Trevena, Inc. (TRVN) 2016-03-09 Earnings Call Transcript

Good day, ladies and gentlemen and welcome to the Trevena fourth quarter and full year 2014 earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to Mr. Jonathan Violin, Director of Investor Relations. Sir, you may begin.

Thank you and welcome everyone. Thanks for joining us on this morning's call. With me today are Max Gowen, our CEO; Roberto Cuca, our Chief Financial Officer; Mike Lark, our Chief Scientific Officer; and David Soergel, Trevena’s Chief Medical Officer. Before we begin, we wish to inform participants that we will make forward-looking statements on this call, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including risks detailed from time to time in the company’s periodic reports filed with the Securities and Exchange Commission and that we undertake no obligation to update these statements beyond today. During today’s call, Max will provide a brief overview of some 2014 and recent corporate highlights. David will then provide a detailed review of our clinical programs and Mike will review the most recent additions to our product pipeline. Roberto will review our financial results and Max will conclude with a review of important upcoming milestones. We’ll then open the call for questions. I’ll now turn the call over to Max.

Thanks, John and good morning everyone and thank you for joining us today. Since our IPO in January 2014, we have made tangible, meaningful progress across all areas of our business to support our pipeline of differentiated therapy, all of which are biased ligands and G protein coupled receptors. To begin with for us acute heart failure program. We are progressing well with our Phase 2b BLAST-AHF trial of TRV027. We recently completed a pre-specified interim analysis and as planned, we revised the trial protocol allowing us to wait future recruitment towards the most promising dose. We also expanded the size of the trial so that we could continue studying the remaining two doses and we were pleased to report that our collaborator, Actavis, will fully fund this trial expansion with $10 million payment which complements their initial $30 million investment in 2013. With the larger study size, we now expect to report topline data in the first half of 2016. We also progressed our lead pain program TRV130, through a successful Phase 2a/b study in moderate to severe acute postoperative pain generating data to suggest that it may offer a superior product profile versus morphine. The results reinforce our confidence in the program as we moved into a second Phase 2b study in soft tissue surgery and started planning for Phase 3 development. In 2014 we rapidly advanced our second opioid program oral TRV734 proof 2 Phase 1 study. Our goal with this program is to offer an improved therapeutic profile versus oxycodone for the treatment of acute and chronic pain. And our Phase 1 study has provided key insights on activity that we will use to inform Phase 2 development. In addition to reaching these clinical milestones, our research team had a very successful year. At the end of 2014 we expanded our pipeline by advancing TRV250, an oral delta receptor modulator into preclinical development as a potential therapy for treatment refractory migraine as well as other CNS disorders. With our biased ligand approach we believe TRV250 may avoid the problems that have prevented development of other delta receptor candidates. I am very pleased that our research team has delivered this fourth differentiated and promising biased ligand NCE in the seven years since we founded the company. And Mike and David will provide a detailed update on these programs momentarily. In parallel with our clinical development efforts, we have aligned our organization and business activity with our maturing pipeline. We significantly strengthened our balance sheet and increased our financial flexibility. Our January IPO which raised $67 million was followed by a $51 million follow on financing in December. As we transition from an early stage private company to a public company with programs approaching Phase 3, our board has also evolved. Most recently, we welcomed Anne Phillips, Senior Vice President of Clinical, Medical and Regulatory Affairs at Novo Nordisk to our board of directors. In addition, we expect to announce an appointment of an experienced executive to the role of chief commercial officer at Trevena in the coming weeks. And in recognition of his exceptional performance and leadership of the clinical team, David Soergel was recently promoted as the Chief Medical Officer of Trevena. And with that, I will turn the call over to David to provide a more detailed update on the status of our pipeline.

