Atea Pharmaceuticals Inc (AVIR) 2022 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Atea Pharmaceuticals Fourth Quarter and Full Year 2022 Financial Results and Business Update Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

I would now like to turn the call over to Jonae Barnes, Senior Vice President of Investor Relations and Corporate Communications at Atea Pharmaceuticals. Ms. Barnes, please proceed.

Thank you, operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals Fourth Quarter and Full Year 2022 Financial Results and Business Update Conference Call. Earlier today, we issued a press release which outlines the topics we plan to discuss. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at ir.ateapharma.com.

With me from Atea are Chief Executive Officer and Founder; Dr. Jean-Pierre Sommadossi; Chief Development Officer, Dr. Janet Hammond; Chief Medical Officer, Dr. Arantxa Horga; Chief Financial Officer and Executive Vice President of Legal, Andrea Corcoran; and our Chief Commercial Officer, John Vavricka. They will all be available for the Q&A portion of today's call.

Before we begin the call, as outlined on Slide 2, I would like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we encourage you to read. Our actual results may differ materially from what is discussed on the call.

With that, I'll now turn the call over to Jean-Pierre.

Thank you, Jonae. Good afternoon, everyone, and thank you for joining us. As you will see on Slide 3, this year, we are poised to continue the meaningful progress made across our advanced clinical development programs following strong execution in 2022. Clinical efficacy results from the MORNINGSKY trial informed our Phase III SUNRISE-3 trial of bemnifosbuvir for the treatment of COVID-19, which was initiated in the fourth quarter of 2022. We anticipate an interim analysis from the SUNRISE-3 trial in the second half of this year, followed by completion of enrollment by year-end.

We also made meaningful progress advancing our preclinical second-generation protease inhibitor program, and we anticipate filing an IND for a clinical candidate around the end of the year. With our HCV program, we completed preclinical and manufacturing work needed for the initiation of a Phase II combination trial of bemnifosbuvir and ruzasvir in the second quarter. With our Dengue program, we conducted 2 proof-of-concept studies for AT-752, and the results will be shared with you today.

Let's now move to COVID-19. Turning to Slide 5. Bemnifosbuvir is an oral, nucleotide prodrug that targets viral RNA polymerase, a highly conserved enzyme critical to viral replication and transcription. We believe that bemnifosbuvir profile addresses the key limitations of current therapies. It has low risk of drug-drug interaction and may be coadministered with commonly prescribed drugs for high-risk COVID-19 patients, a key limitation of Paxlovid. Scientific presentation demonstrating bemnifosbuvir lack of drug-drug interaction were presented last week at the Conference on Retroviruses and Opportunistic Infections, also called CROI.

The U.S. COVID-19 Public Health Emergency is set to expire on May 11, and the market dynamics for COVID continue to show. Based on the current variants, there are very limited treatment tools available with essentially only Paxlovid for outpatients or Veklury or remdesivir for hospitalized patients. The lapsing of the Public Health Emergency is going to make it even harder for this patient population to assess diagnostic and treatment. This is likely to lead to further mobility and mortality, particularly in the most vulnerable.

Moving to Slide 6. We believe COVID-19 will continue to remain endemic throughout the world and particularly impact the patient population that we are studying in SUNRISE-3. We believe that all therapeutics will remain a multibillion-dollar opportunity for years to come and projected annual COVID-19 oral antiviral U.S. demand using IQVIA retail prescriptions suggests the current estimated annual market opportunity over $10 billion.

Beyond that, we believe that there is an opportunity to expand this market to patients with drug-drug interactions associated with Paxlovid are a concern, limiting and complicating prescribed. These include commonly prescribed drugs, such as seizure medications, antipsychotics, anticoagulants and more. Let me remind you that Paxlovid currently has 90% of the prescription market share, and there is still a significant unmet medical need as less than 30% of COVID-19 patients are being prescribed an oral antiviral.

Turning to Slide 7. As we are moving to a traditional payer market, it is clear that we will have to demonstrate a value proposition of the impact of bemnifosbuvir against COVID. This will be achieved by using a primary endpoint of decrease in hospitalization and death. We believe that this will be the key consideration for drug reimbursement for COVID therapies in the future.

