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spk07: Good afternoon, ladies and gentlemen. Welcome to the Atea Pharmaceutical second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. In order to ask a question, you'll need to press star 1 1 on your telephone, and you'll then hear an automated message advising that your hand is raised. Please note that today's conference is being recorded. I would now like to turn the call over to Janae Barnes, Senior Vice President of Investor Relations and Corporate Communications at Attea Pharmaceuticals. Please proceed.
spk01: Good afternoon, everyone, and welcome to Attea Pharmaceuticals' second quarter 2022 financial results conference call. Earlier today, we issued a press release that outlines the topics we plan to discuss. You can access the press release as well as the slides that we'll be reviewing today by going to the investor section of our website at irateafarma.com and go to the events and presentation section. With me today from Atea are Chief Executive Officer and Founder, Dr. John Pierre Semedosi, Chief Development Officer, Dr. Janet Hammond, Chief Financial Officer and Executive Vice President of Legal, Andrea Corker, and our Chief Commercial Officer, John Bavrica. They will all be available for the Q&A portion of today's call. Before we begin the call, as outlined on slide two, I would like to remind you that today's discussion will contain statements that involve risk and uncertainties. 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. Our actual results may differ from what is discussed on today's call. With that, I'll now turn the call over to Jean-Pierre.
spk03: Thank you, Julie. Good afternoon, everyone, and thank you for joining us today. I would like to start with our many thoughts of your program, where there is much to report, as you can see summarized on slide three. It is now evident that, as detailed on slide four, COVID-19 will likely remain a global health concern for a very long time. We see new variants and sub-variants emerging in shorter time intervals, and the rate of infection is increasing. The changing characteristics have caused the existing antibody treatment to fail and have reduced the efficacy of vaccine-induced immunity, creating the need for frequent and early engineered booster to combat the emerging variants. Pandemic surges can be life-threatening, to those at high risk over 65 years old, particularly those with risk factors causing increased hospitalization and death. Right now, BA.5 accounts for the vast majority of infections. It's highly infectious, and new variants are expected to fuel a surge of this fall. New oral antivirals with improved profiles are urgently needed. due to the limitations of the current antiviral treatment options. These limitations include the issue of relapse, which was experienced by both President Biden and Tony Fauci, among others, after taking Paxlovid. Relapse can lead to a rebound of symptom as well as transmission of infection to others. Other limitations include drug-drug interactions with many commonly prescribed life-saving drugs. These drugs are frequently used among those that are the most vulnerable to COVID-19, limiting the ability for Paxlovid to be prescribed and raising treatment dilemma for patients and prescribers. With very fast review, we have the potential to address many of these limitations, and we are working diligently to deliver improvements over the current standard of care. Moving to slide five, We recently had an end-of-phase two meeting with the FDA and met with the European Medicines Agency Emerging Task Force to review the Benefos Reveal data package today, including the Morning Sky results. Let me remind you that in the Morning Sky study, which we reported in May, the risk of hospitalization was 71% lower in the Benefos Reveal 550 mg BID arm versus placebo with a p-value equal to 0.047, unadjusted and exploratory. Obviously, we are very encouraged with this outcome, and the results were consistent in both standard and high-risk patients as well. We are now in the process of finalizing the design of a global late-stage clinical trial for the treatment of mild to moderate COVID-19. The trial will evaluate many parts of you, 750 milligrams, those twice daily for five days in high-risk patients, including those who are immunocompromised, regardless of vaccination status. The primary endpoint will be hospitalization and death. Operational planning is currently underway for this global trial. and we expect to initiate this study in the fourth quarter of this year. Turning to slide six, we are confident that very fast review will remain fully active against future variants. This is based on the consistent potent antiviral activity that we continue to generate as new variants of concerns emerge and are tested. Our most recent data set confirms antiviral activity against omicron surveillance similar to the potency demonstrated with alpha, beta, gamma, epsilon, and delta. This data reinforce our understanding of venifos will be a potent inhibition of the two functional domains of the highly conserved viral RNA polymerase. Let me remind you that details related to the molecular