Reata Pharmaceuticals, Inc.

Thank you for standing by and welcome to Reata PharmaCuticle's conference call, during which the company will discuss fourth quarter and fall year 2021 financial results and provide an update on its clinical development programs. An audio recording of today's webcast will be available shortly after the call in the investor section of Reata's website at reatapharma.com. Before the company proceeds with its remarks, please note the forward-looking statements disclosure on the company's press release. These are many factors that could cause results to differ from expectations, including those noted in the company's SEC filing. On today's conference call, non-GAAP financial measures will be used to help investors understand the business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in RIATA's earnings release and presentation from today, which again could be found on RIATA's website. Today's statements are not guarantees of future outcomes. Please also note that any comments made on today's call apply only as of today, February 28th, 2022, and may no longer be accurate at the time of any webcast replay or transcript rereading. Following the prepared remarks, we will open up the call for questions. We ask that you please limit yourself to one question and one follow-up so that we can accommodate as many questions as possible. We are joined today by Warren Huff, REARTIS Chief Executive Officer, Manmeet Soni, President, Colin Meyer, Chief Innovation Officer, and Simi Khan, Chief Medical Officer. At this time, I would like to turn the call over to Warren Hutch.

Good morning, everyone. We thank you for joining us today. At RIADA, our mission is to develop therapies with novel mechanisms of action and the potential to have high clinical impact on deadly diseases with few or no available therapies. This is a challenging mission that involves many risks but is also very meaningful. We announced on Friday that we received a complete response letter from the FDA for our new drug application for our Bridoxelone program in chronic kidney disease caused by Alport syndrome. This outcome is a significant disappointment for our company, as well as the many patients, families, and investigators who have participated in our development program for Bridoxelone and Alport syndrome patients. In a moment, I'll comment on the implications of the CRL for the Bardock Sloan program. But before I do that, I'd like to point out that we're well positioned to recover from this setback and achieve our goal of launching our first commercial product. We have a strong cash position, a second program, OMAP, for Friedreich's ataxia at the NDA stage, and a pipeline of additional development opportunities, including our program in RTA 901, for diabetic neuropathy entering a phase two proof of concept study. With that background, I'll start by providing a brief update on OMAV. I'll start on slide four. The OMAV NDA submission for Friedreich's ataxia is on track to be completed this quarter and subject to FDA approval, we're planning for the commercial launch of OMAV early next year. As you know, we had our pre-NDA meeting regarding OMAV for the treatment of Friedreich's ataxia in the third quarter of last year. During the fourth quarter of last year, the FDA granted OMAV fast-track designation for the treatment of FA. This makes the OMAV NDA eligible for priority review and rolling submission of the NDA. The FDA granted our request for a rolling NDA submission. We submitted the first NDA modules last month and we plan to complete our submission next month. While the FDA has not indicated if they'll hold an advisory committee meeting to discuss our NDA, we've initiated preparations for a meeting should they decide to hold one. We're looking forward to working with the FDA on its review of our NDA for OMAV throughout this year. FA is a debilitating degenerative neuromuscular disorder that profoundly affects patients' motor function, and in almost all cases, shortens their lives. The disease is relentlessly progressive with no approved treatments. If OMAD is approved, we're preparing to be in a position to launch this important drug early next year. Turning to slide five, I'll now turn to our Bardoxilone Development Program and the implications of the CRL. As you know, we've pursued the development of bardoxalone for severe forms of chronic kidney disease because we believe strongly that the drug has the potential to transform the treatment of CKD. It has a novel mechanism of action that restores mitochondrial function, reduces reactive oxygen species and