Thanks, Max and good morning everyone. I would like to begin with an update on our Phase 2b BLAST-AHF study for TRV027. We believe that unlike other therapies, TRV027 can directly target the pathophysiology of acute heart failure via the critical angiotensin II type 1 receptor and produce potentially beneficial effects on the vasculature, the kidneys and the heart. In the BLAST-AHF trial, TRV027 is being evaluated in patients with acute heart failure using an innovative composite endpoint. This approach allows us to test 027's effects on several clinically important outcome including mortality, worsening heart failure, hospital readmission rate, dysemia and hospital length of stay. The study design was recently published in the March edition of the Journal of the American College of Cardiology, heart failure, under the State of the Art heading. When we started the trial, three doses of TRV027, 1, 5 and 25 mg per hour were tested versus placebo, both in addition to standard heart failure therapy. We plan to evaluate the safety and efficacy data approximately half way through the trial. The aim of this interim analysis was to focus the remaining patients on the single most promising dose of TRV027 and placebo. Working the study DSMV, the steering committee and our collaborators at Actavis, we recently completed this analysis. Based on interim data from 254 patients, we will wait future enrollment towards the most promising TRV027 dose of 5 mg an hour and increase target enrollment in the study from 500 patients to 620 patients. This increase in sample size allows us to collect additional dose ranging data and be even better prepared for Phase 3 trials while maintaining study power. In addition, the DSMV and steering committee determined that patients with lower blood pressure could safely enroll in the study. These patients have few proven therapies. They were pleased to be able to evaluate TRV027 in this broader patient population. As Max noted, Actavis will fund the trial expansion which we believe reflects their continued enthusiasm for the program. Moving on to our CNS programs. Our lead program is TRV130, which is being developed for in-hospital treatment of moderate to severe acute pain. TRV130 is a small molecule biased ligand as the mu opioid receptor with a unique chemical structure. We believe that TRV130 may have a superior clinical profile versus morphine, which often fails to effectively manage pain and causes efficacy limiting adverse effects. According to market research and other studies, inadequate analgesic efficacy is clearly an unmet medical need. In a large market research study published in 2012 by Decision Resources, enhanced analgesic efficacy was the most commonly studied reason to prescribe a new post-operative analgesic. We believe that TRV130 may be able to meet this need and be a best in class analgesic, particularly for the most severe and difficult to treat types of pain in the hospital. In November, we announced positive data from our Phase 2b trial of 130 for the treatment of moderate to severe acute post-operative pain following bunionectomy surgery. As you may remember, this was a very successful clinical trial which showed that TRV130 is a remarkably effective analgesic with a very rapid onset of action. In this study, TRV130 at 2 and 3 mg showed statistically superior analgesic efficacy compared to morphine 4 mg when pain was most severe. In the trial, after the first dose of morphine, the average numeric pain scores were reduced from 7 out of 10, to 4-5 out of 10. So on average after morphine, patients were still experiencing moderate pain. In contrast, TRV130 at 3 mg reduced pain from a score of 7 to a score of 1. So in our study, patients suffering from severe pain experienced little or no pain after a single 3 mg dose of TRV130. We believe that this level of efficacy is unprecedented in well controlled clinical trials with any analgesic. In addition, the onset of meaningful efficacy for the two higher doses of TRV130 was less than five minutes, significantly faster than the greater than 20 minutes it took for morphine to work. Importantly, this profound level of efficacy was achieved safely. Transient oxygen desaturation, a measure of opioid induced respiratory depression, favored TRV130 over morphine. Over the 48 hour study period, the tolerability profile of the highly effective TRV130 doses was similar to that of the less effective dose of morphine. Our data therefore suggests that TRV130 could have a wider therapeutic index compared to morphine. Which means that we could show either improved efficacy with similar safety and tolerability as a conventional opioid on one end of the spectrum or similar efficacy with improved safety and tolerability on the other end. In the bunionectomy study, improved efficacy was a clear differentiator and suggested that TRV130 may be able to control pain better than current opioids like morphine. And pain control is after all the goal of giving a strong analgesic. For a broad acute pain label, the FDA's recent guidance indicates that well-controlled pivotal trial in both a heart tissue surgery like bunionectomy and a soft-tissue surgery need to be performed. In January, we initiated a Phase 2b soft-tissue surgery trial in patients who have undergone abdominoplasty surgery as a potential prelude to a similar study in Phase 3. In this trial we are evaluating the administration of TRV130, placebo or morphine in a patient controlled analgesia or PCA device, a common way to deliver opioids in the hospital. This device allows the patient to self-administer study medication to achieve the desired amount of pain relief and trade that off with negative side effects they experience. PCA also reduces the peaks and troughs of pain relief since patients can control when the next dose of pain medication is given. Approximately 200 patients will be assigned randomly to a post-operative regimen of TRV130, placebo or morphine in 2:1:2 ratio respectively, for 24 hours after surgery beginning when post-operative pain becomes at least moderate in intensity. We remain on track to report top line data from the study in mid 2015. The study is progressing in parallel with our ongoing preparations for Phase 3 clinical trials of TRV130. In summary, we have learned crucial information about TRV130. We know the effective dose range, we know how well 130 works compared to a standard opioid, we know how quickly it works and we know how long the effect lasts. These are the pieces needed to design and execute a successful Phase 3 program which we expect to begin in the first quarter of 2016. Now to review TRV734, our second CNS candidate. TRV734 is an oral follow on to TRV130. TRV734 shares 130's novel mode of action and is intended to bring the potential benefits of 130 to the oral treatment of acute and chronic, moderate to severe pain. Opioid related adverse events seen in post-operative pain patients are also problematic for oral opioids. The most troublesome of which is constipation, which unlike many side effects becomes more prominent as therapy continues. Our preclinical studies suggest that ligand bias may reduce constipation. Both TRV734 and TRV130 had less of an impact on GI motility than morphine and oxycodone while producing equivalent analgesia. In our first clinical study, we found that TRV734 was indeed orally bioavailable and produced notable effects on pupil constriction at doses of 80 mg or higher. We also found that even without formulation work, TRV734 had a duration of activity that was consistent with four to six times a day dosing, which is a norm for opioids for acute pain. We initiated a multiple ascending dose study last August. This study included oxycodone as a benchmark to give us some practical experience with oxycodone before including it in Phase 2 study. We reported the results from this trial last month. At doses between 80 and 175 mg, TRV734 performed similarly to 10 mg of oxycodone in the core pain test while showing promising trends in safety and tolerability including in the Bowel Function Index, a validated measure of opioid induced constipation. Given the small number of volunteers in the trial and the short duration of dosing, we did not expect to find any differences between 734 and oxycodone. So these favorable trends were encouraging and were consistent with our preclinical data. As with 130, we believe there is value in a novel analgesic that either has superior efficacy to oxycodone with similar safety and tolerability or has similar efficacy with improved safety and tolerability. The next step for TRV734 is to formulate the drug appropriately to support development. Both Phase 1 trials have tested in neat powder in a capsule. We believe that there are many formulation options that may further enhance the performance of TRV734 as it moves into Phase 2 trials. We are testing some of these formulations in a Phase 1 PK study which we expect to readout this year. I will now pass the call to Mike Lark, our CSO, to introduce the newest entrants into our biased ligand portfolio, TRV250.