mechanism were published in natural communications earlier this year. Moving to slide seven, based on the evolving nature of COVID-19 variants and unmet medical needs, we are pursuing a multi-pronged approach which places us at the forefront of developing a combination regimen to fill the treatment gaps of COVID-19. In the future, we see a role for benifosovir as monotherapy, as well as in combination regimens. Right now, as previously noted, there are treatment gaps with first-generation protease inhibitors, including drug-drug interactions and relapse homo-odosens. Also, we can anticipate resistance to emerge with broad use, prolonged treatment, and retreatment when protease-administered when protease inhibitors are administered as monotherapy. With very positively attractive profile, we believe that he has the potential to become the cornerstone therapeutic for both monotherapy and incombination therapy. This is our rationale for pursuing in parallel to our late-stage monotherapy trial a second-generation protease inhibitor with an improved profile to be used in combination with venifosbuvir in specific patient population. On slide eight, as part of this approach, our target profile for second-generation protease inhibitors is a highly potent drug that has a good safety profile with limited drug-drug interaction and does not require ritronavir or any other booster. And I'm pleased to report today that we have made significant progress with our internal program. Indeed, in a short time period, we have achieved two essential properties with potency at nanomolar and sub-nanomolar levels and good metabolic stability, leading to highly promising compounds. We are now working to combine this potency and metabolic stability in the clinical candidate, which we hope to select later this year. Moving to slide nine, the antiviral effect of benifazovir, in combination with the protease inhibitor Paxlovid, was examined in vitro in an HCAR229E cell good model. And the results indicate an additive antiviral effect. So not only we are encouraged by this data, but also this data supports potential benefit of a combination of benifrogravir with a protease inhibitor for the treatment of COVID-19. I will turn the call over to Janet for a review of our dengue fever and hepatitis C programs. Janet?
spk05: Thank you, Jean-Pierre. Turning to slide 11, I'll begin with a review of our program to treat dengue fever. In recent weeks, hundreds of thousands of cases of dengue have been reported across Southeast Asia, owing to the flooding and other climate-related issues experienced there. In the United States, in Miami-Dade County, a mosquito-borne illness advisory was issued for dengue in late July after the first case was confirmed this year in a Florida resident. There are no treatments for dengue. Dengue is the most prevalent mosquito-borne viral disease and affects almost 400 million individuals on an annual basis. Dengue is endemic in over 100 countries, and more than half of the world's population is at risk for it. There is a significant unmet medical need, and the global economic burden is estimated to be between $8 to $9 billion annually. As noted on slide 12, we continue to enroll patients in the DEFEND-2 trial, which is a randomized phase 2 proof-of-concept study in patients with dengue fever. The study is designed to assess antiviral efficacy, safety, and the pharmacokinetics of multiple doses of H3752 with a primary endpoint of change in dengue virus viral load from baseline. H3752 or placebo will be administered orally for five days in up to 60 patients with dengue infection. We expect to report initial results from this study later in the year. We also initiated a second dengue study, which is a human challenge model in the United States. In this study, healthy volunteers are dosed with AT752 or placebo and then administered a live dose of DengueVar. The subjects are closely monitored within a very controlled setting, allowing for the assessment of viral load and the viral kinetics between the treatment groups. We also expect to report the preliminary results from this study later in the year. Turning now to our hepatitis C program. As shown on slide 14, our HCV combination development plan looks very promising, and we believe that there is still room to improve upon the standard of care for hepatitis C. Our HCV combination profile includes convenient and short treatment duration, with the potential for the first ribavirin-free therapy for decompensated disease. We believe Ruzazir, in combination with demlifosavir, provides the opportunity to create a best-in-class, pan-genotypic HCV therapy. We're continuing to make progress with our program and have completed a required combination preclinical toxicology study. We are currently manufacturing Ruzazir clinical trial supplies and are finalizing the Phase II clinical trial design. We expect the Phase II combination program to evaluate convenient and short treatment durations in both non-cirrhotic and compensated patients with cirrhosis. We anticipate initiating the study later this year. With that overview, I will now hand the call over to Andrea to review our financial information.