inflammatory drive. This mechanism results in acute increases in estimated glomerular filtration rate, or EGFR, that are the opposite of the acute decline in EGFR observed with blood pressure medications that reduce dialysis risk in large clinical outcome studies. Bardoxalone's mechanism of action has been well characterized in hundreds of peer-reviewed publications. Despite that, and largely because of the observed increases in EGFR, the mechanism of action and clinical profile of Bardoxalone is controversial among many nephrologists. As we've discussed in the past, drug development in rare forms of CKD is difficult because the disease progresses slowly over many years and the decline in EGFR is real and measurable but not considered a clinical endpoint. In addition, there are not enough patients to conduct a true clinical outcomes or time to kidney failure study. Importantly, the cardiorenal division of the FDA understands this and has developed alternate endpoints for these diseases. As all of you know, Phase III Cardinal Study met all four of its pre-specified primary and key secondary endpoints. Importantly, it met these endpoints in patients with a rare, genetic, rapidly progressive form of CKD. As a result, we believed that the data from the Phase III Cardinal Study, as well as the other studies of Vardoxelone and CKD, demonstrated a positive benefit-risk profile which would support bardoxelone approval. This was also the position of the many key opinion leaders and patient groups that supported approval of bardoxelone. Nevertheless, we received a negative vote at the ATCOM and the CRL. I believe that the committee was not convinced that the improvements in EGFR would translate into a real reduction in the risk of dialysis or kidney transplant. Without actual outcomes data, questions could be raised about on and off treatment EGFR trajectories over time, the off treatment period, and changes in clinical chemistry parameters that raise doubts about whether the observed EGFR improvements would actually delay dialysis. Also, some express concern that there could be a heart failure risk like that observed in Beacon, even though we've since implemented risk mitigation procedures in all trials and have observed no imbalances in heart failure, other cardiac SAEs or AEs, or increases in blood pressure since vegan. I believe that if the nephrologists on the committee had been convinced that bardoxelone treatment was likely to delay dialysis, we would have received a favorable vote. For this reason, an important event for the bardoxelone development program will be the results of a YAME, a large phase three clinical trial in patients with diabetic kidney disease being conducted by our strategic collaborator in Japan, Kiowa Kirin. Kirin has enrolled approximately 1,000 stage 3 and 4 diabetic kidney disease patients in the Ayame study, and all of the patients will have a minimum of three years of study drug exposure upon completion of the study. Ayame has as its primary and key secondary endpoints events that are validated to predict the risk of dialysis and transplant, including actual dialysis events and large declines in EGFR of 30, 40, and 53 percent. Kaiwa Kieran expects to complete the last study visit in the second half of this year. If the results of this trial are positive, it could provide clinical evidence that improvements in EGFR observed in bardoxelone-treated patients do in fact delay progression to kidney failure. Further, since it is such a large and long-term study, it should provide very important information on the safety profile of Vardoxelone. It's notable that the study includes a large number of stage four diabetic CKD patients. With respect to our programs in Alport syndrome and ADPKD, we've requested a type A meeting with the FDA to discuss the FALCON study. We're incorporating changes to that study that we believe address the issues raised by the FDA and the ADCOM during the review of the Alport syndrome in the A. Further, we're reviewing the FDA's comments in the complete response letter and are addressing next steps for our Alport syndrome program. We expect to request a follow-up meeting to discuss the program after the type A meeting for ADPKD. With that update, I'll now turn the call over to Colin, who'll provide clinical and other regulatory updates on the program NFA, as well as an overview of the Ayame study. Then to Dr. Khan, who'll provide an update on our program with bardoxalone in patients with ADPKD and our program with RTA901 in diabetic neuropathy. Finally, Mahmid will provide an update on our financials and operations.

