Trevi Therapeutics - Q4 2023

Transcript

Operator (participant)

Good afternoon and welcome to the Trevi Therapeutics 4Q and year-end 2023 earnings conference call. At this time, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press * then 1 on your telephone keypad. To withdraw your question, please press * then 2. 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-K, which the company filed with the SEC this afternoon. In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing the company's views as of a 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 over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Jennifer Good (CEO)

Good afternoon, and thank you for joining our 4Q and year-end 2023 earnings call and business update. Joining me today on this call are my colleagues Lisa Delfini, Trevi's Chief Financial Officer, and Dr. David Clark, Trevi's Chief Medical Officer. Lisa and I have some prepared remarks, then we will open it up for questions. The 4Q of 2023 and start of 2024 was a productive time for Trevi, with the initiation of three clinical studies. Let me provide a brief update on each of these trials. I will begin with our phase 2a RIVER trial in refractory chronic cough that was initiated in the 4Q of 2023. Refractory chronic cough, or RCC, is a debilitating disease that affects up to 10% of the adult population and is defined as a persistent cough lasting greater than eight weeks, despite a treatment for an underlying condition.

RCC is caused by cough reflex hypersensitivity in the central and peripheral nerves and has a significant impact on patients physically, psychologically, and socially. With multiple drug failures in the space and a lack of any approved therapies for RCC in the U.S., there continues to be a significant unmet and urgent need for new potential treatments. The key point of differentiation for Haduvio in refractory chronic cough is the mechanism of action, which works synergistically both centrally in the brain and peripherally in the lungs. We believe Haduvio's central and peripheral mechanism has the potential to work in more patients and potentially have a stronger effect across a broader range of baseline cough counts than peripheral-only mechanisms like the P2X3 inhibitors.

RCC patients have been stratified for clinical trial purposes into three categories of frequency: very high, greater than 20 coughs per hour, high to moderate, 10 to 19 coughs per hour, and low-frequency coughers. The very high and high to moderate frequency coughers are all considered as having severe cough by the KOLs. The P2X3s to date have only demonstrated statistical significance in the very high cough counters and have not shown successful results in the cough frequency of 10 to 19 coughs per hour. We believe that based on the data from our IPF cough trial, which showed a strong drug effect across all baseline cough counts and the drug central and peripheral mechanism of action, that Haduvio has the potential to work in patients broadly across varying cough frequencies.

When you look at the RCC patient distribution, 44% of the patients are estimated to have moderate to high cough frequency, whereas only 29% are estimated to have very high cough frequency. So there's potential Haduvio may address close to three-fourths of the RCC market, whereas P2X3s may only be effective in less than a third of the market. Onto the details of our RCC trial, which is the standard design across several cough trials run to date. The RIVER trial is a phase 2a double-blind randomized placebo-controlled two-period crossover study evaluating the reduction of cough in approximately 60 patients. These patients will be randomized with a 1:1 stratification between those with 10-19 coughs per hour and those with greater than 20 coughs per hour. Each treatment period will last three weeks, separated by a three-week washout period.

Patients on Haduvio will have the dose titrated weekly from 27 milligrams up to 108 milligrams twice daily across the dosing period. The primary efficacy endpoint is the relative change in the 24-hour cough frequency at day 21 from treatment period baseline for Haduvio compared to placebo, as measured by an objective cough monitor. The study will also explore secondary endpoints, including patient-reported outcome measures for cough and quality of life. We are excited to have initiated this study and expect to have substantially all the sites activated by the end of this month. We continue to expect top-line data from this study in the second half of this year. Next, an update on our lead program in idiopathic pulmonary fibrosis, or IPF, chronic cough. IPF is a serious end-of-life disease.

Chronic cough is reported by approximately 85% of patients suffering from IPF and has similar significant physical, psychological, and social impacts to that of RCC, but may also be a risk factor that plays a role in the progression of IPF. The constant lung injury, micro-tears, and potential inflammation caused by persistent coughing may lead to worse health outcomes for patients, such as increased respiratory hospitalizations, mortality, or need for transplant. With no currently approved treatment options for chronic cough in IPF, patients and providers have an urgent need for new therapies. While there are a lot of ongoing development programs in IPF, current and in-development therapies have not shown an impact on chronic cough, one of the primary complaints of these patients, elevating the unmet need. At the end of 2023, we initiated a phase 2b study in chronic cough in IPF, the CORAL study.

