Q3 2025 Atea Pharmaceuticals Inc Earnings Call
Speaker #1: Following the formal remarks, we'll open the call up for your questions. I would now like to turn the call over to John A Barnes.
Speaker #1: Senior Vice President of Investor Relations and Corporate Communication at Atea Pharmaceuticals. Ms. Barnes, please proceed.
Speaker #2: Thank you, Operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals' third quarter 2025 financial results and business update conference call. Earlier today, we issued a press release which outlines the topics we plan to discuss.
Speaker #2: You can access the press release, as well as the slides that will be reviewing today, by going to the investor section of our website, at ir.ateaopharma.com.
Speaker #2: With me from Atea are our Chief Executive Officer and founder, Dr. Jean-Pierre Sommadossi; Chief Development Officer, Dr. Janet Hammond; Chief Medical Officer, Dr. Maria Horga; Chief Commercial Officer, John Vavricka; and Chief Financial Officer and Executive Vice President of Legal, Andrea Corcoran.
Speaker #2: All of whom will be available for the Q&A portion of today's call. Before we begin the call, and as outlined on slide two, I would like to remind you that today's discussion will contain forward-looking statements that involve risk and uncertainties.
Speaker #2: These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we encourage you to read.
Speaker #2: Our actual results may differ materially from what is discussed on today's call. With that, I'll now turn the call over to John
Speaker #2: Pierre. Thank
Speaker #3: Good afternoon, everyone, and thank you for joining us. I will begin on slide three. I'm pleased to share with you the significant progress and achievements we have made this quarter, which is a testament to strong execution across our team.
Speaker #3: Our global phase three program for the treatment of HCV is on track, and we expect to complete patient enrollment for our North American trial CBR next month.
Speaker #3: This timeline leads us to the first phase three top line result in meat 2026. For C forward, our trial outside of North America we anticipate enrollment completion mid 2026, with top line result anticipated by late 2026.
Speaker #3: An advance that will provide an update on our phase three program. A few days ago, new modeling data was presented at the liver meeting 2025 in Washington, D.C., along with two additional data sets further demonstrating the antiviral potency with short treatment duration of our regimen for the treatment of hepatitis C.
Speaker #3: Janet will review the highlight of these data next. I'm pleased also to report that we announced today new exciting research findings including evidence of a unique dual mechanism of action for Benifosbavir against HCV, further demonstrating its differentiation and potency, and I will review this data in a moment.
Speaker #3: In addition, I'm also very pleased to share with you that we are expanding our antiviral hepatitis pipeline for a major unmet medical need of immunocompromised patients living with hepatitis E infection.
Speaker #3: We have identified two new potent candidates derived from our nucleotide platform. IND enabling studies are ongoing, to select a clinical candidate which phase one initiation anticipated in mid 2026.
Speaker #3: We will discuss this program in more detail with today's presentation. At the end of the third quarter, we maintain a strong balance sheet with approximately 329.3 million in cash, cash equivalent, and marketable securities, providing runway through 2027.
Speaker #3: The strong cash position enables us to fully fund our phase three program, launch the new regimen, and advance our new HCV development program. With that, I will now turn the call over to Janet, to review the highlights of the presentation at the liver meeting.
Speaker #4: Thanks, Jean-Pierre. Janet? Let's move to slide five. I'm pleased to share with you that a few days ago, we presented multiple data sets at the liver meeting.
Speaker #4: These data reinforce the strong clinical and pharmacologic profile of our fixed dose combination of regimen of Benifosbavir and Rusivir, for the treatment of HCV.
Speaker #4: In an oral presentation, multi-scale modeling results predicted that our combination regimen inhibits both intracellular replication of HCV, as well as viral assembly and secretion of new HCV virions in the bloodstream.
Speaker #4: The model predicted a cure time of approximately seven to eight weeks. Because the regimen suppresses the virus at multiple critical stages, these data reinforce the potential of the combination regimen as a potent short duration therapy for chronic HCV.