Thank you, Warren. Thanks, Warren. Starting on slide seven, and as Warren mentioned, FA is a debilitating degenerative neurovascular disorder that profoundly affects patients' motor function and in almost all cases shortens their lives. Over time, patients become dependent on walkers and then wheelchairs, and they ultimately lose their independence altogether. The disease is relentlessly progressive, and the median survival for this disease is in the mid-30s. There are no approved treatments for FA. FA is a disease of mitochondrial dysfunction caused by mutations in the gene for protexin, a mitochondrial protein that helps assemble iron-sulfur clusters that are necessary for the production of cellular energy in the form of ATP. FA researchers have established that NREF2, the target of OMAD, is suppressed in FA patients. This depression contributes to mitochondrial dysfunction and reduced cellular energy production that is the hallmark of FA. FA is the most common recessive form of ataxia, and based on literature and proprietary research, we believe FA affects approximately 5,000 children and adults in the US. Next slide. The pivotal portion of MOXIE was a double-blind, placebo-controlled, randomized, international study that was one of the largest global interventional studies ever completed in FA. We enrolled 103 patients across a wide and representative range of age and disease severity. The primary analysis population included the 82 patients who did not have the foot deformity, pes cavus, and the primary endpoint was the change from baseline and MFAR scores at week 48. The progression of FA is measured in clinical studies by the Modified Friedreich's Cetaxia Rating Scale, or MFARS, a physician-assessed neurological exam. The Friedreich's Cetaxia Research Foundation, or FARA, worked with the FDA to develop the MFARS scale to accurately track disease progression in FA patients. The scale is composed of four subsections, including bulbar, upper limb, and lower limb coordination, and upright stability. As patients lose function, their MPAR scores increase. MOXIE met its primary endpoint of change in MPARs relative to placebo after 48 weeks of treatment. Patients treated with OMAP demonstrated a statistically significant placebo-corrected 2.4-point improvement in MPARs compared to placebo after 48 weeks of treatment, with a p-value of 0.014. Moreover, we observed improvements in all subsections of the MPHAR scale and in all major subgroups and analysis populations. This change is very clinically meaningful in that the OMAP-treated patients did not progress during the 48-week treatment period and recovered function. Further, the placebo-corrected improvement is equal to more than one year progression. In addition to the change in MPHARs, several secondary endpoints were included in MOXIE and analyzed hierarchically. While it was not feasible to power the trial for these endpoints, we observed improvements in those secondary endpoints. Next slide. As you know, in the second half of 2020, the FDA provided us guidance that, although it did not have concerns with the reliability of the MFARS primary endpoint results from MOXIE Part 2, it was not convinced that the results from MOXIE Part 2 as a single study were sufficient to support approval. To provide additional evidence of persuasiveness, the FDA suggested that we perform an exploratory analysis, the delayed start analysis. In the next few slides, I will discuss the design of the delayed start analysis and results from an updated data cut from August 2021, which was included in our NDA submission. The intent of the post-hoc delayed start analysis is to evaluate whether OMAP has a persistent effect on FA disease course. Conceptually, this analysis evaluates whether the treatment effect that was observed in the placebo-controlled MOXIE Part 2 study is maintained in the MOXIE extension study when all patients are receiving OMAP. If the treatment effect is maintained in the MOXIE extension study between those originally randomized to OMAP versus those who have a delayed start of OMAV because they were originally randomized placebo in MOXIE Part 2, then it demonstrates evidence of a persistent effect on the course of the disease. If the treatment effect is not maintained and the patients who have a delayed start on OMAV because they're originally randomized placebo are able to achieve the same absolute response and catch up to the patient's initially randomized OMAV, The results are consistent with a symptomatic treatment that does not affect the underlying course of the disease. A total of 73 out of 75 patients without PESCAVIS who completed MOXIE Part 2 were enrolled in the MOXIE extension. Importantly, the MOXIE extension is ongoing, and we continue to accrue long-term safety and efficacy data from the study. The delayed start analysis compares the change from baseline and mFARS for patients randomized to placebo during MOXIE Part 2, or the placebo to OMAP group, to the change from baseline and mFARS for patients randomized to OMAP during MOXIE Part 2, the OMAP to OMAP group. Two time points were used in the analysis. The first time point was at week 48, the final week of the placebo-controlled MOXIE Part 2 study. The second time point was at week 72 of the open-label MOX extension in which all patients received OMAD. A non-inferiority test was used to evaluate if the difference in MFARs between groups observed at the first time point was maintained or non-inferior at the second time point. Analysis methods, including the