CORAL is a 4-arm, phase 2b dose-ranging trial that will study 3 active doses of Haduvio and placebo. The study is a 6-week trial in approximately 160 patients. We plan to conduct this study in multiple countries and sites to be able to complete enrollment in a timely manner. Site activations are moving along in multiple countries, and enrollment is in early stages. We reconfirm our guidance for this study for top-line data in the first half of 2025, assuming no changes from our sample size re-estimation results, which are expected in the second half of this year. Lastly, we initiated dosing of the final part of the human abuse potential, or HAP, study in January of this year.

The final portion of the HAP study is a randomized double-blind, double-dummy, five-way crossover design to determine the abuse potential of three doses of oral nalbuphine relative to the selected dose of IV butorphanol and placebo. The primary objective is to evaluate the likability of nalbuphine as compared to both placebo and butorphanol, and the primary endpoint is a drug-liking VAS scale. Recall that parenteral nalbuphine is unscheduled by the DEA. This study is moving along nicely, and we have passed the 50% enrollment mark. We continue to expect top-line data from this study in the second half of this year as well. As you can see, it is a busy time clinically for Trevi, and we believe the data from these trials will be important to inform the development path forward for Haduvio and chronic cough conditions.

We are motivated by the potential to offer an effective treatment to patients with these serious conditions and chronic cough. I will now turn it over to Lisa to review our financial results, then we will open it up for any questions you may have.

Lisa Delfini (CFO)

Thank you, Jennifer, and good afternoon, everyone. The full financial results for the three months ended December 31st, 2023, can be found in our press release issued ahead of this call and our 10-K, which was filed with the SEC today after the market closed. For the 4Q of 2023, we reported a net loss of $7.8 million compared to a net loss of $5.5 million for the same quarter in 2022. R&D expenses were $6.5 million during the 4Q of 2023 compared to $4.3 million in the same quarter of 2022. The increase was primarily due to increased clinical trial costs in our Phase 2B CORAL trial and our Phase 2a RIVER trial, both of which were initiated in the 4Q of 2023.

G&A expenses have remained essentially flat at $2.4 million during the 4Q of 2023 compared to $2.3 million in the same period of 2022. We take a very disciplined approach to cash management, and as a result, while R&D expenses increased as we are starting up four clinical trials, G&A expenses have remained consistent. Other income net was $1.1 million in both the 4Q of 2023 and 2022 and primarily consists of interest income on our cash balances offset by any interest expense. We paid off our term loan in May of 2023, so interest expense was de minimis in the 4Q of 2023. As of December 31st, 2023, our cash, cash equivalents, and marketable securities totaled $83 million compared to $120.5 million as of December 31st, 2022.

Our cash runway guidance that we will have cash, cash equivalents, and marketable securities into 2026 remains unchanged, and we believe is enough to fund all of the trials Jennifer just discussed and gives us good cash runway after the last readout. In 2024, we expect average cash burn of about $9 million-$12 million per quarter, and our fully diluted shares outstanding at December 31st, 2023, is 114.5 million. 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 a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question comes from Leland Gershell with Oppenheimer. Please go ahead.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

Good afternoon, and thanks for taking our questions. Two from us. First, with respect to IPF, the CORAL design, just wanted to have clarity on the primary endpoints. You're testing three dose levels, and then you have placebo. So will that primary endpoint, in terms of 24-hour cough frequency, be the aggregate cough frequency across all three doses versus placebo, or would it be that analyzed on an individual basis with each dose level versus placebo? Thank you.

Jennifer Good (CEO)

Go ahead, David.

David Clark (CMO)

So Leland, thank you very much for the question. So the analysis will be per dose level, so top dose, mid dose, low dose, all compared independently with placebo. It's important for us to get a good feel for dose response, and that analysis allows us to do that.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

Okay, thanks. That's very helpful. And then my other question, wondering, maybe Jennifer and team, if you could comment on the recently published data from a short-term trial of low-dose controlled morphine used in the IPF cough setting, which had shown a 40% reduction in cough related to placebo. But in the context of the fact that it was only a two-week trial and then, of course, morphine versus nalbuphine, thank you.

Jennifer Good (CEO)

Yeah, it's a good question. The PACIFY trial, which was run in the UK, I think Leland, our takeaway was it wasn't surprising it worked. We believe in the mechanism. We think the opioid pathway works, but we also believe that the synergistic effect of working at both kappa and mu of our drug is important. And I think that's why you see a 40% reduction from morphine and a 76% reduction or 74% reduction on nalbuphine. So we always thought it would work, and we thought our drug would likely work better. I think the other challenge morphine has just practically is because of the respiratory depression. They are dose-limited. They have to keep those at very low doses. So that's always going to sort of hinder where they can go with that.

Leland Gershell (Managing Director and Senior Biotechnology Analyst)

Okay. Thanks very much for the added information.

