Reata Pharmaceuticals, Inc.

Thank you for standing by and welcome to the Reata Pharmaceuticals second quarter 2022 financial results and update on development programs conference call. 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 in the company's press release. There are many factors that could cause results to differ from expectations, including those noted in the company SEC filings. 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 the RIATA's earnings release and presentation from today, which again can be found in 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, August 8th, 2022, and may no longer be accurate at the time of any webcast replay or transcript rereading. Following the prepared remarks, we will open the call up 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, Reata's Chief Executive Officer, Manmeet Soni, President, Colin Meyer, Chief Innovation Officer, Simi Khan, Chief Medical Officer, and Dawn Burt, Chief Commercial Officer. At this time, I would like to turn the call over to Warren Huff.

Good morning, everyone. We thank you for joining us today for our quarterly update. I'll start on slide four. As you know, we're developing omaviloxelone, or omav, a small molecule Nrf2 activator for the treatment of patients with Friedreich's ataxia, or FA. FA is a relentlessly progressive and debilitating neuromuscular disorder which affects approximately 5,000 patients in the United States. There are no approved therapies and patients typically become dependent on walkers and then wheelchairs in their mid-20s and unfortunately pass away from the disease in their mid-30s. Following the announcement of positive data from the MOXIE Part 2 study in October of We met with the FDA in a type C meeting in which the FDA provided us with guidance that it did not have any concerns with the reliability of the modified Friedreich's ataxia rating scale or MR's primary endpoint results. Nevertheless, the FDA was not convinced that the MOXIE Part II results could support a single study approval without additional evidence that lends persuasiveness to the results. The FDA acknowledged the unmet need of patients with FA reiterated its commitment to facilitate the development of OMAP within the constraints of the regulatory standards and emphasized its willingness to consider all available options to meet the regulatory standards. The FDA subsequently requested a delayed start analysis of the data. During the first quarter of 2021, we submitted the results of the delayed start analysis from a February 2021 data cutoff to the FDA as additional supporting evidence of effectiveness. And in May 2021, we received a communication from the FDA stating that after a preliminary review of briefing materials for the Type C meeting, including the delayed start analysis, a pre-NDA meeting would be the most appropriate format for a discussion of the development program for OMAV-NFA. In the third quarter of 2021, we completed our pre-NDA meeting with the FDA. On November 18th, 2021, the FDA granted OMAV fast-track designation for the treatment of Friedreich's ataxia, providing eligibility for FDA programs such as priority review and rolling submission of the NDA. The FDA granted our request for a rolling submission, and in March 2022, we completed the submission of the NDA. In May 2022, The FDA accepted our NDA for filing and granted priority review designation. The FDA advised us that it is planning to hold an advisory committee meeting to discuss the application. The PDUFA date is scheduled for November 30, 2022. If approved, we're preparing to launch OMAP in the U.S. in early 2023. Next slide. I'd now like to provide some background on the regulatory framework for the OMAP-NDA review. FDA guidance states that a drug's effectiveness must be established by substantial evidence, which generally requires at least two adequate and well-controlled clinical trials for a new drug approval. However, in the context of a rare disease like FA, it's challenging to conduct two adequate and well-controlled studies. The Food and Drug Modernization Act of 1997, or FDAMA 115, as well as FDA guidance provide two alternative pathways to demonstrate substantial evidence of efficacy for drug approval. Either one, a single adequate and well-controlled study that has demonstrated a clinically meaningful and statistically very persuasive effect. or two, a single adequate and well-controlled clinical trial plus confirmatory evidence. FDA has regulatory flexibility and may consider a number of factors when determining whether reliance on a single adequate and well-controlled clinical investigation plus confirmatory evidence is appropriate. These factors may include the seriousness of the disease, particularly where there is an unmet medical need, and the size of the patient population. In a setting like FA, it's challenging to design and power a single clinical trial with an extremely low p-value that would be considered statistically very persuasive due to the limited number of patients available for clinical research and the relatively slow rate of disease progression in these patients. As a result, we've been pursuing the second regulatory path of one adequate and well-controlled clinical trial plus confirmatory evidence. As summarized on slide 6, 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. MOCSE Part 2 met its primary endpoint of change in MFARS relative to placebo after 48 weeks of treatment. Patients treated with OMAP