Travere Therapeutics, Inc. (TVTX) Q4 2019 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the Retrophin, Inc. Fourth Quarter Full-Year 2019 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Chris Cline. Please go ahead.

Great. Thank you, Angela. Good afternoon, everyone, and welcome to Retrophin’s fourth quarter and full-year 2019 financial results and corporate update call. Today’s call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by our Chief Medical Officer, Dr. Noah Rosenberg; and our Chief Financial Officer, Laura Clague. Peter Heerma, Chief Commercial Officer: and Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I’d like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statements. Please see the forward-looking statement disclaimer on the company’s press release issued earlier today, as well as the risk factors section in our Form 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made February 24, 2020, and Retrophin specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Chris, and good afternoon. I’m incredibly proud of our team at Retrophin and our accomplishments for 2019. Specifically, we continue to identify and reach new patients with our commercialized products, including through the successful launch of our new formulation of Thiola and we continue to advance sparsentan in our two pivotal Phase 3 studies. We also made the difficult, but prudent decisions to move beyond programs that did not meet our criteria for advancement. This includes discontinuing our development activities for the L-UDCA program and declining to exercise our option under the Censa collaboration. It also included ending further development of fosmetpantotenate, following the disappointing results from the FORT study. Notably, these actions allowed our organization to come together with a clear focus and make significant progress on the key priorities that we believe will position us to become a leading company dedicated to the delivery of innovation and hope to patients in the global rare disease community. Maximizing sparsentan’s potential for patients with rare kidney disorders remains our highest priority. For the last 50 years, clinical trials in nephrology have been too few, and those in the rare nephrology have been nearly nonexistent. With sparsentan, we are changing that. Our DUPLEX and PROTECT studies are viewed as landmark trials that have the potential to change the treatment paradigm for FSGS and IgA nephropathy. If successful, they have the potential to deliver the first medicine approved for these rare disorders and the prospect of impacting the more than 100,000 currently underserved patients living in the U.S. and Europe. This is why our primary near-term focus is executing on the enrollment of our pivotal studies as quickly as possible, while maintaining the high-quality conduct of the trials we have seen since initiation. I’m pleased to report that as a result of our clinical and operational team’s solid execution over the last several months, we are well on our way to reaching the enrollment milestones that will enable top line readouts from our pivotal study. In DUPLEX, we are approaching enrollment of the 190th patient with FSGS to enable the 36-week proteinuria analysis. We anticipate reaching this milestone in the next two months, which keeps us on track to report top line data in the first-half of next year. And if positive, submit our regulatory filings for approval in the U.S. and Europe. We also made substantial headway with enrollment of our pivotal PROTECT Study of sparsentan in IgA nephropathy. We have leveraged our learnings and synergies from the DUPLEX Study to create a high awareness and growing enthusiasm among investigators and patients for the PROTECT Study. This has resulted in a meaningful inflection point, which gives us great confidence in achieving our enrollment target by early next year to support the top line data from the 36-week proteinuria analysis in the first-half of 2022. We clearly have positive momentum for enrollment in both of our studies and we look forward to updating you as we reach key milestones later this year. As part of our priority to explore opportunities to maximize sparsentan’s potential to help patients, we’ve also continued to evaluate additional development opportunities. As we mentioned on our previous call, we have seen encouraging preclinical exploratory work in Alport syndrome. Our team continues to make progress in evaluating clinical feasibility, and we anticipate making a decision later this year on whether to pursue an additional indication. Our main priority alongside sparsentan’s advancement is to build upon our strong commercial teams’ capabilities. We are focused on this, so that we may optimize the full potential of our approved products and ultimately prepare for a successful launch of sparsentan. In addition to our clinical and R&D teams, I continue to be impressed with the execution of our commercial organization. A successful commercial stage rare disease company must have a foundation built upon earning and keeping the trust and respect of the patient communities. And it must have a deep understanding of who the patients are, what is most important to them and their families, as well as where they are on their treatment journey. This is how our organization has continued to identify new patients and deliver our life-changing therapies. We continue to have a successful launch of THIOLA EC, and it serves as a good example of how we have listened to the needs of our patients. Prior to introducing the new product to the market, our market research told us that approximately two-thirds of cystinuria patients would ultimately choose the new EC formulation, because it provided the potential for freedom of administration and potential to reduce the number of tablets necessary to manage their cystinuria patients. I’m pleased to report that within six months of making THIOLA EC available, we have reached that mark. This demonstrates our ability to understand patients and their needs to execute a launch plan and to identify new patients, including by reengaging those who have previously discontinued therapy. Additionally, it gives us a high degree of confidence that we have a robust foundation in nephrology to launch sparsentan, if approved, and that we will be able to maximize its potential for patients. We also continue to have solid execution with CHOLBAM, where our goal is to help patients manage their bile acid synthesis disorders or liver disease from Zellweger Spectrum Disorders. Our efforts with specialists, including pediatric geneticists and hepatologists are resulting in the identification and treatment of new patients with these ultra rare conditions. Chenodal also continues to grow, and we recently initiated clinical development that may ultimately lead to an NDA to support a label for CTX. Noah will talk a bit more about that shortly. Our final priority is to evaluate opportunities to diversify our growth potential through business development. We continue to look opportunistically within the rare and ultra rare spaces. Importantly, we will remain disciplined to only act on transactions, where we believe we can leverage our current expertise to create meaningful value. Let me now turn the call over to Noah for clinical update. Noah?

