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spk00: Good day. Thank you for standing by and welcome to the Trifida First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you require any further assistance, Please press star zero. Thank you. I would now like to hand the conference over to your speaker today, Ms. Jackie Kussman. The floor is yours.
spk05: Thank you, Alex. Good afternoon, and thank you for joining the Tricita First Quarter 2021 Financial Results and Business Update Conference Call. In today's call, Garrett Klarner, our founder, CEO, and president, will discuss an update on our ongoing VALORCKD study, potential for near-term data based on first pre-specified interim analysis for early stopping for efficacy, and our strategy for re-engagement with the FDA. Jeff Parker, our COO and CFO, will then discuss our upcoming business activities and financial results for the first quarter and review our financial guidance. Please note that in today's call, we will be making various statements that include forward-looking statements as defined under applicable securities laws. Forward-looking statements include our anticipated activities, related to our ongoing renal outcomes trial, VALOR-CKD, our plans and interactions and communications with the FDA, our plans and expectations regarding potential pathways to approval of Averamer by the FDA, and our expectations regarding our financial runway. Management's assumptions, expectations, and opinions reflected in these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from any future results, performance, are achievements discussed in or implied by such forward-looking statements. Tricita can give no assurance that these statements will prove to be correct, and we do not intend and undertake no duty to update these statements. We also urge you to read the risks and uncertainties associated with our business that are described in our filings with the Securities and Exchange Commission. We issued our first quarter financial results press release this afternoon just after the close of markets. For copies of our press release, please go to www.tricita.com and follow the link to our investor relations page. At this time, I'd like to turn the call over to Gary.
spk02: Thank you, Jackie, and thank you all for joining us today. Our primary focus this year is on the continued execution of the valid CKD renal outcomes trial, which is designed to assess whether the variant can slow kidney disease progression in patients with metabolic acidosis and CKD. Given the complete response letter that we received last August and the appeal denied letter from the FDA's Office of New Drugs, which we discussed at length earlier this year, we believe the optimal path forward for the potential approval of Averma is to provide additional data to the FDA from the ongoing outcomes trial. We believe that positive data from valid CKD on Averma's ability to slow CKD progression or improve physical function would enable a productive discussion with the agency. I'll talk about our plans to re-engage with the FDA shortly, but first, let me provide an update on our trial progress. On slide three, as a reminder, LRCKD is a randomized, double-blind, placebo-controlled trial that is designed to enroll 600 subjects. The primary endpoint of the trial is the time to first occurrence of DD40, defined as renal death, ESRD, or a confirmed greater or equal 40% reduction in EGFR. The protocol includes two pre-specified interim analyses for early stopping for efficacy. Interim one will occur after 150 events, and interim two will occur after 250 events. If the criteria for early stopping are not met, the trial is scheduled to conclude when the Independent Unblinded Endpoint Adjudication Committee has positively adjudicated 511 DD40 events. The trial was designed with 87% power to show a 24% difference in primary endpoint events. Set another way, the assumed hazard ratio for the powering of the Valid CKD trial is 0.76. As you can see on slide four, as of May 4th, 2021, the Valid CKD trial has randomized 1,440 of 1,600 subjects with an average treatment duration of approximately 15 months. And the trial has accrued 95 subjects with positively adjudicated primary endpoint events towards our goal of 511 events. The projected event rate for valid CKD is laid out on slide five. So far, there are 95 subjects with adjudicated primary endpoint events. We've accrued 26 additional subjects with adjudicated events since our February 25th fourth quarter financial results call. Over the past two months, the rate of event accrual has increased and is currently tracking close to our mean estimate. The rate of accruing endpoint events is key to determining the timing of the interim analyses. Assuming that the accrual of endpoint events continues at the projected rate as previously communicated, we estimate that the number of adjudicated endpoint events necessary for the Interim 1 and Interim 2 analyses would occur in the second half of this year and