This is why we are targeting the most vulnerable patient populations in SUNRISE-3, who are the greatest risk for disease progression to severe COVID-9 or mortality and for whom there are limited treatment options. Let's keep in mind that CMS estimates an average cost approaching $22,000 per hospitalization and approximately 70% of COVID-19-related hospitalization -- of hospitalized patients were covered under Medicare.

Moving to Slide 8. Let's now review our innovative SUNRISE-3 trial, our Phase III registrational trial, which is evaluating bemnifosbuvir as monotherapy and as combination antiviral therapy. Enrollment continue in this global Phase III randomized, double-blind, placebo-controlled study, which will evaluate bemnifosbuvir or placebo administered at the same time as locally available standard of care. Patients will be randomized 1:1 to receive bemnifosbuvir at 550 milligram twice daily or placebo.

We expect to enroll at least 1,500 high-risk patients with mild or moderate COVID-19. Two study cohorts defined by the type of standard of care the patients received would be studied. The first cohort is a monotherapy cohort that will be comprised of patient receiving supportive care, which represent the primary analysis population. The second cohort is a combination antiviral cohort that will be comprised of patients who are receiving a compatible antiviral against COVID-19 as part of the standard of care. The primary endpoint of the study is all-cause hospitalization or death through day 29 in at least 1,300 patients from the monotherapy cohort.

You will recall that we have already evaluated hospitalization in the MORNINGSKY trial and bemnifosbuvir showed a 71% reduction in hospitalization versus placebo. And importantly, in addition, a subgroup analysis showed a 82% reduction in patients over 40 years old. SUNRISE-3 were focused on high-risk patients that are the greatest risk for disease progression to severe COVID-19 or mortality. The study is expected to have a large global footprint with up to 300 clinical sites in 25 countries, including the United States, Europe, Japan and the rest of the world.

Moving now to our hepatitis C program, which we believe has the potential to become a best-in-class combination with the potential to improve upon the current standard of care by offering a shorter-duration protease inhibitor pretreatment for patients with HCV. Slide 10 outlines our Phase II open-label study of bemnifosbuvir and ruzasvir in HCV patients. This study will enroll approximately 280 HCV-infected, direct-acting antiviral naive patients across all genotypes, including a lead-in cohort of approximately 60 patients.

Patients will be administered 550-milligram bemnifosbuvir in combination with 180-milligram ruzasvir once daily for 8 weeks. The primary endpoints of the study are safety and sustained virologic response or SVR at week 12 posttreatment. Other virologic endpoints include virologic failure, SVR24 posttreatment and resistance. Regulatory submissions for the initiation of the trial are ongoing, and dosing of patients in this clinical trial is expected to begin during the second quarter. Initial data from the leading cohort of approximately 60 patients is anticipated around the end of the year.

Turning to Slide 12. I will now provide an update on our program for AT-752 intervention against dengue. We have been a pioneer in the development of our an oral antiviral therapeutic for dengue. Our proof-of-concept study, DEFEND-2, demonstrated that AT-752 treatment led to a faster resolution of fever, which is the major clinical sign of dengue. However, DEFEND-2 also highlights the need for better diagnostics to identify patients earlier in the course of the disease and also the need for a large sample size to account for the high variability for treatment and for prophylaxis as well. To address these factors, robust Phase II studies would require long clinical time lines with major associated costs, which has led to the business decision to deprioritize the dengue program.

Turning to Slide 13. As you may recall, we have been conducting 2 studies to assess the efficacy of AT-752 in the treatment and prevention of dengue fever. First, the DEFEND-2 Phase II clinical trial was randomized, placebo-controlled and conducted in dengue endemic areas. It's enrolled patients with dengue fever within 48 hours of the onset of fever and the diagnosis of dengue confirmed with a positive NS1 antigenemia test. The primary endpoint of this trial was changed in dengue viral load from baseline with exploratory analysis, looking at the change in viremia, NS1 level and fever.