Thanks, Eric, and good afternoon. Sparsentan has the potential to be a first-in-class therapy and shape the treatment paradigm for patients with FSGS and IgA nephropathy. The goal of our ongoing pivotal DUPLEX and PROTECT studies is to ultimately deliver sparsentan as a potential first medicine approved for these rare kidney disorders. As Eric mentioned, the awareness, enthusiasm for these programs continues to rise, which is important due to broad support for proteinuria and eGFR measurements serving as clinical endpoints and glomerular disease like FSGS and IgAN. We also hear from investigators and thought leaders in the space that sparsentan has a well-understood mechanism with an established safety database of more than 500 subjects. And that our Phase 2 DUET Study, one of the largest FSGS trials conducted to date, provides confidence in sparsentan’s potential to impact disease progression. In the DUET Study, the overall sparsentan-treated group demonstrated a significant reduction in proteinuria and a clinically meaningful response in the FSGS partial remission of proteinuria endpoint, or FPRE. This is a 36-week endpoint in DUPLEX to support potential FDA and EMA submissions next year. After eight weeks in DUET study, we also saw the 28% of the sparsentan-treated patients achieved the FPRE endpoint, a threefold increase when compared to irbesartan. Importantly, we saw an increasing proportion of patients achieving FPRE during the 84-week open label period, including nearly 50% of sparsentan-treated patients qualifying as responders at 36 weeks. These components, along with an efficient network of sites and scientific engagement, has fueled the momentum in both of our pivotal studies to end 2019 and begin the New Year. As you have just heard, both our DUPLEX and PROTECT studies are enrolling well, and we are maintaining high-quality study conduct. This is a testament to the collective hard work of our entire organization and partners. Enrollment in our lead pivotal study DUPLEX in FSGS continues to benefit from a heightened sense of awareness and engagement in a broad global network of open sites. We have designed DUPLEX to recruit a similar patient population to our DUET study. And thus far, the baseline characteristics of the world population remain consistent with our expectations and how the study was powered. Our most recent months have produced some of the strongest screening and enrollment trends yet. This gives us confidence in reaching 190 patients enrolled in DUPLEX in the next two months and keeps us on track to report top line results from the 36-week proteinuria analysis in the first-half of next year. The proteinuria analysis will measure the proportion of responders that reach FPRE after being randomized to either sparsentan or irbesartan for 36 weeks. Importantly, if sparsentan shows a statistically significant improvement in response rate in DUPLEX, we would expect to then file a new drug application under the Subpart H accelerated approval pathway in the U.S. and for Conditional Marketing Authorization consideration in Europe to ensure we’re in a position to file for approval after receiving top line data, our teams are conducting regulatory submission planning in parallel. We also made noteworthy progress recently with our PROTECT Study in IgA nephropathy. We continue to leverage the established nephrology footprint built by the DUPLEX Study, the heightened awareness of IgA nephropathy and the larger overall patient population to accelerate recruitment. We have maintained momentum in the study, including through the holiday period, which has resulted in some of the highest recruitment months to date. As a result, we are very confident in our ability to meet the enrollment milestone of 280 patients in PROTECT by early 2021 and to report top line results from the 36-week proteinuria analysis in the first-half of 2022. The proteinuria analysis in PROTECT will be the percent reduction proteinuria after being randomized either sparsentan or irbesartan for 36 weeks. It has been widely established that proteinuria exposure over time is one of the strongest predictors of rate – of renal function decline in IgA nephropathy. Thus, if we are successful in demonstrating a meaningful difference in proteinuria reduction between sparsentan and irbesartan after 36 weeks in a PROTECT Study, we would expect to then file an NDA under the Subpart H accelerated approval pathway in the U.S. and for CMA consideration in Europe. As we move through 2020, we will channel the momentum in our two pivotal programs to continue our pioneering efforts with the goal of potentially delivering the first medicine approved for FSGS and IgA nephropathy. Our focus remain on completing enrollment in both studies and preparing for our subsequent FDA and EMA filings. Last, before I turn the call over to Laura for the financials, I would like to point out that we recently initiated a small pivotal study evaluating the efficacy and safety of our proof product, Chenodal, for the treatment of CTX, or cerebrotendinous xanthomatosis. As many of you may know, Chenodal is not labeled for the treatment of CTX, and we do not promote the product. Over time, we’ve been working towards the path that potentially allow us to gain an updated label. Our hope is that this study will ultimately lead to a CTS indication and allow for us to support greater identification and earlier treatment efforts in this ultra rare progressive neurological disorder. Let me now turn the call over to Laura for the financial update. Laura?

