Trevi Therapeutics, Inc. (TRVI) Q3 2022 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Trevi Therapeutics Q3 2022 Earnings Conference Call. [Operator Instructions] Please note, today's 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 statements represent 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 do change. I would now like to turn the conference over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Good afternoon, and thank you for joining our third 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 short prepared remarks, then we will be available for questions at the end of the call. This has been an exciting year for Trevi with regard to delivering against our business plans, and the third quarter was no exception. As expected, the full trial results for our CANAL trial in chronic cough and idiopathic pulmonary fibrosis, or IPF, were reported in September and confirmed the positive interim results previously reported, showing a significant reduction in the frequency of cough from baseline, and were highly statistically significant on both the primary and several key secondary endpoints. This included objective measures of coughs, patient-reported outcomes on cough frequency and severity, along with investigator-reported improvements in coughs. In mid-September, we hosted an R&D Day to review these results in detail along with the PN results and heard from prominent KOLs and [indiscernible]. Instead of rereviewing all of the information, I would like to provide you with an update on our activities since our R&D Day. Chronic cough in IPF has emerged as our lead indication, and we are busy developing protocols for the next phase of development and interacting with both the FDA and preparing for interactions with European regulatory authorities. Haduvio is the lead therapy in development for cough and IPF and is the only one to have shown positive results in a blinded study in this indication. IPF is a serious end-of-life disease and chronic cough is a major cause of morbidity, significantly impacting the patient's quality of life. Although there are many learnings we can take from the development that is ongoing in the refractory chronic cough space, there are unique aspects in the IPF patient population related not only to the potential effect in the underlying disease, but also safety as it relates to this frail patient population. So as we prepare for this next step in development, we want to make sure we are aligned with the regulators. In parallel, the clinical teams are preparing for the study so that we can initiate once we have agency agreement on the protocol and an open IND. We expect to initiate the next study in the first half of 2023 and we will provide guidance on the overall design as well as the timing for the trial and results when we begin the study. Our data in cough and IPF has been presented by Dr. Toby Maher, as a late breaker at the European Respiratory Society and also was presented at [I-Class]. Dr. Philip Molyneaux will present the full data this month at the British Thoracic Society meeting. We are also currently preparing a manuscript to publish the trial results. The IPF cough data has gained the attention and support from KOLs and pulmonologists globally. The other program 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 incessant and severe itching. In June, we also reported positive data in the Phase IIb/III PRISM trial in PN. The trial achieved statistical significance on the primary and all key secondary endpoints. We still have several patients in the 1-year open-label extension study with the last patient forecasted to complete in February 2023. In parallel, we are completing all the various clinical reports and documents and preparing to request an end of Phase II meeting with the FDA, which we expect to hold in the first half of 2023. Our PN data was presented orally at the European Academy of Dermatology and Venerology by Dr. Sonja Stander in September. And we are currently working on a manuscript to publish the full study results as well as abstracts at several other dermatology meetings. It is a busy time at Trevi, preparing for upcoming regulatory meetings across indications, designing the protocols for the next phase of development and identifying sites for our next study. We are making good progress and look forward to updating you with more details as we get ready to initiate the next studies. As I look back on 2022, I am extremely proud of the execution by our team and the positive trial results in both of our lead indications. The trial data and subsequent financings have positioned us well to continue the development of Haduvio in not only IPF chronic cough but also other serious chronic cough conditions. For PN, we are in discussions with potential partners to advance that program into the next stage of clinical development. I will now turn it over to Lisa to review our financial results, then we will open it up for questions.

Thank you, Jennifer, and good afternoon, everyone. As a reminder, the full financial results for the 3 and 9 months ended September 30, 2022, can be found in our press release issued ahead of this call and in our 10-Q, which was filed with the SEC today after the market closed. In the third quarter of 2022, we reported a net loss of $8.3 million compared to a net loss of $7.3 million for the same quarter of 2021. R&D expenses were $5.8 million during the third quarter of 2022 compared to $4.7 million in the same period of 2021. This was primarily due to start-up activities for our planned trials, including purchases of clinical trial supplies and increased expense related to the timing of activity in our Phase II CANAL trial as compared to the third quarter of 2021. These increases were offset by decreased expenses for activities in our PRISM trial due to the completion of the blinded portion of the trial in the second quarter of 2022. G&A expenses were $2.6 million during the third quarter of 2022 compared to $2.2 million in the same period of 2021. The increase was primarily due to higher legal fees related to intellectual property and increased market research costs. During the quarter, after the announcement of the positive results for the full data in our CANAL trial, we raised gross proceeds of approximately $55 million from both new and existing investors through a public offering. We also received proceeds of $5.9 million in the quarter related to the exercise of previously issued warrants. Subsequent to quarter end, we received another $3.1 million in proceeds from the underwriters' option for the [indiscernible] related to the September offering. So we end October with a cash and investments balance of approximately $125.7 million, which we have invested in a portfolio of high credit quality marketable securities and is providing us with healthy interest income in today's higher interest rate environment. This gives us cash runway into 2026 to execute the plans that Jennifer laid out today and to pay off our term loan in accordance with its terms between now and February 1, 2024. In closing, I'm happy to welcome our new investors to Trevi, and I'm thankful for our existing investors, including those who participated in this latest funding round. I look forward to supporting our Trevi team with financial discipline as we negotiate agreements and execute the next phase of development for Haduvio. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A.

