Q3 2021 Reata Pharmaceuticals Inc Earnings Call
Okay.
Yeah.
Thank you for standing by and welcome to the Reata Pharmaceuticals third quarter 2021 financial results and update on development programs Conference call.
You'll hear a recording of today's webcast will be available shortly after the call and the investors section of react. This website are we at the pharma they'll come.
Before the company proceeds with its remarks. Please note the forward looking statements disclosure disclosure in the company's press release.
There are many factors that could cause results to differ from expectations include a Dutch nature and the company's S E SEC filings.
Today's conference call non-GAAP financial measures will be used to help investors understand the business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures and we have just a news release and presentation from today, which again can be found on reactors website.
Statements are not guarantees of future outcomes. Please also note that any comments made on today's call apply only as of today November H G falls in 'twenty, one and may no longer be accurate at the time of any webcast replay or transcript rereading.
Following the prepared remarks, we will open the call up for questions. We ask that you. Please limit yourself to one question and one follow up so that we can accommodate as many questions as possible. We're joined today by US as Chief Executive Officer, Warren Huff, Chief Research and development Officer, Colin May our Chief commercial officer jumped up and chief operating and Chief.
Financial Officer Me Tony at this time I would like to turn the call over to Warren Huff.
Good morning, everyone. We thank you for joining us today for our quarterly update.
As you know our new drug application for Botox alone for the treatment of patients with chronic kidney disease caused by Outport syndrome is currently under review by the FDA.
<unk> syndrome is a severe rare genetic form of chronic kidney disease with no therapies, specifically approved for these patients. The F. D. A scheduled an advisory committee meeting for our NDA on December the age and we've been actively preparing for the Advisory Committee meeting colony will expand more on this later in the call.
<unk>.
The Paducah date for the NDA is February 25th 2022. In addition to our regulatory activities. We're actively preparing for commercial launch of <unk> subject of course to FDA approval.
Additionally, we recently announced that we submitted a marketing authorization application to the European Medicines agency for <unk> for the treatment of patients with C. J D caused by airport syndrome.
Finally, we recently reported that we completed our pre NDA meeting with the FDA for our development program for <unk> for the treatment of patients with Friedrichs ataxia F.
S. A as a severe inherited degenerative neuromuscular disorder with no approved therapies. We're in the process of completing the NDA and plan to submit it during the first quarter of 2022.
Now I'll turn the call over to Colin who will provide an update on our preparation for the Fda's upcoming Advisory Committee meeting for <unk> alone a.
A clinical update for botox alone in rare forms of CK D and a regulatory update on our program with <unk> for patients with FAA next Don will outline preparations for commercial launch and finally made me it'll provide an update on our financials and operations.
Thanks, Warren and good.
Everyone starting on slide five as Warren mentioned, we have been actively preparing for the Advisory Committee meeting for Botox alone, which is scheduled for December eight and I'll provide more information about our preparations.
We are pleased to report that we recently submitted our marketing authorization application to the EMA and look forward to working with the EMA towards securing approval for botox alone for the treatment of patients with CK D caused by <unk> syndrome in Europe.
We are also happy to report that the NDA submitted in Japan by Kyowa Kirin are strategic collaborator is currently under review. We are also working with kyowa kirin to assist them in the regulatory process with the P. M D. A.
Turning to slide six we continue to actively prepare for the upcoming AD com and we have submitted our briefing book for the meeting to the F. D. A over the past few months, we have been working with external key opinion leaders in multiple disciplines to join us for the icon meeting. Additionally, we have already conducted several market.
Greetings and question and answer sessions with former panelists and regulators to prepare for potential questions and discussion topics. We continue to refine our analysis to ensure we will be prepared for an active discussion with the committee on the efficacy and safety profile of the Blackstone for patients with C. J D caused by Albert syndrome neck.
Slide.
Moving to our program in autosomal dominant polycystic kidney disease. The most common hereditary form of CK D. We are continuing to conduct our phase III Falcon trial. We are currently enrolling patients across approximately 100 sites globally last quarter, we announced that we had received feedback from the FDA regarding our ATP.
PPD program falling a type B meeting the primary endpoint of this study is the off treatment Egfr changed from baseline versus placebo at week 104, we will be analyzing that primary endpoint using only data at week, one O four irrespective of time off treatment patients who discontinued treatment early well.