Thank you, Noah. During the fourth quarter, net product sales from our commercial portfolio grew to $46.7 million, a 7% increase over the same period in 2018. For the full-year 2019, we reported $175.3 million in net product sales. This achieved our guidance and represents our fifth consecutive year of organic growth. We reported a GAAP net loss of $30.3 million for the fourth quarter and $146.4 million for the full-year 2019. After adjusting for non-cash expenses and income tax, we reported a non-GAAP net loss of $11.2 million for the fourth quarter and $89.9 million for the full-year 2019. On a GAAP basis, R&D expenses were $36.4 million for the fourth quarter and $141 million for the full-year 2019. The increase over 2018 is largely attributable to higher expenses to support our clinical and product development efforts. On an adjusted basis, R&D expenses were $34.5 million for the fourth quarter and $132.9 million for the full-year 2019. Relevant non-cash expenses for the fourth quarter included $1.9 million of stock-based compensation and amortization. On a GAAP basis, selling, general and administrative expenses for the fourth quarter were $27.5 million $129 million for the full-year 2019. The increase over 2018 is largely attributable to increased compensation expense and higher professional fees. On an adjusted basis, SG&A expenses for the fourth quarter were $19.6 million and $95.5 million for the full-year 2019. Significant non-cash adjustments for the quarter consisted of $7.9 million in stock-based compensation and depreciation and amortization. Looking ahead for the year, we anticipate that our net product sales will continue to grow in the mid single-digit range, similar to what we experienced in 2019. As has been typical for us in years past, we anticipate seasonality in net product sales, including higher growth to net discounts during the first quarter of the year. We do expect that to normalize throughout the balance of 2020. We anticipate that our operating expenses for the full-year 2020 will be similar to what we reported for the full-year 2019. This includes ongoing disciplined investments to achieve our enrollment and development milestones for our Phase 3 studies. We entered the New Year with a solid financial foundation and $398.5 million of cash and cash equivalents as of December 31, 2019. Importantly, we believe that we have sufficient cash on hand to fund our operations beyond our Phase 3 data readout. Let me now turn the call back to Eric for his closing remarks, Eric?

Thank you, Laura. The outlook for our organization is clear. And as a result of our dedicated team members’ hard work and accomplishments, we are in a great position to build upon our momentum in 2020. We are fortunate to hear directly from the communities we aim to serve, including in the case of a renal pathologist, who is living with IgA nephropathy. He recently shared with us that he has been hoping and waiting for a medicine that could meaningfully improve treatment options for rare kidney disorders for many years. For him, it is not just about his patients, it’s also personal. Hearing stories like this gives us a deep understanding of the unmet need and provides an incredible sense of urgency for all of us at Retrophin. We will channel this urgency throughout the year to remain focused on the execution and advancement of our pivotal DUPLEX and PROTECT studies, so that we deliver top line data and potential FDA and EMA filings next year. In parallel, we will continue to deliver our commercial products and build upon our commercial capabilities, so that, if approved, we are in a position to quickly reach the greatest number of patients with sparsentan. Let me now turn the call back over to Chris to open it up for questions. Chris?

Great. Thanks, Eric. Angela, can we go ahead and open up the lines for Q&A, please?

Yes, of course. [Operator Instructions] And your first question comes from the line of Joseph Schwartz with SVB Leerink. Please go ahead.

Great. Thanks so much for taking my question and congrats on the progress. Several sessions at ASN during the fourth quarter highlighted significant amount of interest in new treatments for glomerular disease amongst the treatment community. So I was wondering if you could just summarize your main takeaways from the sessions and do you have any new insights on where sparsentan could fit in?

