Trevi Therapeutics, Inc.

Good afternoon and welcome to the Trevi Therapeutics third quarter 2024 earnings conference call. At this time, all participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your phone. To withdraw your question, please press star then two. Please note this event is being recorded. Various remarks that management makes during this conference call about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the Risk Factors section of the company's most recent quarterly report on Form 10-Q, which the company filed with the SEC this afternoon. In addition, any forward-looking statements represent the company's views only as of today and should not be relied upon as representing the company's views as of any subsequent date. While the company may elect to update these forward-looking statements at some point in the future, The company specifically disclaims any obligation to do so, even if its views change. I would now like to turn the conference call over to Jennifer Good, Trevi's President and CEO. Please go ahead.

Good afternoon, and thank you for joining us for our third quarter 2024 earnings call and business update. Joining me today on this call are my colleagues Lisa Delfini, Trevi's Chief Financial Officer, and Dr. James Casella, Trevi's Chief Development Officer. I will give an update on our trials and upcoming data milestones, and Lisa will give a brief financial update. Then the three of us are happy to answer any questions. First, I would like to take a minute and introduce you to Jim Casella, who has recently joined our leadership team as our Chief Development Officer. As some of you may know, Jim has been on our Board of Directors for the past four years and has been a valuable advisor to me in that role. Jim has a deep background in neuroscience drug development, with over 35 years working specifically on CNS therapies. Prior to joining Trevi, Jim served as CDO for Concert Pharmaceuticals, which was acquired by Sun Pharma in 2023, where he led the development activities, resulting in the successful U.S. FDA approval of the autoimmune JAK inhibitor Lexalvi. Prior to joining Concert, Jim was EVP Research and Development and CSO at Alexa Pharmaceuticals, from 2004 to 2015, where he was responsible for the US and European approval of the CNS drug, Adesuv. Jim received a PhD in Physiological Psychology from Dartmouth College and completed a post-doctoral fellowship in the Department of Psychiatry at the Yale School of Medicine. Jim brings a wealth of development experience to Trevi, including phase three and recent regulatory approval experience, which will be invaluable as we advance into late stage development. He joins Trevi at an exciting time as we read out important studies over the upcoming months and prepare for phase three pivotal trials and NDA submission. So welcome, Jim. This has been a very productive quarter at Trevi as we continue to execute against our clinical development plans for both patients with chronic cough and idiopathic pulmonary fibrosis, or IPF, as well as patients with refractory chronic cough, or RCC. We have a number of upcoming data readouts, and we hope to build on the strong efficacy we saw in our Phase 2A trial in patients with IPF chronic cough. As we have advanced the clinical development in our two programs, there have been continued failures with competitors' products in both disease modification trials and IPF, as well as drugs being studied in RCC, reminding us of the continued need for new therapies for patients suffering from these serious conditions. I will run through an update on our upcoming clinical data readouts, which I believe are seminal in value creation for the company. I will discuss them in order of timing. First up, the human abuse potential, or HAP study. I have discussed this extensively with investors and analysts, so I'm sure you all feel you know more about HAP studies than you ever cared to. So let me summarize the key points on HAP as we prepare for data. As a reminder, injectable nalbufine, which is indicated for severe pain, has been around for decades and has remained unscheduled by the DEA. The DEA looks at scheduling of molecules regularly and schedules drugs based on the chemical entity, not the delivery mechanism. As recently as 2023, the date of their last review, the DEA has kept nalbufine unscheduled. Importantly, I wanted to summarize for you their reasonings and their recent opinion. First is nalbufine's unique mechanism of action. Nalbufine is a kappa agonist and mu antagonist, or CAMA, which is in the class of mixed agonist-antagonist drugs. All drugs that are either a kappa agonist or a mu antagonist are unscheduled, and these were designed to mitigate abuse potential. Second, nalbufine is less attractive to abusers due to its potent antagonistic effects at mu, which precipitate drug withdrawal. Third, even though nalbufine is currently available, the DEA cites that nalbufine is rarely encountered by law enforcement personnel or submitted to forensic labs for analysis. So there's a lot of history with nalbufine as a molecule, and it is not new to the DEA. So why are we doing the HAP study at all? There is FDA guidance from 2017 that requires HAP studies for all CNS active drugs. So we are bringing the package