Speaker #4: We also presented two posters. The first poster was identified as a Poster of Distinction. It highlighted a resistance analysis from the Phase Two study of our regimen, demonstrating that FER12 rates were not impacted by NS5A-resistant variant baselines at baseline.
Speaker #4: Viral kinetics and pharmacokinetic analyses indicated that most of the viral failures were due to treatment nonadherence and not to viral resistance. The second poster reviewed the results from a phase one study in healthy participants.
Speaker #4: Which demonstrated the high relative bioavailability of the Benifosbavir and Rusivir commercial formulation for the fixed dose combination. These data also support dosing of the fixed dose combination with or without food and with famotidine and H2 blocker, which can substantially diminish the effectiveness of our antivirals.
Speaker #4: The fixed dose commercial formulation is being used in our ongoing phase three program. Moving to slide six. We will host a virtual panel event featuring key opinion leaders or KOLs in hepatology, gastroenterology, infectious diseases, and hepatitis C tomorrow.
Speaker #4: Thursday, November the 13th. At 10 o'clock. Eastern time. The discussion will cover a wide range of HCV related topics, including the needs of the current HCV patient population, the importance of early diagnosis and treatment, public policy initiatives including the test and treat model of care, and whether HCV eradication in North America is an achievable goal, what benefits a new optimized HCV therapy could provide for prescribers and patients.
Speaker #4: The link to register for this event can be found in our latest quarterly press release distributed earlier today, and on the investor section of our website.
Speaker #4: Under events and presentations. The virtual panel discussion will feature several HCV key opinion leaders, including Jordan Seld from the University of Toronto, Toronto General Hospital in Canada, Eric Lawitz from the Texas Liver Institute University of Texas Health San Antonio, Anthony Martinez from the University of Buffalo Erie County Medical Center, and Nancy Rowe from Rush University Medical Center in Chicago.
Speaker #4: A live question and answer session will follow the formal discussion. We hope you can join us. I'll now hand the call over to Arantxa to review our phase three program for hepatitis C.
Speaker #4: Arantxa?
Speaker #5: Good afternoon,
Speaker #5: Everyone. On slide eight, let's now turn to our global Phase 3 program, which is the first head-to-head Phase 3 program for chronic hepatitis C.
Speaker #5: Comparing our regimens against the current global standard of care, so phosphodier and velpatadier marketed as Epclusa. Our regimen includes Benifosbavir, the most potent nucleotide inhibitor, and Rusivir, a highly potent NS5A inhibitor.
Speaker #5: Data support our regimen as a potential best in class treatment option for patients infected with HIV, HCV. With a differentiated profile, featuring a short duration, low risk of drug-drug interactions, and convenience with no food effect.
Speaker #5: I would like to highlight that we have new study results demonstrating no risk of drug-drug interactions with proton pump inhibitors. Which are estimated to be taken by at least 35% of HCV patients.
Speaker #5: These results will be presented at an upcoming scientific meeting. We view this as a key differentiator since proton pump inhibitors can substantially decrease the effectiveness of currently approved DIA therapies for HCV.
Speaker #5: Our phase three program is designed to confirm the efficacy, safety, and tolerability demonstrated in our robust phase two study, where we achieved a 98% sustained virological response at 12 weeks post-treatment for SVR12.
Speaker #5: This phase two results gave us confidence to move to our current phase three late stage program, historically in HCV development. Phase two data have proven to be highly predictive of phase three outcomes, given the well-understood biology of the virus, and the reliability of SVR12 as an established clinical endpoint for cure.
Speaker #5: Moving to slide nine, the global Phase 3 program is composed of two pivotal trials: See Beyond, which is enrolling across approximately 120 sites in the U.S. and Canada.
Speaker #5: And see forward, which includes another 120 sites across 16 countries outside of North America. Combined, these studies are expected to enroll approximately 1,760 patients.
Speaker #5: Both trials are open-label and randomized 1:1 against the active comparator. They are stratified by cirrhosis status and genotype, including HIV co-infected patients.