We have shortened treatment exposure and a longer off treatment duration, which is expected to dilute the treatment effect. We are increasing the sample size from 550 to 700 patients to account for the dilution of treatment effect from discontinued patients.
More than 450 patients are currently enrolled in this study and we now expect to complete enrollment by the middle of 2022.
Finally on slide nine as Ward mentioned, we recently reported that we completed our pre NDA meeting for a development program for <unk> for the treatment of patients with Peter's ataxia. The purpose of the pre NDA meeting was to discuss the content every odd as planned NDA submission.
Based on the results of the pre NDA meeting, we are not planning to conduct a second preapproval clinical study prior to the NDA submission.
In response to your questions about the contents of the filing and because of the seriousness of the indication the FDA exercised its discretion subject to review to permit us to submit the results of certain clinical pharmacology and non clinical studies after approval.
We will continue to finalize the NDA package for submission during the first quarter of 2022 with that I would now like to turn the call over to Don to provide an update on our commercial preparations.
Thank you Colin and good morning, everyone I'll continue on slide 11. This.
This is both an exciting time and a unique time as riad and now has two potential product launches insight as we look ahead to 2022 and at Paducah date of February 25th we are actively preparing for the launch of BARDA ox alone for the treatment of CK D caused by airport syndrome, and inherited and rapidly progressing kidney.
Disease with no approved therapy.
Following the positive news of our pre NDA meeting. We are also re initiating launch readiness efforts for Omega locks alone.
If approved <unk> will be the only FDA approved treatment for a friedrichs ataxia.
Rare and life shortening neuromuscular disease impacting children and young adults are commercial infrastructure is in place, including our core leadership team a team of experienced biotech professionals, representing marketing market access commercial operations and sales we've hired trained and deployed reata.
First payer field team with an initial focus on <unk> syndrome. They're primary responsibility is to facilitate coverage of our products to label following approval with the top U S commercial payers and Medicare and state Medicaid programs.
Recent pricing and value research confirmed our previous studies, reflecting that both payers and physicians the high unmet need and output syndrome and place high value on a specific treatment option when presented the BARDA ox alone product profile, we've identified highly influential thought leaders, who ship shape the treatment landscape of CK D.
Rare kidney diseases and airport syndrome, we are now leveraging their insights through final market research and preparing engagement plans that support commercial launch pull through customer targeting and segmentation is complete this was used to determine our appropriate nephrology sales force size and territory alignment.
On November 1st our team of Nephrology regional business directors joined Reata. Their first task is to build our sales organization identifying experienced kidney and rare disease sales professionals to join our team early next year.
Now with Friedrichs ataxia back in focus we're advancing similar commercial work to prepare us for the launch of Omega locks alone in neurology for both therapeutic areas disease awareness efforts will continue through approval and launch highlighting the significant unmet need the urgency to treat and the severity of these life threatening diseases.
I will now turn the call over to Manny to provide a summary of our financials and operations for the quarter.
Thanks, Don Good morning, everyone.
Please refer to our press release issued earlier today for a summary of our financial results from the third quarter of 2021.
Let me start with our cash balance on slide 13 as of September 30th we maintained a solid balance sheet with approximately $732 million in cash and cash equivalents.
In keeping with our current guidance, we expect our cash balance to fund our operations through mid 2024.
Moving to expenses, our R&D expenses for the quarter was $39 $4 million as compared to $47 $2 million in the third quarter of 2020.
Higher R&D expenses were primarily due to increased personnel cost to support the product development activities.
Yeah.
G&A expenses for the quarter was $25 7 million compared to $18 $3 million for the third quarter of 2020.
Higher G&A expenses were primarily due to increased spend related to commercial readiness activities and personnel costs to support growth in our development activities.
Our GAAP net loss for the third quarter of 2021 was $71.8 million as compared to a net loss of 65, four and $5 million for the same period of the prior year.
Our non-GAAP net loss for the third quarter of 2021 was $46 $2 million as compared to a non-GAAP net loss of $44 $3 million for the same period of the year prior.
The increases in GAAP and non-GAAP net loss are primarily driven by increased personal cost and commercial launch readiness activities.
Yes.
Moving to slide 14, which is a reconciliation of GAAP to non-GAAP financial measures.
Non-GAAP research and development non-GAAP G&A expenses, our non-GAAP operating expenses exclude stock based compensation expense, while non-GAAP net loss also excludes other income and expense items.
