This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk11: Good day and thank you for standing by. Welcome to the Troisida Second 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. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Jackie Kosman. Please go ahead.
spk08: Thank you, May. Good afternoon, and thank you for joining the Tricita Second Quarter 2021 Financial Results and Business Update Conference Call. In today's call, Garrett Klarner, our founder, CEO, and president, will provide an update on the ongoing Valor CKD Renal Outcomes Trial and discuss our business progress. Jeff Parker, our COO and CFO, will discuss the recent results from our new market assessment of Aviramer as a potential therapy for slowing CKD progression, provide a summary of our financial results for the second 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 the applicable securities laws. Forward-looking statements include our anticipated activities related to our ongoing Valor CKD Renal Outcomes Clinical Trial our plans for interactions and communications with the FDA, our plans and expectations regarding potential pathways to approval of Viveramer by the FDA, our assessment of potential clinical development pathway for Viveramer, the future market potential of Viveramer, 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 or achievements discussed in or implied by such forward-looking statements. Tri-Cita 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 second quarter press release this afternoon just after the close of the market. For copies of the 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.
spk05: Thank you, Jackie, and thank you all for joining us today. In today's call, we'll provide a status update on our continued progress for the valid CKD trial. We'll also provide highlights on a new commercial market assessment based on the Verimer as a potential therapy to slow CKD progression. And then we'll provide a brief overview of future development opportunities for VARIMA that we believe could unfold with positive Valid CKD data. Finally, we will provide a recap of our second quarter financial results and cash position. Now, turning to Valid CKD. On slide five is a summary of the Valid CKD trial design. We plan to randomize 69 subjects to VARIMA or placebo, and the trial will end when the Independent Blind and Clinical Endpoint Adjudication Committee has positively adjudicated 511 subjects with DD40 events, defined as renal death, ESRD, or confirmed greater than or equal to 40% reduction in EGFR. And as you saw in our press release, we now have one interim analysis that will occur when we have accrued 250 subjects with primary endpoint events. We anticipate that this will occur around mid-2022. If the criteria for early stopping for efficacy are not met at the interim analysis, the trial is scheduled to conclude at 511 DD40 events. We recently removed the 150-event interim analysis from the Valid CKD protocol. We chose to eliminate this early analysis to preserve statistical and regulatory optionality for the trial. Overall, the Valid CKD trial is designed to have 87% power to show a 24% difference in primary endpoint events. Said another way, the assumed hazard ratio for the powering of Valid CKD is 0.76. And on slide six, you can see that we are making good progress in the conduct of the Velocity trial. As of August 6, 2021, the trial had randomized 1,455 of the planned 69 subjects with an average treatment duration of approximately 17 months, and 127 of the targeted 511 primary endpoint events have been accrued. With respect to the overall trial enrollment rate, the change in our geographic focus and the impact of COVID-19 has slowed the rate of the enrollment somewhat, We now anticipate completion of enrollment in the first half of 2022. On slide 7, there have been 32 additional primary endpoint events since our last quarterly call. Based on our event accrual projections for valid CKD, we believe that we are still on track for the 250-event interim analysis in mid-2022. Now, on slide 8, before I turn to the assumptions around our interim analysis and final analysis, I want to provide some perspective around the assumed hazard ratio of the valid CKD trials. You can see that epidemiological studies analyze the relationship between serum bicarbonate level and risk of CKD progression results in an estimated hazard ratio of 0.76, whereas several published prospective studies of the effect of increasing serum bicarbonate on CKD progression in patients with metabolic acidosis and CKD reported hazard ratios in the range from 0.2 to 0.5. As we've previously described, when discussing our valid CKD powering assumptions, we took a conservative approach and used epidemiologic data to apply a 0.76 hazard ratio to estimate the power of valid CKD. On slide nine, if we assume the true hazard ratio is in fact 0.76, we have a 22 percent probability of meeting the criteria for stopping the trial early for efficacy at 250 events. And as I said, the overall power at the final analysis is 87 percent. However, given the risk reduction from slowing CKD progression from some of the published prospective trials, patients treated with Vivarumab may experience greater benefit in viral CKD than the epidemiological models might suggest. For example, if we were to assume a two-hazard ratio of 0.70 instead of 0.76, the probability of stopping viral CKD early for efficacy at the interim analysis doubles from 22% to 47%. If instead the two-hazard ratio were 0.6 or 0.5, the probability of stopping early at the interim increases to 88 or 99.6% respectively. At the bottom of the slide, expressed another way, an observed hazard ratio of less than 0.67 at the interim analysis would result in meeting the criteria for early stopping of the trial for efficacy. We believe the interim analysis will be an important milestone for valid CKD and alpha well spent. It will be conducted by an independent, unblinded interim analysis committee, and if this committee does not recommend stopping early for efficacy, we'll receive no information from the interim analysis. The interim analysis was to yield a statistically significant result for the primary efficacy endpoint, and the committee recommends early stopping for efficacy. It could potentially form the basis for resubmission of the NDA through the traditional approval pathway. Now, turning to slide 10, we may find ourselves in a situation where we must stop the trial early for administrative reasons. As you are 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 5-11 events, we may be compelled to stop the trial early for administrative reasons, which could occur either prior to