Trevi Therapeutics - Q1 2023

Transcript

Operator (participant)

Good afternoon, welcome to the Trevi Therapeutics Q1 2023 earnings conference call. At this time, all participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your phone. To withdraw your question, please press star then two. Please note this event is being recorded. Various remarks that management makes during this conference call about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of the company's most recent quarterly report on Form 10-Q, which the company filed with the SEC this afternoon. In addition, any forward-looking statement that represents the company's views only as of today and should not be relied upon as representing the company's views as of any subsequent date. While the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so, even if its views change. I would now like to turn the conference call over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Jennifer Good (President and CEO)

Good afternoon, and thank you for joining our first quarter earnings call and business update. Joining me today on this call is Lisa Delfini, Trevi's Chief Financial Officer. Lisa and I have some prepared remarks, then we will open it up for questions. During the first quarter, we continued to advance our clinical development plans for Haduvio for difficult to treat patients with chronic cough and idiopathic pulmonary fibrosis or IPF, other chronic cough indications, andPrurigo Nodularis. Let me provide an update on each of our programs, beginning with our lead program in chronic cough and IPF. IPF is a serious end-of-life disease, and chronic cough is a major cause of morbidity that significantly impacts a patient's quality of life. There are no approved therapies for the treatment of chronic cough and IPF, and the cough is often refractory to antitussive therapy.

Patients with chronic cough and IPF can cough up to 1,500 times per day, leading to fatigue, air hunger, and increased anxiety. The chronic cough in IPF is also hypothesized to potentially enhance activation of pro-fibrotic mechanisms and disease worsening. We are planning to conduct two studies in parallel during this next phase of development in our IPF chronic cough program. The first is a phase IIb dose-ranging trial that will study three active doses of Haduvio and placebo. The doses we are planning to study are 27 milligrams, 54 milligrams, and 108 milligrams BID. We are planning for a total N in the study of approximately 150-200 subjects and dosing for approximately six weeks. We plan to conduct this study in multiple countries and sites to be able to complete enrollment in a timely manner.

As you may be aware, there is a lot of development work going on with anti-fibrotics in IPF patients, so we expect that enrollment will be competitive and we are planning for that scenario. We have finalized the protocol for the dose-ranging study and are preparing for various international submissions to regulatory authorities. We have also engaged our CRO and are in the final stages of country and site selection. We are planning on initiating this study in the second half of this year. In parallel, we are planning for a phase Ib respiratory physiology study. Opioids have a generic risk of causing respiratory depression. This is not something we have seen in our safety data across our various studies to date, and there is literature that suggests that mixed agonist-antagonists have a ceiling effect on the impact on respiration.

However, given the respiration impairment of the IPF population, it is important that we characterize to what degree, if any, our drug causes respiratory depression in this patient population. Trevi is planning to conduct a phase Ib in-patient study in IPF patients with cough that have varying levels of disease severity to determine if we see any clinically significant impacts on respiratory depression. This study will help define the patient population for our pivotal program and ultimately the label. We have received FDA feedback on the planned phase Ib study and are finalizing the protocol and preparing for the IND submission. We expect to initiate this study in the second half of this year as well. In addition to the preparations in IPF cough, we are also developing a protocol for a phase II study in refractory chronic cough, also known as RCC.

We believe that because Haduvio works both centrally in the brain and peripherally in the lungs, Haduvio has the potential to provide therapy across a range of chronic cough indications, regardless of what the underlying disease is. We expect that this trial will look a lot like the CANAL trial, which was a dose-escalating crossover design, and we expect to enroll approximately 60 subjects. There have been a lot of trials in RCC with only one mechanism which has seen some success, the P2X3s, which mechanistically work peripherally in the lung. However, we believe there is still a significant opportunity for a mechanism that works both centrally and peripherally and has the potential to provide strong and consistent efficacy in the most difficult to treat cough patients.

We are leveraging the learnings from the prior development work in RCC by other companies as we design our own study. Our cough data to date continues to garner a lot of attention at upcoming medical conferences, with oral presentations of the data accepted at both the American Thoracic Society meeting beginning the end of next week, as well as the American Cough Conference being held in June. We have also finalized a manuscript on the CANAL trial results and have submitted it for publication. I think this speaks to the importance of the unmet medical need in these difficult to treat IPF patients and the medical community's interest in our program across cough indications.