sometime around mid-2022, respectively. On slide 6, at the bottom of the slide, you can see that our approach to the two interim analyses is to keep the majority of the alpha for the final analysis at 511 events and allocate meaningful alpha to the 250-event analysis. With very little alpha allocated to it, there's relatively low probability that the 150-event interim would lead to early stopping. Put another way, looking at the interim analyses, assuming the true hazard ratio is in line with our trial design, i.e. 0.76, we have a 1 percent chance of stopping at interim one and a 21 percent chance of stopping at interim two. the 65% power remaining for the final analysis at 511 events for an overall power of 87% for the trial. Given the hazard ratios observed in some of the academic trials related to metabolic acidosis in our own 301 trial, there's historic evidence that treated populations of metabolic acidosis patients may experience greater benefit than the retrospective predictive models would indicate. If we were to assume a true hazard ratio of .70 instead of .76, the probability of stopping early doubles to 40% at interim two. Extending the true hazard ratio to .6 and .5, the combined probability of stopping early at either the first or second interim analysis increases to 83% and 99% respectively. And if we were to observe a hazard ratio of .67 or less, at interim two, the trial would meet the criteria for early stopping for efficacy. As such, we consider interim two an important milestone for the valid CKD trial and alpha well spent. The interim analyses will be conducted by an independent unblinded interim analysis committee, and if this committee does not recommend stopping the trial early for efficacy, we will receive no information from the interim analyses. If, however, data from the trial were to yield a statistically significant result for the primary efficacy endpoint, it could potentially form the basis for resubmission of the NDA through the traditional approval pathway. Now turning to slide seven, we may find ourselves in a situation where we must stop the trial early for administrative reasons. As you're aware, conducting clinical trials is expensive and uncertainties can arise at any time. If we are unable to ensure that we have adequate resources to complete the trial in accordance with the protocol, or if other events occur which diminish our likelihood of reaching 511 events, we may explore the possibility of stopping the trial early for administrative reasons which could occur prior to or following either or both of the planned interim analyses. Any such decision would be made in the future based on a range of considerations. including our ability to reasonably stop and wind down the trial consistent with our regulatory and ethical obligations and within the confines of our financial runway. If we were to stop the study for administrative reasons, the data obtained from the study would be analyzed using all alpha remaining at that time. As an example of how the alpha would be applied to an administrative stop, I will use the 250 event time point as an illustration of the power of the trial at an administrative stop. Assuming a true hazard ratio of 0.76, if the trial were stopped for administrative reasons at 250 events, you would have 58 percent power to see 24 percent reduction in the VARAMER versus POSIWA endpoint events. To provide you with a sensitivity analysis, if the treatment effect in the VAR trial is slightly higher and we have a true hazard ratio of 0.70, the power increases to 81 percent if stopped at 250 events. switching from power to observed hazard ratio statistics, we could be successful at 250 events if the observed hazard ratio is 0.78. It is noteworthy that this hazard ratio is not much lower than the 0.83 hazard ratio required at the final analysis of 511 events shown on the prior slide. If the data from a trial after administrative software to yield statistically significant results for the primary efficacy endpoint, it could potentially form the basis for resubmission of the NDA through the traditional approval pathway. In the event that the primary endpoint is not met, we would evaluate other endpoints related to CKD progression as well as physical function and serum bicarbonate endpoint, which could inform our discussions with the FDA and or additional clinical investigation of the effect of Averma on these parameters. We've highlighted on slide eight the key CRL and ADL issues. We believe data from valid CKD will be very important in determining the regulatory path for approval of AVERMA. Ultimately, our goals are to, one, generate outcome data showing the impact of AVERMA on CKD progression, and two, show that the data are applicable to the U.S. population. If we are successful in both counts, we believe that the data could address the regulatory concerns expressed by the FDA and the CRL and ADL. I would note FDA's acceptance of the VAERS-CQD data in support of an NDA resubmission, including the