Trevena, Inc. (NASDAQ:TRVN) Q3 2023 Earnings Call Transcript

Trevena, Inc. (NASDAQ:TRVN) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Greetings and welcome to Trevena, Inc. Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Barry Shin, Chief Financial Officer. Thank you, Mr. Shin. You may begin.

Barry Shin: Good morning and welcome, everyone. With me today are Carrie Bourdow, our President and CEO; Patty Drake, our Chief Commercial Officer; and Demitrack, our Chief Medical Officer. We’re also joined by Dr. Daniel Clauw, a key opinion leader and paid scientific consultant with Trevena, who provides his views on our recent TRV045 proof-of-concept data. Dr. Clauw is a rheumatologist, a leading expert of CNS mechanisms in pain, and professor of anesthesiology, medicine, and psychiatry at the University of Michigan. We’ll also be making forward-looking statements under federal securities law. These statements are subject to risks and uncertainties related to our business, including those covered in our filings with the SEC.

We undertake no obligation to update these statements beyond today. As a reminder, OLINVYK was approved by the FDA in August 2020 and contains oliceridine, an opioid which is a schedule two controlled substance with a high potential for abuse similar to other opioids. It’s indicated in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. As with all opioids, serious life-threatening or fatal respiratory depression may occur in patients treated with OLINVYK, as indicated in the box warning. The important safety information, including the box warning and full prescribing information, are all available on OLINVYK.com. I’ll now turn the call over to Carrie for an overview of our third quarter and recent business accomplishments.

Carrie?

Carrie Bourdow: Thank you, Barry. Good morning, everyone, and thank you for joining. We’re pleased to report a quarter of significant milestones achieved. Let’s start with TRV045, our novel S1P receptor modulator that we’re studying for potential use in chronic pain and epilepsy two large market opportunities. During the quarter, we released very promising top-line results from two Phase 1 proof-of-concept studies where we demonstrated a statistically significant dose dependent effect in a validated model of neuropathic pain and statistically significant EEG changes and evidence of early reduction in cortical excitability in the TMS study, a biomarker for epilepsy. Both studies highlighted TRV045’s unique mechanism of action and CNS target engagement.

In addition, last month, we also announced favorable top-line safety and tolerability data from these studies. We believe the data generated to-date supports the therapeutic potential of TRV045 as a non-opioid with a novel mechanism of action, expected once daily dosing, and a favorable safety tolerability profile. Mark will provide more details from the studies during his comments. We’re also pleased to be joined today by Dr. Daniel Clauw, who will provide his thoughts on TRV045 and its potential fit in the therapeutic landscape. In addition, as we previously mentioned, the NIH continues to study TRV045 for seizure prevention and we’re expecting data from their non-clinical study by the year end. We’re actively planning next steps to advance TRV045 in patients on our own or with a strategic partner for the potential treatment of neuropathic pain, epilepsy, and other CNS disorders.

Turning to OLINVYK, we announced the completion of the initial analysis of respiratory data from the 200 patient VOLITION study that was generated at Cleveland Clinic and Wake Forest Baptist Health. The results were presented at the recent American Society of Anesthesiologists meeting last month. OLINVYK was featured in three abstracts at the meeting, including a podium presentation. Our U.S. OLINVYK commercial business remains challenging. We’re efficiently deploying resources and pursuing our contracting strategy, and we’ll continue to assess performance and the best path forward for OLINVYK. Lastly, related to OLINVYK, during the quarter, we received $15 million as a result of the first commercial sale of OLINVYK, Nhwa our licensee in China, in connection with the R-Bridge Financing agreement.

Let me now turn the call over to Mark to provide more details on TRV045. Mark?

Mark Demitrack: Thank you, Carrie. Today I’d like to spend time providing an update on TRV045, which continues its exciting progress in clinical development. I’m also pleased to be joined by Dr. Daniel Clauw of the University of Michigan Medical Center, a renowned expert on chronic pain, who will provide his own perspective on our recent accomplishments with 045. I’d like to begin by reiterating some of the key features that sets TRV045 apart within the class of medications that target the S1P receptor. First, TRV045 is potent and selective in its action at the Type 1 S1P receptor, the subtype that is highly expressed on key T-cells of interest in the brain, namely astrocytes and microglia. Second, data from our non-clinical studies, we believe, shows that TRV045’s action on these cells modulates their inflammatory signals in the brain with a net action to potentially reduce inflammation.

