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spk07: Ladies and gentlemen, thank you for standing by, and welcome to the Tricita Second Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star 1 on your telephone keypad. If you would like to withdraw your question, press star 1. As a reminder, today's call is being recorded. I will now hand today's call over to Jackie Kosman of Tricita. Please go ahead.
spk01: Thank you, Tamika. Good afternoon, and thank you for joining the Tricita Second 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 Valor CKD Reno Outcomes Trial and discuss our business progress. Jeff Parker, our COO and CFO, will discuss 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 applicable securities laws. Forward-looking statements include our anticipated activities related to the Valor CKD Renal Outcomes Clinical Trial, including 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. 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 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 like to note that we've 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'll turn the call over to Garrett.
spk02: Thank you, Jackie, and thank you all for joining us today. As we reported in May, we've stopped the valid CKD trial early for administrative reasons as permitted by the existing study protocol to allow for six months of financial runway following the reporting of top-line results. We've continued to accrue primary endpoint events as clinical trial subjects complete their participation in the study. As of today, the 1,480 subjects who were randomized in the valid CKD trial had an average treatment duration of approximately 26 1⁄2 months, And the trial had accrued 281 subjects with positively adjudicated primary endpoint events, defined as renal death, end-stage renal disease, or greater than or equal to 40% reduction in EGFR. Given the current event rate trend, we are increasing our estimate for positively adjudicated primary endpoint events in the final analysis. We now anticipate between 285 to 295 subjects with primary endpoint events in the final analysis, which is up from our prior estimate, last quarter of 250, 270 events. We anticipate that the last subjects will complete their participation in this trial in the third quarter, and we plan to report top-line results from ValorCKD in October 2022. We have reviewed various hazard ratios and corresponding powering assumptions for ValorCKD in prior calls. These calculations are also in our investor presentation on our website. To recap, Assuming a true hazard ratio of 0.70, which corresponds to a 30% reduction in variable versus placebo 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, the trial is expected to meet its primary endpoint 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 the VARAMER impacts slowing of CKD progression in patients with metabolic acidosis and CKD. And before I turn the presentation over to Jeff, I'd like to say that we are really proud of our Atricida team. along with our partner CROs who are doing a fabulous job ensuring an orderly completion of the VALOR CKD trial at almost 200 sites in over 30 countries to enable top-line data in October. With that, Jeff will now provide an overview of our financial results for the quarter.
spk04: Thanks, Garrett. Our second quarter results were in line with our expectations, with R&D expense of $16.9 million and $19.8 million for the three months ended June 30th, 2022 and 2021 respectively. The decrease in R&D expense was primarily due to a decrease in clinical development costs related to our Valor CKD trial following the administrative stop announced in May 2022. G&A expense was $9.8 million and $9.6 million for the three months ended June 30th, 2022 and 2021 respectively. The increase in G&A expense was primarily due to higher stock-based compensation expense. Net loss was $28.5 million and $33.6 million, and non-GAAP net loss was $21.3 million and $24.6 million for the three months ended June 30, 2022, and 2021, respectively. As of June 30, 2022, cash, cash equivalents, and investments were $98.7 million. We believe our current financial resources will fund our planned operations into early in the second quarter of 2023, which is approximately six months from the anticipated October announcement of top line results for Valor CKD. With that, I will turn the call over to the operator for questions. Operator?
spk07: Thank you. At this time, if you'd like to ask a question, press star one on your telephone keypad. If you'd like to remove yourself from the queue, please press star 1. Our first question comes from the lineup, Eva Parita from CalWIN.
spk00: Hi. Congrats on the execution of the trial, and thank you for taking our questions. So the event accrual seems to be happening faster than what was previously guided, which is great. What do you think is accounting for this faster rate, and is it still within the range of what you had previously modeled?
spk02: Yes. Eva, thanks for the question. Yes, it's spot on. It's right in, I think, in the middle of what we expected over time. There was some uncertainty. As we bring people in for the last visit in shorter intervals, if we would still see the same number of events that we've seen pretty consistently over the last year, year and a half of the trial. But that's clearly the case. So we continue to stay on track.
spk00: Excellent. Thanks. And a second question. So you list the 0.76 hazard ratio, and that's based on the serum bicarb effect seen in the 301 trial and the Tengri model developed a few years back. There was a paper published last year by Tengri that draws from a larger database of patients. Is 0.76 still kind of the base case assumption, or have you made any point as to anything to point to possibly different hazard ratio?
spk02: I think we have a couple of different buckets here that we draw from, right? And one you just described, and that was really important in the context of accelerated approval, where we obviously wanted to connect the serum bicarb effect and then ultimately the expected outcome benefit. Now, the other bucket are really sort of some of the smaller academic trials, the de Brito study, Gagnata, where interventions like oral alkali or extreme low-protein diets in patients who could tolerate these interventions were studied in single-center trials, and there were hazard ratios that were much, much lower. That's also now a our slide deck, investor slide deck. And there, basically, you're looking at hazard ratios in the 0.25 to 0.5 range. And then, of course, we had our own study where we had a pre-specified safety analysis that is quite different from the renal endpoint, but had all-cause mortality and dialysis in 50% EGFR decline in the TRCA301E study. And there we saw basically also a fairly significant and small hazard ratio of, I think it was a 65% reduction in those DD50 events. Again, not a renal endpoint and very, very small numbers. But the way we think about it, we look at all three. And I think that gives us comfort that we ultimately, when we take a look, that we are below the point or 0.79 in terms of hazard ratio.