or following the plan's interim analysis. Any such decision would be made in the future based on a range of considerations, including our ability to responsibly 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 trial for administrative reasons, the primary endpoint would be analyzed using all alpha remaining at that time. As an example of what we estimate the power of the trial would be under an administrative sub-scenario, we have laid out two hypothetical time points after either 150 or 250 primary endpoint events have occurred. Assuming a true hazard ratio of 0.76, the trial is 39% or 58% power at 150 or 250 events, respectively. To provide you with a sensitivity analysis, if the treatment effect is larger and the true hazard ratio is 0.70, the power increases to 59% at 150 events and to 81% if stopped at 250 events. And as we move to hazard ratios of 0.6 or 0.5, the estimated power goes up significantly. On the last line, expressed another way, if the trial was terminated early for administrative reasons at 250 events, The data from the trial would show statistical significance if the observed hazard ratio is less than 0.78. And if that occurs, could potentially form the basis for an NDA resubmission through this additional approval pathway. As a reminder, we've highlighted on slide 11 the key CRL and ADL issues from our initial NDA. We believe outcomes data from VALOR-CKD will be very important in determining the regulatory path for approval of the VERIMR and could address the regulatory concerns expressed by the FDA in the CRL and ADL. Regarding the applicability of the trial results, the U.S. population and practice of medicine, while we expect that few primary endpoint events will come from U.S. patients, 10 to 20 percent of patients are expected to be enrolled in the U.S., Canada, and Western Europe, we'll conduct subgroup analyses of the primary endpoint by geographic region. In addition, we plan to conduct sensitivity analyses to assess the effects of country and other baseline variables on the primary and secondary endpoints of the trial. We also intend to ensure that no single site in the viral CKD trial provides credit for 5% of the total number of trial subjects. I would note, however, that FDA's acceptance of the viral CKD data in support of the NDA resubmission, including the acceptability of the data from non-U.S. countries or regions, will ultimately be a review issue. As always, in presenting new data to the FDA, new issues can arise. On slide 12, to summarize our reason and plan into FDA interactions, We have submitted a protocol amendment to eliminate the 150-event interim analysis and provided the FDA with an update on the VALOR-CKD trial and potential future development activities for Reverma. The timing of future substantive interactions with the FDA will ultimately be dependent on the availability of VALOR-CKD data. If VALOR-CKD is stopped early for efficacy at the 250-event interim analysis in mid-2022, resubmission of the NDA could occur in 2023. If the trial must be stopped early for administrative reasons, it could occur prior to the Plan 250 event interim analysis, and in that case, if the data demonstrate efficacy, resubmission of the NDA could occur as early as late 2022. We believe our submission will be classified as a resubmission under the original NDA and, as such, will 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. I'll turn the presentation over to Jeff for an update on the Bavaria Market Opportunity.
spk06: Thanks, Garrett, and thank you all for joining us today. Our goal with the new market assessment was twofold. First, we wanted to evaluate physician receptivity to a new target profile that included disease-modifying outcomes data, and second, we wanted to understand how a broader population of physicians beyond nephrologists, are currently diagnosing and treating metabolic acidosis, and further understand how they might use Viveramer as a treatment for patients with metabolic acidosis and CKD if Viveramer were approved on the basis of a target product profile with outcomes data. On slide 14, the 2019 target product profile is on the left, and the target product profile that we presented in the recent surveys is on the right. As you can see, the major difference is the primary efficacy endpoint. In 2019, the focus was on a change in serum bicarbonate, while the current profile focuses on outcomes data, specifically DD40. Now moving to slide 15. In addition to 71 nephrologists, we broadened the survey population in this new survey to also include 91 non-nephrologists who were cardiologists, endocrinologists, and primary care physicians. Now, stepping back for a moment, on slide 14, to characterize the opportunity in the non-nephrologist market, you can see that there are about 500,000 diagnosed patients with metabolic acidosis and CKD that are under the care of physicians other than nephrologists. When we were considering a commercial launch based on accelerated approval, prior to availability of outcomes data from Ballard CKD, our strategic focus was on nephrologists. That would still be the primary target audience. About 50% to 60% of diagnosed patients are seen by nephrologists, with the percentage increasing as the patient moves into later stages of CKD. But as we look at a possible commercial launch based on a potential label for slowing CKD progression with outcomes data, we wanted to understand the receptivity from non-nephrologist physicians to prescribe Viveramer. On slide 17, we have provided both the 2019 and 2021 survey results that provided us with answers to two questions. First, would nephrologists and non-nephrologists be likely to prescribe Viverumor based on a target product profile for slowing CKD progression? And two, what percent of patients with metabolic acidosis and CKD would receive Viverumor five years after launch? As you can see here, physician survey results demonstrated a strong interest in prescribing Viveramer with 93% of nephrologists and 71% of non-nephrologists indicating that they would definitely or probably prescribe Viveramer. In addition, peak patient penetration for prescribing Viveramer was estimated to be 74% among nephrologists and 58% among non-nephrologists. I would like to note that to avoid variations in responses based on the price of the product or insurance coverage, we ask physicians to assume price is not an issue and there is adequate insurance coverage. It is typical to adjust these numbers down based on these factors and others as we look at modeling a future revenue opportunity for Viveramer. But these results are very encouraging and signal significant increased interest from nephrologists