In the first cohort of DEFEND-2, we enrolled 21 patients in India, Thailand and the Philippines. We have also been conducting a Human Infection Challenge trial under a U.S. IND. The healthy subjects were treated on day 1 with AT-752 or placebo, and they're injected with a live attenuated strain of DENV-1 on the following day, subject with those with AT-752 or placebo for a total of 14 days. Subjects were then monitored for symptoms, viremia, NS1 level and safety.

Let's move to Slide 14. This schematic depicts our understanding of the time course of dengue illness. As you can see, there is a lag between inspection and viremia, and viremia precedes the development of symptoms and signs. Our study was designed to enroll patients around day 6 of infection. And based on the data that we will now review patients likely presented later in the course of the disease at enrollment.

On Slide 13 (sic) [Slide 15] you can see that the viral load changes over time through day 7, as measured by PCR. Placebo patients are depicted in red and AT-752 patients on the right in blue. Please notice that the study enrolled patients with all 4 serotypes of dengue, and it is well known that the viral kinetics of each serotype are quite different.

At enrollment, patients presented late in the course of the disease with high variability and low viremia level at baseline, particularly in the placebo arm, which had 3 patients with viremia levels below the lower level of quantification. As a consequence, the primary endpoint of change in viral decline, as you can appreciate from baseline, is [unevaluable].

Moving to Slide 16. Platelets are a biomarker of dengue progression. You can see in this slide the trajectory of platelet counts from baseline through day 7 for both the AT-752 treatment arm and placebo. Consistent with the viremia data at baseline, platelets were already low or below the lower limit of normal in the majority of patients further demonstrating late presentation of disease at enrollment.

Turning to Slide 17. As I have mentioned, the fever is the major clinical sign of dengue. This slide demonstrates the time to resolution of fever defined as a temperature of 37 degrees Celsius or less sustained for 24 hours and maintained to day 5. In a prespecified exploratory endpoint in patients who presented with body temperature above 37 degrees Celsius, the median time to fever resolution was 4 days in the AT-752 arm and greater than 5 days in the placebo arm.

Slide 18 shows the change in body temperature for those patients who presented with a temperature of more than 37 degrees Celsius at baseline. In a posthoc analysis, there was a difference in body temperature change from baseline of 0.9 degrees Celsius at day 3 in favor of the AT-752 as compared to the placebo arm. Also, at day 3, 100% of patients who presented with baseline body temperature above 37 degrees Celsius has a reduction in body temperature below the baseline levels in the AT-752 arm versus only 33% of patients in the placebo arm.

Moving to Slide 19. The safety profile of AT-752 was favorable in the study, and there were no drug-related assays. And adverse events were largely mild to moderate and occurred at similar frequency with those in the placebo group. Two nondrug-related SAEs, which were hospitalization due to thrombocytopenia and disease progression to severe dengue, occurred, 1 out of 7 in placebo and 1 out of 14 in the AT-752 arm. Other nonserious adverse events were mostly mild and moderate, self-limiting and occurred in comparable frequency in active and placebo arms.

Turning to Slide 20. The Human Infection Challenge study was also a randomized, double-blind, placebo-controlled challenge evaluating AT-752 dosed at of 750-milligram TID, where dosing was initiated prophylactically, 24 hours ahead of subject receiving an injection of attenuated live DENV-1 virus. The available results in 5 healthy volunteers were uninterpretable due to the high variability observed in terms of viremia, antigenemia and the onset and severity of symptoms.

In addition, they were much lower drug exposures than those observed in the Phase I with normal volunteers and in DEFEND-2 study with treatment patients were very likely due to a lack of dosing compliance. For this type of the study, it is clear that a much larger sample size of greater than 50 healthy volunteers would be needed to account for this high variability.

I will now turn the call to Andrea Corcoran, our CFO, to review our financial update.

Thank you, Jean-Pierre. As Jonae mentioned in her introductory remarks, earlier today, we issued a press release containing our financial results for the fourth quarter and full year 2022. Those statements of operations and balance sheet can be found on Slides 22 and 23.

Our balance sheet remains strong with cash, cash equivalents and marketable securities of $646.7 million at December 31, '22 compared to $764.4 million at December 31, '21.