acceptability of the data from non-U.S. countries or regions, which will comprise a substantial proportion of the data from the trial, will ultimately be a review issue. Further, the FDA may require additional clinical data beyond that provided by VAERS-CQD. For example, we know that about two-thirds of the subjects in the trial will be from Eastern Europe. So we anticipate that these subjects will account for two-thirds or more of the primary endpoint events. In the CRL, the FDA indicated that it believes differences in patient management, such as concomitant medications and diet, might affect the treatment response to Viverma and expressed a concern of the applicability of the 30131E trial data to a U.S. patient population. Our evaluation of the 30131E's serum bicarbonate data indicate that the etiology and treatment paradigms for CKD are substantially similar in the U.S. and Eastern Europe. and other baseline lab values are not substantially different. But we cannot be certain how the FDA will ultimately view the proportion of events from regions outside the U.S. in its evaluation of the outcomes data. We are preparing to analyze the value of CKD data once available to evaluate the effect of geographic region as a predictor of response to the VIRMA in the context of the multitude of other factors that play a role in asset-based buffering. Which brings me to our plans for future engagement with the FDA, as you can see on slide nine. We intend to re-engage with the FDA to discuss our options for traditional approval of VRMA. The timing of this interaction will ultimately be dependent on the availability of data and guidance we receive from our regulatory advisors. In the event that the trial is stopped early for efficacy at one of the interim analyses, we'll plan on a substantive discussion with the FDA with data in hand that will guide our plans for potential resubmission of the VRMA NDA. Based on the current estimated time for the interim analysis, our earliest estimate for resubmission of the NDA would be late 22 or early 23. Assuming the trial is stopped early for efficacy at one of the interim analyses, we believe this would be classified as a resubmission under the original NDA submission and as such would qualify for a six-month review. Clearly, the specifics related to any NDA resubmission and related timing will be determined for our future FDA interactions. Before I turn the call over to Jeff, I'd like to take a few moments on slide 10 to highlight our efforts to advance the understanding of metabolic acidosis and its serious complications. We sponsored or authored several presentations at the NKF Spring Clinical Meeting 2021 that occurred in early April. The topics covered and sponsored presentations by several key opinion leaders They included analyses of the association between metabolic acidosis and accelerated kidney decline, the association in kidney transplant recipients between metabolic acidosis and graft failure, and between metabolic acidosis and the higher risk of death. Tricita also presented in vitro data showing that VeroMed does not bind to or affect the iron-binding properties of other non-absorbed binder drugs that are prescribed to patients with CKD, such as Venvela, Veltasa, Loquelma, and K-Exfolate. More sponsored and in-house publications are planned for this year, and we'll continue to engage with the nephrology community to present our findings. With that, I'll turn the call over to Jeff.
spk03: Thanks, Garrett, and thank you all for joining us today. Before I provide a summary of our financial results, I'd like to discuss our ongoing activities to further understand the market opportunity for Viveramer. Turning to slide 11, There are approximately 3 million people in the U.S. with CKD and metabolic acidosis. As previously stated, if Valor CKD meets its primary endpoint, we are looking at a potential indication of slowing CKD progression through treatment of metabolic acidosis. In our prior market opportunity analysis and commercial launch planning, our target market focused primarily on the 600,000 patients treated by nephrologists. We would now also like to better understand how the broader HCP community, including primary care physicians, cardiologists, and endocrinologists, might utilize a product with Viveramer's product profile, assuming we have outcomes data on slowing CKD progression at launch. We'd also like to understand the rate of adoption of Viveramer with data based on outcomes at launch relative to our prior assumptions of adoption, assuming accelerated approval based on a surrogate endpoint. Therefore, we are conducting new surveys with nephrologists to further explore their attitudes and priorities for treating metabolic acidosis in patients with CKD. And we are surveying primary care physicians, cardiologists, and endocrinologists to better understand how a product with Viveramer's target profile would fit into their treatment paradigm for their patients with metabolic acidosis and CKD. We believe