Speaker #5: In non-cirrhotic patients, treatment duration is eight weeks, compared to 12 weeks with the standard of care. For patients with compensated cirrhosis, patients receive 12 weeks of either regimen.
Speaker #5: The primary endpoint for both studies is SVR12, which is recognized as the definitive measure of HCV cure. Slide 10. I am pleased to confirm that enrollment in the North America see beyond trial is on track for completion next month, with top line results anticipated mid 2026.
Speaker #5: For see forward, which has a broader global geographic footprint, enrollment completion is expected mid 2026, followed by top line results by year end of 2026.
Speaker #5: I will now hand the call over to Jean-Pierre to review our new mechanism of action data. Jean-Pierre?
Speaker #6: Thank you, Arantxa. Let's now move to slide 12. As many of you know, Benifosbavir is a nucleotide NS5B polymerase inhibitor with an established mechanism of action of inhibiting HCV RNA through chain termination.
Speaker #6: Thus, blocking valve production and replication inside the cell. Our collaborators are at Los Alamos National Laboratories, headed by Dr. Alan Pearson. I've conducted HCV valve kinetic modeling using data from the Phase 1 Benifosbavir monotherapy trial.
Speaker #6: The new modeling suggested that Benifosbavir may have an additional mechanism of action inhibiting HCV valve assembly secretion of new HCV variants in the bloodstream significantly reducing extracellular HCV RNA and mechanism previously only associated with NS5A inhibitors such as Rusivir and Velpastavir.
Speaker #6: On slide 13, in vitro studies conducted under another collaborator at Loyola University, confirm this dual mechanism of action for Benifosbavir. On this slide, the study showed that the level of the intracellular HCV RNA were comparable with selected concentrations of Benifosbavir and Sofosbavir.
Speaker #6: So why both agents produce these similar declines of intracellular HCV RNA? As you can see, Benifosbavir led to a far greater and faster reduction in extracellular RNA indicating possible inhibition of viral assembly and release into the bloodstream.
Speaker #6: On slide 14 now, the other in vitro study shows that intracellular RNA HCV RNA were comparable with selected concentrations of Benifosbavir and an NS5A inhibitor such as Velpastavir.
Speaker #6: So of importance here extracellular HCV RNA level decreased similarly with Benifosbavir or Velpastavir. An NS5A inhibitor demonstrating that Benifosbavir also inhibits HCV assembly and secretion into the bloodstream in addition to inhibiting valve replication.
Speaker #6: So in the slide 16, you can see this cartoon which illustrates on the left side the HCV life cycle and then on the right side the dual mechanism of action for Benifosbavir showing how Benifosbavir blocks the valves from making copies inside the cell.
Speaker #6: And it also blocked new valves from entering the bloodstream. Therefore, on slide 16, what the data means. The data demonstrate that Benifosbavir is a potent and differentiated nucleotide product with a unique dual mechanism of action which may explain now the higher potency of Benifosbavir as compared to Sofosbavir.
Speaker #6: Importantly, even in the presence of NS5A resistance. Benifosbavir will continue to block valve assembly secretion due to its dual mechanism of action. Lastly, this results further highlight the differentiation and the potency of the Benifosbavir and Rusivir regimen for the treatment of hepatitis C.
Speaker #6: With that, I will now turn the call over to John for an overview of the new hepatitis E valves program.
Speaker #6: John? Thank you,
Speaker #7: Jean-Pierre. As shared earlier by JP, we are expanding our pipeline of oral direct acting antiviral candidates to include hepatitis E virus or HEV. A virus with no approved therapies and high unmet medical need.
Speaker #7: As seen on slide 18, the WHO estimates that there are 20 million global infections annually. HEV is an inflammation of the liver caused by the hepatitis E virus.
Speaker #7: It is a growing public health challenge in both the developed and developing world. In developing countries, genotypes one and two are most prevalent, and the virus is transmitted primarily through contaminated water.