Thanks, David. As Max mentioned, at the end of 2014 we advanced a new internally discovered product candidate, TRV250 into preclinical development. 250 is an oral, small molecule, G protein biased ligand targeting the delta opioid receptor. This receptor which is distinct from the mu and kappa opioid receptors, has long been of interest for drug discovery. Hundreds of published preclinical experiments suggest benefits of activating the delta receptor in a variety of CNS indications without the addiction liability associated with mu opioid receptor activation. However, seizure liability has hindered drug development targeting the delta receptor but research from our labs suggests that a biased ligand like TRV250 could minimize that risk. We have profiled TRV250 in a range of preclinical models including testing for seizure liability and believe that 250 may safely harness the benefits of delta receptor modulation. We plan to initially focus development efforts in treatment refractory migraine headaches and have initiated IND-enabling studies with an anticipated IND filing in 2016. More broadly, looking across our portfolio, we strengthened our IP state in 2014. We received a U.S. Methods of Use patent for TRV027 including methods for treating acute heart failure as well as other cardiovascular indications providing coverage until at least 2029. This complements our previously granted composition of matter patent for TRV027 which provides protection until at least 2031. We also obtained patent coverage for the TRV027 composition of matter in Japan, China and New Zealand with claims pending in other regions including the European Union. In addition, we received a composition of matter and methods of use patent for TRV130 in the U.S. which is expected to provide coverage until 2032. Together with granted and pending patent applications worldwide, we are building a comprehensive and enforceable patent portfolio to protect the commercial potential of our key aspects. These achievements reflect the strength of our research organization. I am extremely proud of our productivity. Four differentiated NCEs discovered in seven years supported by a broad and growing patent state. I look forward to providing additional updates as our programs advance. Now I will pass the call to Roberto to review our financials.