spk08: That's very helpful. Thank you. Your next question is from the line of Sergei Belegar from Needham.
spk05: Hi. Good afternoon. Just a couple for me. I guess first, just looking forward to October and thinking of the data readout. are we just going to see the top line, the primary endpoint, or should we also see some of the secondary endpoints at that time? And then thinking of those secondary endpoints, which ones are the most important for what you project the label to be for Viviramer? And given the stoppage of the VALOR trial, I'm just curious whether you think the the study is powered well enough to see a static difference on some of these secondary endpoints. Thank you.
spk02: Thanks for the question. Again, right now we're busy really taking down obviously the trial and orderly manner and then ultimately locking the database, analyzing the data, and then obviously communicating as soon as possible. The primary endpoint is really it. Let's be very clear. In terms of FDA approval, in terms of the claim for slowing of CKD progression, we are really a laser focus on the DD40 endpoint. Now, we do have other endpoints that describe the slowing of CKD progression. There's obviously the DD50. There are the individual components. EGFR slope, and I think they're all important. And the idea is hopefully that if we are successful on the primary, there's a good chance we also can see some interesting things on the individual components and some of the other renal related endpoints. So to me personally, at least, that's really from a labeling perspective, from an FDA discussion perspective, that this is really where the rubber hits the road. Now, we do have endpoints on physical functioning. And obviously, that's really, really important for patients. And I think we are, of course, interested in the KDQL, which is the patient-reported outcome, and also the repeated chair stand test. I think it's less clear. Those are not basically the same in terms of proven endpoints. from a regulatory perspective, but they're obviously really, really important for patients and how a patient feels and functions. So those are really the two buckets that we are focused on and that are important to us. Others around mortality and hospitalizations, to be clear, those are all, I think, important endpoints. We did run this against the backdrop of a 100-year pandemic. So I think that's always a question in terms of what type of noise is generated in terms of hospitalizations and overall mortality. But that's why we're paying a lot less attention at this stage to some of those other endpoints.
spk03: Thank you. Look forward to seeing the data. Thank you.
spk08: Your next question is from the line of Jessica Fay with JPMorgan.
spk06: Hey, guys. Good afternoon. Thanks for taking my question. Maybe asking the first question a little bit of a different way. How much separation between arms on serum bicarb do you think is needed to have an impact large enough to achieve a hazard ratio no higher than 0.79?
spk02: Yeah, I'd try to answer that if we were still pursuing accelerated approval. Yeah, so to me, basically, you know, we expect, you know, obviously, you know, a statistically significant difference in serum bicarb between active and placebo patients. But I think this overly quantitative view, as I said before, was really important, you know, to get initial approval on the basis of the surrogate, which we didn't. And so I think that to us, I think it's much more important to have a larger number of events that we are observing right now. So that if we were sitting here just with 200 events or so, or 230 events, that would make me, I think, a little bit more nervous than... than sort of an expected CRM bicarb difference because you have random, the fewer events you have, the more random variability plays into this. And so with us having 281 events as of today, I think that really gives us a chance to truly see the effect. I think we stopped right around the time of the CRL or the ADL, we stopped kind of having this very quantitative view of serum bicarb and outcomes. Got it.
spk06: And just so I better understand, when in the third quarter might you finally stop counting events? It seems like every update we get, the projected number of events goes a little bit higher. And so I want to make sure I'm thinking about that potentially happening one more time.
spk02: No, that won't happen because this is the last call before data.
spk08: Okay, thank you. Our final question comes from the line of Madhu Kumar with Goldman Sachs.
spk03: Hey, guys. This is Rob on for Madhu. Thanks for taking our question.
spk04: So I was just wondering what information will be disclosed in the VALOR CKD top line data
spk05: And then beyond the top line data, are there any other gating factors for an NDA submission?
spk02: Probably, as I said, we basically obviously are going to disclose the primary endpoint. And depending on how many we get to analyze, the secondary endpoints as well. And ultimately, I think the... The important piece here is also the primary endpoint and the individual components. You know, so, to me, everything else is, I think, is interesting, but not critical, right? And then, of course, safety. I mean, I think, you know, this is a multi-year study in a large group of patients, and so we'll have, obviously, safety data, and as you know, Ultimately, what this comes down to from an approval perspective is risk benefit. So I think at top line, our goal is to give a clear picture of safety and efficacy so that I think this will ultimately then inform the risk benefit that is underlying the approval decision. And as you know, we are very data-driven and we move very quickly, so we will basically include as much as we can at this time point of communicating top line data.
spk03: Thanks.
spk08: At this time, there are no questions.
spk07: I will hand the call back over to the presenters for any closing remarks.
spk01: Thank you all for joining us today. And as always, if you have additional questions, don't hesitate to email us at ir.tricito.com. Thank you and goodbye.
spk07: This concludes today's call. Thank you for joining. You may now disconnect your lines.
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