demonstrated a statistically significant placebo-corrected 2.4-point improvement in MFARS compared to placebo after 48 weeks of treatment, with a p-value of 0.014. We observed improvements relative to placebo in all subsections of the MFARS scale, all major subgroups, and all analysis populations. And overall, only 4% of MFARS values were missing, with 9% missing at week 48 time point. Sensitivity analyses demonstrate that the missing data do not affect the trial's conclusion. As I mentioned earlier, FDA has not expressed concerns about the reliability of the MFARS primary results from MOXIE Part 2. Next slide. We recently completed a mid-cycle communication meeting with the FDA. In the preliminary Agenda 4 and during the mid-cycle communication meeting, the FDA stated that it has not identified any new significant issues, but it continues to have concerns regarding the strength of the efficacy evidence. The FDA noted three specific points of discussion for the meeting, including that MOXIE Part 2 is not exceptionally persuasive and has only weak support from the secondary endpoints, the significant reduction in the number of patients in the extension phase of MOXIE at each time point makes it challenging to interpret the delayed start analysis, and three, there's a lack of support from MOXIE Part 1 as no dose-response relationship was observed. They also noted, with respect to a potential label, they requested additional justification or literature to support the relevance of proposed biomarkers to Nrf2 activation and how that would correlate with the treatment benefit in FA patients. The FDA did not identify any significant clinical safety issues, and they noted that they are continuing to evaluate the cardiac safety of OMAP in patients with FA. During the meeting, we proposed to address FDA's concerns in three ways. To address FDA's first point, we proposed a new propensity-matched analysis of MOXIE extension data using the largest, most robust FA natural history study to provide additional clinical data that could be considered confirmatory evidence. We noted that in the FDA's draft guidance on substantial evidence of effectiveness that confirmatory evidence could include comparison to reliable, systematically collected, and well-documented natural history of patients with the disease, especially when the natural history is well-defined, the external control population is similar to the treated population, and standard of care and concomitant treatments are not substantially different. we described how FAA meets all of these criteria. The FDA acknowledged the approach and agreed to allow us to submit the analysis to the NDA. Second, regarding the interoperability of the delayed start analysis, we first noted that the reduction in number of patients was primarily due to missed visits due to the COVID-19 pandemic and not due to study discontinuations. We then presented updated results of the delayed start analysis using a March 2022 data cutoff, which contained new later time points and increased numbers of patients at later time points than the prior analysis. The FDA acknowledged this data and agreed to allow us to submit the analysis to the NDA. Third, regarding the lack of a dose response relationship in MOXIE Part 1, We noted that based on the small size and short duration of MOXIE Part 1, it was not intended to demonstrate definitive efficacy. However, the study did demonstrate dose-dependent increases in Nrf2 target proteins. And then finally, we discussed an additional NDA amendment containing compelling mechanistic evidence in the setting of FA's well-understood disease pathophysiology, which could also serve as confirmatory evidence. Data from MOXIE Part 2 showed an association between OMAD-induced Nrf2 activity and measures of neurologic function, with larger increases in Nrf2 target levels associated with larger improvements in MFAR scores. The FDA agreed to allow us to submit the analysis to the NDA. Following the mid-cycle communication meeting, we have subsequently submitted the additional data and analyses to the FDA as NDA updates and amendments as shown on slide 8. First, we submitted updated data from the long-term MOXIE extension trial from the March 22 data cutoff to address the interpretability of the delayed start analysis. These results demonstrate that the separation in MFARs observed at the end of MOXIE Part 2 is maintained through extension week 144. Second, we provided the propensity score-matched comparison of the progression in MFARs of subjects in the clinical outcome measures in Friedreich's ataxia, or FACOM's natural history study, to the patients in our MOXIE extension study. This analysis demonstrated that the rate of progression as measured by mFARS over three years was 55% slower in the MOXIE extension patients as compared to their matched FACOMS patients. And third, we submitted mechanism of action data validating Nrf2, the target of OMAV, as a key player in the pathophysiology of FA. We also submitted clinical biomarker data showing that induction of Nrf2 target proteins in OMAV-treated patients in the MOXIE Part 2 trial was associated with improvements in MFAR scores. With that, I'd now like to turn the call over to Colin Meyer, who will provide more detail on the results from each of these new submissions. Don Burr will then discuss our recent progress in our commercial preparation activities for OMAV. Lastly, Mahmid Soni will review our financial results for the quarter.