up to current day standards. Finally, this study will be reviewed by the Controlled Substance Staff, CSS, a group in FDA as part of the eight-factor plan. The eight-factor plan has several categories of which only one is the half. So we will wait to see the final data, but we believe there are a lot of reasons why nalbufine will remain unscheduled if approved in chronic cough. Okay, moving on to our clinical indications. Next up for data will be the sample size re-estimation in our IPF cough trial. First, I want to note that new treatment options for IPF patients have been scarce since the antifibrotics were approved 10 years ago, and neither of the two approved antifibrotics have shown significant reduction in chronic cost. Second, other than our Phase II data, there have not been any successful trials in IPF cost, despite being one of the primary complaints by these patients. And third, we believe cough may be a risk factor that plays a role in the progression of the underlying disease. The constant lung injury, micro tears, and potential inflammation caused by persistent coughing may lead to worse health outcomes for patients, such as increased respiratory hospitalizations, mortality, or need for transplant. So, we continue to believe our program is important to these patients, their loved ones, and doctors. Our IPF chronic cough trial, CORAL, is a Phase IIb parallel-arm dose-ranging study that will investigate three active doses of Heduvia and placebo. The study is a six-week trial in approximately 160 patients. The next milestone in CORAL is to conduct the sample size re-estimation, SSRE analysis, when 50% of the patients complete the study. This analysis will be done by an unblinded statistician external to the company who will rerun the power calculations using actual data. We will get very limited information back, but will be informed of one of the following three outcomes. One, continue on with the planned 160 patients, which will reconfirm the original powering assumptions. Two, the drug is working within the pre-specified promising zone, but will require an upsize in the number of patients to maintain the power. Or three, the drug is not working in the pre-specified range and the company should consider stopping or futility. We will announce the results of this analysis when we have the information, which we expect in December of this year. We continue to expect top line data for the full study in the first half of 2025, subject to the outcome of the SSRE. From my perspective, the SSRE is a key de-risking event for the ultimate success of this trial, if the answer back is anything but futility. The statistical range in this study, both the original N as well as the upper limit of the range, is aligned to a clinically meaningful placebo-adjusted change, so it is just a matter of figuring out the right sample size in this study population. Following the SSRE and IPF cough, we expect data in the first quarter of 2025 for our Phase IIa river trial in RCC. RCC is a debilitating disease that affects approximately two to three million U.S. adults and is defined as a persistent cough lasting greater than eight weeks, despite treatment for an underlying condition or where no underlying condition exists. With a lack of any approved therapies for RCC in the U.S. and several drug candidate failures, There continues to be a significant unmet need and an urgency from patients and providers for new mechanisms. Although there have been many failures in RCC drug development, we believe our unique central and peripheral mechanism could change that outcome. The many drugs that have failed have all been peripheral only agents. The types of cough we are studying are linked through hypersensitivity in the brain, and this is why we believe our mechanism may be important in this condition. Our RCC trial is a phase 2a crossover design that has been conducted in several cough trials across the industry and was designed to enroll approximately 60 patients. These patients were randomized to now bufini R or placebo with patients stratified by cough count. Those with 10 to 19 coughs per hour, moderate cough, and those with greater than or equal to 20 coughs per hour, high cough. The primary analysis will be conducted on the total population, but we will have the ability to understand if our drug shows a signal in these moderate coffers where other programs have been unsuccessful. This trial is now fully enrolled with the last patient out at the beginning of 2025. We are excited to complete this study and report the data for this significant chronic cost condition in Q1 of 2025. As you can see, we made a lot of progress over the last few months on completing enrollment and dosing, and are eager to see the data from each of these trials. To summarize, we expect half data in December of this year, followed by Coral Phase IIb SSRE by year end as well. Then looking into 2025, we expect River Phase IIa top line data in Q1 2025, then the top line data from the full Coral Phase IIb study in first half 2025. assuming no increase in the sample size. This is an exciting time at Trevi, with strong news flow in the upcoming months, all representing important value inflection points. I will now turn it over to Lisa to review our financial results.