To summarize our non-GAAP operating expenses were $51 $8 million during the third quarter of 2021 as compared to $44 $2 million for the same period of the year prior.
Increase in operating expenses is primarily driven by product development and commercial launch readiness activities.
On the operations front, the other current and planned inventories of investigational product and product potential commercial product are adequate to cover demand for next several years.
Yes.
We continue to invest in our medical affairs team to increase disease awareness and education in the nephrology comedy for output syndrome.
We have also initiated building our European infrastructure to prepare to launch in Europe and other countries.
With that I will turn the call back over to Warren.
Thanks Mimi.
As our presentation today indicates we're making significant progress across our broadening set of programs. We remain focused on working with the FDA during their review of our NDA for <unk> and on completing our preparations for the December 8th Advisory Committee meeting.
In addition, we continue to make steady progress in our other programs in C. D. We've now submitted an MAA with the EMA for production alone for the treatment of patients with C. J D caused by Outport syndrome.
Finally, we remain dedicated to advancing O mab in friedrichs ataxia and look forward to updating you on the next steps for this program as we prepare to submit the NDA during the first quarter of 2022.
That concludes our prepared remarks, we'd like to thank everyone, who dialed in and I will now turn the call over to the operator for questions.
Thank you we will now open the line for questions. Please keep your questions to one question and one follow up if you'd like to I. Just have a question. Please press star followed by one in your telephone keypad, if you'd like to withdraw your question. Please press star followed by cheap.
First question comes from Eagle Nutshell, Mohit <unk> from Citigroup. Please go ahead. Your line is open.
Alright. Thank you very much for taking the questions I have three interrelated one first of all has there been any additional questions posed by the SBA on the outward NDA in support of Houston, The mid cycle review and if so can you discuss them.
Second regarding the steps to prepare the panel problem.
But if she is bringing you identified as a mock panels, where you feel you need to clarify and revise their presentation and thirdly can you identify that two or three biggest questions around botox, both efficacy and safety profile.
Need to successfully address at the AD com to provide a framework for others cannot.
Thanks, Hugo I'll start and then hand it over to Colin.
We're not going to comment any further on guard kind of day to day interactions with the FDA. So we won't be discussing like.
So I think the issues that we think are the key issues were the ones that the F D. A.
Set forth in the mid cycle meeting and that we disclosed last quarter.
Yeah, and just one additional point you got the purpose of the mid cycle review meeting was for F. D. A to disclose as the issues that they raised.
And so the plan had been to be able to provide them with additional information to address any remaining concerns and getting to your second and third question is about AD comm preparation and biggest questions I.
I think the as you know the FDA will provide a briefing document in addition to us and they will frame their questions.
Around the main topics that we've been addressing it with them and so recall in the mid cycle review meeting.
There were four significant issues that they raised.
And there were no significant safety concerns and they said they do.
Do not expect our rems and so we'll be prepared to address all topics, including safety topics and we're focusing our preparation.
One on basically clinical meaningfulness of GFR change over time, that's the central issue with with any kidney program that does not have outcomes data and so being able to clearly articulate that our endpoints.
Or a derivative of the NK F working group, where they showed that even a change as small as 0.7 mil per minute per year over two years is associated with reduced clinical outcomes and as we've discussed before after two years or on treatment changes 7.65 Mil per minute in the primary endpoint and in the key secondary off treatment in <unk>.
It's four to six mil per minute in so much much larger changes and so I think there'll be a lot of probing about that and how do you interpret data and we believe will be.
Adequately prepared to it to address any of those questions.
Thank you.
Thank you for your question.
Next question comes from Salvino, Mike Child from Goldman Sachs.
Please go ahead your line is open.
Thank you for taking the question. This is Tommy on for <unk> and about your AD com preparations what in particular is driving your confidence heading into the event. Thank you.
Yeah.
Well, we've I think known the issues for blocks on for some time because of our our extensive development history. We've had several years to address questions that have been raised about the mechanism.
Since it is novel, the clinical profile, including both efficacy and safety.
So in an FDA, we believe has been transparent with us to raise any remaining key issues and so as I just mentioned in response to your golf question, we are prepared to address those and other questions.
The dataset from our output syndrome trial is.
Somewhat small because it's a rare disease, we enrolled 157 patients in the trial, but theres two years' worth of data plus data that's accumulating in the extension study that we believe helps to clarify that profile over time.