pre-specified non-inferiority margin, were based on literature. Next slide. In the August 2021 data cutoff, 58 of 73 patients from MOXIE Part 2 without PESCAVIS who enrolled into MOXIExtension had at least 72 weeks of exposure in MOXIExtension, and 28 of these patients had at least 120 weeks of exposure in the MOXIExtension. Results of this analysis demonstrated that the difference between groups was maintained. Specifically, the between-group difference in MFARs observed at the end of the placebo-controlled MOXIE Part 2 period was preserved at the MOXIE Extension Week 72 in the delayed start period. Recall that a decrease in mFARS shows improvement. Importantly, the upper limit of the 90% confidence interval for the difference estimate was minus 0.615, meeting the threshold for demonstrating significant evidence that the difference was maintained or was not inferior. Because the treatment effect is maintained between those originally randomized to placebo versus those originally randomized to OMAP, the delayed start analysis provides evidence of a persistent effect on the course of the disease. Next slide. The first year of the MOXIE extension study was affected by the COVID-19 pandemic, and many visits that were scheduled during that time were conducted remotely. The MPARS exam cannot be conducted remotely, and therefore many patients had missing data during the first several visits of the extension, especially during extension weeks 24 and 48. Therefore, in order to compute an annual rate of progression over the entire extension period, we conducted a longitudinal analysis that incorporated all available data from the MOCS extension. In essence, the analysis computed individual patient trajectories over time and then estimated the group's average slope. For reference, the Ferris-sponsored natural history studies published data demonstrates a progression rate of approximately two MFARS points per year over several years of follow-up. This analysis includes many hundreds of patients followed for several years. Our longitudinal analysis demonstrates a much lower rate of progression for patients treated with OMAD. The two subgroups of patients, placebo to OMAD and OMAD to OMAD, showed similar mean slopes in MFARS with mean slopes of 0.45 and 0.27 MFARS points per year, respectively. There was no significant difference between slopes with a p-value of 0.79. These data suggest that patients treated with OMAP are progressing at approximately one-quarter of the rate of progression as untreated patients who have been followed in the national history study. Overall, we believe our data are consistent with a meaningful and persistent effect on the course of the disease. Regarding safety, turning to slide 12, OMAP was generally reported to be well-tolerated and reported adverse events were generally mild to moderate in intensity. In MOXIE Part 2, only a small number of patients discontinued due to adverse events in either arm. The most commonly reported adverse events are shown in the table on the right of the slide. Increases in aminotransferases are a pharmacological effect of OMAD, were associated with statistically significant improvements or reductions in total bilirubin, and were not associated with liver injury. The overall rate of cardiac and vascular adverse events was low, and fewer OMAP-treated patients reported these AEs. The overall rate of serious adverse events, or SAEs, was low. Next slide. We believe that the pharmacology of our Nrf2 activators may be applicable to a wide range of other neurological diseases that have a common pathophysiology of mitochondrial dysfunction and neuroinflammation. Based on our understanding of the pathophysiology of neurological diseases characterized by mitochondrial dysfunction, inflammation, and oxidative stress, we believe OMAD may be applicable to diseases such as progressive supranuclear palsy, amyotrophic lateral sclerosis, or ALS, Parkinson's disease, frontotemporal dementia, Huntington's disease, Alzheimer's disease, and epilepsy. Consistent with this, we have observed compelling activity of OMAD and our other interrupt to activators and preclinical models of many of these diseases. Transitioning to Barak Sloan and our CKD programs, on slide 15, I'd like to provide a status update on our Asian strategic collaborators' ongoing diabetic CKD outcomes trial, which is called AYAME. It's being conducted in Japan. As Warren mentioned, AYAME is a randomized, double-blind, placebo-controlled phase three outcomes trial The primary endpoint is the time to onset of at least a 30% decline in EGFR or kidney failure, including dialysis and transplant. Patients with an EGFR between 15 to 60 mil per minute were enrolled who were between 20 and 79 years old. Kewa Kieran used a similar risk mitigation strategy as we have employed in our recent CKD studies and excluded patients with a history of heart failure or BMP greater than 200 milligrams per mil. The trial has a minimum treatment duration of three years with an expected median duration of treatment of approximately three and a half years. Over 1,000 patients were enrolled, and the last patient visit is expected to occur in the second half of this year. If this trial is positive and demonstrates that Bredoxilone reduces kidney failure events without major safety concerns, we believe these data will be very helpful to support our ongoing programs and to convince the nephrology community that the drug can be used safely and will be beneficial over the long term. I will now turn the call over to Simi.