Jennifer Good (CEO)

Thank you.

Operator (participant)

The next question comes from Thomas Smith with Leerink Partners. Please go ahead.

Faisal Khurshid (Senior Research Analyst)

Hi, this is Nancy Runsup for Tom Smith. In grasping the progress we made in 2023, we have a couple of questions. So the first one, you plan to conduct a sample size estimation for the CORAL trial. Can you walk us through the rationale and the process behind the sample size estimation? And can you also remind us again on the number of targeted clinical sites and the split between the U.S. and ex-U.S. sites?

Jennifer Good (CEO)

Yep. I'm going to let David do this.

David Clark (CMO)

Yeah. No, thank you very much for the question. So the rationale is really to protect the study. We believe we've seen a very clinically relevant effect, as we've described, in the Phase 2a study. So we want to be protected from the situation where the estimates that we have for the effect size going into the CORAL study, we've assumed a 36% effect size. So we believe we've been appropriately conservative compared to the placebo-corrected more than 50% effect size that we saw in the Phase 2a study. But we wanted to protect ourselves from the situation where the effect size could still be clinically relevant because, as you know from experts in this field, 20%-30% effect size on objective cough is believed to be clinically relevant.

Faisal Khurshid (Senior Research Analyst)

If we have what we've done with the powering and the SSRE supports this is if we have an effect size which is not as large as we saw in the phase 2a, but it's still clinically relevant, for example, 25%, we can detect that with an increased sample size.

Jennifer Good (CEO)

Yep. I would just add too, David, there hasn't been a lot of work done in this area, right? There was one other good-sized study in our small-scale study. Everything else has failed or been too little. So your powering was not a lot of information. So it made sense, I think. You want to take this question too? Number of targeted sites and U.S., ex-U.S.?

David Clark (CMO)

Yeah. So there'll be approximately 60 sites or so planned for the CORAL study. Right now, the majority of those sites, they're ex-U.S. So they're primarily in the E.U. and the U.K. And we also have sites starting up in Australia, in other regions, so Australia and Chile and Canada. Those are the main regions and countries we're in at the present time and planning.

Faisal Khurshid (Senior Research Analyst)

Got it. Very helpful. One last question. Do you have an end-of-phase 2 meeting with the FDA for Haduvio in Q2 or July? What's the feedback from the meeting and the progress on partnership discussions? Thank you.

Jennifer Good (CEO)

Yeah, no, it's a good question. We have not yet filed a request for an end-of-phase 2 meeting. As you can tell from late in the year, David and his team were sort of flat out getting these studies up and running. We've got one more we want to get running. And we're sort of buttoning down all the reports and writing what we need to. But sometime this year, we'll file for an end-of-phase 2 meeting. It just hasn't been a priority. So eventually, we'll get there. We have not done so yet.

Faisal Khurshid (Senior Research Analyst)

Got it. Thank you so much.

Jennifer Good (CEO)

Yeah, thank you for the questions.

Operator (participant)

The next question comes from Serge Belanger with Needham & Company. Please go ahead.

Serge Belanger (Managing Director in BioPharma Equity Research)

Hi, good afternoon. Thanks for taking my question. I guess for Jennifer and David, I'm just curious what kind of takeaways or KOL feedback you've gotten following the FDA AdCom for Merck's P2X3 candidate and their second CRL. Just curious if there's been any change regarding the approach to clinical development or how they view the market opportunity for refractory chronic cough. Thanks.

Jennifer Good (CEO)

David and I are looking at each other because we can both answer this. I'll give a couple of comments and then let David comment. I mean, fundamentally, I think at the end, not only sort of what everybody saw in the briefing book and listening to the meeting, but we also followed up with KOL, our own advisory board, to make sure we weren't missing something. I think fundamentally, the Merck drug just didn't have good enough efficacy to clear the hurdles and got hung up in the primary endpoint, didn't correlate with the pros, etc. So I think at the end of the day, that was it, I would say, and then I'll let David comment. The other takeaway that I certainly had from listening to the AdCom was just how compelling the patient stories were about how disruptive RCC is to their lives.

That made a huge impact on me. And I think you heard it from the panel, and you heard it from the FDA say that they recognize that it's a serious disease. Having watched that journey over the last five years when there was some debate about, "Was this a real sort of condition?" I think that ship's clearly sailed. I left that call feeling that the FDA's bought in and the patients did a really good job of making the case. So David, as a drug developer, what'd you hear?