Thanks, Joe, for the question. Let me start and then I’ll ask Noah to weigh in. I think importantly, what we saw at the most recent ASN was a growing body of evidence to support the link between proteinuria and eGFR, particularly within IgA nephropathy and rare renal diseases, which gives us great confidence in how we have designed our studies. Noah can share a little bit more about what he saw from the ASN? Noah?

Yes. I think, Eric, I would just support your statement about the emphasis on proteinuria. I think that’s probably, Joe, what’s really spurred a lot of interest in the area. The nice thing about where we are at this stage in in FSGS, in particular, we’re in Phase 3. There are no other programs in Phase 3, and we’re pretty far ahead of the pack. I think we’ve got an established database. From a safety standpoint, the drug is well-accepted and well-understood. I think the other advantage that we have is that, we’re non-IST. Meaning that, we’re not an immune suppressive therapy, as you probably noticed, quite a bit of interest in the area or in areas of complement in different immune suppression, steroid-sparing approaches. But many of these approaches have not yet been proven from a safe distance. And while, of course, we hope that they are successful to bring new cures to patients, because they direly need it. Number one, they still have to be proven in terms of both efficacy and safety. And number two, I would say that there really wasn’t anything out there, Joe, that I could see that we really couldn’t necessarily be complementary to, given the way the drug works. So I think it further supplements the arguments that, there are – there’s a role for sparsentan not just when we get there, which is probably first, but also when some of these other therapies potentially get there as well and working together.

That’s very helpful. Thanks. And then as a follow-up, I was wondering if you could talk about the requirement for patients in DUPLEX to wash out of any RAS blockers other than irbesartan before entering the study. Has this been an impediment for any patients or investigators who might prefer a different RAS blocker than irbesartan? And is this being handled the same way in PROTECT? It seems like it could be different based on the protocol I see online?

Yes. Noah, do you want to take that one?

Sure. To answer and address your first question, in terms of the way that DUPLEX is designed, these patients do go undergo a washout period. I would say the majority of the patients that are coming in are on RAS blockade, because as we know, those patients are often treated with that therapy. We saw that in DUET, about 85% of patients are in RAS. I think that, we talked frequently with sites and investigators. They pulled us from the beginning as this is a very recruitable protocol. That specifically was not raised to us as a particular concern. And I think the reason for that, Joe, is that recall that sparsentan is a dual blocker. So we’ve got not only an endothelin blocking component, but an angiotensin blocking component as well. So essentially, it’s kind of in a sense two drugs in one. The patients who aren’t going to be randomized onto spar go on to, as you know, irbesartan. So either way, they’re going to get an ARB. And frankly, when you look at the data, it’s not really clear that one aren’t necessarily superior to another. There is generally thought of is a class effect. These drugs tend to work pretty uniformly. So I think that’s kind of how I would answer that. And then I think with regard to the two studies, while there is a two-week washout in DUPLEX, it’s just a small nuance. But we actually do have in the PROTECT Study the ability to go directly and switch over to spar or irbesartan without the washout effect there. There’s certainly always debate in these studies and we’ve had many, many discussions about what’s right and what’s the best approach. Frankly, it probably doesn’t matter that much. Because the two weeks, once they get into the study, they’re just going to switch over anyway. So it doesn’t have much of an impact on the overall data set.

That make sense. Very helpful. Thank you.

Thanks, Joe.

And your next question is from the line of Maury Raycroft with Jefferies. Please go ahead, sir.

Hi, everyone. Congrats on the progress and thanks for taking my questions. I was wondering for Phase 3 DUPLEX, the confirmatory endpoint is change in slope of eGFR after 108 weeks. If you can – I’m wondering if you can remind me what exactly is the confirmatory endpoint in Phase 3 PROTECT? And then for both studies, how important will the results be after the four-week drug cessation at end of study? What are your goals post drug cessation? And what will FDA be looking for?

Thanks, Maury, for the questions. Why don’t I take the first part around the confirmatory endpoint, and then I’ll have Noah talk about the end of treatment measurement. So for both DUPLEX – sorry DUPLEX and PROTECT, the confirmatory endpoint is eGFR slope with an interim analysis on proteinuria. And we’re confident in sparsentan’s ability to have efficacy both for proteinuria and eGFR, which regard to this approach, for both diseases, it’s very much aligned with the nephrology community and the wide belief in the utility and the link between proteinuria and eGFR. And this is supported by the literature and, in fact, a growing body of evidence that supports the link between proteinuria and eGFR. And it remains a focal point for future use in clinical studies, as we’ve seen, both the ASN this past year that we just talked about, but also, we think from a regulatory standpoint, that there’s growing confidence and acceptance of this approach, which we’re seeing now reflected in more and more studies using this methodology of proteinuria and eGFR in rare renal trials. For us, it’s critical to demonstrate that link in a trial. And we’ve designed our studies to have some flexibility. As is common in studies like this, we have planned a sample size reassessment procedure that would allow us to further derisk the eGFR endpoint, if we think it would be helpful. Importantly, if the decision is made to do this, we believe it would not impact the timelines for our proteinuria analysis, or subsequent NDA and EMA filings of the proteinuria data. So, Maury, overall, that confirmatory endpoint of eGFR we think is well established. And for our clinical trials, everything is aligned to make sure that we are successful and so we’ve got a high degree of confidence in that confirmatory endpoint. I’ll ask Noah to add anything else and also to address your question around the cessation of treatment at the end of the trial.

