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spk06: Good day and thank you for standing by. Welcome to the Tricita First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. 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 zero. I would now like to hand the conference over to your speaker today, Jackie Kosman of Tricita, and please go ahead.
spk05: Thank you, Didi. Good afternoon, and thank you for joining the Tricita First Quarter 2022 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 Dollar CKD Renal Outcomes Trials and discuss our business progress. Jeff Parker, our COO and CFO, will discuss our 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 Valor CKD renal outcome clinical trial, including early termination of the trial, anticipated endpoint event accruals, and the estimated timing for receipt of top-line data, as well as 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. 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 market. For copies of our press release, please go to www.tricita.com and follow the link to our investor relations page. I would also note that we have posted an updated slide presentation on the investor relations portion of our website that includes updated information from our press release and call. 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. We continue to make good progress on the execution of our valid CKD renal outcomes trial. As of May 9th, the 1480 subjects randomized in the trial had an average treatment duration of approximately 25 months. The trial has accrued 233 subjects with positively adjudicated primary endpoint events defined as renal death, end-stage renal disease, ESRD, or greater than or equal to 40% reduction in estimated glomerular filtration rate, EGFR. As we previously reported, based on our financial runway, we intend to stop the Valid CKD trial early for administrative reasons in the second quarter of 2022, with continued accrual of primary endpoint events into the third quarter of 2022. Based on the current event rate trend, we are updating the anticipated number of subjects with positively adjudicated primary endpoint events in the final analysis to 250 to 270. We anticipate reporting top-line results from the Valley Seeker Detroit early in the fourth quarter of 2022, which will allow for approximately six months of financial runway following the announcement. Assuming a true hazard ratio of 0.70, which corresponds to a 30% reduction in the very most possible endpoint events If there are 250 events in the final analysis, the trial has 78% power. And if there are 300 events in the final analysis, the trial has 85% power. Switching from power to observed hazard ratio statistics, we could be successful with 250 events if the observed hazard ratio is 0.78 or lower, and with 300 events if the observed hazard ratio is 0.79 or lower. We believe that the VALOR CKD trial will provide interpretable data to evaluate how treatment with VAMR impacts slowing of CKD progression in patients with metabolic acidosis and CKD. With that, I'll turn the presentation to Jeff for an overview of our financial results for the quarter.
spk03: Thanks, Garrett. Our first quarter results were in line with our expectations, with R&D expense at $18.5 million. and $32.2 million for the three months ended March 31st, 2022 and 2021, respectively. The decrease in R&D expense was primarily due to decreased activities in connection with our Vivarumur clinical development program related to the manufacturing of drug substance and other clinical development costs. G&A expense was $9.2 million and $9.9 million for the three months ended March 31st, 2022 and 2021, respectively. The decrease in G&A expense was primarily due to lower legal and consulting fees. Net loss was $29.6 million and $53.4 million, and non-GAAP net loss was $22.9 million and $38.3 million for the three months ended March 31, 2022, and 2021, respectively. As of March 31, 2022, cash, cash equivalents, and investments were $123.7 million. We believe our current financial resources will fund our planned operations into early in the second quarter of 2023, which is anticipated to be approximately six months from the announcement of top line results for Valor CKD. With that, I will turn the call over to the operator for questions. Operator?
spk06: Thank you. 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. One moment. Our first question comes from Phil Nadeau of Callan and Company. Please proceed.
spk01: Good afternoon. Thanks for taking our questions. First, a financial question for you, Jeff. On the R&D expense, it was a bit lower than we were modeling, though it does seem like if this is your consistent R&D expense, that's how you get to Q2, 23 cash runaway. So, are we fair to assume that R&D will be at similar levels kind of through, at least through the end of 2022?
spk03: So, Phil, R&D for Q2 and Q3 is estimated to be similar to Q1. with an uptick in Q4, probably somewhere between $8 and $12 million uptick in Q4. So, roughly speaking, that's how the year will trend out.
spk01: That is very helpful. Second, on Valor CKD.
spk03: By the way, just to add there, that's due to the fact that our contract with Patreon is somewhat lumpy. So that's why you see that tick up in the fourth quarter. In fact, Papillon ticks up then. And, of course, if things go as planned, the Valor trial will be ticking down at that time.
spk01: Got it. Okay. That helps a lot with our modeling. Second, on Valor CKD, it looks like there were maybe 16 events that were accrued over the last two months, which is a little bit higher than in the past you've suggested, maybe 10 to 11 events per month. Is there any identifiable reason behind that uptick, or is it just the randomness in event rates and dealing with a trial the size of LRCKD?