Speaker #7: In developed countries, genotypes three and four are most prevalent, and the virus is transmitted primarily through contaminated foods such as undercooked meat. Moving to slide 19, however, in recent years, there's been a growing incidence of chronic HEV genotype three and four infections in immunocompromised individuals.
Speaker #7: A population that includes solid organ transplant recipients, hematopoietic stem cell transplant recipients, as well as patients with hematological malignancies and pre-existing liver disease. In these patients, HEV may not resolve spontaneously, may not resolve spontaneously, resulting in chronic HEV infection.
Speaker #7: Which left untreated can quickly lead to liver inflammation, rapid fibrosis progression, and in some cases, cirrhosis within three to five years of infection. Currently, there are no approved therapies anywhere in the world for HEV.
Speaker #7: For at-risk populations, clinicians can reduce immunosuppression, which risks organ rejection or relapse of underlying disease. Some clinicians also use ribavirin, an older antiviral therapy approved for other viral infection indications.
Speaker #7: Off-label for HEV, which yields inconsistent efficacy results and is often poorly tolerated and poses risk of significant toxicities. This leaves clinicians and patients with a significant unmet need for a safe, orally available direct acting antiviral that can achieve sustained viral clearance or cure.
Speaker #7: Let's move on to slide 20. The number of immunocompromised patients continues to rise each year in the US and Europe. There are approximately 450,000 cases of solid organ transplants, hematopoietic stem cell transplants, and hematological malignancies per year across these markets.
Speaker #7: While advances in modern medicine, especially in transplantation and oncology, have led to an increased survival, it may likely also explain why more HEV is being observed in these at-risk populations.
Speaker #7: Approximately 3% of these at-risk patients go on to develop chronic HEV. While the overall prevalence of HEV is high in the general population, a relatively smaller proportion of immunocompromised patients are at risk for poor outcomes.
Speaker #7: As such, there is the potential to seek an orphan drug designation. Which can have development and regulatory advantages. These life-saving procedures continue to expand the population of immunocompromised patients that could be susceptible to chronic HEV infections.
Speaker #7: Using other viral infections such as hepatitis D virus as a guide to pricing, this HEV market opportunity could translate into roughly between 500 to 750 million dollars per year or more.
Speaker #7: I will now turn the call back to Jean-Pierre to review preclinical data for our two candidates for HEV. JP?
Speaker #8: Thank you, John. So moving to slide 21, the in vitro data on this slide shows the potent nanomolar antiviral activity of 8587 and 82490 against hepatitis virus genotypes one and three.
Speaker #8: And underscore why HEV represents a compelling extension of our antiviral platform. Our two candidates demonstrate approximately 200-fold higher antiviral activity in vitro as compared to ribavirin which has John mentioned is used off-label for the treatment of hepatitis E virus.
Speaker #8: While in vitro and in vivo activity of Benifosbavir was also shown against HEV, and that's how we start to understand that our platform could have some anti-HEV activity, the 10-fold higher activity for 8587 and 82490 led us to advance these two promising candidates.
Speaker #8: On slide 22, it is interesting to point out that only a fluor atom in the sugar ring differentiates the active triphosphate metabolite 89068 from the two analogs 8587 and 82490, as compared to 89010, which is the active triphosphate of Benifosbavir.
Speaker #8: Of particular importance, these two candidates efficiently convert to their active triphosphate form in human hepatocytes and as a clean preclinical safety profile to date, positioning them as leading candidates for first-in-class hepatitis E antivirals.
Speaker #8: IND enabling studies are ongoing to select the clinical candidate for phase one evaluation. We are also pleased to announce that we would be presenting more information on our HEV program at an upcoming scientific meeting early next year.
Speaker #8: I will now turn the call over to Andrea to discuss our financials. Andrea?
Speaker #9: Thank you, Jean-Pierre. As Jonae mentioned in her introductory remarks, earlier today we issued a press release containing our financial results for the third quarter of 2025.