Okay. Thank you, Eric. So, Maury, it’s a great question. If you look across, it essentially is a regulatory requirement to stop drug and then measure four weeks at loss. Frankly, if you look at bardoxolone and some of the other programs, the ADPKD drug from Otsuka, they were required to do this as well. My sense is that what they’re looking for is to ensure that there are no significant number one safety concerns and any changes in eGFR off drug. Once you stop drug, there’s no dramatic changes there. That probably doesn’t apply as much to our therapy. But I think it’s a standardization technique that they’re probably applying and I’m just intuiting here across programs, so they can sort of look from one to the other, But for us, it’s probably not a huge relevant piece.

Great. That’s very helpful. And then I had a question for the Chenodal Phase 3 in CTX. Just wondering if the FDA recommended that trial or is Retrophin practically running in? And then I see the primary endpoint is changing urinary bile alcohols week four and 16. I guess, can you walk through the crossover design for the study?

Yes. So I’ll give a brief overview and then I’ll ask Bill to mention it. With the Chenodal program, it is quite unique. And I think it’s important to just remind everyone that this is a medicine that it’s been available for sometime and is not approved for CTX, but is commonly used for this ultra rare condition. And we believe that it was the right thing to do to study this and to get an approval for this and to have a label that would help in guiding our discussions with clinicians at how to use Chenodal in these patients. Bill, do you want to talk about the design of the trial?

Certainly, the trial is a placebo controlled, randomized, crossover design, with a blinded withdrawal that happens twice during the study. So the way that works, patients who are already on Chenodal, once randomized, go into their first period of blinded withdrawal and their medication has changed and the patient, the physician don’t know whether it’s being changed to placebo, or they remain on Chenodal. And there are observations for clinical symptoms on the part of the patient and the physician. There’s also biomarkers that are being assayed, and you referenced the urinary bile alcohols to see if there are biochemical changes that are evident with the cessation of treatment. By having two periods, we repeat the process and just flip the treatment selection that way each patient serves as their own control. And so by using a short window of time for withdrawing the medicine from the patient, we’re able to maintain a study that safe and ethical and hopefully enrollable, that patients will accept, the physicians accept, but will give us the data that allows us to demonstrate the utility and support an ultimate regulatory filing to get the CTX on the label for Chenodal.

Got it. Thank you very much.

And your next question is….

Thanks, Maury.

….from the line of Gena Wang with Barclays. Please go ahead.

Hi. This is David for Gena. Thank you for taking my questions. The first question is regarding the DUPLEX and PROTECT trial. Can you remind us the power the assumptions for the trial? And then a follow-up with Maury’s question, so you said that you are planning to do a simple set assessment. Can you just helps us understand whether the simple set assessment would actually affect the powering of the trial?

Thanks, David. Noah, why don’t you take these questions around powering then how does sample size modify?

Sure. Thanks, Eric. So let’s start with DUPLEX. For the proteinuria analysis of 190 patients, the analysis will evaluate the proportion of patients achieving FPRE at week 36. So with 190 patients, that gets us power at approximately greater than 90% for the two sided alpha of 0.05. This assumes that the treatment difference in FPRE response at 36 weeks is consistent with the observed difference at week eight. So the end of double blind treatment, which was 28.1% for sparsentan and 9.4% for ARB from the sparsentan Phase 2 DUET study. For the eGFR endpoint, we’ll be looking at eGFR slope and that is the confirmatory endpoint to week 108. And the projected treatment difference between slopes was obtained by modeling the relationship between eGFR and FPRE using DUET and the NEPTUNE databases. Importantly, what has been observed is that even what appears to be small differences in eGFR slope, such as like point – we use 0.8 to 1.52 is that range, that small range around one has been considered to be clinically meaningful. So that’s kind of how it works for DUPLEX. For PROTECT, the primary endpoint, remember, is slightly different in DUPLEX’s FPRE; in PROTECT, it’s percent change from baseline, that’s because they utilize separate databases to derive these cut points. And that is the last – so for PROTECT, the percent change from baseline, the last pretreatment value available before the first dose of study medication and UPCR based on a 24-hour urine collection at week 37. So they have similar time point and similar measure just a different percent versus absolute. PROTECT is empowered to detect a 30% difference in proteinuria between spar and placebo, and this is based on two large IgAN registries in Western, Glasgow. And basically, it showed in these registries that are greater than one gram per deciliter change or patients who are greater than one change to achieve the 30% reduction at nine months with RAS blockade had decrease in long-term eGFR decline. And consistent with findings from the NKF workshop, this indicates a white paper a 30% reduction at nine months is also predicted to reflect the treatment effect on outcomes. So you can see we’ve incorporated in multiple ways in these two studies of assessing these endpoints and they’re consistent with the date and literature that’s out there. So that was the first question on powering, right? And the second question was sample size.