David Clark (CMO)

I agree with what you've said. The only pieces I would add, two points. I think effect size. What we hope will be a differentiating factor for our program is the effect size. If we get a translation from the effect size we saw in the IPF cough population and the RCC population when we'll see in phase 2a and hopefully subsequent studies. So we think that'll be a differentiator really protecting us for what happened to that Merck program, as you said, Jennifer. The only other piece I'd add, there are so many learnings. You were aware of it from the Bellus, now GSK, program that are in place. I think also as a field, a lot of the KOLs were reflecting to us.

A lot of lessons have been learned from these multiple programs being run, which we can utilize if hopefully we're successful in Phase 2a and River and we're expanding into the larger studies. There's a lot of good learnings to be which are to our advantage.

Jennifer Good (CEO)

Yeah. It's never easy to be the first guy over the wall in a new condition, so. But it makes our job easier for sure.

Serge Belanger (Managing Director in BioPharma Equity Research)

Thank you.

Jennifer Good (CEO)

Thank you, Serge.

Operator (participant)

Again, if you have a question, please press star and then one. Our next question comes from Mayank Mamtani with B. Riley Securities. Please go ahead.

William Forbes (Equity Research Analyst)

Hi, yes. This is actually William Forbes from Mayank. Thank you for taking our questions and congratulations on a nice year and quarter. On your phase 2a RIVER and HAP trials, do you plan on announcing full enrollment or last patient dose to give some refinement as a timeframe expectation surrounding these readouts? And should we expect the HAP trial to read out first given that it's already over 50% enrollment? I have a couple of follow-ups.

Jennifer Good (CEO)

Yeah, thank you for the questions, William. I think what you should expect is we'll let people know when the study initiates. We'll give guidance around what we think the top-line data readout is. I think we'll also let people know when we hit the 50% enrollment mark so that investors and analysts will know whether we're on sort of the front end of enrollment or the back end of enrollment. And we would announce last patient in. That's a pretty big milestone. So what we're going to avoid doing is update by update of sort of where we are in enrollment. That just gets painful all around for everybody. So that's our current thinking.

William Forbes (Equity Research Analyst)

No, that's helpful. And a quick follow-up on that. With these falling potentially so close to each other, the readouts, both in second half, 2024, what are your plans on meeting with the FDA to discuss next steps? And specifically for the HAP trial, do you and possibly having some discussion on RAMS or some of the regulatory sort of put into place given the readout here, how should we be looking at that? And would that be one meeting? And I'm assuming those will be sort of incorporated into the next trials going forward.

David Clark (CMO)

Correct. So our current thinking is we're doing the preparations right now with experts in the abuse liability field so that we are ready when that data comes in to really expect to interrogate it with them and get their expert opinion. And then with that, you're quite right, then make our decisions, "Okay, what do we think is the logical next steps for any further discussion with the regulator?" So that's what we're currently planning.

Jennifer Good (CEO)

Probably David goes into, at a minimum, the end-of-phase 2 discussion around IPF, right? Because that'll be a defined meeting, I think. Whether we choose to do something separate from that, it's probably really only relevant if there's something in the data we want to flag. So I would expect, William, at the end-of-phase 2 meeting for IPF, we'll bundle all that up and probably discuss it then.

William Forbes (Equity Research Analyst)

Okay. No, that sounds like.

Jennifer Good (CEO)

I didn't answer your question. By the way, I remembered that you had asked which we thought would come first. You're right. I think with the HAP study only needing 56 subjects and we're more than 50% enrolled, I imagine that trial will report out first.

William Forbes (Equity Research Analyst)

Okay. Appreciate that. And then maybe last, just on the RIVER trial that it's stratified, obviously, as you said, the primary endpoint with reduction of cough, should we be expecting that breakdown at the time of top-line to better understand the efficacy in these subpopulations? Or I guess it's just some better color on what we should be expecting at the top-line readout when that occurs. Thank you.

David Clark (CMO)

Yeah. No, you are correct in that assumption. We would plan, we're doing the overall population and also these two subpopulations. That's what we will be analyzing and would plan to announce those results with the top-line data readouts.

William Forbes (Equity Research Analyst)

Awesome. Appreciate it. Thank you for taking our questions. I'll jump back into the queue.

Jennifer Good (CEO)

Thank you, William.

Operator (participant)

I am not showing any further questions. This concludes our question and answer session. I would like to turn the conference back over to Jennifer Good for any closing remarks.

Jennifer Good (CEO)

Thank you. We are expecting a milestone year with regards to our clinical trials data for Haduvio. We see an exciting road ahead for Trevi and look forward to focusing on execution of our clinical trials to get to data and these important indications beginning in the second half of this year. We would like to thank everybody for participating in today's call and are available after the call for any follow-up questions you may have. Thank you.

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.