Thank you, Jennifer, and good afternoon, everyone. The full financial results for the three months ended September 30, 2024, can be found in our press release issued ahead of this call and our 10-Q, which was filed with the SEC today after the market closed. For the third quarter of 2024, we reported a net loss of $13.2 million compared to a net loss of $7.7 million for the same quarter in 2023. R&D expenses were $11.2 million during the third quarter of 2024 compared to $6.3 million in the same quarter of 2023. The increase in R&D spend reflects the significant clinical development activity Jennifer just discussed, including continued enrollment in our CORAL trial in chronic cough and IPS, the final full quarter of enrollment in the RIVER trial in RCC, and the final full quarter of dosing in the HAP trial. G&A expenses were $2.9 million during the third quarter of 2024 compared to $2.7 million in the same period of 2023, primarily due to an increase in stock-based compensation expense and importantly demonstrating the control of overhead expenses, which we continue to be mindful of. As of September 30, 2024, our cash, cash equivalents, and marketable securities totaled $65.5 million compared to $83 million as of December 31, 2023. Our current expectation is that our cash burn for 2024, excluding proceeds from share issuances and interest and investment income, will be between $41 and $43 million, in line with our previous guidance. We now project cash runway into the second half of 2026, more than a year past all current projected data readouts. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A.

Thank you.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Due to the number of participants on the call, questions will be limited to one per caller and any relevant follow-up to your question. If you have other questions, you may get back into the queue. And at this time, we will pause momentarily to assemble our roster.

And the first question will be from Faisal Khurshid from Lirinc.

Please go ahead. Hey, everyone. Thank you for taking the question. I also just wanted to say welcome to Jim and congrats on the new hire. Thanks so much. Yeah. And since it's on the HAP, can you clarify, you know, like what is your expectation for butyrophenol drug liking and what's the evidence that supports that? And also, you know, totally hear your point that drug scheduling considers the entire eight-factor analysis. But what do you want to see from Nalbufine in the HAP to support an unscheduled designation as opposed to a potential Schedule IV?

Thank you, Faisal. I'm going to let Jim go ahead and take that.

Yeah. So, thank you. It's nice to meet you and pleasure to be here for sure. So, you know, these are complicated studies and they involve, you know, experts running these things with subjects who have experience with the drug. Butorphanol is a drug that is scheduled for and has been abused by subjects. So, We don't think we're – well, we have to have patients qualify or subjects qualify to get into the study with butorphanol in a qualification period. So we are setting limits on their entry into the study where they have to have a certain criteria reached in an absolute sense as well as having a differentiation from placebo. So we know we're going to have effects on butorphanol or from butorphanol, in the study, and that is the part of the protocol that has been approved by the FDA. So when we look at this study, and it's in the context of, you know, looking at scheduling in total at the end of the day, this study is really designed to look at a number of things. With the primary endpoint, which is the VAS drug liking scale, We're looking to determine study validity by showing that butorphanol does differentiate from placebo, and there's a fixed criteria of at least 15 points for that. We'll be looking at the relative abuse liability in terms of nalbufine versus butorphanol. And in that, we'll be able to see if there is a lower relative abuse potential for nalbufine by pre-specified statistical endpoints determined and approved by the review by the FDA. And importantly, we'll be looking at the absolute abuse potential for nalbufine in relationship to placebo. So in that case, we are able to determine within a equivalence margin that has been preset, and again, reviewed and approved by the FDA, of 11 points within the placebo arm, we'll be able to determine for each dose whether or not we are significantly within that 11-point range from placebo. And if we are, then we'll be able to make a statement that we do not produce an abuse-related signal compared to placebo. So those are the three outcomes using the primary efficacy endpoint of drug liking. And we'll be able to take it from there as we look at the further evidence from the other endpoints in this study and put that in relationship to the whole package that we'll need to put in front of the FDA. That includes other things like, you know, experience from our other clinical trials and the other things that Jennifer has referred to from the most recent DSS analysis of nalbufine.

Got it. That's helpful. Thank you.

And the next question will be from Leland Gerschel from Oppenheimer. Please go ahead.

Hey, thanks for the update, and my welcome to Jim as well. Thanks for taking the questions. Or I'll try to keep it to one, but maybe a multi-part. I just wanted to ask with respect to the SSRE, would there be a fixed increase in sample size that could be triggered if that's the outcome, or would it be variable depending on how much you may need to increase the number of patients given what's been seen? And have you shared what the fixed number would be if that's the case? Thank you.

Yeah. No, it's a good question, Leland. Thank you. So, basically, the range that we pre-specified for the SSRE is the original N of 160, and it can go up to a total N of 400. it is not a fixed increase. They're gonna take the actual numbers seen through 50%, repower the study, and give us an exact number. So it can be anywhere in that range between 160 and 400 that they would come back with.

And maybe just one other comment on that. So we will be looking at the conditional probability of our findings, and then we'll be able to power up based on that. And again, it will be a sliding scale depending on what the conditional probability is, that is determined by the SSRE.

Thank you. I'll jump back in the queue.

Okay. Thanks, Leland.

The next question comes from Deb Chatterjee from Jones Trading. Please go ahead.

Hi. Thanks for taking my question. I might have missed it, but could you please confirm that in the RCC trial, the two arms, like, you know, of different degree of coffers are now balanced?

Thanks, Deb and Jonna, for the question. So she's asking about if they're both balanced, the two arms in the RCC trial, since we finished enrollment.

Yeah, balanced in terms of the treatment assignment?

I think she's talking about the stratification, one to one.

Yeah, sure. So, you know, the intention was to open up the trial to patients that were stratified on a cough count of 10 to 19 or greater than 20. We did increase the enrollment period to try to get more subjects in the moderate arm. We decided that we were going to cut it off at a certain point in time and not wait for the complete balancing, the complete enrollment of that stratification factor. It doesn't really impact the overall analysis because the overall analysis is based on the number of people in the trial and not based on these subgroup analyses. So we're not concerned about that at all, and I think that it will be sufficient numbers in that group to allow us to look at future looking statistical analyses and planning for our greater, you know, the Phase IIb or Phase III program. But I think we'll have sufficient numbers in there, and that's why we decided to stop when we did.