R&D expenses were $27.5 million and $81.9 million for the fourth quarter and full year 2022, respectively, compared to $57.8 million and $167.2 million for the corresponding period in 2021. The decrease in R&D expense was primarily due to the elimination of the cost share arrangement with Roche. In addition, in Q4 '21, we recorded a $25 million expense due to the upfront payment related to our in-license of ruzasvir from Merck.

G&A expenses remained relatively consistent at $12.4 million and $48.7 million for the fourth quarter and full year 2022 compared to $13.2 million and $45.8 million for the corresponding period in 2021. Interest income and other was $5.6 million and $11.2 million for the fourth quarter and full year 2022 compared to less than $0.1 million and $0.2 million for the same period in 2021. The increase was primarily the result of investing in higher yield marketable securities and higher interest rates.

For 2023, our R&D spend will be driven principally by spending on clinical trials, including primarily our SUNRISE-3 Phase III clinical trial for COVID-19 and our hepatitis C Phase II study of the combination of bemnifosbuvir and ruzasvir.

In closing, due to the deprioritization of our program for dengue, we are extending our cash guidance into 2026.

I'll now turn the call back over to Jean-Pierre for closing remarks.

Thank you, Andrea. In closing, on Slide 25, we have a busy year ahead of us as we continue to advance our antiviral programs to fight serious viral diseases, especially for patients with limited treatment options. Importantly, we are well capitalized to fund our program through key inflection points and beyond to the finish line with an extended cash runway now until 2026 due to the deprioritization of our dengue program.

With that, operator, we will now open the call up to your questions.

Thank you. (Operator Instructions) Our first question comes from Matthew Harrison of Morgan Stanley.

This is [Steve] for Matthew. So I want to ask, would you consider to license out your dengue program since you deprioritized this one?

I'm sorry. Can you repeat the question?

Sure. Would you consider to license out your dengue program?

Well, look, as you know, there is some nonprofit agency and government agency and other third parties as well that have the potential to be interested in the collaboration partnership. We are not giving our guidance on one if this could happen. But certainly, we are interested in discussing with third parties.

Our next question comes from Tim Lugo of William Blair.

This is John on for Tim. So maybe 2 from us. So I'm wondering if you can maybe just give us some color or commentary on your confidence in enrollment of the SUNRISE study. I mean, obviously, we're seeing a lot more apathy towards COVID, and there's less reporting that's going on, is seeming to show -- that seems like trends there going in our favor. But sometimes it's a little hard to tell with the lower reporting. Maybe you could just tell us something about what you're seeing coming through, especially in the higher risk populations.

Yes. Janet?

Thanks, John. Yes. So enrollment is continuing in SUNRISE, and we're making good progress. We filed our clinical trial in all targeted countries for regulatory approval. And we are continuing to see enrollment, but we're not going to provide specific numbers at this point, and we will continue to report as the year goes through.

Maybe just one more from us. So I'm seeing some articles now coming out that viral rebound is more common than we initially might have thought regardless of treatment with an antiviral, such as Paxlovid. Wondering if you maybe have any updated thoughts about this. Are the time courses just too short? Is this maybe fixed with a combination? And maybe how you're thinking about this longer term?

Janet, do you want to address the question?

Yes. Thank you. Yes, we've been watching the report also with some interest, and that seems to be a variety of series, I think. So where you'd have to call on as to what the cause for viral rebound may be. And it's something that we're certainly watching in our study. We're going to be collecting virological samples and also continuing to watch patients for symptoms of rebound as well as viral -- just plain viral rebound as we conduct the study. And so we have to get some further clarity and information on that.

But I think the jury probably still allows us to exactly what happens yet, whether it's variance, whether it's dependent on viral load and a much higher viral load and perhaps needing longer times to clear. It's still something I don't think we fully understand. But thank you for the question.

If I may just add, it sounds like in some posthoc analysis on some trial, there is a rebound highly dependent on the age of the patients. And so we hope that with our high-risk patient population, actually mostly in the elderly, we are going to really evaluate, as Janet indicated, those potential rebounds and the impact of the combination.

(Operator Instructions) This question comes from Roanna Ruiz of SVB Securities.