The other indication where we have ongoing work is for the treatment of Prurigo Nodularis, or PN, which is a serious and debilitating disease characterized by papules and nodules on the skin, as well as severe itching. In June of last year, we reported positive data in the phase IIb/3 PRISM trial in PN. The trial achieved statistical significance on the primary and all key secondary endpoints. During the 1st quarter of 2023, we completed the one-year open label extension study that was associated with PRISM. We are currently analyzing the data from that study and will then seek an end of phase two meeting with the FDA, which we expect to have later this year. After this meeting, we will determine next steps for the program. Finally, we are conducting a human abuse potential study, which is required for an NDA filing.

Note that the parenteral version of nalbuphine is currently unscheduled in the U.S. by the Drug Enforcement Administration, or DEA. The objective of this study is to compare the likability or abuse potential of oral nalbuphine to an active comparator, which is butorphanol for this study. Butorphanol is a Schedule IV drug. The study is being conducted in two parts, with the objective for the first part to characterize the various butorphanol doses and choose a dose appropriate for comparison against oral nalbuphine in part two. We have completed part one of the study and have selected the butorphanol dose for the second part of the study. The second portion of the study is a randomized, double-blind, active, and placebo-controlled five-way crossover design to determine the abuse potential of three doses of oral nalbuphine relative to the selected dose of butorphanol as well as placebo.

There are two gating items to moving into part two of this study. The first is a nationwide shortage of butorphanol. We are working with our CRO partner to secure the doses we need to conduct the study. Second, we intend to submit the results from part one of the study to the FDA for any comments on dose selection of butorphanol before proceeding with part two of the study. Assuming neither of these two items causes a significant delay, we expect top-line results from the human abuse potential study by the end of this year. In closing, we are focused on execution to get these studies up and running. We will announce studies as they are initiated and provide more details on the study design, expected timelines, and the all-important name of the trial.

I will now turn it over to Lisa to review our financial results, then we will open it up for any questions that you may have.

Lisa Delfini (CFO)

Thank you, Jennifer. Good afternoon, everyone. The full financial results for the three months ended March 31st, 2023 can be found in our press release issued ahead of this call and our 10-Q, which was filed with the SEC today after the market closed. For the first quarter of 2023, we reported a net loss of $6.4 million, compared to a net loss of $7.3 million for the same quarter in 2022. R&D expenses were $5 million during the first quarter of 2023, compared to $4.6 million in the same quarter in 2022. The increase was primarily due to increased consulting and professional fees related to startup activities for the three planned chronic cough trials.

This was offset by a decrease in clinical development expenses, reflecting the completion of both the blinded portion of the phase IIb/3 PRISM trial and the phase II CANAL trial in 2022. G&A expenses were $2.6 million during the first quarter of 2023, compared to $2.4 million in the same period of 2022. The increase was primarily due to an increase in personnel-related expenses and higher tax professional fees. Other income net was $1.2 million for the first quarter of 2023, compared to other expense net of $0.3 million in the same period of 2022. The change was primarily due to an increase in interest income.

As of March 31st, 2023, our cash equivalents, and marketable securities totaled $111.3 million, compared to $120.5 million as of December 31st, 2022. Subsequent to the end of the first quarter, we elected to pay off our term loan early. The amount paid was $6.5 million and was previously classified as current on our balance sheet because the final payment was due in the first quarter of 2024 according to its terms. The loan was with Silicon Valley Bank, now a division of First Citizens Bank, and it included restrictions related to keeping our corporate cash equivalents, and marketable securities either at or managed by SVB. Given the recent events at SVB, we wanted to free ourselves of these restrictions.

Our cash runway guidance remains unchanged since it had previously incorporated the paydown of the note in accordance with its terms. Accordingly, our cash equivalents, and marketable securities will enable us to fund our expenses into 2026. In the first quarter, we burned approximately $9 million of cash. That included completing the clinical work on the PN open label extension study and conducting part one of the human abuse potential study.

Excluding the payoff of the term note, we expect cash burn to be between $10 million-$12 million per quarter for the rest of 2023 as we continue the human abuse potential study and initiate the IPF and RCC trials. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A.

Operator (participant)

We will now begin the question and answer session. To ask the question, you may press star then one your touchtone phone. If using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Annabel Samimy with Stifel. You may now go ahead.

Speaker 6

Hi, this is Stacy dialing in for Annabelle. Congrats on the quarter and just a few questions on our end. The first is what was the rationale behind the decision to dose up to 162 in the phase Ib respiratory trial and IPF when the phase IIb are at lower doses? Another is, has the level of interest by outside partiers in your RCC significantly increased since the GSK acquisition of BELLUS Health, and how has that changed any of your strategic thoughts around the indication?