On the sample size, how that might affect power?

Right. So in terms of how sample size might affect powering, it’s hard to put a specific likelihood on either study, whether it would affect the overall endpoint. But remember that this reassessment, which is a derisking piece, right, which allows us to recalibrate, really is designed to affect the confirmatory endpoint, and not the initial proteinuria endpoint. So we don’t expect that to impact our primary endpoint or 190 patients and the timeline. We don’t have visibility into whether that reassessment will or not occur, we’ll just continue to monitor the data and monitor our data and externally what’s out there. And as we mentioned earlier, if the reassessments result in any change, we would not be expected to impact the timelines for proteinuria, so the timelines that we’ve been speaking about.

Thanks, Noah. I think, just to take a step back, David, from the detailed description that Noah has provided. If we were to adjust the sample size for either of the trial, it would be for eGFR to ensure that we have sufficient power and thus, derisk the trial in demonstrating the confirmatory endpoints. And, again, if we do that, it has no bearing on or unlikely to have any bearing on our timing for proteinuria and certainly would not impact the power assumptions for that endpoint.

And just, Eric, if I may add one more thing. It is a technique that’s commonly used in the area and there are examples out there of companies that have used us in renal rare.

Yes.

And they’re helpful. Thank you, guys.

Thanks, David.

And your next question comes from the line of Christopher Marai with Nomura Instinet. Please go ahead.

Hello. This is Jackson Harvey on for Christopher Marai. Now that you have quite a few patients on the DUPLEX Study. I was just curious if you can provide some early color around the proportion of patients that have had to reduce dose to the tolerability and maybe their reasons for doing so? And my second question is, if the 36-week proteinuria measurement is not statistically significant, but trending in the right direction. Will you continue to run the trial for the eGFR endpoint? Thank you.

Thanks, Jackson. Noah, why don’t you take these questions?

Sure. Let me start with the DUPLEX question. I think specifically, you’re asking about the progress of the study and dosing and how many patients. And I just to reflect back, for those who don’t know, the DUET study and DUPLEX were slightly differently designed. DUPLEX had – DUET did not have titration step. So everyone started at 200, 400, 800, and there were a number of patients at the 800 didn’t tolerate it. They had to back down. We designed the DUPLEX study with a 400 to 800 titration step and that was to allow patients to acclimate to the dose and hopefully reduce any of the safety concerns. Well, it’s an ongoing study, and I – we can’t reveal the number. We do track that and I can say that, we’re not seeing anything safety concerns or safety issues. The drug does appear to be well tolerated. And, as you know, we had a recent Data Monitoring Committee meeting, which we mentioned on the last call, that gave us the ability to continue to move forward with the study. And I think that’s probably as much as I can say.

Yes. Noah, I think the only other thing I would add before you go to the 36-week proteinuria is in the DUET study. We did see that there was a significant efficacy difference for the patients that were on 400 or on 800. So, Jackson, while, the team has designed the DUPLEX Study to minimize that early onset RAS blockade associated adverse events that we saw. If those patients do down titrate, we don’t believe that, that would impact efficacy.

Yes. Can you just repeat the 36-week question for me, the proteinuria question?

Sure. I’m just curious if that endpoint misses at 36 weeks, but it follows and trending in the right direction. Will you continue to trial to the eGFR endpoint?