spk04: Thank you, Janice. As Joneigh mentioned in her introductory remarks, earlier today we issued a press release containing our financial results for the second quarter of 2022. The statement of operations and balance sheet are on slides 16 and 17. For the second quarter of 2022, the decrease in R&D expenses in comparison to the second quarter of 2021 was driven principally by the discontinuation of our cost-share arrangement with Roche. This cost-share arrangement ceased when the collaboration with Roche ended earlier this year. The decrease was partially offset by an increase in R&D employee payroll and personnel related expenses. The nominal increase in G&A expenses in the second quarter 2022 over the second quarter 2021 was primarily due to an expansion of our organization and reflects an increase in payroll and personnel related expenses. We ended the quarter with a strong balance sheet, including cash resources in the amount of $684.5 million to support our clinical development programs. The cash expenditures during the quarter were $21.1 million. We are reiterating our cash guidance with a runway through 2025. I'll now turn the call back over to Jean-Pierre for closing remarks.
spk03: Thank you, Andrea. Throughout the first half of 2022, we made considerable progress advancing our oral antiviral platform with the aim of transforming the treatment of severe viral diseases. As the global demand for COVID-19 treatments continued and abated, we remained confident in the opportunity for Atea to deliver a multi-pronged approach with best-in-class oral antivirals. to treat COVID variants as the virus continues to evolve. On slide 19, as we look to the balance of the year, we expect to build on this momentum by achieving a number of value-creating milestones, including the initiation of our late-stage clinical trial of Benifazovir for COVID-19, reporting preliminary clinical data from our dengue fever program, and the initiation of our Phase II combination program in HCV. In addition, our goal is to select the second-generation protease-inhibitor clinical candidate for COVID-19 combination therapy with Benifaz Vivian. These programs have the potential to provide global solutions for patients suffering from severe viral diseases, and I look forward to reporting our progress in the months ahead. With that, operator, we will now open the call up to your questions.
spk07: Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1 1 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question comes from the line of Tim Hugo, Lugo, from William Bear, Flair. Your line is now open.
spk08: Thank you for taking the question, and congrats on the progress in the quarter. I guess from a 10,000-foot level, it seems like there might have been a bit of a regulatory shift at the agency where maybe they're now more open to the monotherapy trial, whereas you know, maybe at the beginning of the year, that wasn't the case. Can you talk about, is it just the updated Morning Sky data, which, you know, impressed them, or is it just, I guess, the issues with the PI, or is it all of the above?
spk03: Janet, you'd like to address the question?
spk05: Thank you. Yes, JP, and thanks, Tim. No, I think to clarify, We had not had discussions about combination therapy versus monotherapy with any agencies. So these were end of phase two discussions that we reported now. And so I don't believe there was any issue one way or the other with that. And I think they see a path forward for us, you know, both as monotherapy and then potentially as combination therapy also. Okay.
spk08: Okay, fair enough. And is there any, can you just talk about thinking about using your own PI versus partnering with one of the other PIs? Obviously, there's PaxLavid, but there are other kind of development stage candidates out there. Is there something that just makes those not quite right for combination?
spk03: Look, we'll see, you know, in the next six to 12 months. As you know, the issues with Paxlovid are going to remain whether monotherapy or combination, and mostly it's drug-drug interaction. And very likely we foresee that the combinations are very likely when we are talking about specific population, we are talking about immunocompromised patient transplant where you can have long-term bioreplication. already you start with a major limitation, which is the drug-drug interaction issues of COVID. So as you have seen, we are moving very fast with our second generation. Our goal is to have, like we said, a highly potent drug, which will lead to low dose. We foresee potential a co-formulation with Benifazovir. Let's not forget, we have a low pill burden with Benifazovir. It's two pills twice a day. If you combine with Paxilovir, you're talking about five pills twice a day. That's quite a bit. So we keep in mind all this. But we believe that we will have a best in class. You see that, to my knowledge, This is the first time we're putting sub-nanomolar potency. We start to see even binding at the picomole level, which this is what we would like to see as we have in HIV and HCV. So not to talk about nanomolar, but picomoles. So let's see where we stand in the next six to 12 months. We believe that our combination, proprietary combination, will lead and help and create major benefits for patients, especially in those very high risk patients with COVID-19. All right.