Speaker #9: A statement of operations and balance sheet can be found on slides 24 and 25. In the third quarter of 2025, R&D expenses increased compared to the same period in 2024.
Speaker #9: This increase was principally attributable to increased spending in 2025 in our HCV clinical development program. For G&A, expenses in the third quarter of 2025 decreased compared to the third quarter of 2024.
Speaker #9: The decrease was primarily driven by lower 2025 stock-based compensation. Interest income in Q3 2025 decreased compared to the third quarter of 2024 due to lower investment balances.
Speaker #9: For the remainder of 2025, we expect our R&D expenditures will be driven principally by the conduct and advancement of our global phase three HCV program.
Speaker #9: As Jean-Pierre mentioned at the beginning of the call, at the end of third quarter of 2025, our cash cash equivalent and marketable securities balance was 329.3 million dollars.
Speaker #9: Continuing our strong financial discipline, we project our cash guidance runway through 2027. With respect to other matters, I would like to note that we continue to evaluate options to maximize shareholder value.
Speaker #9: As announced, we completed our share repurchase program after having repurchased a full 25 million dollars of shares authorized by the board. Under the program, we repurchased a total of 7.6 million shares of common stock at an average person price of $3.26 per share.
Speaker #9: All repurchased shares were retired and returned to authorized but unissued status. Regarding our strategic process, as we've previously stated, we believe the HCV phase three clinical development results will drive shareholder value and catalyze business development discussions.
Speaker #9: While our discussions to date with potential counterparties have been positive, positive phase three outcome would further significantly de-risk the program, strengthening our ability to maximize the value of this asset and to secure attractive terms.
Speaker #9: For this reason, today we announced the conclusion of our formal engagement with Evercore. While we now focus principally on the execution and completion of the phase three trials, which we believe is the best path forward at this moment to drive shareholder value, we remain open to all opportunities to drive shareholder value including a potential strategic transaction.
Speaker #9: I'll now hand the call back to Jean-Pierre for closing remarks.
Speaker #10: Thank you, Andrea. In closing, the significant progress and achievements we have made within the last quarter reflect strong execution across our team.
Speaker #10: We are on track with patient involvement in our global phase three program for the treatment of HCV, and we look forward to the top line phase three results from the US and Canada trial CBONG in mid 2026, followed by top line results expected for the outside North American trial C4 at the end of 2026.
Speaker #10: We continue to present new data supporting the potential best in class profile of Benifosbavir and Rizosvir for the treatment of hepatitis C. If approved, we believe it can become the most prescribed treatment for hepatitis C and disrupting and expanding the cure global HCV market of approximately 3 billion in annual net sales.
Speaker #10: The new data reviewed today demonstrate a new and unique dual mechanism of action for Benifosbavir against hepatitis C, highlighting its unique and differentiated profile as compared to Sofosbavir.
Speaker #10: And this data now can explain in part the potency of our regimen for the treatment of hepatitis C. In addition to our HCV program, I'm really pleased to share the information today about the potential of our proprietary preclinical candidates derived from our nucleotide platform along with the expansion of our antiviral pipeline.
Speaker #10: This compounds may help to address the unmet needs of the many immunocompromised patients living with hepatitis E virus infection. And we look forward to providing more updates soon on this program.
Speaker #10: Before opening the call to your question, I would like to thank our talented and dedicated employees, our team with limitless pursuit of excellence drives our dedication to advancing all antiviral therapeutics for patients worldwide affected by severe viral diseases.
Speaker #10: With that, I would turn the call back over to the
Speaker #10: operator. Thank you.
Speaker #11: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker #11: If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.
Speaker #11: The first question comes from Maxwell Score, with Morgan Stanley. Please go ahead.
Speaker #12: Hello. This is Selena on for Max. Thank you for taking our question. How does your recent data set at the liver meeting showing no interaction with famotidine in addition to your prior data showing no interaction with PPI increase your differentiation from Epclusa?
Speaker #10: Janet, you want to address the question, please?