this updated market research will be critical to understanding HCP's willingness to use Viveramer if it is approved with outcomes data on slowing CKD progression. On slide 12, I'd also like to remind you that we have a broad patent estate which includes composition of matter in the U.S. that provides protection to 2038 and broad patent protection outside the U.S. Now turning to our financial results on slide 13. R&D expense was $32.2 million and $49.4 million for Q1 2021 and 2020, respectively. The decrease in R&D expense was primarily due to decreased activities in connection with our Beveremer Clinical Development Program related to manufacturing process optimization and the manufacturing of drug substance and lower personnel costs. G&A expense was $9.9 million and $23.5 million for Q1 2021 and 2020, respectively. This decrease in G&A expense was primarily due to decreased administrative activities in connection with our Viverum or clinical development program, including pre-commercialization, medical affairs, and personnel costs. Net loss was $53.4 million and $74.1 million, and non-GAAP net loss was $38.3 million and $63.8 million for Q1 2021 and 2020, respectively. Now on slide 14, let me turn to our financial position. As of March 31, 2021, cash, cash equivalents, and investments totaled $217.7 million. I would note that our cash balance at the end of the first quarter reflects the prepayment in March of our Hercules debt facility. Given that this debt facility included a 100% cash coverage covenant, we felt it prudent to avoid additional interest charges and prepay this debt. The total payment was approximately $83.5 million, inclusive of accrued interest and end-of-term charges. There were no prepayment penalties. Additionally, in March, we negotiated an amendment to our contract with Papillon, our drug supply manufacturer. This amendment will result in a cash savings for Tricita of approximately $48 million through the end of 2022. This cash savings will allow us to extend our capital resources through late 2022 under our current operating plans. As previously discussed, The two interim analyses of the VALOR CKD trial are expected to occur within this timeframe. We will continue to evaluate our available cash resources as it is one of the key factors relevant to any decision to stop VALOR CKD early for administrative reasons. Finally, as Garrett described, and I will reiterate here on slide 15, We are focused on the continued execution of the VALOR CKD trial in 2021 and beyond. We anticipate that the interim one analysis of 150 events will occur later this year, and the interim two analysis of 250 events is anticipated to occur around mid-2022, if we remain on our projected event timeline. An early stopping of the trial for administrative reasons may also be assessed as we consider our cash position and other factors related to the VALOR CKD trial. Finally, I would like to take a moment to thank all of our employees who are driving our key initiatives towards our collective goal of bringing ViveraMER to patients as soon as possible. With that, I'll turn the call over to the operator for questions. Operator?
spk00: As a reminder, to ask a question, you will need to press star 1 on your telephone keypad. Again, that is star 1 on your telephone keypad. To withdraw your question, you may press the pound key. Let us stand by while we compile the Q&A roster. Your first question comes from the line of Joseph Stringer from Needham Company. Your line is now open.
spk04: Hi, everyone. Thanks for taking our questions. I'm going to go back to this trial site. A question about trial site overlap between Valor CKD and the 301 studies, in particular in Europe and Eastern Europe. Can you remind us what the split, I guess, more generally what the split U.S. to EU is for each of those And I guess in Europe, you know, what the percent overlap in sites were, and have a couple follow-ups to that.
spk02: Joey, this is Garrett. Yeah, I think the vast majority in the 301, 301E trial were Eastern European side. I think it was around 80% or so. And we expect, ultimately, the Eastern European size to represent about two-thirds in the valid CKD trough. There's a lot of overlap with the sites. I think the difference is that we almost have 10 times more sites in valid CKD. Remember, 301, 301e, 217 subjects, and I think it was around 30 to 40 sites And here we're talking 300 sites, a truly global study. And, again, about two-thirds of those in Central and Eastern Europe.
spk04: Okay, thanks. And then to the, I guess, as a follow-up to that, in terms of FDA's concern about, you know, a single high-enrolling site, I mean, you're still randomizing patients in Valor CTD. I'm just curious. were there any steps taken to minimize, given that there is some overlap in sites, especially in Eastern Europe, to sort of mitigate maybe a site or two that was a high roller in 301? Or is there anything that could be done or – has been done for Valor CKP to sort of mitigate that risk.