We believe this property of 045’s effect is particularly relevant to central pain signaling, to the control of seizures, and may play a role in how seizures develop in the first place, a process known as epileptogenesis. Finally, in our clinical studies, TRV045 has shown no evidence of lymphopenia, a known on-target effect of existing S1P modulating drugs, and has shown a favorable safety and tolerability profile with respect to cardiac and pulmonary function and an ophthalmologic examination. Taken together, we believe these features position 045 as a compound especially well-suited to explore its potential use in the treatment of chronic neuropathic [Technical Difficulty] action on the brain and to assess pharmacodynamic outcomes relevant to our interest in chronic neuropathic pain and epilepsy.

As I mentioned previously, we’ve been pleased with the outcome of these studies. Among the most important findings from that work in our pain cart target engagement study, we showed that 045 had a statistically significant dose-dependent action to reduce the mechanical allodynia evoked by topical application of the neurotoxic irritant, capsaicin. These data are important since this validated model provides strong support for the potential efficacy of 045 in the treatment of chronic neuropathic pain in patients. In a new analysis, we compared the results of our work with similar published data from the same testing laboratory using standardized effect size estimates, a valid statistical method used to compare results across studies. By this measure, our data shows a statistically large effect size.

The effect size for 045 is also comparable in magnitude to outcomes seen in published data with known analgesics, including pregabalin, and with Vertex’s investigational compound VX150, a sodium channel blocking drug. There are limitations of this method of using standardized effect sizes to compare data as there are with all comparisons across studies, given that these different treatments were studied in different experiments. These comparisons should be confirmed through head-to-head clinical studies in the future. In the second study, we examined EEG and EMG measures in association with TMS, a non-invasive method to electrically stimulate the brain. The most interesting finding in this study was that 045 modulated the resting state EEG with a statistically significant increase in the power spectral analysis among the mid to higher frequency EEG bands, alpha, beta, and gamma, which are thought to be correlated with arousal, alertness, and higher order cognitive processes like learning and memory.

At the same time, we saw no increase in slow wave activity in the delta or theta bands, changes which are seen with some anti-epileptic drugs and are thought to be associated with their cognitive and sedating adverse effects. The safety and tolerability data from these two studies is consistent with the safety and tolerability data seen in our prior first-in-human work. In particular, there were no serious adverse events. Most events were mild and transient and were not related to study drug administration. Physical exams before and after drug exposure showed no clinically significant findings, including on ophthalmologic exam. There were also no drug-related changes on total circulating lymphocyte levels, vital signs, or interval measures on ECGs. In short, we are very pleased with the outcome of our proof-of -concept study program.

We also expect a readout shortly from the NIH’s Epilepsy Therapy Screening Program on our seizure prevention model, which will provide additional insight into 045’s potential to exert a disease-modifying effect in epilepsy, and we believe could make TRV045 unique among anti-epileptic drugs. We’re now continuing development of 045 with ongoing work to develop an optimized formulation that will improve bioavailability parameters observed in Phase I and provide a potential commercial-ready formulation that could be used in Phase II studies. In addition, our non-clinical toxicology program is progressing well with ongoing reproductive toxicology and sub-chronic toxicology studies, which will allow us to study an extended treatment duration in Phase II, critical to defining the value proposition.

We expect all of this work to be completed in the second-half of 2024. I’d now like to introduce Dr. Daniel Clauw. Dr. Clauw is an internationally recognized expert in the clinical pathophysiology of chronic pain. Dr. Clauw has published 450 peer-reviewed articles in his area of expertise. He’s received over $100 million in federal funding through his career and currently serves as Co-PI of four NIH center grants and two R01s studying various aspects of chronic pain. Dr. Clauw will offer his perspectives on the TRV045 data and its potential implications for future development. Dan?

Daniel Clauw: Thanks, Mark, and thanks for inviting me to join this call and have an opportunity to comment on TRV045. Let me start by providing some context for why a novel treatment for chronic pain is needed. The current landscape of drug treatment options for chronic pain is that we have marginally effective drugs that have lots of side effects. In the FDA registration trials for these drugs, they only had modest effects, offering clinically meaningful improvement in a small portion of those who take the drugs. Even fewer patients continue to use drugs long-term, because of all the side effects, especially issues with cognition and sedating side effects. It’s clear that more treatment options are needed, especially non-opioid options that have normal mechanisms and offer potential improvements in any of these areas.