But it's not just data from those 157 patients.
Its data from the broader dataset and so we've exposed approximately 2500 people two blocks alone and so that gives us a large amount of data to interrogate the clinical profile of those both safety and efficacy and address any real or perceived concerns.
Yeah.
Thank you for your question.
We'll now move onto Maury Raycroft from Jefferies. Please go ahead.
Hi, good morning, Thanks for taking my questions.
A follow up to your earlier response I think part of the plan was to submit your for statistical Rebuttals to FDA. Soon after your <unk> call you saved it for rebuttals were adjusted at all since your update or were they as as you presented them.
I would say that once again, we're not going to comment on our day to day interactions with FDA, but the plan had always been to respond and we're always continuing to refine any potential questions and that's part of this process. So occasionally FDA will ask additional questions or they may not and we've had extensive preparation.
<unk> for AD Com I mean literally almost every single day, we do Mark sessions. Some of them are very formal with no. Prior panelists, who actually sat on the cardiac committee, we've had been working with them ex regulators from this and other divisions and so occasionally we will.
I realized that there could be a new analysis.
That will further support our position.
So I think we're continually iterating and we may or may not provide that to F. D. A in advance or we may just to have that as you know a backup information.
For the actual outcome.
Got it that makes sense for.
For the briefing documents I think the public will get those closer to the AD com, but I'm just checking to see if you received a draft.
Topics and questions from FDA, yet and you know who's going to be on the panel at this point.
Yeah.
Yeah.
The we wouldn't expect to receive the FDA briefing document or that additional information until a couple of weeks before the AD com.
Based on their their guidance as to timing, yes, you can find that in their formal guidance on nephews webpage.
The public will see our briefing document and Fda's briefing document approximately 48 hours before the meeting their standing members on the panel and so once again, it's on the Fda's webpage.
Ad-hoc members won't be disclosed to the public can tell about two days prior.
And then as I mentioned.
During our prepared remarks, we do have several external kols that cover many disciplines.
And yet we will not disclose those specific individuals' until about two days prior.
Got it okay. Thanks for taking my questions.
Okay.
Perfect. Thank you.
Question comes from Annabel <unk> from Stifel. Please go ahead your line is open.
Hi, Thanks for taking my question.
No I'm talking about.
A sudden uptick specifically on Ebola there was some more patients. So it really is.
Weak.
And you know obviously paradox.
So egfr benefit although declining a bit can you just go into a little bit more.
Detail or give us some other color or things that we should be thinking about and some of the critical points that you drew from the Eagle data that was presented this week.
And then separately on the.
Welcome trial.
Can you just give us a sense.
Simplistically that hit that you're taking for that.
Continuations can you give us a little bit more sense of what.
[laughter] discontinuation rate you assume there and how you're going to be treating patients.
Yeah.
Yes, and so the the Eagle data. It has been very helpful for us to be able to characterize the longer term efficacy and safety profile.
We released an <unk> of 19.
For a number of patients who've completed three total years of treatment. There's obviously more patients who have not reached years three and.
And there's a good amount of patients who were initially randomized to placebo during the pivotal Cardinal trial, who have since rolled over to Eagle and so those data demonstrate a profile.
That shows you know clinically meaningful.
And durable improvements through three years of treatment and so if you have access to the poster I believe its on our website.
We see a similar profile in your one and two.
That compared to the randomized population for Barack Sloan and Cardinal and we see the curve over time on treatment flattened out in the second year and that continues in the third year and patients are still.
Above baseline by about six Mil per minute after three years and so that's a very large increase in the context of the historical rate of decline, which is approximately five mil per minute per year, which we collected for most patients prior to enrollment in Cardinal and Furthermore, the placebo rate of decline it was approximately four to five months.
A minute and so these data to us are reassuring and we will be releasing additional data in the future with larger ends at appropriate venues.
From the Falcon perspective, and so yes, the statistical hit is that we will.
We will be including patients who discontinued from the trial in the week one of four analysis, which is different from the analysis that we couldn't afford in the Cardinal trial here, we can power. The trial. So that we can effectively run a week one O four analysis without including early values and we know based upon.
The adverse event profile that most patients who discontinue the trial do so earlier and so based upon the Cardinal dry up trial, we know that patients who discontinued early behaved like placebos and so we're simply modeling in a conservative rate of discontinuation and so that we can still maintain.