Thank you, Warren. I'll start on slide 10. As Warren mentioned, we recently submitted an update to the Delayed Start Analysis to the FDA from a data cutoff in March of this year. As a reminder, the purpose of the Delayed Start Analysis is to determine if the separation observed at the end of MOXIE Part 2 was preserved in the extension once all patients were converted to OMAP treatment. If patients who are originally randomized to placebo catch up to patients who are originally randomized to OMav, the treatment effect is consistent with a symptomatic benefit. If the patients originally randomized to placebo do not catch up and the difference at the end of the placebo control portion is maintained, the treatment effect is consistent with disease modification and a persistent effect on the course of the disease. Since patients have been returning to the clinic for visits in the past year, the updated data from March contains a meaningful increase in the number of patients with MPARS assessments at later time points, and new time points are available for analysis. This is shown by the boxes around the x-axis in each of the plots. Results of the updated analysis are consistent with prior results, and showed that patients originally randomized to OMAV have continued to demonstrate a persistent treatment benefit after three years in the extension. As shown in the graphical plot on the right, the between-group difference in mFARS observed at the end of the placebo-controlled MOXIE Part 2 period was preserved at six out of seven time points in the MOXIE extension. Additionally, the upper limit of the 90% confidence interval for the difference estimate was less than zero at both extension weeks 72 and 120, meeting the formal threshold for demonstrating significant evidence of non-inferiority. Numerically, the separation observed at week 48 in MOCSE Part 2 was observed at extension week 72 through extension week 144, which represents three years of treatment in the extension. To assess the treatment effect more formally in the extension, We recently performed a new propensity match analysis of the MOXIE extension data to the largest, most robust FA natural history study to provide additional clinical evidence. In the FDA's draft guidance on substantial evidence of effectiveness, the FDA has stated that confirmatory evidence could include comparison to reliable, systematically collected, and well-documented natural history of patients with the disease. Accruing data in the MOXIE extension provides longer-term follow-up for disease progression in patients receiving OMAV. However, there is no long-term placebo arm for comparison. The MOXIE extension data were compared to natural history external controls using propensity matching to provide longer-term efficacy data in support of the statistically significant benefit demonstrated by pivotal MOXIE Part 2. In this slide, we highlight criteria cited by FDA that are important when comparing clinical results from a treated population with an external natural history control group. These include a well-defined understanding of the disease progression and variables that influence progression, an objective outcome measurement that is not subject to significant investigator biases, a well-documented database of natural history information on a group of patients that closely resembles the treated population, no substantial difference in the standard of care or available therapies for the control group versus the treated population, and compelling evidence of a meaningful change in the progression of the disease between the two groups. We believe that FA and our data set meet all of these criteria. Turning to slide 12. The largest natural history study of FA, FACOMS, constitutes a well-established, reliable, and well-documented source of natural history data for FA for comparison to the MOXIE extension results. FACOMS is a global, multi-center, longitudinal, prospective observational study that has enrolled more than 1,250 patients. Clinical outcome measures, including MFARs, are assessed annually, and patients are followed for up to 25 years in the study. All FACOM sites are tertiary care centers specializing in FA, and all MFARS assessments are conducted in a standardized manner by trained neurologists with experience in FA. The score for each component of MFARS is based on measurements of a patient's functional ability using the same standardized set of instructions and similar case report forms in both the FACOMS study and our MOXIE trial. Investigators of the FACOMS study meet regularly to review conduct of the study, results, and study-related issues. Additionally, the significant overlap in sites between FACOMS and MOXIE provides a similar testing environment, standard of care, and standardized instructions for the MFARS assessment. Lastly, the size of the FACOMS database makes propensity score matching feasible. Next slide. Patients from FACOMS were matched to MOXIExtension patients using propensity scores