Thanks, Mike. We disclosed key financial measures earlier today in our press release and expect to file full financial statements later today in our Form 10-K. For now I will summarize the headline numbers. For the fourth quarter, we reported a net loss attributable to common stockholders of $13.3 million or $0.45 per share compared to $7 million or $7.48 per share for the fourth quarter of 2013. For the year ended December 31, 2014, we incurred a net loss attributable to common stockholders of $49.7 million or $2.02 per share compared to $23.6 million or $29.71 per share for full year 2013. The increase in net loss from 2013 to 2014 was primarily due to development expenses associated with our advancement into a Phase 2b clinical trial of TRV027 and the initiation of a Phase 2a/b clinical trial of TRV130, as well as increased headcount to support drug development and increased operating costs resulting from our becoming a public company. We ended 2014 in a strong financial position with cash, cash equivalents and investments on the balance sheet of $106.9 million. I will now return the call to Max for closing remarks.

Thanks, Roberto and thanks also to David and Mike. As you have heard, it's been a highly productive year for us and we look forward to building on this momentum in 2015. I would like to close our call with a summary of our key objectives and expected milestones for the next several quarters. First, we look forward to publishing the full data from our Phase 2a/b trial for 130 in bunionectomy patients in the coming months in a peer reviewed journal. Towards the middle of this year, we expect to report top line Phase 2b data for TRV130 in patients following abdominoplasty surgery. Planning for our Phase 3 program is progressing in parallel with the Phase 2b trial and we expect to talk more about our plans there in the second half of this year and launch the first Phase 3 study in the fourth quarter of 2016. We also expect Phase 2b data for TRV027 in acute heart failure in the first half of 2016 and expect to refine guidance on that timing as we get the study recruitment back up to steady state over the coming months. We look forward to continued progress and to updating you on our programs over the course of the year. Thanks to all of you for your interest and for your time today. And now we can open the call for questions.

At this point we are not actively exploring that. I think that we will really need to see the benefit, the activity of the drug before we will move into that.

Thank you. And I am showing no further questions from the phone lines at this time. I would like to turn the conference back over to Mr. Jonathan Violin for any further remarks.

Thank you. I would like to remind listeners that a replay of this call will be available from the company's Web site at www.trevenainc.com. On behalf of the management team at Trevena, I would like to thank everyone for joining us today. I will be available to receive any further enquires following the conclusion of this call. With that operator, please conclude the call.

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day everyone.

[Operator Instructions] And our first question comes from the line of Jason Butler of JMP Securities. Your line is now open.

Just wanted to follow up on TRV130. Could you talk about what was the kinds of Phase 3 preparation work you are conducting now and what were the rate limiting steps to initiation of the Phase 3 trial are other than the bunionectomy study. Are you planning on having an end of Phase 2 meeting with FDA for example?

Hi, Jason. Well, we are doing a lot of work right now actually designing the Phase 3 program. As I mentioned, we are also in the process of, the final stagers actually, of recruiting a Chief Commercial Officer. And we think that that person is going to be very valuable in helping guide our planning for Phase 3. We will wait until we fully fill out the profile of the drug with the Phase 2 study that’s ongoing. And obviously doing quite a bit of work in terms of CMC, manufacturing drug product for the study. And we are in the process of putting together the dossier for the end of Phase 2, as far as we can do that at this point. We will be expecting obviously to have an end of Phase 2 meeting and we are targeting that for the end of this year. And I will just ask David if he has anything to add to that?

No, I think that covers most of it, Jason. You know we do have some Phase 1 work ongoing with TRV130 that will be part of the end of Phase 2 meeting at the end of the year. So those in combination with data from the two Phase 2 trials are going to make up a very nice dossier for the end of Phase 2 meeting.

