Trevi Therapeutics, Inc. (NASDAQ:TRVI) Q1 2023 Earnings Call Transcript

Trevi Therapeutics, Inc. (NASDAQ:TRVI) Q1 2023 Earnings Call Transcript May 11, 2023

Trevi Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.06, expectations were $-0.07.

Operator: Good afternoon and welcome to the Trevi Therapeutics’ Q1 2023 Earnings Conference Call. [Operator Instructions] 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 annual report on Form 10-K which the company filed with the SEC this afternoon.

In addition, any forward-looking statement 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.

Jennifer Good: Good afternoon. And thank you for joining our first quarter earnings call and business update. Joining me today on this call is Lisa Delfini, Trevi’s Chief Financial Officer. Lisa and I have some prepared remarks, then we will open it up for questions. During the first quarter, we continued to advance our clinical development plans for Haduvio for difficult to treat patients with chronic cough in idiopathic pulmonary fibrosis or IPF, other chronic cough indications and prurigo nodularis. Let me provide an update on each of our programs. Beginning with our lead program in chronic cough and IPF. IPF is a serious, end-of-life disease and chronic cough is a major cause of morbidity that significantly impacts a patient’s quality of life.

There are no approved therapies for the treatment of chronic cough and IPF and the cough is often refractory to anti tested therapy. Patients with chronic cough and IPF can cough up to 1500 times per day leading to fatigue, air hunger and increased anxiety. The chronic cough in IPF is also hypothesized to potentially enhance activation of pro fibrotic mechanisms and disease worsening. We are planning to conduct two studies in parallel during this next phase of development in our IPF chronic cough program. The first is a Phase 2b dose-ranging trial that will study three active doses of Haduvio and placebo. The doses we are planning to study are 27, 54 and 108 milligrams BID. We are planning for a total N in the study of approximately 150 to 200 subjects and dosing for approximately six weeks.

We plan to conduct this study in multiple countries and sites to be able to complete enrollment in a timely manner. As you may be aware, there is a lot of development work going on with antifibrotics in IPF patients. So, we expect that enrollment will be competitive, and we are planning for that scenario. We have finalized the protocol for the dose-ranging study and are preparing for various international submissions to regulatory authorities. We have also engaged our CRO and are in the final stages of country and site selection. We are planning on initiating this study in the second half of this year. In parallel, we are planning for a Phase 1b respiratory physiology study. Opioids have a generic risk of causing respiratory depression. This is not something we have seen in our safety data across our various studies to date, and there is literature that suggests that mixed agonist antagonists have a ceiling effect on the impact on respiration.

However, given the respiration impairment of the IPF population, it is important that we characterize to what degree, if any, are drug causes respiratory depression in this patient population. Trevi is planning to conduct a Phase 1b inpatient study in IPF patients with cough that have varying levels of disease severity to determine if we see any clinically significant impacts on respiratory depression. This study will help define the patient population for our pivotal program and ultimately, the label. We have received FDA feedback on the planned Phase 1b study and are finalizing the protocol and preparing for the IND submission. We expect to initiate this study in the second half of this year as well. In addition to the preparations in IPF cough, we are also developing a protocol for a Phase 2 study in refractory chronic cough also known as RCC.

We believe that because Haduvio works both centrally in the brain and peripherally in the lungs, Haduvio has the potential to provide therapy across a range of chronic cough indication regardless of what the underlying disease is. We expect that this trial will look a lot like the CANAL trial, which was a dose escalating crossover design, and we expect to enroll approximately 60 subjects. There have been a lot of trials in RCC with only one mechanism, which has seen some success, the P2X3s, which mechanistically work peripherally in the lung. However, we believe there is still a significant opportunity for a mechanism that works both centrally and peripherally and has the potential to provide strong and consistent efficacy in the most difficult-to-treat cough patients.

We are leveraging the learnings from the prior development work in RCC by other companies as we design our own study. Our cough data to date continues to garner a lot of attention at upcoming medical conferences with oral presentations of the data accepted at both the American Thoracic Society meeting beginning at the end of next week, as well as the American Cough Conference being held in June. We have also finalized a manuscript on the CANAL trial results and have submitted it for publication. I think this speaks to the importance of the unmet medical need in these difficult-to-treat IPF patients and the medical community’s interest in our program across cough indications. The other indication where we have ongoing work is for the treatment of Prurigo Nodularis or PN, which is a serious and debilitating disease characterized by papules and nodules on the skin as well as severe itching.