Yes. That’s a really great question. I would say that, that when the data in the first-half of next year, we have that data set, we will look at it and we look at the totality of the evidence at that time. So, there could be some circumstance where you might imagine, where, particular –while we might not hit significance overall, perhaps you might see a subgroup that shows significant difference. So, we try to prepare for all scenarios. But, of course, when you get the data, you get the data and you look at it. And for me, as a clinician, having done many of these studies, it really comes down to, do you have clinically meaningful data set that can help patients in the long run. If you look out there in the renal rare space, I mean, you have therapies and that haven’t necessarily even improved their endpoint and specifically in rare as well. But they – but they’re out there and even some therapies that are approved within select subpopulation. So I don’t want to speculate on what that might look like, but we internally are always evaluating and looking at these different potential scenarios, and we’ll certainly update you at that time. And hopefully, we won’t have to cross that bridge and will be not significant.

Great. And if I could squeeze in one more question, you said DUPLEX demographics are similar to DUET. So does that include the percentage of African-American patients? Thank you.

Yes. We…

Noah?

…yes, thank you, Eric. We haven’t disclosed those numbers. And I will tell you that we’ve screened quite a number of patients in the study, including African-American patients and we’ve made all efforts to include as many patients as we can. And that’s really as much as I can say.

Thanks, operator. If we can go to the next question, please?

Your next question is from the line of Liisa Bayko with JMP Securities. Please go ahead.

Hi. I also want to say congrats on progress. And just a couple of questions for me. One follow-up. For this adjustment, is there a particular timeframe, where you’ll be doing that? And is that something you’ll communicate to us just letting us know that, you’ve increased the size of that you’re proceeding as with no adjustment, or just curious on that point?

Yes. Eric, would you like to answer?

Yes. So Noah, why don’t you take that one?

Okay. Liisa, the reassessment is based on enrollment trends in DMC scheduling. So we really cannot provide a specific timeframe there. As is common in these assessments, any change will be done working with the DMC after doing the available data and with regulatory input. So, just want to re emphasize if any of these reassessments occur, they’re not likely to have an impact on the proteinuria endpoint. And, of course, once we are confident if such a change were made, we would let you know.

Okay.

Yes. I think importantly, Liisa, if there was a change, we would make sure that we communicate anything around the timelines that we have committed to. And I think, as no Noah and I’ve mentioned, if we were to do this, it would be on the confirmatory endpoint, and we don’t believe that it would have any impact on the proteinuria and the timelines that we’ve committed to over the next year in terms of proteinuria readout and regulatory filings. But certainly, we make sure that we provide any update.

Okay. And it’s not a futility analysis, it’s just an interim check to see if things are trending in the right direction and then if any adjustments are needed to highlight those are operational bulwarks. Okay. And then for the CTX…

Yes, that’s absolutely right.

Okay. For CTX, can you talk about sort of the – a little more specifically about the growth opportunity in doing the study. Maybe you can quantitate it in someway in terms of maybe additional number of patients that you could may be able to treat or some percentage growth that you might expect….

Yes.

…or something along those lines, just give us a sense of what we’re talking about? Thank you.

Sure. Thanks, Liisa. So, just as a reminder the rationale for doing this study was to make sure that we have a label for this treatment that it’s been around for sometime and is considered a very important treatment option for these patients. I’ll ask Peter to talk a little bit about what he sees as the opportunity if and when we receive the approval.

Thank you, Eric, and thanks, Liisa for the question. Based upon what we know today and the fact that CTX is an ultra rare population with Chenodal, currently available as the standard of care. We do not anticipate a material change in a market opportunity. We would, however, like to pursue additional investment, raising awareness and ultimately, earlier diagnosis to help patients. We think it’s appropriate to give the right guidance for our field force to the physician, so they are in a good position to write a prescription for Chenodal.

Okay. I thought part of it was to maybe uncover, be able to kind of look for more patients, but I guess is that sort of an unknown?

Yes.

Yes.

Okay. [Multiple Speakers]

Yes. I think it certainly – yes, Liisa, thank you. Certainly, it would give us the opportunity, as we’ve done over the last few years with our promoted products finding these rare and also rare patients is not an easy task. And so, with something like CTX, where we don’t promote it, we think that – we’d be able to help in identifying these patients. I’d say right now, we’re not in a position to say that it’s going to have an inflection on any of the growth that we’ve seen with that product. But I think it’s going to be, as Peter says, an opportunity for us to continue to raise awareness. And hopefully, that for these patients to be able to get that diagnosis and connected to treatment even earlier. And once we get closer to completion of that trial and filing, we could talk more in detail about what that might look like.

Okay, great. Thank you.

Your next question is from the line of Tim Lugo with William Blair. Please go ahead. Lachlan Hanbury-Brown - William Blair & Company: Hey, this is Lachlan on for Tim. Thanks for taking the questions. You sounded pretty positive on the PROTECT enrollment. So I was just wondering what – and you mentioned that leveraging your footprint and increasing awareness has helped with the enrollment there? Are there any other specific learnings you’ve been able to apply from DUPLEX that have helped there? And are there anymore that you’re sort of in the process of implementing that could further speed up the rate of enrollment?