spk08: Thank you for the call.
spk07: Thank you, Tim. As a reminder, if you'd like to ask a question, you'll just need to dial star 11 on your telephone. Thank you. Our next question comes from the line of Umar Rafat from Evercore.
spk02: For Umar. I would love to get a little bit more color about your expectations for the continuing market for antivirals. I mean, obviously, there's still unmet need in COVID. But by the time your either monotherapy or proposed combination is eligible for launching, what do you think the ongoing COVID market is going to look like at that stage?
spk03: Sure. John, do you want to address that question? Yes, sure.
spk10: Yes, I understand your question. We believe that the COVID-19 endemic will really continue throughout the world. And right now, recently, you've seen the multibillion dollar opportunity. And that's just for treatment. There's no mention of even stockpiling there. But even if you look at the current landscape that you have, which the dominant player, at least in the United States, is Paxlovid, you know, as JP said, that due to the drug-drug interactions with many commonly prescribed medicines, that is not going to go away. And these drugs are frequently used among those who are the most vulnerable to COVID-19. And unfortunately, it's limiting the ability of Paxlova to be prescribed and really praising treatment dilemmas for both patient and prescribers. And just to reiterate, I think we always have seen that the commercial opportunity for COVID will really come from two areas. One will be from the active disease, which is what you see now. And then once NDA approval comes, that the government will stockpile that. And the stockpiling will likely be similar to other types of endemics that we've seen before, which was usually a percentage of the population that would be ongoing. So we don't see anything really changing, at least on the current landscape that you see right now. The liabilities of those assets we see are continuing.
spk02: Okay, great. That makes sense. I guess one more, and apologies if we already discussed this, Can you talk a little bit about viral rebound and whether the risk of that is going to be different in Kambo and Rana?
spk06: Viral rebound and the risk of SIGGAP, please?
spk02: I'd love to talk a little bit about the expectations that other antivirals have had with viral rebound. And obviously, it's not just Paxlovid. You've seen similar reports from Molnupiravir, although it's not as widely used. So I'm wondering what you think about the risks there.
spk03: and whether combo will will meaningfully address that well look we will have to uh uh to conduct the study uh to see if this benefit can be realized right uh uh we just see you know recently uh potential uh for a rebound of monetary although you're really not really being uh i i would say documented just in this review paper recently. Paxlovid is clear. And I think that it's really related to the mechanism of action. When we talk about protease inhibitors, we are talking about the likely incomplete suppression, incomplete value application. Let's not forget that back so it does an off rate of one hour that mean that basically when uh the clearance occurred within one hour you're back on full value application that's the major difference with with a nucleoside analog the way you have chain termination uh you have an irreversible process so again um we We need first to have a good hand on relapse. There is several reports that talk about 2%, 5%, 10%. It would be very important to know exactly where we are talking. Some even mention 20% or 30%. I say very likely it varies among different patient populations, very likely immunosuppressed patients, for example, or immunocompromised. where you are potentially long-term viral replication may occur at the highest rate. And combination you will expect should lead to those benefits. But obviously, the studies will have to be conducted.
spk02: All right. Thanks. Thanks.
spk06: Okay, thank you.
spk07: Our next call comes from the line of Nick Gasek with SVB Securities. Hey, good afternoon. Your line is open.
spk09: Nick Gasek. Hey, good afternoon. This is Nick Gasek on for Rolando Ruiz. Thanks for taking our questions. Maybe first off on bemifosfavir, how might lower hospitalization and death event rates impact of primary endpoint data for benefit from the foster here in phase three?