as well as strong interest from non-nephrologists as a result of a target product profile that includes renal outcomes data. We also conducted a new payer survey. A summary of this is on slide 18. Our early work with payers included education on chronic metabolic acidosis, clinical data from 301-301E trial, and discussions about the mechanism of action of Averamer. We also educated payers on the medical need for and economic benefits of a potential treatment for chronic metabolic acidosis prior to our anticipated launch. Our early efforts paid off here, and we found that payers were generally well-informed and understood the link between metabolic acidosis and CKD progression, as well as the additional costs of care that are incurred by the healthcare system for patients with metabolic acidosis and CKD compared with similar patients without metabolic acidosis. In this new survey, payers are clearly interested in Viveramer as a disease-modifying therapy, and the verification of this through an outcomes-based endpoint from Valor CKD was a net positive. And as always, they consider the cost savings to the healthcare system from treating metabolic acidosis which is estimated to be approximately $40,000 per year to be a key driver to adoption. We tested a range of prices and the general consensus among survey responses, respondents, was that approximately $3,000 per month or $36,000 per year would be a reasonable price for Viveramer, which is in the same range as previous survey results. I mentioned earlier that our survey numbers are unadjusted, so on slide 19, we provided our previous estimates of the anticipated payer mix for the target population of patients with CKD and metabolic acidosis. We believe that over half of the initial targeted patients with metabolic acidosis and CKD will have either low copay, such as Medicaid, Medicare with subsidy, or VADOD, or may have assistance with their copay, which would be the commercial segment of the payer mix. We believe this would provide access to Viveramer to the majority of patients with metabolic acidosis and CKD. Now turning to slide 20, I want to highlight that patent protection for Viveramer runs until 2038 in the U.S., and we continue to expand our patent protection in other regions as well. We believe Viveramer's long patent life will enable us to maximize the value of Viveramer over time. In summary, we believe that there is significant market opportunity for Viveramer based on the initial anticipated indication. As we delve more deeply into the science of acidosis, we are already starting to think beyond that to look at a broader population of patients who may benefit from acid removal. I'll turn the call back to Garrett to describe this expanded opportunity.
spk05: Thanks, Jeff. Let's move to slide number 22. If the VALOR CKD trial demonstrates the treatment with a very much slow CKD progression, we have an opportunity to pursue an expanded development program. Related to this, two papers have been published in the Clinical Journal of the American Society of Nephrology, C. Jason, this year by preeminent experts in the field of metabolic acidosis research. one by Dr. Nicholas Madias and the other by Dr. Donald Wesson. Both publications focus on the concept that clinical metabolic acidosis, defined as a serum bicarbonate less than 22 milligrams per liter, is a lagging indicator of acid retention in patients with CKD. Prior to a chronically low serum bicarbonate level, these patients have already accumulated acid that has used and depleted multiple buffering mechanisms designed to mitigate the deleterious effects of the accumulated acid. Growing evidence suggests that acid accumulation prior to avert metabolic acidosis causes clinical harm. Let me review the science briefly, and then I'll turn to how we are thinking about a future development plan for the Veramer that could benefit patients with serum bicarbonate levels still in the normal range. The diagram on slide 23 depicts the multiple strategies and interactions between the strategies to mitigate acid stress when kidney damage precludes complete excretion of the daily acid load. This is a complicated slide, but the key message here is that multiple systems are at play, and serum bicarbonate is a lagging indicator of the impact of acid accumulation. As summarized by both Drs. Madias and Wesson, experiments in both animals and clinical trials in humans suggest that acid accumulation prior to overt metabolic acidosis results in kidney injury. Thus, while serum bicarbonate may be the most widely used method of diagnosing acid accumulation today, it may not be sufficiently sensitive a measure of acid accumulation, particularly prior to depletion of the many other acid mitigation mechanisms used by the body. The importance of this work lies in the fact that, one, it supports the basic premise that serum bicarbonate is a lagging indicator, of the impact of acid accumulation, and two, there may be considerable benefit to early intervention with the Veramer to improve acid-base balance and prevent clinical consequences of acid retention. Now, on slide 24, as we look at the Veramer's mechanism of action, you can see that the Veramer was designed to supplement acid removal in the setting of the kidney's reduced ability to excrete acid because of kidney disease. It has both high capacity and high selectivity for hydrochloric acid binding. yielding an elegant means of removing acid within the GI tract. As we examine more closely the full spectrum of mechanisms that impact acid-base balance, we believe that the Veramer may provide kidney protective effects in CKD sooner than the diagnosis of metabolic acidosis, and it may have the potential to benefit a broader population of patients. As you can see on slide 25, We believe this may be similar to the development path used by the SGLT2 inhibitors, where the first studies supporting labeling for slowing CKD progression were conducted in patients with advanced disease with subsequent studies involving patients with progressively milder disease. In the case of Averam, we believe that a successful valid CKD trial could support approval for slowing CKD progression in patients with chronic metabolic acidosis and CKD. We may then conduct additional outcome trials to seek to expand the label for ovarian med to include slowing of CKD progression in patients with CKD who have not yet developed overt metabolic acidosis, but for whom acid accumulation is still harmful. Given this broader view, we believe there's potential to significantly expand the addressable CKD patient population for ovarian med. With that, I ask Jeff to review our financial results for the quarter.