Thanks, Lachlan. Noah, why don’t you take this one?

Yes. Number one, I would say to reemphasize the foundational sites, I think that’s a key point. We continue to grow the site footprint. And I think it’s really important that you have a global reach. I would also say that one thing that we’ve observed, and I think this may be why PROTECT is benefited. Beyond the fact that PROTECT is a little bit of a larger population or against a larger population. When you recruit these studies, we have a pretty big overlap between the two studies of PROTECT and DUPLEX. We have a substantial overlap there. And physicians as investigators, what they’ll typically do is, they will enroll a patient and they’ll see how that patient does on therapy. In their hands, they want to make sure that patient does well. They’re comfortable, they’re confident. Once they do that, then sometimes you’ll actually see them enroll two or three, they’ll start to bring in more patients. They want to make sure they’re confident and comfortable. And I expect what’s happened is for sites that are bringing in DUPLEX patients, they’re getting comfortable and confident with sparsentan, and now they’re bringing in patients onto the PROTECT side. So I think it’s kind of a hand in hand thing. It goes back to the well understood mechanism. They understand how the drug works. They’re comfortable with it. So I think that’s a big part of it. We continue to drive number of strategic imperatives. I’ll just add one that’s going to be – that is key and important. it’s been helpful. And community key is, we talked in the last call about the 9,000 nephrologists in United States, 300 academic sites and 8,700 sites that are community-based nephrologists and we continue to extend the connectivity between the academic sites and the community-based sites. And there there I’m specifically speaking about the U.S., which has done a pretty substantial amount of enrollment in DUPLEX and PROTECT as well. But – so that – those are the kinds of things that we’re doing. We will continue to drive those efforts to bridge and broaden out that enrollment in accelerate recruitment.

Okay, great. Can you give a sense of it in terms of the recent uptick? Is that mostly coming from those centers that already have patients enrolled, or is that primarily driven by the addition of new centers?

Yes. I would say, it’s a combination. We’ll see sites that are recruiting and continue to recruit. But it’s interesting in this disease, we’ll also sites that haven’t recruited in six months, bring a patient in. So, it really depends on the site. Yes. So – and the other thing is, I mean, just remember, PROTECT is moving very well. Trends continue. And we’re pretty encouraged, we could reach our enrollment milestones early, potentially. And I think I just want to – I’ll leave it there.

Okay. Thank you.

Thanks, Lachlan.

And your final question comes from the line of Lina Kaminski with Canaccord. Please go ahead.

Hi, guys. Thank you. So it’s Lina for Michelle. So one of the things that were mentioned at ASN for the SONAR study was the higher baseline UACR in non-responders versus responders. So given the majority of FSGS patients, they have higher proteinuria. Do you think this would be true to FSGS around the population that is most likely to respond? And I guess, have you done any analysis on this with respect to DUET population?

Yes. I mean, I believe there is an analysis. There’s a whisker plot in the DUET paper that, Lina, I think it’s a great question that speaks directly to this. So I just – Chris can provide it after the call. But yes – we’ve looked at the cut point of above and below. It was two or three was the cut off there for, in this case, UPC – or we’re using UPC in this case. But yes, we’ve looked at that and there appears to be an effect both above and below that “nephrotic” range proteinuria level that you’re getting at.

Got it. Thank you. And then just another one on Alport syndrome. Since you mentioned that earlier on the call, I’m just wondering, since just – it seems like you’re still looking at this. Can you maybe provide some color on kind of how the competitive landscape influences your decision on making the progress on this disease, specifically since bardoxolone has a risk of fluid retention? And this may prevent ability to dose it in combination with sparsentan?

Yes. Line, thanks for that question. We are looking at that. And certainly, we want to make sure that we understand how the market and the treatment paradigm may evolve. But also part of our assessment is looking at what the clinical and regulatory path would look like. We will continue to look at how other products may be developed and used and we think that there potentially could be a role for sparsentan. We’re not in a position really to talk much in more detail about that or about the potential competitors in that space. But I will say that, we will go into that if we believe that there is a clear role and a clear pathway for sparsentan.

Got it. Thank you. This is super helpful and congrats again on the quarter. Thank you.

Thanks, Lina.

And I’m showing no further questions at this time. I would now like to turn the conference back to Chris Cline for closing remarks.

Great. Thank you, Angela, and thank you all for joining us today. This concludes our call. We look forward to seeing you over the next few weeks at the upcoming investor conferences.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation and have a wonderful day. You may all disconnect.