based on five covariates, sex, baseline age, age of FA onset, baseline MFARS score, and baseline GATE score. Selection of these covariates was selected in collaboration with the principal investigator and statistician for FACOMs based on clinical relevance, their relevance as prognostic indicators for disease progression, and availability in both studies. The change from baseline and MFARS at year three for MOX extension patients compared to the propensity score matched FACOMs patients was analyzed as the primary efficacy endpoint using the same mixed monorepeated measures, or MMRM analysis, as we used for the primary analysis for MOXIE Part 2. All data from all time points were used to estimate the treatment effect. Three populations were analyzed, and additional sensitivity analyses were conducted. For inclusion in each of the study populations, patients must have had, one, a baseline MFAR two, at least one post-baseline mFARS within three years after baseline, and three, values for all propensity score model covariates. The MOX extension study population included 136 patients with at least one post-baseline mFARS assessment irrespective of PES-CAVA status. All of these patients were included in the primary pool population. The FACOM study population included 598 patients eligible for one-to-one matching with the MOXIExtension population for a total of 136 patients in each group. Next slide. Demographics and baseline characteristics were highly comparable between MOXIExtension patients and the matched FACOM's external control groups. For the 136 patients in each group, the mean treatment duration was approximately three years as of March 2022. Slide 15 shows the results of the primary pool population of 136 patients in the MOXIE extension compared to 136 patients in FACOMS. In this population, patients in the FACOMS match set progressed approximately 6.6 mFARS points by year three. whereas patients treated with OMAV in the MOCSIC extension progressed only three points, representing a significant minus 3.61 imparts point difference with a nominal p-value of 0.0001. This absolute difference translates to a 55% slower rate of progression for OMAV-treated patients in the MOCSIC extension compared to patients in the FACOM study at year three. Next slide. In addition to the primary pool population, we defined two subpopulations, the placebo to OMAP population, which included 95 patients previously randomized to placebo in MOXIE Part 2 and patients from MOXIE Part 1 who had been off treatment for a minimum of 21 months. And the OMAP to OMAP population defined as 41 patients previously randomized to OMAP treatment in MOXIE Part 2. A new propensity score was used to match each of these populations to the FACOM study population. Demographics and baseline characteristics were also highly comparable between MOX extension patients and the matched FACOM's external control group for the subpopulations. At year three, the treatment effect in each of these populations was similar magnitude to the results from the primary pooled population. Not shown on this slide, we conducted additional sensitivity analyses using different matching criteria, and all results demonstrated a significant treatment effect. In summary, while post hoc, these analyses provide a robust assessment of the effect of OMav in the ongoing extension study, whereas the pivotal MOXIE Part 2 study compared 40 patients randomized to OMav to 42 patients randomized to placebo, over 48 weeks, the propensity match analysis includes over three times as many patients who have been treated with OMAV to matched FACOMS patients for a duration that is three times longer. And all analysis populations demonstrated a significant slowing of progression for patients treated with OMAV. Next slide. In addition to the updated delayed start and propensity match analyses, we provided additional mechanistic evidence to the division that included an integrated and detailed presentation of the disease pathophysiology of FA, linking for taxon deficiency with Nrf2 suppression and impaired mitochondrial function, mechanism of action data showing that OMAD restores Nrf2 activity in mitochondrial energy production in preclinical FA models and FA patient fibroblasts, and clinical biomarker data demonstrating that induction of Nrf2 targets in OMAD-created patients in a MOXIE Part 2 trial was associated with improvements in MFAR scores. Moving to slide 18, the molecular pathophysiology underlying FA has been well characterized with many recent publications. Deficits in mitochondrial respiration and ATP production are observed in cells and tissues isolated from patients with FA. For example, maximal mitochondrial respiration and spare mitochondrial respiratory capacity assessed by oxygen consumption rate were lower in fibroblasts from patients with FA than in fibroblasts from healthy control subjects. Similarly, mitochondrial ETP production in skeletal muscle was lower in patients with FA than in healthy control subjects or