spk06: Thanks, Garrett. On slide 27, as a quick overview of the second quarter results, R&D expense was $19.8 million and $28.8 million for the three months ended June 30, 2021 and 2020, respectively. The decrease was primarily due to decreased activities in connection with our Viberamer clinical development program related to manufacturing process optimization and the manufacturing of drug substance and lower personnel costs. GNA was $9.6 million and $28.4 million for the three months ended June 30, 2021, and 2020, respectively. The decrease was primarily due to decreased administrative activities in connection with our Veramer Clinical Development Program, including pre-commercialization, medical affairs, and personnel costs. Net loss was $33.6 million and $58.2 million, And non-GAAP net loss was $24.6 million and $48.8 million in Q2 2021 and 2020, respectively. Now on slide 28, let me turn to our financial position. As of June 30, 2021, cash, cash equivalents, and investments totaled $175.8 million. We currently have a $200 million, 3.5% convertible senior note outstanding, with a maturity date of 2027. At June 30, we had approximately 50 million shares outstanding. We believe our current financial resources will fund our planned operations into late 2022. Based on the current rate of primary endpoint event accrual in the Valor CKD Renal Outcomes Trial, the 250 event interim analysis for early stopping of the trial for efficacy is expected to occur within the timeframe of our existing capital. If we are compelled to stop the trial early for administrative reasons, that event could occur prior to the Plan 250 event interim analysis. With that, I will turn the call over to the operator for questions. Operator?
spk11: Absolutely. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Eva Privatera of Calvin. Your line is open.
spk12: Hi. Thank you for taking my questions. I just had a question about the event rate in VALOR. Is it tracking thus far with the estimated event accrual timeline based on your internal forecasts?
spk01: Yes.
spk12: And can you remind us how often EGFR is measured in patients in the trial?
spk05: It's measured at every study visit. So it's really multiple times a year.
spk12: Okay. And a quick follow-up. So Based on the last six reported accrual numbers of endpoints, the accrual rate seems to be rather linear. When does that event rate accelerate? Do you happen to know the equation for the exponential regression?
spk06: On page seven, you can see that we have an outlook for our estimated event rate accrual. And you're correct, it looks primarily linear. We are tracking right now right around the mean, so that would be the green dots on that chart. Of course, if we get to the higher rate, it would become a little more accelerated, and the lower confidence interval would be a little less accelerated. But our forecast appears to be fairly linear.
spk02: Okay. Thank you very much.
spk11: Your next question comes from the line of Jessica Fee of JP Morgan. Your line is open.
spk03: Hello, this is Daniel. Thanks for taking our question. This is for Jessica Fee. When looking at patients with CKD and latent acidosis, given that the acidosis is not overt, how do you plan to identify the patients? And if so, when do you expect to start the study?
spk05: Yeah, this is a future study post-VALA CKD data, and we would still use serum bicarbonate, and we would basically use patients who are in the low normal serum bicarbonate range between 22 and likely 24 millicolons per liter.
spk03: Great. And then the accrual rate for the primary endpoint from the last report stands around 34%, while the randomization patients around 1%. Given this lag for the randomization, is there a possibility that you can reach the end-term before enrollment completion?
spk05: Yeah, let's be clear. The event accrual and enrollment are decoupled. I think the patients that are currently in the study for an average duration of about 17 months or so, they are the ones who are contributing the primary endpoint events. The patients we are adding into the study, assuming that we were successful at the interim analysis sometime mid-next year, are not likely going to contribute significantly to event accrual.
spk04: Thank you.
spk11: Your next question comes from the line of Greg Sivanave of Goldman Sachs. Your line is open.
spk07: Hey, good afternoon. Thanks for taking my questions. I just wanted to revisit the hazard ratios from some of the other studies that you mentioned earlier in your presentation. I believe you mentioned that you've seen hazard ratios of 0.20 to close to 0.5. Can you just remind us what those interventions were. And then secondly, a question just on, I guess, cash. And Jeff, I might have missed this, but if you could just remind us the circumstances with which you would be leaning towards perhaps pulling the trigger on an administration staff, or is the guidance around cash being sufficient until late 2022? Does that basically take out the possibility that you might decide to use the administration. I'll stop. Thanks.
spk05: Yeah, on the prior studies, those are really the academic, often single-center studies that in one case, for example, used oral alkali. That's a debris study. And another one, they used really a diet supplement intervention, a very low protein diet. And both of those interventions yielded those very large event rate reductions compared to the control group. And again, those were one- to two-year studies.
spk06: So, Greg, on the administrative stock vis-à-vis our cash, again, We forecast cash into late 2022, so if you look at the calendar, that would imply if we did need approximately six months of runway to ethically and appropriately wind up that study, we would need to see data in the second quarter of 2022. Okay, thank you very much.
spk11: Again, as a reminder, to ask a question, you will need to press star 1 on your telephone. Again, that is star 1 on your telephone keypad. There are no further questions at this time. I will now turn the call over to Jackie Cosman for closing remarks.
spk08: Thanks, Mae, and thank you all for joining us on today's call. As always, if you have additional questions, please don't hesitate to email us at ir.tricita.com. Thanks and goodbye.
spk11: This concludes today's conference call. Thank you for participating. You may now disconnect. Thank you. Thank you.
spk10: Thank you. Thank you. THE END you Thank you. Thank you.