spk02: Yeah, I think we are mitigating this by ensuring that there's no site that's recruiting more than 5% of the patients.
spk04: Got it. And is that something that was – you sort of put in place those, you know, entry restrictions, enrollment restrictions – more recently, or was that something you had in mind, you know, or I guess maybe take us through the timing of when those, you know, that 5% restriction was put into place.
spk02: Yeah, just, yeah, I think we, in general, I think we knew that this was going to be, Valor CKD, a larger, more global trial with more sites. And let's be clear, we started Valor CKD in 2018, and we got our CRL in 2020. So just to fix the timeline, FDA obviously has started the outcome trial well before the initial NDA submission. But even with that and not knowing the issue, I think we had so many sites that we didn't have anyone that recruited a larger number of subjects. And we're handling this on the clinical operations level, which is quite customary.
spk04: Okay, great. Thanks for taking our question. Thank you.
spk00: Your next question is from Jessica from JPMorgan. Your line is now open.
spk07: Hey there. Thanks for taking my question. Just following up on some of your comments from prepared remarks and maybe slightly related to the past line of questions. Given the demographics of the patient enrolled in the Valor study thus far, and therefore the likelihood, as you mentioned, that Eastern European patients will account for many of the events in these upcoming interims, can you elaborate on how you think the FDA would interpret that data as evidence of the drugs effect?
spk02: Yeah, I think when you look at, and we've analyzed, renal outcome trials and renal trials in general, it's quite common to have the majority of the subjects come from Eastern Europe. We don't believe that they're different. We are not aware that any outcome trials are powered to deliver certain results in certain regions. But we're also very mindful, I think, of FDA's concerns. So our approach is obviously to, we have very tight and clear inclusion-exclusion criteria. We, you know, understand the disease at baseline. That's one thing, and we've said this many times, and we feel very, very good about this, and our experts feel good about this, too. And then I think we're also looking at sort of, you know, an explanation of some variability that can occur among patients, you know, and quite frankly between patients in Florida and California, or patients in the Republic of Georgia or the state of Georgia. And we are working on an approach where we can explain some of that variability in response to the VIRMA on the basis of the underlying pathophysiology of acid-base balance and normalization, and also in terms of you know, what our clinical data will show. So we feel that, you know, that the data from the territories that we're recruiting from is informative and applicable to the U.S. patients. We're not just repeating the same argument we've made with FDA before, but we're supplementing it with explaining the expected variability in response, you know, to acid-base correction in various patients from various territories.
spk07: Okay, got it. And maybe just one more quick regulatory question with respect to the possibility of a resubmission and a shorter review period. Do you know if the resubmission has to happen within a certain timeframe after the original CRL to be eligible for that shorter review period? Or if you resubmit even over two years later, are you still eligible for that, like, six-month review?
spk02: Yeah, I'm not aware of any sort of time, yeah, expiring sort of time frame for that. But obviously, as we've said, you know, that needs to be discussed with FDA in the context of new data and the resubmission. But, again, we believe that this is, you know, I think... FDA mentioned, you know, in the CRL, obviously the avenue of providing full data from an outcome trial. An outcome trial is not something that takes weeks or months, right? It's understood that that takes years.
spk00: Got it. Thank you.
spk02: Thanks, guys.
spk00: Again, that is part one to ask a question. Next question is from Laura Christensen from Calvin. Your line is now open.
spk06: Hi guys, thanks for taking my question. I was just wondering if you could remind us exactly how you're estimating the timeline for the accrual of the primary endpoint events and just what error bars timing of the first and second interim analyses.
spk02: Yeah, I'm glad that you asked about this because we're excited about the increased event accrual and that's very driving I think, sort of key milestone of potential near-term data. And the forecast of the event rate is really from a control group of multiple trials, 29 CKD trials and a total of 2,200 roughly subjects, and that participated, you know, with similar inclusion, exclusion criteria specifically matched for EGFR. And that's how we generated that. Again, those are some of the trials are a bit older, but I think they're relevant. And it's always good that we're actually tracking now that we have, you know, a good number of events. So we think this is quite meaningful. And obviously we hope that we stay on track so that we can have the interim one this year and interim two next year.