With that in mind, I find that the data Mark described with TRV045 to be very intriguing. I will start with some of the comments on the pain cart results, which included 25 individuals. What I find really notable is that 045 had a large statistically significant effect on the mechanical allodynia endpoint. This and other favorable quantitative sensory testing profiles makes me think that this is a true clinical signal. The particular outcome seen in this study, namely a reduction in mechanical allodynia, is also an accepted marker of the central action of the drug. Its effects demonstrate what I believe to be strong evidence that 045 is exerting an effect on central pain processing with a favorable safety and tolerability profile. These data also support the notion that the drug is working in part by dampening central hyper-excitability of cortical and sub-cortical regions in the brain involved in pain signaling.

This is important since we know that the development of central hyperexcitability of these brain regions is one of the main ways in which chronic pain develops in the first place and why it persists over time. While we have much more to talk about the specific mechanisms of 045, I suspect that these effects are somehow being driven by modifying the balance in the brain between glutamatergic-associated neuronal excitation and GABA-mediated inhibition of brain function. All central nervous system chronic pain states in some manner involve dysregulation in these central neurochemical events, as do seizure disorders, which is why I feel you’re seeing parallel signals in these two different types of disorders. Let me turn to the EEG and EMG data seen in the second proof-of-concept study that’s been discussed.

These data provide further evidence that 045 is potentially modifying the excitability of the brain itself. These changes fit nicely with the analgesic effects observed in the first study and reinforce the idea, in my opinion, that 045’s principal actions are to reduce central hyper-excitability. It’s important that TRV045’s actions in both the pain cart study and the EEG study are occurring in what appears to be a favorable safety and tolerability profile, including, again, with respect to cognition and sedating side effects. I previously noted that 045 had a large effect size on the pain cart findings, but I want to emphasize that even if TRV045 only has a small or moderate effect size on pain in clinical trials. If it continues to demonstrate this favorable safety profile, it would still have the potential to be an important addition to the current options.

And it’s especially appealing that 045 is not an opioid, which have limited utility and significant toxicity when used in chronic pain. While the company is currently pursuing the development of 045 for chronic pain in epilepsy, I’d like to make a few comments to broaden an understanding of the opportunity that this compound could offer. As I mentioned, my opinion on these data is working to reduce central neuro hyperexcitability, which we know plays a significant role in chronic pain caused by the nervous system now referred to as nociplastic pain. Nociplastic pain is certainly present in chronic neuropathic pain, but it’s also an important underlying pathophysiologic mechanism across a range of other pain conditions, including seemingly disparate conditions like osteoarthritis, chronic low back pain, and rheumatoid arthritis, for example.

This is also the primary pain mechanism in conditions such as fibromyalgia. In addition to nociplastic pain being a primary mechanism in these common pain conditions. There are also significant orphan disease opportunities since this type of pain plays a major role in conditions such as sickle cell disease and hypermobility syndrome such as Ehlers-Danlos syndrome. In short, given this early phase of development, this compound looks as promising as any centrally acting analgesic that I’ve seen. I believe the parallel evidence of potential benefit in both pain and epilepsy models indicate that the drug is somehow modulating central hyper-excitability of the brain, which supports its therapeutic potential. Again, this is accompanied by what initially looked like a favorable safety and tolerability profile.

I also believe there’s potential broader applicability for a compound with these attributes for a wide range of central nervous system disorders characterized by central hyperexcitability. I look forward to the next chapter in this story. And with that I will turn the call back to Mark.

Mark Demitrack: Thank you, Dan. We certainly appreciate your insight and perspective on the data. I’ll now turn the call over to Barry to review our third quarter financials. Barry?

Barry Shin: Thanks, Mark. In the third quarter, our net loss was $7.9 million, or $0.57 cents per share, compared to $15.3 million, or $2.24 per share for the same period last year. This reduced net loss was largely due to cost savings we implemented in 2022. We finished the quarter with $35 million in cash and marketable securities, which we believe will fund our operations into the third quarter of 2024. We continue to investigate partnering and other opportunities for OLINVYK, TRV045, and our other pipeline candidates, which would provide additional resources and build shareholder value. We’ll now open the call for questions, after which, Carrie will provide some closing remarks. Operator?

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Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] The first question comes from the line of Jason Butler with JMP Securities. Please go ahead.