Speaker #13: Definitely. Thank you. Thank you for the question. So I think we know that there is in the label for Epclusa a contraindication to the concomitant use of H2-reducing therapy, with Epclusa and the recommendation in their label is for that to be at least a four-hour window of separation between dosing of the one and dosing of the other.
Speaker #13: Proton pump inhibitor use is widespread in the US. I think I said on the last call about 10 to 20 percent of the US population apparently uses this type of therapy and generally over the counter.
Speaker #13: But it's actually even higher in patients with hepatitis C, and it's estimated to be around 35 percent of HCV patients use acid-reducing therapy. So this is a clear problem for patients when they're taking therapy because it can reduce the levels of antivirals that are achieved, and this can compromise efficacy.
Speaker #13: So we see this as a really important differentiator. Thank
Speaker #13: you. you.
Speaker #14: Great. Thank
Speaker #11: The
Speaker #11: line of Andy Shea, The next question comes from the with William Blair. Please go ahead.
Speaker #15: Thanks for taking our questions. I have two. One is from the modeling poster that you presented at AASLD. There is a chart basically showing time to undetectable.
Speaker #15: And interestingly, there is a separation between genotype one and genotype three, with three showing a more rapid time to undetectable. I'm curious if there is any also maybe the significance in that, and observed trend.
Speaker #15: Does that have to do with a dual mechanism that you announced earlier? So that's a question number one. Question number.
Speaker #10: Yes. Maybe I can address the first, and then after we go over the second one. So thanks for looking at the slide of the presentation.
Speaker #10: The liver meeting. Indeed, you're correct. The modeling suggests that there is a more rapid decline with three. I think that we know that Benifosbavir is interestingly more potent in vitro, actually against genotype three than genotype one A or one B.
Speaker #10: genotype When we did the in vitro study about 10 years ago now, that Beni, that's another differentiation with Sofosbavir, for example, where Sofosbavir is less potent on genotype three.
Speaker #10: So it's possible we need to do dual mechanism. And as Andy had suggested, and wrote in one of his reports a few months ago that at least in the phase two, we had 100% cure in our genotype three non-cirrhotic patient, which definitely at least as compared historically to other regimens were very high rate a very high cure
Speaker #10: rates. Yeah.
Speaker #15: That's correct. Okay. Great. Thanks for sharing that perspective. The second question has to do with the compound that you outlined in the slides for hepatitis E.
Speaker #15: Maybe more of an academic question, but it doesn't employ the prototype technology so I'm curious if that's kind of a kind of a deliberate decision or maybe in this context prototype doesn't it's not optimized for prototype.
Speaker #15: I'm curious if you can comment on that as well. Thank you.
Speaker #10: Sure. It is I can tell you that. We did not include the chemical structure but it is exactly the same pro drug that we have used for BEM, which is a phosphoramidate.
Speaker #10: So it's identical. So we feel very comfortable with the PK and the safety and the efficacy as well. So as you have seen, interestingly, it's only the fluor atom at the four prime position that differentiates between 5H7 and BEM, for example.
Speaker #10: And what's interesting is that while we are 10 times more potent with 5H7 and 2490 as compared to BEM, in hepatitis E, these are less potent as compared to BEM in hepatitis C, by about the same magnitude of about tenfold.
Speaker #10: So here we have a very specific inhibition of hepatitis E with this active triphosphate, and we are evaluating now really the molecular rationale at the binding of the polymerase. Why we are more potent definitely has to do with a better binding with the presence of the four prime fluor atom.
Speaker #15: Oh, great. Thanks for that, JP. Great. Well, good luck with the phase three readout and look forward to additional information from the hepatitis E program.
Speaker #10: Thank you so much for your questions.
Speaker #11: Thank you. This concludes our question and answer session. I would like to turn the conference back over to John Pier for any closing remarks.
Speaker #10: Again, thank you all for joining us. To our third quarter earnings conference call, and thank you for your continued
Speaker #10: support. Thank