spk06: And I noticed you extended your cash runway relative to the last earnings report, you know, and now you're saying through, you know, late 2022. Is there potential to extend the cash runway further? And what is, I'm just trying to think about when you might expect to perform an administrative stop for the trial?
spk03: So, Laura, the extension of the runway, of course, was directly linked to the amendment with Papillon. So that was a $48 million savings, if you will, in the relevant 21-22 timeframe. As far as extending the runway, of course, we're going to look at all of our expenses with the Valor CKD trial being our crown jewel and something that we want to not spare any expense on. But there are other areas that we may look at. It's premature to say what those savings could be, but there may be opportunities to extend the runway beyond the end of 22, independent of any financing. And I'll turn it to Garrett to finish the answer.
spk02: Yeah, I think the – just to be clear, our goal is to conduct the valid CKD study per the protocol and to get to 511 events. And I think we want to be very clear that an administrative stop is not currently something that we're planning for. It's something that we will consider at the time when we have to. And so that's why we want to be very cautious to not talk about any potential timing. Because again, we hope to enable the completion of our CKD or of the interim analyses, of the successful interim analyses, at least. So, again, I think that will be a discussion at the time we make the decision to administratively stop.
spk06: Okay. So you're still hoping to get to 511 events and hoping that maybe you can extend the cash runway to get there?
spk02: Yeah, I mean, I think ultimately that always has to be the goal. We're actively recruiting patients, you know, into the study, and they're signing up for the VALOR-ZKD as we outlined it in the protocol, and that has to be our goal.
spk06: Okay. Thanks for taking my question.
spk02: Thank you. Thank you, Laura.
spk00: Your next question is from Greg Sivanova from Goldman Sachs. Your line is now open.
spk01: hey god good afternoon thanks for taking my questions uh um i've got two my first um maybe it's because my memory's not so good these days but can you provide me uh the a reminder of when you did the amendment to your uh clinical trial program um Did you provide that feedback or did you provide feedback to the FDA and have they directly responded with a view of the changes you made and how you plan now to analyze the data, you know, with the two interims? I'm just asking about kind of where FDA stands on the changes to, you know, the current plan to get the VERAMER approved. And then my second question is more of a clarifying. question with respect to the cash runway and the potential administrative stop to the trial. I just want to understand the dynamics. So you've been able to, and nice job, Jeff, on extending the cash runway. But there's a potential that you would consider an administrative stop, you know, before or during the interims. And if you have cash through the end of 2022, I'm just trying to figure out why you would have to be in a position to consider an administrative stop. And maybe I'm just missing something, so I apologize for the question.
spk02: Greg, I think from an FDA perspective, of course, you know, whenever you make a protocol amendment, you submit it to FDA, and if you don't hear within 30 days, you proceed. That's what we've done. We haven't received any additional feedback on the interim analyses yet. And quite frankly, you know, the amendment was based on an FDA letter from last year, from July, I think, 29th, that discussed that very topic, and we followed sort of what they suggested. So while we didn't get specific feedback, we did follow the standard procedure of protocol submissions or protocol amendments, and we also informed the FDA that we obviously conducting and continuing the study per that protocol amendment number two currently. And as new things evolve, you know, we'll obviously re-engage. And then on the administrative stuff, again, I think this will be a discussion at the time. You know, I think looking at a bunch of different things, including runway, you know, and balance sheet strength and so on, I think we will, you know, we will look at and the need for and the timing of a potential administrative stop. Okay, thank you very much. Thank you.
spk00: If you don't have any more questions at this time, you may continue, presenters.
spk05: Thank you, Alex, and thank you all for joining us today. As always, if you have additional questions, please don't hesitate to email us at ir.tricita.com. Thank you, and goodbye.
spk00: This concludes today's conference call. Thank you for participating. You may now all disconnect.
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