spk02: Well, this is Garrett. No, I think, you know, in the last two or three months, we do see more events. You know, we had, I think, just over 20 events the month before in March, and then now, as you said, 16 in April. I think it's still a modest uptick, but actually that's why we updated the projected number of primary endpoint events in the final analysis. So we went from 240 to 255, now to 250 to 270 to accommodate this, I would say, the robustness that we're seeing. I wouldn't say uptick.
spk01: Got it. Okay. And then last question again on VelarCKD. The slide that you referenced, it calls out, as you suggested, the hazard ratio, observed hazard ratio of 0.78 to 0.79 for statistical significance based on events between 250 and 300. The slides talk about, like, 10,000 simulations were used to calculate those numbers. Can you maybe go in a bit more detail as to how exactly you did calculate the observed hazard ratio that's necessary for a Statsig benefit in Velar CKD?
spk02: It's basically to look at the random variability in a simulation where tens or hundreds or thousands of times you run the trial and look at the results. And then you look at the threshold that you need to be above or in the case of hazard ratio below in order to be statistically significant. And I think what's really consistent with what we said before is that 250 events is really a bit of a plateau. As you can see, every 50 events thereafter give you maybe, you know, around 0.01 of higher sort of threshold for hazard ratio. And remember, with 511 events, we would have been able to have statistical significance, but I think it's a 0.83. So the hazard ratio of 0.83. And so you're seeing this in this very table, and I think it's helpful, you know, to add the 300 event column here to illustrate sort of the potential range of scenarios.
spk01: In those simulations, is it statistically significant like every time at that hazard ratio, or is there some threshold like at that hazard ratio it's statistically significant more than 51%?
spk02: I think they always give you 99% or something like this. I can check back with our statisticians, but those are conservative, I think, estimates based on these simulations.
spk01: So the vast majority of the time it would be Stensic. Perfect. Thanks for taking our questions. Thanks, Bob.
spk06: Thank you. Our next question comes from Jessica Fye of J.P. Morgan. Please proceed.
spk00: Good afternoon. This is J.L. for Jess. Thank you for taking our questions. So a couple of From us, assuming positive top-line results, is there any guidance you can give us regarding how you would prepare for a potential filing and launch further down the line internally? And then how would you think about potentially extending the financial realm by assuming positive top-line results? Thank you.
spk03: So with regards to the first part of your question, were you asking about the timing of resubmission and PDUFA date?
spk00: Yeah, and also is there anything you're preparing or thinking about to prepare for the potential launch internally?
spk03: Yes, yes. So we are always updating and reviewing our commercial plans, commercial assumptions. So we're doing that. over the next few months as well as we did last summer. While we don't expect to have any significant spend on commercial, prior to data, we are doing background work to update our plans for commercial. With regards to timing overall towards potential commercial launch, presuming we have the announcement of the VALOR study early in Q4, we would anticipate filing or resubmitting the NDA in Q2 of 23 and have a potential PDUFA date in Q4 of 2023. That's a six-month review for a resubmission. And then, roughly speaking, would have a launch in Q1 of 2024. So presuming positive data on Valor CKD, we will put those plans into motion later this year. With regards to capital and runway, as I discussed earlier, we have sufficient capital based on our current plans through the first quarter of next year into the early part of Q2 of 2023. We also have in place a warrant that were related to our direct equity investment at the end of last year. So we have 7 million warrants outstanding with an exercise price of 11 And those warrants would expire six weeks after the announcement of Valor CKD data if, in fact, our stock price trades above $15 per share with a certain volume requirement. But assuming a good reaction to the Valor positive data, we would have the opportunity to bring in $77 million through the exercise of those warrants, which would take us into late 2023 with regards to capital. I think with regards to any further additions to capital, we'll address that after we receive and announce the VALOR CKD data.
spk05: Operator?
spk06: Thank you. Our next question comes from Madhu Kumar of Goldman Sachs. Please proceed.
spk04: Hey, guys. Thanks for taking our question. This is Rob on for Madhu. I was just wondering, is there anything that would change your expectation for the top-line data, like quicker accrual of events or slower, or is that already set in stone?
spk02: Yeah, I think... Just to remember, I think the top line data is driven by our balance sheet, and really sort of what we've discussed around the administrative stop, that this is really six months of cash left, and it's not driven by targeting a certain number of events. So event accrual has really nothing to do with the timing of the administrative stop and correspondingly the timing of top line data.
spk04: Okay, thank you. And just one other question. What would be the cadence for the data release post the top line?
spk02: I think very traditional. You know, we, you know, I think we will obviously look at the primary endpoint and that, you And then, as we've said, between what's appropriate to put into the initial press release, what's appropriate in, I think, if it's positive data, obviously into one of the top journals. We're not going to reinvent the playbook here.
spk04: All right. Thank you.
spk06: Thank you. At this time, I'd like to turn it back to Jackie Kosman for closing remarks.
spk05: Thank you, DeeDee, 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.
spk06: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.
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