Jason Butler: Hi, great. Thanks for taking the questions and appreciate all of the detailed comments this morning. Just in terms of TRV045, can you speak to your current views on partnership prioritization? Are you looking for something that’s regional or indication specific or just what would you view as an optimal outcome, if you chose to partner the asset? And then on the formulation work, can you just give us a little bit more detail on what the bioavailability you’ve seen so far is? And is bioavailability the only thing that you’re optimizing for? Are there other parts of the PK profile you’re looking to optimize? And then just lastly there, how should we think about penetration into the brain versus plasma bioavailability? Thanks.

Carrie Bourdow: Great. Thanks, Jason. I appreciate the question. So I’ll start with the partnership question, then I’ll turn it over to Mark to talk about the formulation and the bioavailability and the brain penetration. So we’re flexible as it relates to partners and partnerships. And we have partners that are potentially interested in both epilepsy and pain. So we’re looking for the best way to advance TRV045 in patients. Mark, do you want to talk a little bit more about formulation? And I can circle back, yes.

Mark Demitrack: Sure. Jason, thank you for the question. And I’ll try and remember all of the points that you raised.

Carrie Bourdow: [Multiple Speakers] formulation. And I’ll try to improve it.

Mark Demitrack: Yes. So, as you know, in early Phase I work, we use a very basic formulation, which had been API in capsules. So we’re proceeding with based on that data we proceed then with an optimized formulation to bring forward into further development and for commercial use. The bioavailability, the main topic that we want to address in an improved formulation is we have a moderate food effect with dosing. We’d obviously like to change that and allow administration with or without a meal. So that’s an important observation from our early Phase 1 work. The other thing that we’d like to do is increase the headroom, so to speak, in terms of the plasma exposure. We’re well within our targeted efficacy range. We’d like a little more ability to maneuver in terms of plasma exposures.

That gives us a better opportunity as we proceed into Phase 2 to do full dose ranging work that we’d like to do. The other question you asked was regarding to CNS penetration. In our animal studies, we see good penetration of the compound into the brain. And we’ve seen that in multiple studies to the tune of about a four to five-fold ratio of brain to plasma concentration. So the central penetration of the compound is clear from that work. And that’s why we think the pharmacodynamic data that we see in the proof-of-concept studies is consistent with that. It reflects brain presence and engagement of the compound with relevant targets in the CNS. I think that covers the topics that you raised.

Jason Butler: Yes, that’s really helpful. Thanks for taking the questions.

Mark Demitrack: Sure.

Operator: Thank you. Next question comes from the line of Douglas Tsao with H.C. Wainwright. Please go ahead.

Douglas Tsao: Hi, good morning. Thanks for taking the questions. Just maybe it’s a starting point for Dr. Clauw. I’m just curious within the sort of potential indications or application of TRV045, I’m just curious which ones would you prioritize or think see as the most compelling in the near-term for the drug? And would you like to see first sort of begin clinical data or work with patients? Thank you.

Carrie Bourdow: Thanks, Doug. So let me just start and then I’ll turn it over to Dr. Clauw, only in that I think what’s helpful is that we have an opportunity in both neuropathic pain, and Dr. Clauw mentioned some of the broader applicability within the non-opioid space, and then also epilepsy. But Dr. Clauw, I know you’re more focused, of course, on pain, so please.

Daniel Clauw: Yes, I mean, I think the company will have a lot of options. I think that this may be effective in a large subset of people with really common chronic pain conditions such as osteoarthritis or chronic low back pain, because we know that at least 30% or 40% of people with either of those conditions has prominent nociplastic pain or CNS-driven pain and that’s why duloxetine for example worked in those conditions before it ended up patent expired. So we know that there’s strong CNS components even in conditions like low back pain and osteoarthritis that often start out as being more nociceptive pain. And then you have all these other conditions like fibromyalgia that are now actually being called primary pain conditions because that, the pain is the primary problem.

It’s not secondary to something else. So the new ICD10 classifications for primary pain would include things like fibromyalgia, irritable bowel tension, headache, again, really common chronic pain conditions, all of which have a big unmet need. So I think it’s really more of a corporate decision. I think there’s any number of sort of CNS-driven pain conditions that this may very well work in and as the drug gets further on in development, that’s just a decision the company will have to make.

Douglas Tsao: Okay, great. That’s helpful. And, Carrie, I know you mentioned epilepsy and obviously you still are sort of waiting some of the data from the NIH work. I’m just curious, you know, is that a gating item in terms of potentially seeking partners and figuring out what direction you want to go from a corporate development standpoint? Thank you.