Okay. Thanks for the color.

Sure.

Thanks, Deb and John, and we're looking forward to your call.

And our next question is from Mayank Memtani from B. Riley. Please go ahead.

Hi, yes, this is William Wood. Thank you for taking our questions, and congrats on the strong queue. So just to sort of continue on with the HAP trial, I'm just kind of curious what would happen after you received the results from the trial, maybe the next steps. Would you, essentially, would you go directly to the FDA with those results, or would this sort of be wrapped into a larger mid-year 2025 end of phase two meeting?

I'll start with that, William, and Jim's obviously just joining us, so he may bring some different views, but we'll obviously get the data. We'll end up submitting the CSR and the results around that. We'll for sure discuss it in our end of phase two meeting on the IPF trial and probably invite any comments back, but I would envision that we'll wrap that into our next FDA meeting, but we'll submit the results ahead of time. Absolutely.

I mean, it's a standard tech study for drugs like this, We'll submit the CSR and all the data to the FDA per usual timing. And, you know, this study doesn't really date us in terms of looking at future efficacy studies and our indications. So this will be a matter of more NDA than the process of actually conducting our clinical programs.

Okay, so it wouldn't affect any of the ongoing trials either, just to confirm?

No. No. No, and again, this is one of many pieces of information that is really weighed by the DEA in general, and I think we just want everyone to remember that nalbufine has been around for decades. It is unscheduled. It is the moiety, as Jennifer said, that is usually considered, that is considered in the terms of scheduling. So, this is a different formulation. We are catching up on bringing HAP data into the realm for nalbuthine. So, again, all these things are going to be taken into account as well as the experiences of our subjects in our clinical trial. So, you know, there's nothing here that is necessarily gating the and these will all be taken into account in the NDA process for approval.

Thank you very much. I appreciate your questions.

Thank you, William. The next question comes from Brandon Folks from Rodman and Renshaw. Please go ahead.

Hi. Thanks for taking my questions, and congratulations on the update. Maybe just one from me. Any updates on the timing of the title response? respiratory physiology study. You know, when can we hear more about that study? And, you know, maybe the second part of that with Jim coming in. Welcome, Jim. Great to have you on board. But, you know, do you still intend to run that study? Is this something that may be under review? Just any color on commitment and timing to that title study would be great. Thank you.

Yeah, I'll comment on the first two, and then I'll let Jim answer. I don't think he has any different thoughts. So, Brandon, as you know, we're running this study really just to be able to define our Phase III patient population and IPS specifically. There's a group of patients that have sleep disordered breathing that we've carved out in our prior two clinical studies because we wanted to answer some questions around that. So that study is enrolling. It's screening patients enrolling. Timing is we need that data by the time we go to our end of phase two meeting on IPF, which will be sometime on the current schedule, second half of next year. I think it's unblinded. I don't anticipate that we'll probably put out a lot of data until we get to the end and we actually can interpret all the results and sort of what it means for our inclusion and exclusion. Jim, I'll let you have any color. I don't think you have any different thoughts.

No, there's no different thoughts there at all. I think this is a good informative study for us that will just help us make some decisions in the future. Thanks, and that's great to hear.

Thank you for taking my question.

Yeah, thank you, Brandon.

Again, if you have a question, please press star then one. The next question is from Brian Deschner from Raymond James. Please go ahead.

Hi there. I'm curious as to the timeline for DEA to make a decision in sort of once you have the HAP results in hand, their decision or even feedback from them on the potential for scheduling. And also curious what dose level the comparator butorphanol is being dosed at. Thank you.

Yeah, no, I can answer both those. The DEA process, unfortunately, comes in the end if it comes at all. What happens is you submit your NDA. FDA will review all that with a consult with CSS. Sometimes it doesn't even get referred to DEA. They sort of consider everything, look at your data that you submitted, and it never even goes to DEA. If it does, it goes as part of the NDA process, and then they'll schedule it as part of your approval. So it'll come sort of right after that. As for the dose that we're using in butorphanol, it's a six milligram infusion over the course of an hour. And there was a whole study that was done to sort of mimic the inhaled version of butorphanol that's on the market. We couldn't use that because that actually had a taste to it. So it was very hard to blind it. And so we ended up basically mimicking the PK of that through the six milligram infusion.

But that was all signed off with the FDA as the right dose.

Got it. Thank you very much.

Yeah, you're welcome. Thank you.

And I'm not showing any further questions at this time. This concludes our question and answer session. I would like to turn the conference back over to Jennifer Good for closing remarks.

Thank you. We look forward to sharing the results of our various clinical trials with you in the near future. Thank you for joining today's call, and we are available after this call for any follow-up questions you may have.

The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.