spk11: Good day and thank you for standing by. Welcome to the Troisida second 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. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Jackie Kosman. Please go ahead.
spk08: Thank you, May. Good afternoon, and thank you for joining the Tricita Second Quarter 2021 Financial Results and Business Update Conference Call. In today's call, Garrett Klarner, our founder, CEO, and president, will provide an update on the ongoing VALOR-CKD Renal Outcomes Trial and discuss our business progress. Jeff Parker, our COO and CFO, will discuss the recent results from our new market assessment of Aviramer as a potential therapy for slowing CKD progression, provide a summary of our financial results for the second 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 the applicable securities laws. Forward-looking statements include our anticipated activities related to our ongoing Valor CKD Renal Outcomes Clinical Trial our plans for interactions and communications with the FDA, our plans and expectations regarding potential pathways to approval of Viveramer by the FDA, our assessment of potential clinical development pathway for Viveramer, the future market potential of Viveramer, 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 or achievements discussed in or implied by such forward-looking statements. Tri-Cita 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 second quarter press release this afternoon just after the close of the market. For copies of the 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.
spk05: Thank you, Jackie, and thank you all for joining us today. In today's call, we'll provide a status update on our continued progress for the Valid CKD trial. We'll also provide highlights from a new commercial market assessment based on the Verimer as a potential therapy to slow CKD progression. and then we'll provide a brief overview of future development opportunities for VARAMA that we believe could unfold with positive VALOR-CQD data. Finally, we will provide a recap of our second quarter financial results and cash positions. Now, turning to VALOR-CQD. On slide five is a summary of the VALOR-CQD trial design. We plan to randomize 69 subjects to VARAMA or placebo, and the trial will end when the Independent Blind and Clinical Endpoint Adjudication Committee has positively adjudicated 511 subjects with DD40 events, defined as renal death, ESRD, or confirmed greater than or equal to 40% reduction in EGFR. And as you saw in our press release, we now have one interim analysis that will occur when we have accrued 250 subjects with primary endpoint events. We anticipate that this will occur around mid-2022. If the criteria for early stopping for efficacy are not met at the interim analysis, the trial is scheduled to conclude at 511 DD40 events. We recently removed the 150-event interim analysis from the Valid CKD protocol. We chose to eliminate this early analysis to preserve statistical and regulatory optionality for the trial. Overall, the Valid CKD trial is designed to have 87% power to show a 24% difference in primary endpoint events. Said another way, the assumed hazard ratio for the powering of Valid CKD is 0.76. And on slide six, you can see that we are making good progress in the conduct of the Velocity trial. As of August 6, 2021, the trial had randomized 1,455 of the planned 69 subjects with an average treatment duration of approximately 17 months, and 127 of the targeted 511 primary endpoint events have been accrued. With respect to the overall trial enrollment rate, the change in our geographic focus and the impact of COVID-19 has slowed the rate of the enrollment somewhat, We now anticipate completion of enrollment in the first half of 2022. On slide 7, there have been 32 additional front-end point events since our last quarterly call. Based on our event accrual projections for volatile CKD, we believe that we are still on track for the 250-event interim analysis in mid-2022. Now, on slide 8, before I turn to the assumptions around our interim analysis and final analysis, I want to provide some perspective around the assumed hazard ratio of the volatile CKD trials. You can see that epidemiological studies analyze the relationship between serum bicarbonate level and risk of CKD progression results in an estimated hazard ratio of 0.76, whereas several published prospective studies of the effect of increasing serum bicarbonate on CKD progression in patients with metabolic acidosis and CKD reported hazard ratios in the range from 0.2 to 0.5. As we've previously described, when discussing our valid CKD powering assumptions, we took a conservative approach and used epidemiologic data to apply a 0.76 hazard ratio to estimate the power of valid CKD. On slide nine, if we assume the true hazard ratio is in fact 0.76, we have a 22 percent probability of meeting the criteria for stopping the trial early for efficacy at 250 events. And as I said, the overall power at the final analysis is 87 percent. However, given the risk reduction from slowing CKD progression from some of the published prospective trials, patients treated with Vivarumab may experience greater benefit in VALOR-CKD than the epidemiological models might suggest. For example, if we were to assume a true hazard ratio of 0.70 instead of 0.76, the probability of stopping VALOR-CKD early for efficacy at the interim analysis doubles from 22 percent to 47 percent. If instead the true hazard ratio were 0.6 or 0.5, the probability of stopping early at the interim increases to 88 or 99.6 percent, respectively. At the bottom of the slide, expressed another way, an observed hazard ratio of less than 0.67 at the interim analysis would result in meeting the criteria for early stopping of the trial for efficacy. We believe the interim analysis will be an important milestone for well-seeker DNR for well-spent. It will be conducted by an independent, unblinded interim analysis committee, and if this committee does not recommend stopping early for efficacy, they'll receive no information from the interim analysis. The interim analysis was to yield a statistically significant result for the primary efficacy endpoint, and the committee recommends early stopping for efficacy. It could potentially form the basis for resubmission of the NDA through the traditional approval pathway. Now, turning to slide 10, we may find ourselves in a situation where we must stop the trial early for administrative reasons. As you are 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 5 in 11 events, we may be compelled to stop the trial early for administrative reasons, which could occur either prior to or following