Jennifer Good (President and CEO)

Yeah. Okay. Thank you Stacy, for the questions. The phase IB trial, we're still finalizing the study design. Our current plan is to only dose to 108 milligrams, but that's some of the discussions that have been going back and forth with the FDA. We think we only need to go to 108, but we'll see when we finalize it. As far as the RCC indication, yeah, I mean, we obviously got a lot of inbound interest. I think I'm gonna state the obvious, but GSK certainly validated the importance of cough as a market and the unmet need there. I think with refractory chronic cough as well, there's just not been a lot of success there. You have the two players with the P2X3. We kept quite busy from an investor perspective.

We already are in a lot of discussions around sort of, with various strategics. Actually, I'll see several more over the next couple of months at conferences. Yes, I think that got everybody's attention and certainly turned the light back on Trevi, because I think at that point we're the only standalone cough company once BELLUS Health is acquired. It was good news for us.

Speaker 6

Amazing. Thank you. That's very helpful.

Jennifer Good (President and CEO)

Thank you, Stacy.

Operator (participant)

Our next question will come from Serge Belanger with Needham & Company. You may now go ahead.

Serge Belanger (Managing Director)

Hi, good afternoon. Just one question for us today. I think you received a new patent for nalbuphine over the quarter. Maybe just give us an update on the overall IP for the product.

Jennifer Good (President and CEO)

Yeah. Thank you, Serge. Yeah, it was an important patent for us. We had filed a broad application. We have three layers of patent coverage. One is the formulation patents that have been in place for the product. Those start to expire in roughly 2029. The primary coverage that will extend that is through method of treatment patents. We have a big, broad application that we filed around various neurological coughs. What we did was take the data from the IPF CANAL trial and actually pull out claims and prosecute a specific patent based on, you know, the dosing, the data, etc. That patent was issued, Cooley has helped us with that. We consider it to have broad claims in the patent. It goes to 2039, will be Orange Book listable.

That becomes really sort of the core of the protection. On top of that, we also have filed other, what we call special population patents, data we've learned in the hepatically impaired population, the elderly, that'll be in the label around dosing. You know, those all have to play through. If those get issued and actually into the label, that would move protection out even a couple years beyond that. Getting that method of treatment in IPF chronic cough was super important for us.

Serge Belanger (Managing Director)

Thank you.

Jennifer Good (President and CEO)

Yeah. Thank you, Serge.

Operator (participant)

Our next question will come from Thomas Smith with SVB Securities. You may now go ahead.

Max Masucci (Analyst)

Hi, this is Max Masucci sub on for Thomas Smith. Just one quick question from us. What are the gating factors to initiate a phase II trial in RCC and a phase IIb study in chronic cough in IPF? Previously, you mentioned, packaging material shortage was one of the factors. Is that issue being solved?

Jennifer Good (President and CEO)

Yeah. Just to be clear, the materials issued I mentioned is butorphanol and only affects our human abuse potential study. That does not affect our phase IIb dose ranging or our refractory chronic cough. We have plenty of drug supply with our own product. Just to be clear, that's sort of its own distinct issue. As far as the gating factors of where we are now, I gave you sort of a good rundown of what we've accomplished. It's really the regulatory, getting sign off from the regulatory authorities. We are running these studies internationally. You know, we have to work through sort of the various regulators comments. We have final protocols. They'll be submitted for regulatory input, and that's really the swing factor. We've set initiating in the second half of this year.

Assuming that we get through the regulatory process pretty smoothly, it'll be sooner. If we get any comments back, we'll have to adjust the protocol and go back to them. It could be a little later in the second half.

Speaker 5

Got it. Thank you.

Jennifer Good (President and CEO)

You're welcome.

Operator (participant)

Our next question will come from Mayank Mamtani with B. Riley Securities. You may now go ahead.

Speaker 5

Hi, this is William on for Mayank. Congratulations on the very nice quarter, and thank you for taking our question. A couple from us. Just at a regulatory level, I guess, could you remind us of the current IND status for Haduvio in chronic cough, and how that's progressing?

Jennifer Good (President and CEO)

Thank you, William. Yeah. We were getting input with the FDA around this phase Ib respiratory physiology study. That will be our IND opening study. We're preparing that now, and that should be submitted shortly with the agency. Fortunately, we've had a lot of good dialogue with them about the program. You know, we should be able to move that through and hopefully get the IND open and get that study moving along.

Speaker 5

Got you. Very helpful. Just thinking about RCC, in terms of the patient population, that you're planning to target, are you going completely broad, sort of incorporating everybody or trying to do more of, targeting specific subgroups that you think Haduvio may work best in and then maybe building out from there or some combination of that? If you could just speak to that, please.