non-FA disease controls. Also, longer GAA1 repeats have been associated with lower maximum mitochondrial ATP production in skeletal muscle from patients with FA. A study conducted in 42 patients compared peak VO2 consumption, which is reflective of mitochondrial function, with the Friedreich's Ataxia Rating Scale score and found that reduced mitochondrial function correlated with reduced neurological function. Taken together, these data demonstrate a clear link between reduced mitochondrial function in FA and reduced neurological function in FA patients. Next slide. At the cellular level, frataxin deficiency is associated with impaired mitochondrial function, redox imbalance, and iron dysregulation. Although the molecular mechanism by which frataxin deficiency suppresses Nrf2 has not been fully characterized, dysregulated Nrf2 signaling is a common early upstream event that contributes to mitochondrial dysfunction and redox imbalance in patients with FA. In fact, genetic silencing of frataxin results in suppression of Nrf2. Multiple publications have now demonstrated that Nrf2 levels and target gene expression are suppressed in preclinical animal models of the disease and in cells from patients with FA. As shown on the right of this slide, Nrf2 activity has also been shown to directly regulate mitochondrial energy production in neurons. neurons with genetic silencing of Nrf2 have reduced ATP production. Conversely, genetic Nrf2 activation due to suppression of its negative regulator Keap1 leads to increased levels of ATP in neurons. These data establish a clear link between the genetic defect in FA and impaired mitochondrial function, which causes FA's clinical symptoms. We and our academic collaborators have spent several years to demonstrate the relevance of OMAP to impacting the underlying pathophysiology of FA. As shown on slide 20 on the left, OMAP has been shown to restore Nrf2 levels in FA patient fibroblasts. As you can see on the right, this restoration of Nrf2 is associated with restoration of mitochondrial energy production, which has been shown in FA disease models and patient samples. Moving to slide 21, we have also characterized OMAS pharmacodynamic activity in FA patients and shown how this relates to clinical activity in MOXIE Part 2. As shown on the left, in the dose ranging MOXIE Part 1, we assessed Nrf2 targets ferritin and GGT in a standard blood-based clinical chemistry panel to determine the dose range associated with optimal pharmacodynamic activity. Based on the short duration and small number of patients in part one, we did not expect to see clear or definitive improvements in clinical assessments, but we did expect to see clear trends in pharmacodynamic markers. Both ferritin and GGT demonstrated dose-dependent increases by week four of treatment, with maximal increases observed at 160 to 300 milligrams. To address FDA's request to show how these PD markers of Nrf2 activation correlate with treatment benefit in FA patients, as shown on the right, we performed a tertile analysis of mFARS and Nrf2 target changes at week 48 in Pivotal MOXIE Part 2. This analysis shows that ferritin and GGT increases are associated with mFARS improvements. As shown on this plot, the patients with the most clinical improvement and largest decrease in MFARS at week 48, as shown on the right, were also the patients with the largest increases in ferritin and GGT. Changes in ferritin and GGT were inversely correlated with changes in MFARS. To summarize, these data provide additional context for the relevance between FA pathophysiology, NREP2 induction, and clinical benefit in FA patients, and we believe these data could also constitute confirmatory evidence. Next slide. In summary, MOXIE Part 2 provides the primary evidence for our NDA submission and demonstrated a significant improvement in MFARS in patients treated with OMAV compared to patients treated with placebo with a p-value of 0.014. All MFARS subsections and major subgroups favored OMAV with a low amount of missing data. To supplement the efficacy results of MOXIE Part 2, we have provided FDA with multiple submissions of additional evidence supporting the efficacy of OMAV. These include the delayed start analysis with data through March 2022, the propensity match analysis of patients in MOXIE extension compared to matched patients from FACOMs, and mechanistic data showing how OMAV directly affects the underlying pathophysiology of FA. From a safety perspective, OMAP has been well-tolerated with a low incidence of serious adverse events. While cardiovascular disease is common in FA patients, we observed fewer cardiovascular AEs, no increased stem blood pressure, and no findings on serial ECGs or ECHOs in MOXIE Part 2. Further, we have not identified any new safety findings in the ongoing extension study. We plan to discuss all of these pieces of evidence in our upcoming advisory committee meeting. With that, I'll turn the call over to Dawn for an update on our commercial preparations.