the plan's interim analysis. Any such decision would be made in the future based on a range of considerations, including our ability to responsibly 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 trial for administrative reasons, the primary endpoint would be analyzed using all alpha remaining at that time. As an example of what we estimate the power of the trial would be under an administrative sub-scenario, we have laid out two hypothetical time points after either 150 or 250 primary endpoint events have occurred. Assuming a true hazard ratio of 0.76, the trial is 39% or 58% power at 150 or 250 events, respectively. To provide you with a sensitivity analysis, if the treatment effect is larger and the true hazard ratio is 0.70, the power increases to 59% at 150 events and to 81% if stopped at 250 events. And as we move to hazard ratios of 0.6 or 0.5, the estimated power goes up significantly. On the last line, expressed another way, if the trial was terminated early for administrative reasons at 250 events, the data from the trial would show statistical significance of the observed hazard ratio is less than 0.78. And if that occurs, could potentially form the basis for an NDA resubmission through this additional approval pathway. As a reminder, we've highlighted on slide 11 the key CRL and ADL issues from our initial NDA. We believe outcomes data from VALOR-CKD will be very important in determining the regulatory path for approval of the VERIMR and could address the regulatory concerns expressed by the FDA in the CRL and ADL. Regarding the applicability of the trial results, the U.S. population and practice of medicine, while we expect that few primary endpoint events will come from U.S. patients, 10 to 20 percent of patients are expected to be enrolled in the U.S., Canada, and Western Europe, we'll conduct subgroup analyses of the primary endpoint by geographic region. In addition, we plan to conduct sensitivity analyses to assess the effects of country and other baseline variables on the primary and secondary endpoints of the trial. We also intend to ensure that no single site in the viral CKD trial provides credit for 5% of the total number of trial subjects. I would note, however, that FDA's acceptance of the viral CKD data in support of the NDA resubmission, including the acceptability of the data from non-U.S. countries or regions, will ultimately be a review issue. As always, in presenting new data to the FDA, new issues can arise. On slide 12, to summarize our reason and plan into FDA interactions, We have submitted a protocol amendment to eliminate the 150-event interim analysis and provided the FDA with an update on the VALOR-CKD trial and potential future development activities for Reverma. The timing of future substantive interactions with the FDA will ultimately be dependent on the availability of VALOR-CKD data. If VALOR-CKD is stopped early for efficacy at the 250-event interim analysis in mid-2022, resubmission of the NDA could occur in 2023. If the trial must be stopped early for administrative reasons, it could occur prior to the Plan 250 event interim analysis, and in that case, if the data demonstrate efficacy, resubmission of the NDA could occur as early as late 2022. We believe our submission will be classified as a resubmission under the original NDA and, as such, will 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. I'll turn the presentation over to Jeff for an update on the Bavaria Market Opportunity.
spk06: Thanks, Garrett, and thank you all for joining us today. Our goal with the new market assessment was twofold. First, we wanted to evaluate physician receptivity to a new target profile that included disease-modifying outcomes data, and second, we wanted to understand how a broader population of physicians beyond nephrologists, are currently diagnosing and treating metabolic acidosis, and further understand how they might use Viveramer as a treatment for patients with metabolic acidosis and CKD if Viveramer were approved on the basis of a target product profile with outcomes data. On slide 14, the 2019 target product profile is on the left, and the target product profile that we presented in the recent surveys is on the right. As you can see, the major difference is the primary efficacy endpoint. In 2019, the focus was on a change in serum bicarbonate, while the current profile focuses on outcomes data, specifically DD40. Now, moving to slide 15. In addition to 71 nephrologists, we broadened the survey population in this new survey to also include 91 non-nephrologists who are cardiologists, endocrinologists, and primary care physicians. Now, stepping back for a moment, on slide 14, to characterize the opportunity in the non-nephrologist market, you can see that there are about 500,000 diagnosed patients with metabolic acidosis and CKD that are under the care of physicians other than nephrologists. When we were considering a commercial launch based on accelerated approval, prior to availability of outcomes data from Ballard CKD, our strategic focus was on nephrologists. That would still be the primary target audience. About 50 to 60% of diagnosed patients are seen by nephrologists, with the percentage increasing as the patient moves into later stages of CKD. But as we look at a possible commercial launch based on a potential label for slowing CKD progression with outcomes data, we wanted to understand the receptivity from non-nephrologist physicians to prescribe the Veramer. On slide 17, we have provided both the 2019 and 2021 survey results that provided us with answers to two questions. First, would nephrologists and non-nephrologists be likely to prescribe Viveramer based on a target product profile for slowing CKD progression? And two, what percent of patients with metabolic acidosis and CKD would receive Viveramer five years after launch? As you can see here, physician survey results demonstrated a strong interest in prescribing Viveramer with 93% of nephrologists and 71% of non-nephrologists indicating that they would definitely or probably prescribe Viveramer. In addition, peak patient penetration for prescribing Viveramer was estimated to be 74% among nephrologists and 58% among non-nephrologists. I would like to note that to avoid variations in responses based on the price of the product or insurance coverage, we ask physicians to assume price is not an issue and there is adequate insurance coverage. It is typical to adjust these numbers down based on these factors and others as we look at modeling a future revenue opportunity for Viveramer. But these results are very encouraging and signal significant increased interest from nephrologists