spk06: Janet?
spk05: I'm sorry, Nick. I didn't completely hear your question. How might hospitalization and death rates impact family foster care? Was that your question?
spk09: Hey, Janet. Yeah, I'm just curious, how might lower hospitalization and death event rates impact the primary endpoint data in phase three?
spk05: So I think obviously as an endpoint, it may mean that we will need to explore more patients. But I think one can also probably enrich for patient populations where these events are more likely to occur. So once we have a final study design and we're on our way, we'll give you some idea of what we're anticipating to do. But I think just at a broad level, that would be how we hope to address that.
spk09: Got it. That's very helpful. And I think you previously mentioned potentially optimizing 527, the compound itself, to get better exposures. with a lower cost of goods. Tracy, if you're moving forward with those plans and with the optimized molecule in Phase 3.
spk03: Yeah, basically we are moving forward with the new formulation and improved API. The API is just an improved production process to be able to synthesize multi-ton level. And the formulation actually is also a much more straightforward formulation process. So we actually just in the process to complete phase one with this formulation. So we will basically include the new CMC in the package for the global trial as well.
spk09: Got it. So this new compound won't be assessed in the phase three. It'll still be the prior 527 compound. Correct.
spk03: Exactly the same.
spk09: Got it. And then lastly, on potency data for bendifosfeter against BA4 and BA5 variants, when do you expect to share this data, and how do you expect bendifosfeter's durability to hold up against future variants of concerns?
spk03: Look, as you have seen in the slide, regardless of the variance, and with such major differences in the sequence, especially when we compare the O micro with the alpha, the beta, the delta, there is no difference at all. Not surprising. as the RNA polymerase is highly conserved. I'd like to remind you that any surveillance of exactly 100% homology in the RNA polymerase sequence, and only you have a difference in the spike protein. So, you know, it's going to take a couple months, again, to develop with especially BA.5, you know, We have activity against BA1, now against BA2. I think that I can tell you already the data that we are going to get with BA5. And when we see the future, again, it's important to know that we have not seen any significant mutation in the RNA polymerase. The only one as compared to the original Wuhan strain, is the 323 mutation, which is at the interface between the NIRAN and the polymerase. And actually, we have reported that in one of our clinical trials, we had 98% of these patients add that mutation. So, you know, this is why the nucleoside analog, especially, and I like to make a difference with specifically targeting the RNA polymerase with a chain termination mechanism. We don't anticipate that you're going to see any difference, regardless of the future variant.
spk09: That's helpful. And then lastly, on 752 in dengue, Maybe, I'm just curious, what are you hoping to see in the Phase II data set in terms of efficacy? And are there any particular safety signals you're watching for closely?
spk03: Janet, would you like to address the question?
spk05: So we're looking, in the treatment trial, we're looking primarily to see a decline in viral load. This happens naturally fairly quickly, but we believe that with clinical effect, you should see a more rapid and more deep drop in viral load. And so that would be the primary endpoint. We'll also be looking at symptoms. We have a fair amount of experience in our phase one trials with the drug. So we are confident in its profile as actually being well tolerated and safe. And so we will obviously be monitoring for that and also looking at the pharmacokinetics. But the viral kinetics are really the primary endpoint and the main aspect that we're attempting to evaluate. And also, we're going to look potentially at a couple of different doses and dosing regimens, depending on how we go from cohort to cohort. But those will be the things that we'll be looking for.
spk09: Got it. Super helpful. Thank you, Janet. I'll hop back in the queue.
spk07: Thank you, Nick. So if there's anyone else who has a question, please press star one one on your telephone. You'll be put in the queue. If there are no further questions at this time, I'd like to hand it back to Jean-Pierre for closing remarks.
spk03: Thank you and thank you again for joining us today and look forward to report more progress in the fall. Thank you.
spk07: Thank you everyone for your participation in today's conference. This concludes the program and you may now disconnect.
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