[Operator Instructions] Today's first question comes from Annabel Samimy with Stifel.

I had a few. I guess, one of them has to do with, I guess, what you're going to be asking of the regulatory agencies with regard to design of the future IPF trial. Do you -- are you thinking of looking at any new endpoints incorporating combined usage on top of standard treatment in these patients? And also, what are your thoughts about potential enrollment now that COVID seems to have calmed down? And do you think that you might have some greater enrolling these trials given that it took so long to do the first Phase IIa. So maybe I can just start with those.

Yes. Thank you, Annabel. So we are in discussions with the agency. I would say we're not trying to sort of reinvent the wheel here on endpoints. The FDA has been supportive of this objective cough monitor, and that's what we used in our Phase II study. So I anticipate we'll do that. We will need to validate it in the IPF population. We also will need to find some patient -- a patient-reported outcome that also moves the same direction. But given the fact that all of our secondaries were statistically significant as well, I think it's a matter of just picking one and then doing the work. So I'm not too worried about that. In this trial, we actually let people take the drug on top of standard of care. If you remember, about half of our patients were on antifibrotics, they just had to be stable for at least 8 weeks. So again, kind of sticking to what we've done, I would say that we're just working through inclusion/exclusion criteria, making sure the overall study design -- I mean the purpose of the next Phase II trial is really going to be around finding the minimally effective dose. As you saw from our data, we had an impact really early. And so we'll need to work through that and really get at the dosing question. So just trying to make sure we've got the protocol nailed down. As far as your enrollment question, it's a good question, and I wish COVID was our only enemy, but with these guys, anything RSV, cold, everything, I would say the difference here, though, we were running that study just in the U.K. So you're limited to sort of 10 or 12 sites. We will open this up in the U.S. and also probably Germany. So we'll just have a lot more sites to be able to move through the enrollment. So hopefully, that sort of hedges it a little better.

Sure. And if I can just ask a couple of follow-ups. You have almost $126 million now. Is there any thought to exploring additional chronic cough indications right now? Or is it just something that's going to stay in the back burner? And then separately on PN, it sounds like you are obviously still seeking a partnership. But if there are no bites on that, are you willing to go it alone? And do you have a sense to be able to explore all those opportunities?

Yes. So as far as other chronic cough indications, we are interested in doing a Phase II refractory chronic cough study. I think we've sort of signaled that we'll look to initiate that, hopefully roughly midyear. I do want to get IPF coughs sort of up and on its way. That's going to be our primary focus here as well as wrapping up PN and getting through the agency meetings. So I would anticipate by midyear, we'll be hopefully initiating a refractory chronic cough study. That should be pretty quick to enroll those trials, enroll much quicker. So we hope to get that done in sort of 6 to 9 months. As far as PN, we have not planned on that in this $126 million. I think we're in active discussions with various partners. At this point in time, we don't plan to run the final study ourselves. I think that hopefully, we'll be able to find a partner to do that because we really want to take this money and invest it into this cough portfolio as a priority.

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

Good afternoon. A couple of questions. I guess, first on the cough program. Maybe just any feedback since releasing the full data set about 2 months ago? And then it looks -- you mentioned that the data set will be presented at the thoracic meeting later this month. Just curious if there's any additional analyses of the data that will be part of that presentation. I'll start with that. .

Yes. Thank you, Serge. As far as feedback on the full data set, I mean, you've seen it, it was amazingly consistent with the interim. So that was good news for us. I would say it was just strong, we were able to link it to our 24-hour -- the 24-hour cough data, which we expect to move forward with as an endpoint because we had that in the full analysis set. So I think the feedback has just been really strong. I've been through a lot of these medical meetings and I definitely got the attention of not only pulmonologists but also the whole cough community. So I would say the feedback has been strong. Your second question was... .

Thoracic meeting.

Yes, British Thoracic Society. We shared so -- so that happens to be over the Thanksgiving weekend. So we actually won't be there because of that. I think the Brits do that on purpose. But I would say we showed so much data as part of our R&D Day. There's probably some incremental things in there, and Serge, I can send you the presentation if you're interested. But I think we've been so extensive in sort of sharing what there. I think you'll see sort of a full review as when we get the manuscript out because there's a lot of work going on with all the really thought leaders around this area on the manuscript of the data.

Okay. And then on PN, maybe just I know it's early since you made the decision to look for a partner there. So maybe some of the conversations you've had and whether the recent Dupixent approval to generate additional interest for that indication? .

Yes. So people definitely understand this need. I mean PN is on people's radar screens, they're interested. Everybody accepts that an oral has an important place in sort of the treatment line of therapy. So I think Dupixent will help drive patient numbers. I was just presenting at a conference last week, and there was a lot of discussion about how big pharma does a great job of identifying these diseases and driving patient numbers. So I think that's all really helpful. I would like to get through our FDA meeting and get clear sort of FDA guidance. So as we move forward, a patient -- or a partner will be very clear on sort of the path forward. So yes, I think it does help. I think it's always been part of our thesis that having a biologic here is actually helpful for the overall market.

At this time, there are no further questioners in the queue. And this concludes our question-and-answer session. I would now like to turn the conference call back over to Jennifer Good for closing remarks. .

We would like to thank everybody for participating in today's call and hope to see some of you at Stifel's Investor Conference next week and in San Francisco in January. Thank you. .

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