reaction time, memory and executive function. Enrollment is expected to begin in the first quarter of 2022 and we expect data to be reported by the middle of next year. We also continue to advance our two other ongoing clinical studies. The OLINVYK outcome study led by Cleveland Clinic, known as the VOLITION study has begun enrolling patients and we expect top line data from this study in mid-2022. And the OLINVYK respiratory physiology study led by Dr. Albert Kahan at Leighton University Medical sector is on track to finish by the end of this year with top line data readout shortly thereafter. I look forward to providing additional updates on our post-approval program over the next few months. I’d now like to turn to our pipeline, which also saw several exciting developments last quarter. We announced positive proof-of-concept data for TRV027 from the study led by Imperial College London. This biomarker study evaluated TRV027 as a potential treatment for acute lung damage and abnormal blood clotting associated with COVID-19. We believe these findings provide encouraging preliminary evidence of TRV027’s potential to help hospitalized COVID-19 patients early on in the course of their illness. And we look forward to Imperial College London working rapidly to submit these data for peer review and publication. As a reminder, these data from Imperial College lent momentum to the implementation of 2 global multi-arm platform trials that are evaluating TRV027, the NIH-funded ACTIVE trial led by Vanderbilt University Medical Center in the U.S. and the REMAP-CAP trial in the UK. Data from the ACTIVE trial is expected as early as mid-2022. If positive, results from this study will help elucidate whether TRV027 may have even broader applications in other forms of lung injury or acute respiratory distress beyond COVID infection alone. Finally, I’m also pleased to provide an update on our path toward clinical development of TRV045, our selective S1P modulator targeted for treatment of diabetic neuropathic pain. In October, we received a clinical hold letter from FDA regarding certain Phase 1 study design elements. Responding to the FDA’s comments, we’ve refiled the IND and are prepared to initiate the Phase 1 program once the agency provides final feedback. Let me now turn the call over to Barry to discuss our third quarter financial results. Barry?

Thanks, Mark. In Q3, we reported $181,000 in OLINVYK net sales and license revenue. Our net loss for the quarter was $13.9 million compared to $5.6 million for the same period last year. This change was mainly due to costs associated with our OLINVYK launch. Our operating expense was $14 million for the quarter and this should increase moderately as we commercialize OLINVYK and advance our product pipeline. We finished the quarter with $78.6 million in cash and equivalents, which we continue to expect will fund our operations through the fourth quarter of 2022. We will now open the call for questions, after which Carrie will provide some closing remarks. Operator?

[Operator Instructions] And we have a question from Jason Butler with JMP Securities. Your line is open.

Hi, thanks for taking the questions. First one maybe is for Patty, congrats on joining the company. Maybe you could give us some thoughts here on product messaging. Any thoughts on what you think about the company’s targeting of patients or procedures? And then just more on what you’re doing to expand formulary adoption. Thanks.

Thanks, Jason. Thanks for the question, and it’s nice to meet you. In terms of the product positioning and what I’ve seen so far is that the powerful efficacy data with the differentiation on the side effect profile is really resonating very, very well. As we talked about in terms of where we want to move to in the future, you’ve heard a couple of those strategic choices being now the right time to engage with the integrated health systems and the GPOs as well as a pivot to the burn centers and the burn patients. And what we truly believe because so many of our surgeons and anesthesiologists have said, move to the burn profile because of the fact that we’ve assessed this opportunity from both a medical and a commercial perspective, and it fits the product profile really perfectly. And we see burn as really the experts in terms of pain management. And with about 140 burn centers across the United States, we can really efficiently and effectively target these new set of customers as well. So that’s where we’re at and that’s where we’re headed, Jason.

Great. And then I just had a couple for Mark. Just on the cognitive study, is this something where you think ultimately you could get data reflected in the product label? Are you also looking at cognition in, for example, the Cleveland Clinic study? And then just how did you think about designing the endpoints for this new study? And then just lastly on 045. Has there been any dialogue with FDA since the NHL IND was not approved? And then I guess what gives you confidence now that the resubmission will be approved? Thanks.

Great. Jason thanks for the questions. Let me start with the last one first. So the – in terms of correspondents, we did have, as we talked about before, verbal communication from FDA and then follow-up letter specifying the specific aspects of the Phase 1 study design that they wanted us to address. We’ve done that. We have re-filed the IND. And so we believe we are on track if all goes well, to be in the clinic with 045 at the beginning of the year. In regard to your other questions around the cognitive study and you remind me when I get to the end if I touched on all the points that you raised. But as you heard in Dr. Ryder’s comments and as we have talked about before, we have heard anecdotally comments on differences in the profile of cognition in patients with – who are treated with OLINVYK, a level of alertness that is distinctive in the clinician’s view. So, that’s given us some insight into aspects of cognition that we should investigate things like alertness, reaction time, motor performance, executive function. And we have designed the current study to explore those specific domains of cognitive function. And yes, we are looking at global indices of attention, alertness and sleep quality as well as risk of delirium within the context of the work that we are doing in the VOLITION study. So, both of those studies give us an opportunity from different angles to evaluate the outcome of cognitive function. And in regard to the potential for this information to have regulatory implications, it certainly provides us information that we could then begin a discussion with FDA, how we get to the point beyond that of information that might be necessary to enlarge the label in any way, would be a matter for future discussion. I think that covered most of what you had asked.

Yes. I guess just a real quick follow-up. Any – through here on would there potentially be – or is the thought process that there could be a cost benefit as well if you have a less negative effect on or no negative effect on cognition, you can get the patients out of the hospital faster. Is that the way to think about it?