as well as strong interest from non-nephrologists as a result of a target product profile that includes renal outcomes data. We also conducted a new payer survey. A summary of this is on slide 18. Our early work with payers included education on chronic metabolic acidosis, clinical data from 301-301E trial, and discussions about the mechanism of action of Averamur. We also educated payers on the medical need for and economic benefits of a potential treatment for chronic metabolic acidosis prior to our anticipated launch. Our early efforts paid off here, and we found that payers were generally well-informed and understood the link between metabolic acidosis and CKD progression, as well as the additional costs of care that are incurred by the healthcare system for patients with metabolic acidosis and CKD compared with similar patients without metabolic acidosis. In this new survey, payers are clearly interested in Viveramer as a disease-modifying therapy, and the verification of this through an outcomes-based endpoint from Valor CKD was a net positive. And as always, they consider the cost savings to the healthcare system from treating metabolic acidosis which is estimated to be approximately $40,000 per year, to be a key driver to adoption. We tested a range of prices, and the general consensus among survey respondents was that approximately $3,000 per month or $36,000 per year would be a reasonable price for Viveramer, which is in the same range as previous survey results. I mentioned earlier that our survey numbers are unadjusted, so on slide 19, we provided our previous estimates of the anticipated payer mix for the target population of patients with CKD and metabolic acidosis. We believe that over half of the initial targeted patients with metabolic acidosis and CKD will have either low copay, such as Medicaid, Medicare with subsidy, or VADOD, or may have assistance with their copay, which would be the commercial segment of the payer mix. We believe this would provide access to Viveramer to the majority of patients with metabolic acidosis and CKD. Now turning to slide 20, I want to highlight that patent protection for Viveramer runs until 2038 in the U.S., and we continue to expand our patent protection in other regions as well. We believe Viveramer's long patent life will enable us to maximize the value of Viveramer over time. In summary, we believe that there is significant market opportunity for Viveramer based on the initial anticipated indication. As we delve more deeply into the science of acidosis, we are already starting to think beyond that to look at a broader population of patients who may benefit from acid removal. I'll turn the call back to Garrett to describe this expanded opportunity.
spk05: Thanks, Jeff. Let's move to slide number 22. If the VALOR CKD trial demonstrates the treatment with a very much slow CKD progression, we have an opportunity to pursue an expanded development program. Related to this, two papers have been published in the Clinical Journal of the American Society of Nephrology, or CJSON, this year by preeminent experts in the field of metabolic acidosis research. one by Dr. Nicholas Madias and the other by Dr. Donald Wesson. Both publications focus on the concept that clinical metabolic acidosis, defined as a serum bicarbonate less than 22 milligrams per liter, is a lagging indicator of acid retention in patients with CKD. Prior to a chronically low serum bicarbonate level, these patients have already accumulated acid that has used and depleted multiple buffering mechanisms designed to mitigate the deleterious effects of the accumulated acid. Growing evidence suggests that acid accumulation prior to avert metabolic acidosis causes clinical harm. Let me review the science briefly, and then I'll turn to how we are thinking about a future development plan for the Verima that could benefit patients with serum bicarbonate levels still in the normal range. The diagram on slide 23 depicts the multiple strategies and interactions between the strategies to mitigate acid stress when kidney damage precludes complete excretion of the daily acid load. This is a complicated slide, but the key message here is that multiple systems are at play, and serum bicarbonate is a lagging indicator of the impact of acid accumulation. As summarized by both Drs. Madias and Wesson, experiments in both animals and clinical trials in humans suggest that acid accumulation prior to overt metabolic acidosis, resulting in kidney injury. Thus, while serum bicarbonate may be the most widely used method of diagnosing acid accumulation today, it may not be sufficiently sensitive a measure of acid accumulation, particularly prior to depletion of the many other acid mitigation mechanisms used by the body. The importance of this work lies in the fact that, one, it supports the basic premise that serum bicarbonate is a lagging indicator, of the impact of acid accumulation, and two, there may be considerable benefit to early intervention with the Veramer to improve acid-base balance and prevent clinical consequences of acid retention. Now, on slide 24, as we look at the Veramer's mechanism of action, you can see that the Veramer was designed to supplement acid removal in the setting of the kidney's reduced ability to excrete acid because of kidney disease. It has both high capacity and high selectivity for hydrochloric acid binding. yielding an elegant means of removing acid within the GI tract. As we examine more closely the full spectrum of mechanisms that impact acid-base balance, we believe that the Veramer may provide kidney protective effects in CKD sooner than the diagnosis of metabolic acidosis, and it may have the potential to benefit a broader population of patients. As you can see on slide 25, we believe this may be similar to the development path used by the SGLT2 inhibitors, where the first studies supporting labeling for slowing CKD progression were conducted in patients with advanced disease with subsequent studies involving patients with progressively milder disease. In the case of VARAMER, we believe that a successful valid CKD trial could support approval for slowing CKD progression in patients with chronic metabolic acidosis and CKD. We may then conduct additional outcome trials to seek to expand the label for ovarian med to include slowing of CKD progression in patients with CKD who have not yet developed overt metabolic acidosis, but for whom acid accumulation is still harmful. Given this broader view, we believe there's potential to significantly expand the addressable CKD patient population for ovarian med. With that, I ask Jeff to review our financial results for the quarter.