Hopefully a very significant P value in the Falcon trial and upon its completion.
And so I won't provide the specific discontinuation rate, but it's just a conservative rate.
Okay, great. Thank you.
Uh huh.
Perfect. Thank you Annabel well nowadays Brian's kony from Baird. Please go ahead.
Hey, good morning, everyone. Thanks for taking my question also on Falcon I was wondering if you can comment at all on the rate of progression. Yes argue that you would expect in these patients either just your expectations in this patient population or the actual rate that you're seeing would obviously be more helpful. I'm just trying to understand if you saw it given the size here, but there was an equivalent.
Reduction in progression to ESR D. In the study that you saw in Cardinal and Beacon. If the sample size is big enough to approach statistical significance.
We would expect him very few patients to actually reach kidney failure kidney failure, so dialysis transplant the rate of progression that we're expecting.
Should be similar to what was observed in the placebo group in the reprise trial and because we have very similar eligibility criteria and so even if the rate of progression is near three.
Three to four mil per minute per year based upon a minimum GFR of 30 in the trial and a treatment duration of two years, we would expect it only outliers would hit that but we do have an endpoint. That's included that as a kidney failure a composite that includes time to first of actual kidney failure.
Failure or <unk>.
Confirm reduction of Egfr of 30% or confirmed Egfr is less than 15 and so the trial is not powered for that we don't want to set any expectations. If you look at the reprise trial.
He did not put significant for actual kidney failure outcomes.
But with a large number we should have high confidence with the Egfr trajectories over time.
Great and then sorry, if I missed it but I didn't hear if theres an update on Marlin are we still going to get to see those results this quarter.
We are going to have those results in the first quarter and so.
Slight adjustment were obviously very busy in our primary on the developed R&D side. Our primary tasks are to get through AD comm successfully.
And then you submit our <unk> NDA in the first quarter and so Maryland will be helpful. But it's primarily a set up for a future phase III trial.
So we'll have those results in the first quarter.
Great. Thank you.
Okay.
Thank you very much for your question just as a reminder, if you'd like to ask a question. Please press star followed by one in your telephone keypad.
At Star followed by one on your telephone keypad.
And we have a question from Joseph Schwartz from SBB Leerink. Please go ahead.
Alright, thanks very much.
I understand you don't want to give us a play by play out all of your interactions with the FDA on products alone, but I was just wondering if you can help us understand in general overall, whether the list of issues, which remain to be resolved with the FDA seems to be narrowing or broadening since the mid cycle meeting you had and then I have a hall.
Sure.
Joe So once again, we're not going to.
Give your day to day discussions, but I will say that the list had been much larger you know prior to the NDA submission, we sided many potential review topics.
Annual report at the beginning of the year and we were pleasantly surprised that there were only four significant issues. During the mid cycle review meeting and by that point in Fda's review. They have they will have had to review most of NDA and consolidate their thinking cross functionally and start formulating what the key issues for the advisory.
<unk> Committee and so that number to US was already small once again, we believe we have answers to adequately address those questions as well as any other potential questions that.
Now I've had been raised in the past or may be raised at the meeting.
And I think it's one to call.
I would just add one thing and that is that the while it's called mid cycle. It's actually very late in the review process.
Okay.
Thanks, Lauren very helpful. Also I appreciate it and then could you give us some metrics around the marketing and sales organization, you're planning for Botox alone and whether you expect or where you expect it to be size wise and reach wise relative to the due date, how many reps in MSL.
Do you expect to hire before then versus later.
Thanks for your question Yeah. We're certainly excited about the time that we're in right now and we're really on track for a successful commercial launch in Q1 of next year and so while we're not providing guidance on the exact number of head count we have hired our regional sales directors, who are busy recruiting and actively.
Interviewing for our future sales organization. We also have deployed a payer field team that's engaging with customers at this time and so as you know through our claims data analysis, we can assess the market the number of patients the physicians treating that population and so we've designed our sales organization.
And to support the need of reaching those customers.
Thanks again.
Thank you very much.
And I'm not showing nice other questions in the queue again. Thank you for your participation on today's conference call as a reminder, and nobody ever coding of the call will be available. Shortly after the call. We ask this website at react to pharma to come in the investors section. Thank you very much for participation you may now disconnect.
Okay.
Uh huh.
Yeah.
Yeah.
Yes.
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