Jennifer Good (President and CEO)

Yeah. No, it's a good question. This is where I mentioned in my comments, look, we don't need to sort of recreate the wheel here. There's been a lot of studies run in RCC and, you know, it's become pretty clear that an enrichment strategy there is quite effective. We're working through those details, but we'll probably do a two-to-one enrichment strategy of, you know, coughers greater than 20 and then some portion of coughers that are in the 10 - 19 range. We wanna be mindful, though, because Bellus is out running these two pivotal studies with this enrichment criteria of greater than 20. If we don't have that as a requirement in our studies, we'll end up with all the mild coughers, so we don't want that to happen either.

We have put in some parameters around that to get, you know, a more enriched population, but we will also study some of the lower coughers, which they're doing as well. They're doing a 3:1 randomization.

Speaker 5

Right. Makes sense. One quick last one. I know you've mentioned that the open label PRISM, you're analyzing it, and then be meeting with the FDA. Any indication or color on when and where we might see that? Any potential interactions you've had for that or with that program?

Jennifer Good (President and CEO)

William, I'm actually waiting to see that data myself. Our physician who's driving that along is sort of synthesizing that down, we'll share it with the team. Where that gets presented, I think the most obvious next big derm conference is EADV, which is in the fall in Europe. We probably will do something in one of our press releases with some of the top line that we saw, 'cause I know people are interested in that. As far as strategic conversations, we continue to be active there, move those along. As we said, you know, we as well want to have our end of phase II meeting, so we clarify exactly what's left in this program. We certainly have been in conversations. We know the short list of interest.

I think it's a matter of working our way through that FDA meeting and then reassessing at that point based on what we learn.

Speaker 5

Got it. That's all from us. Thank you for taking our questions again, and congratulations again on a good quarter. Thanks.

Jennifer Good (President and CEO)

Thank you.

Operator (participant)

Our next question will come from Sean Kim with JonesTrading. You may now go ahead.

Speaker 5

Hi, thank you for taking my questions. I guess one question on the modular programs. What kind of feedback would you be expecting from the end of phase two meeting in order for you to kinda move forward with the program? I guess my second question is on the RCC side of things. Now that BELLUS Health is being acquired by the larger pharma GSK, has that shifted your thinking in terms of, you know, potentially commercializing Haduvio, you know, the leading commercial efforts in the U.S., potentially partnering up, can you compete against the larger biopharmas? Thank you.

Jennifer Good (President and CEO)

Thank you, Sean. On PN, as far as feedback, the key question that we want to confirm is that the phase IIb/three serves as one of our two pivotal studies. The agency agrees that we only need one additional trial. We're going to present the protocol for the next trial, which essentially looks just like the trial we just ran, possibly a little bit longer. We just wanna confirm that there's one more study. Here's what it looks like. There's some little CMC questions to nail down, but nothing too major. It's really pretty, it's all really around that we're sort of there. As far as RCC, I don't think it's changed our thinking at all. I think we're continuing to sort of refine in our own minds to where we're gonna compete.

I think where the RCC market comes out for us is, you know, we're looking at those severe, difficult to treat patients. P2X3s work in about half the population, but don't work in about half the population. We think that's because they essentially work on that peripheral chain. We believe because of our central mechanism, that we should be able to work in more patients and have a bigger effect. Our lead indication will be IPF chronic cough, which we think will set us up for nice premium pricing and also other interstitial lung diseases. We think that we may be able to hold that at a pretty strong level if we're picking up the failures in the chronic cough market, which is about half that market. It's still a big opportunity. That's how we think about it.

As far as partnering that out, you know, we say to partners all the time when they ask about that, I mean, we're a single asset company and, you know, cough is our lead focus. If people want the rights in the U.S. for that program, they're gonna have to buy Trevi. You know, we'll look at sort of Japan or possibly Europe, but in the U.S., they're just gonna have to buy the company.

Speaker 5

Okay. That's very helpful. Thank you very much.

Jennifer Good (President and CEO)

Yeah. Thank you, Sean.

Operator (participant)

Again, if you have a question, please press Star then one. Our next question will be a follow-up from Annabel Samimy with Stifel. You may now go ahead.

Speaker 5

Hi, sorry about that. Our question was, previously answered. Thank you.

Operator (participant)

Okay, I'm showing no further questions. This concludes our question and answer session. I would like to turn this conference call back over to Jennifer Good for any closing remarks.

Jennifer Good (President and CEO)

We would like to thank everybody for participating in today's call. We have several upcoming conferences and medical meetings that we are participating in before summer gets fully underway. You can see them detailed in our earnings release issued today. I hope to see some of you at these meetings. Thank you.