Absolutely. And in fact, we saw a hint of this. In fact, when we look at the adverse event of sedation and sedation, you may remember, is one of three major economic contributors to our health economic model, the other two being vomiting and respiratory depression. And you are absolutely right. improvements in cognitive function, whether reflected in sedation or alertness have a great impact on the patient’s ability to cooperate and participate in their own recuperation, which generally has a measurable impact on things like length of stay and time in hospital or time to critical milestones in hospitals. So, the potential from both a clinical recovery point of view and an economic point of view is potentially significant. And that is something that we are very interested in looking at.

Okay, great. Thanks for taking questions.

Thank you. Our next question comes from Jeff Jones with Oppenheimer. Your line is open,

Great. Thanks. Thanks for taking my question guys. Just two quick follow-up questions. Can you give us a feel for the number of P&T committees that are scheduled to review OLINVYK through the end of the year? And where your rate of approval stands in terms of P&T committees at this point? And then just one quick follow-up on the cognitive function study, if I heard right, this is head-to-head versus IV morphine. Can you give us a feel for what the end looks like in that number? How many patients are involved? Thank you.

Jeff. Hi, it’s Carrie. Unfortunately, you can hear, I have lost my voice. Thankfully, that call was recorded. So, let me ask Mark to take the first cognitive function question and then Bob will take the P&T question.

Thanks, Jeff. This is Mark. So, the cognitive function study, you are right, will be a head-to-head comparison. There will be a range of doses of OLINVYK, a range of doses of IV morphine in a double-blind, placebo-controlled crossover design. We expect somewhere in the order of about 25 or so subjects to be participating in that study. And that should give us – on the endpoints we are looking at, that should give us the necessary sensitivity to look at the group effects as well as PK/PD model that we have derived from the data. Bob?

Yes. Thanks Mark. Hi, Jeff. Thanks for the question. So, regarding the formulary review process, we track every step along the way of that – the process to go from submission all the way through a P&T review. And right now, we have got over 125 institutions that are in various stages of that process. More specifically, there is over 40 that are further along that process, either in subcommittee review or awaiting scheduling for the P&T meeting. So, that’s sort of the status of where we are at with the in review. As far as rate of approval, it sort of goes back to what Patty described about what she is seeing in terms of the profile. I would say we have a pretty good hit rate on the approvals once we get to that process. It’s just that we are seeing a lot of the COVID headwinds pushing back P&Ts. We have seen some meetings being delayed and pushed back and rescheduled. But I am happy with the approvals that we are seeing as a hit rate.

Great. Thanks guys.

Thank you. And we have a question from Doug Tsao with H.C. Wainwright. Your line is open.

Hi everyone. Chris Bialas on for Doug. Just a couple of quick ones. So, I was wondering what is your current physician interaction rate to how many physicians can you see versus digital interaction? And then I was wondering if you can kind of give us a little more color on how you plan and leverage your expanded MSL team? Thanks so much.

Yes. Go ahead, Bob, please.

Sorry, yes. I was just going to say, Chris, to answer your first question. So obviously, COVID has an impact on physical access. But what I am happy to see is that of our engagements with customers, a little over 70% plus now are live engagements and that’s obviously the goal to get to, obviously, as many live as we can. And I will say, you mentioned the digital program. We are really happy with how the digital program is performing. We are basically above many of the industry benchmarks in terms of the engagement metrics that you watch, things like open rates, click-through rates and engagement with our various digital platforms. And we understand which of those physicians are what we call active engagers, where they have engaged with us across multiple platforms, multiple times. And the field has those – that information as well to follow-up on what I would call sort of our warm leads in that case. I don’t know, Pat, do you want to add anything else to that?

Bob, just a little color commentary in that I have been out in the field for the last five weeks, probably have called on more than 15 accounts and spoken with and observed probably more than close to at least 100 customer visits across those five weeks. And I am saying early signs of things opening back up, appointments being made and programs being held both live and virtually with very good attendance. And so while you are absolutely right, Bob, there have been the COVID headwinds, I think anecdotally, anyway, things are really starting to turn a corner.

Awesome and the MSLs?

Yes, Bob, I would be happy to answer that. This is Mark. The MSL team, Chris, is composed of a fairly rich collection of individuals with the Form D background with pretty deep experience of the P&T process. So, the two major goals that we have in deployment of the MSL team is first and foremost to assist in the conversations with the formulary committees, particularly around the health economic model, which has generated a considerable amount of interest in our discussions. So, the early success we had with the initial group of five has led us to the expansion. And of course, the other aspect with a larger MSL team, it gives us that much greater ability to engage in scientific dialogue with the clinicians. So, on both of those fronts, those are ways that our MSL team is utilized in field interactions. Bob, do you want to add anything to that?

No, I think that covers it well, Mark. Thanks.

Awesome. Thank you so much.

Thank you. And I am showing no other questions in the queue. I would like to turn the call back to Mr. Barry Shin for closing remarks.

Great. Thanks, operator. Thanks for your questions, and let me also have my thanks to Dr. Ryder for joining us this morning. Today, you have heard about the progress we are making with OLINVYK and our robust pipeline. WE ARE pleased to have Patty on board as we look ahead to the next phase of the OLINVYK launch. We are initiating an exciting study to evaluate its impact on cognitive function, and we have two studies already underway to further characterize this profile. In addition, we continue to advance our novel pipeline assets with multiple catalysts on the horizon for 2022. We remain focused on delivering long-term value for our shareholders and look forward to updating you as we continue to make progress on all fronts. Thank you for your time and continued interest in Trevena. That concludes today’s call.

This concludes today’s conference call. Thank you for participating. You may now disconnect.