Great. That’s helpful. And then just a quick question on expenses. Can you give us any color on how we should think about operating expenses in 2015 relative to 2014 or cash burn?

So we don’t provide specific guidance on OpEx, either R&D or SG&A. What we said is that with cash on hand as of the end of this year plus the second tranche of the debt facility that we are now entitled to draw on that should suffice the end of 2016. What I will say though is that we are continuing to do Phase 2 study work in 2015. We are preparing for initiating Phase 3 work in 2016 and so there could be some natural growth of expenses over the periods.

Thank you. And our next question comes from the line of Alan Carr of Needham. Your line is now open.

I was wondering if you can comment on a couple of things. One of them with 027, if you could comment on the selection of 5 mg as opposed to the highest or the lowest dose for emphasis in the next part of the trial and the relative contribution of safety or efficacy in deciding on that dose. And then also, maybe you could talk a bit about 250 and why migraine. Thanks.

Good morning, Alan. I will let David take the question on 027.

Sure, yes. Hi, Alan. So as I said during the call, we looked at data, both safety and efficacy data from 254 patients. Placebo 1 mg, 5 mg and 25 mg an hour. The steering committee and the DSMV after reviewing those data determined that the 5 mg an hour dose was the most promising of the three and therefore patients could be over weighted to that arm as we progress in the study. What we have done, what we have been very careful to do is to maintain the study power, as I said, during the trial. So at the end of the trial, we will still have adequate power to detect the effect that we were expecting at the beginning of the trial. So the relative contribution in safety -- I mean as you know in acute heart failure, safety and efficacy are kind of two sides of the same coin. If you produce too much pharmacology in patients, you can see effects on safety and actually that can also come out in some of the efficacy endpoints. So it's a little difficult to dissect those two.

And with respect to 250 and inflection with migraine. Why that one might be best and why that’s the best indication ?

Mike, you want to take that?

So, Alan, this is Mike. Migraine remains a significant unmet need. There is 12 million patients treated annually for acute episodic migraine and triptans work well in these patients but 20% to 30% of that population either can't take them or don’t benefit from them. So there is a significant opportunity there. We have very strong data preclinicaly that TRV250 will work there. Thinking about aggressive development, we think we can get an early clinical read as well in migraine and understand both the efficacy as well as the seizure risk for the compound. So a lot of reasons to consider that as our lead indication. We also think, as I mentioned, and I think Max mentioned in her piece as well, that the compound has the potential for treating other CNS indications, so we will be considering those options as we advance the compounds and develop this model.

Thank you. [Operator Instructions] And our next question comes from the line of Hugo Ong of Jefferies. Your line is now open.

This is Hugo speaking in for Biren Amin. Just on 130, on then ongoing Phase 2 abdominoplasty surgery trial. How would you expect dosing to potentially impact the efficacy given that it's a patient controlled analgesic trial versus say the bunionectomy trial.

Hi, Hugo. I will let David take that.

Thanks for your question Hugo. So as you recall, the bunionectomy trial was fifth dosing, so whether or not patients needed a dose of medication, they received it every three or four hours over the 48 hour period. That’s obviously a fairly contrived way of administering pain medication to patients. Typically, clinically patients ask for pain medication when they need it. PCA administration is the most refined way of patients asking for pain medication. In other words, they push a button and the receive the drug when they need it. So it's a directly clinically relevant administration paradigm that I think resonates very very strongly with practitioners. So these type of data I think will be very instrumental in showing practitioners how TRV130 could add to the therapeutic armamentarium.

Great. And what are the assumptions on the trial?

Which assumptions, of what?

Just like your statistical assumptions.

Okay. It's a Phase 2 trial as you know. So if you remember from the bunionectomy study, we had group sizes of about 30 patients and we are able to statistically separate from placebo with those group sizes. So in the abdominoplasty study with a lot of caveats because the administration program is very different. We have a little bit over twice as many patients exposed to each of the active treatment regimens. So 80 per active group planned versus 40 on placebo. So we would expect that that would be able to provide separation.

Got it. Okay. And just last question on TRV734. You guys talked about like exploring new formulations, does that include like an obese resistant formulation?