spk06: Thanks, Garrett. On slide 27, as a quick overview of the second quarter results, R&D expense was $19.8 million and $28.8 million for the three months ended June 30, 2021 and 2020, respectively. The decrease was primarily due to decreased activities in connection with our Viveramer clinical development program related to manufacturing process optimization and the manufacturing of drug substance and lower personnel costs. G&A was $9.6 million and $28.4 million for the three months ended June 30, 2021, and 2020, respectively. The decrease was primarily due to decreased administrative activities in connection with our Veramer Clinical Development Program, including pre-commercialization, medical affairs, and personnel costs. Net loss was $33.6 million and $58.2 million, And non-GAAP net loss was $24.6 million and $48.8 million in Q2 2021 and 2020, respectively. Now on slide 28, let me turn to our financial position. As of June 30, 2021, cash, cash equivalents, and investments totaled $175.8 million. We currently have a $200 million, 3.5% convertible senior note outstanding. with a maturity date of 2027. At June 30, we had approximately 50 million shares outstanding. We believe our current financial resources will fund our planned operations into late 2022. Based on the current rate of primary endpoint event accrual in the Valor CKD Renal Outcomes Trial, the 250 event interim analysis for early stopping of the trial for efficacy is expected to occur within the timeframe of our existing capital if we are compelled to stop the trial early for administrative reasons that event could occur prior to the plan 250 event interim analysis with that i will turn the call over to the operator for questions operator absolutely as a reminder to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound key
spk11: Please stand by while we compile the Q&A roster. Your first question comes from the line of Eva Privatera of Calvin. Your line is open.
spk12: Hi. Thank you for taking my questions. I just had a question about the event rate in Valor. Is it tracking thus far with the estimated event accrual timeline based on your internal forecasts?
spk01: Yes.
spk12: And can you remind us how often EGFR is measured in patients in the trial?
spk05: It's measured at every study visit. So it's really multiple times a year.
spk12: Okay. And a quick follow-up. Based on the last six reported accrual numbers of endpoints, the accrual rate seems to be rather linear. When does that event rate accelerate? Do you happen to know the equation for the exponential regression?
spk06: On page seven, you can see that we have an outlook for our estimated event rate accrual. And you're correct, it looks primarily linear. We are tracking right now right around the mean, so that would be the green dots on that chart. Of course, if we get to the higher rate, it would become a little more accelerated, and the lower confidence interval would be a little less accelerated. But our forecast appears to be fairly linear.
spk02: Okay. Thank you very much.
spk11: Your next question comes from the line of Jessica Fee of JP Morgan. Your line is open.
spk03: Hello, this is Daniel. Thanks for taking our question. This is for Jessica Fee. When looking at patients with CKD and latent acidosis, given that the acidosis is not overt, how do you plan to identify the patients? And if so, when do you expect to start the study?
spk05: Yeah, this is, you know, a future study post-valid CKD data, and we would still use serum bicarbonate, and we would basically use patients who are in the low normal serum bicarbonate range between 22 and likely 24 milligrams per liter. Great.
spk03: And then the accrual rate for the primary endpoint from the last report stands around 34%, while the randomization patients around 1%. Given this lag for the randomization, is there a possibility that you can reach the end-term before enrollment completion?
spk05: Yeah, let's be clear. The event accrual and enrollment are decoupled. I think the patients that are currently in the study for an average duration of about 17 months or so, they are the ones who are contributing the primary endpoint events. The patients we are adding into the study, assuming that we were successful at the interim analysis sometime mid-next year, are not likely going to contribute significantly to event accrual.
spk04: Thank you.
spk11: Your next question comes from the line of Greg Sivanave of Goldman Sachs. Your line is open.
spk07: Hey, good afternoon. Thanks for taking my questions. I just wanted to revisit the hazard ratios from some of the other studies that you mentioned earlier in your presentation. I believe you mentioned that you've seen hazard ratios of 0.20 to close to 0.5. Can you just remind us what those interventions were. And then secondly, a question just on, I guess, cash. And Jeff, I might have missed this, but if you could just remind us the circumstances with which you would be leaning towards perhaps pulling the trigger on an administration staff, or is the guidance around cash being sufficient until late 2022? Does that basically take out the possibility that you might decide to use the administrational stop. Thanks.
spk05: Yeah, on the prior studies, those are really the academic, often single-center studies that in one case, for example, used oral alkali. That's a debridial study. And another one, they used really a diet supplement intervention, a very low protein diet. And both of those interventions yielded those very large event rate reductions compared to the control group. And again, those were one- to two-year studies.
spk06: So, Greg, on the administrative stop vis-à-vis our cash, again, We forecast cash into late 2022, so if you look at the calendar, that would imply if we did need approximately six months of runway to ethically and appropriately wind up that study, we would need to see data in the second quarter of 2022. Okay, thank you very much.
spk11: Again, as a reminder, to ask a question, you will need to press star 1 on your telephone. Again, that is star 1 on your telephone keypad. There are no further questions at this time. I will now turn the call over to Jackie Kosman for closing remarks.
spk08: Thanks, Maeve, and thank you all for joining us on today's call. As always, if you have additional questions, please don't hesitate to email us at ir.tricita.com. Thanks and goodbye.
spk11: This concludes today's conference call. Thank you for participating. You may now disconnect.
Disclaimer