In June of last year, we reported positive data in the Phase 2b/3 PRISM trial and PN. The trial achieved statistical significance on the primary and all key secondary endpoints. During the first quarter of 2023 we completed the one-year open-label extension study that was associated with PRISM. We are currently analyzing the data from that study and will then seek an end of Phase 2 meeting with the FDA, which we expect to have later this year. After this meeting we will determine next steps for the program. Finally, we are conducting a human abuse potential study which is required for an NDA filing. Note that the parenteral version of nalbuphine is currently unscheduled in the U.S. by the Drug Enforcement Agency or DEA. The objective of this study is to compare the likability or abuse potential of oral nalbuphine to an active comparator, which is butorphanol for this study.

Butorphanol is a Schedule IV drug. The study is being conducted in two parts with the objective for the first part to characterize the various butorphanol doses and choose a dose appropriate for comparison against oral nalbuphine in Part 2. We have completed Part 1 of the study and have selected the butorphanol dose for the second part of the study. The second portion of the study is a randomized, double-blind, active and placebo-controlled five-way crossover design to determine the abuse potential of three doses of oral nalbuphine relative to the selected dose of butorphanol as well as placebo. There are two gating items to moving into Part 2 of this study. The first is a nationwide shortage of butorphanol. We are working with our CRO partner to secure the doses we need to conduct the study.

And second, we intend to submit the results from Part 1 of the study to the FDA for any comments on dose selection of butorphanol before proceeding with Part 2 of the study. Assuming neither of these two items caused a significant delay, we expect top line results from the human abuse potential study by the end of this year. In closing, we are focused on execution to get these studies up and running. We will announce studies as they are initiated and provide more details on the study design, expected time lines and the all-important name of the trial. I will now turn it over to Lisa to review our financial results, then we will open it up for any questions that you may have.

Lisa Delfini: Thank you, Jennifer, and good afternoon, everyone. The full financial results for the three months ended March 31, 2023, 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 first quarter of 2023, we reported a net loss of $6.4 million compared to a net loss of $7.3 million for the same quarter in 2022. R&D expenses were $5 million during the first quarter of 2023 compared to $4.6 million in the same quarter in 2022. The increase was primarily due to increased consulting and professional fees related to start-up activities for the three planned chronic cough trials. This was offset by a decrease in clinical development expenses, reflecting the completion of both the blinded portion of the Phase 2b/3 PRISM trial and the Phase 2 CANAL trial in 2022.

G&A expenses were $2.6 million during the first quarter of 2023 compared to $2.4 million in the same period of 2022. The increase was primarily due to an increase in personnel-related expenses and higher tax professional fees. Other income net was $1.2 million for the first quarter of 2023 compared to other expense net of $0.3 million in the same period of 2022. The change was primarily due to an increase in interest income. As of March 31, 2023, our cash, cash equivalents and marketable securities totaled $111.3 million compared to $120.5 million as of December 31, 2022. Subsequent to the end of the first quarter, we elected to pay off our term loan early. The amount paid was $6.5 million and was previously classified as current on our balance sheet because the final payment was due in the first quarter of 2024 according to its terms.

The loan was with Silicon Valley Bank, now a division of First Citizens Bank, and it included restrictions related to keeping our corporate cash, cash equivalents and marketable securities either at or managed by SVB. Given the recent events at SVB, we wanted to free ourselves of these restrictions. Our cash runway guidance remains unchanged since it had previously incorporated the paydown of the note in accordance with its terms. Accordingly, our cash, cash equivalents and marketable securities will enable us to fund our expenses into 2026. In the first quarter, we burned approximately $9 million of cash. That included completing the clinical work on the PN open-label extension study and conducting Part 1 of the human abuse potential study.

Excluding the payoff of the term note, we expect cash burn to be between $10 million to $12 million per quarter for the rest of 2023 as we continue the human abuse potential study and initiate the IPF and RCC trials. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A.

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Q&A Session

Operator: [Operator Instructions] Our first question will come from Annabel Samimy with Stifel. You may now go ahead.

Operator: Our next question will come from Serge Belanger from Needham & Company. You may now go ahead.

Operator: Our next question will come from Tom Smith with SVB Securities. You may now go ahead.

Operator: Our next question will come from Mayank Mamtani with B. Riley Securities. You may now go ahead.

Operator: Our next question will come from Sean Kim with Jones Trading. You may now go ahead.

Operator: [Operator Instructions] Our next question will be a follow-up from Annabel Samimy with Stifel.

Operator: I’m showing no further questions. This concludes our question-and-answer session. I would like to turn the conference call back over to Jennifer Good for any closing remarks.

Jennifer Good: We would like to thank everybody for participating in today’s call. We have several upcoming conferences and medical meetings that we are participating in before summer gets fully underway. You can see them detailed in our earnings release issued today. I hope to see some of you at these meetings. Thank you.

Operator: The conference call has now concluded. Thank you attending today’s presentation, you may now disconnect.