Appreciate you walking us through the dengue results. So I'll start there. I was curious if you could clarify which factors seem to contribute the most to the unevaluable results for DEFEND-2. Sort of seeing different things like made possibly trial execution. Maybe there were some placebo arm trends that were difficult to interpret. And were you able to garner anything about the potency of 752 in this trial?

I'm going to let Arantxa -- but in terms of the potency, as I have indicated, and I'm going to let Arantxa, that -- let's not forget that fever is the major clinical sign of dengue. So Arantxa, why don't you address the question, please?

Yes. Thank you. Thank you for the question. So (inaudible) contributed to the viral load low to be unevaluable. I think the main reason is that the patients tend to come later in the course of the disease. And as you can see in the slide, a lot of them, particularly in the placebo, have already either low or undetectable viral load by the time they come to you. And they come to you later, it's not unusual. We mandate a 48-hour fever criteria, but patients sometimes have a hard time identifying really when the fever started exactly. And so they probably came later -- presented later by the time we were able to enroll them.

Another factor is that the test that we use for enrollment, the NS1 antigen, it's an antigen test. And using with COVID antigen tests are not often very sensitive. They are not sensitive as PCR, but sites don't have PCRs available. So the -- we will need to develop better, more sensitive diagnostic tests if we want to advance brands like this. So those are contributing factors.

And with regards to the efficacy question, I think what we have seen in this data is a resolution of fever that is factoring more rapid in the active. And as you know, fever is the main clinical sign for dengue. In fact, it's called dengue fever. And so we think that the resolution -- faster resolution of fever, even considering such a small data set, is quite interesting and promising as in now in this trial.

Got it. And another question on the COVID program. So could you remind us what you want to see in the SUNRISE-3 interim to encourage you to move forward? And if we fast forward and get positive final results, do you still think EUA is on the table with the FDA?

Janet?

So we're planning to do an interim analysis when we achieve enrollment of 60% of the patient population in the study. And as you know, the primary endpoint is the proportion of patients who require hospitalization. So we're looking to see something that would suggest that we're going to the overall hospitalization rate in the patient population of ideally 4% to 6% is what we're anticipating. And we still think that actually, in the patient population that we're going after in the study, that this is not an unreasonable number, and they've actually been some recent articles coming out, I think, in support of that. So that's where we plan to be there.

This question comes from the line of Umer Raffat of Evercore ISI.

This is Jessica Hui on for Umer. Just one question. We're trying to reconcile the SUNRISE-3 study design with that of a competitor, oral COVID antiviral, especially in light of the announcement last month that the COVID Public Health Emergency will end in May. Specifically, the FDA took issue with a placebo-controlled study in the U.S. So I just want to confirm that in the SUNRISE-3 trial, the randomized monotherapy population will still include U.S. patients, and you don't expect the FDA to want you to change your trial design.

The short answer is no. But Janet will expand on my answer.

Sure. So yes, the answer is no. The FDA has endorsed and reviewed our Phase III clinical trial. And I think as we described, patients are being randomized to drug or placebo on top of what is the available standard of care for the patient where they are. And actually, I think as Jean-Pierre mentioned in his remarks, there actually are a significant number of people, and actually particularly unfortunately, in the most vulnerable patient population, people who are unable to take Paxlovid because of drug interactions.

And so for patients such as these, our drug is administered on standard of care, which would not include a direct-acting antiviral. We do allow patients to have access to direct-acting antivirals, monoclonal antibodies. The first were to be considered to be effective. And patients are allowed to be vaccinated also. But many patients, we believe, will actually not be taking anything other than our drug or placebo because of these circumstances.

We have another question from Roanna Ruiz of SVB Securities.

I just want to circle back about the possibility of an EUA for bemnifosbuvir. Do you have any updated thoughts on that?

Janet?

Sorry, I realized as soon as I finished that I haven't answered your question completely. Yes. So we believe that emergency use authorization is still possible. I think that's the discretion of the health and human services to allow for EUAs even with the passing of the -- or the relapsing of the pandemic health emergency. So we believe it will be data-driven and depending on what we see as to whether what you think might be possible, but we believe it is still possible should we have good results even at the interim analysis.

Thank you. That concludes our Q&A segment. I'll now turn it back over to the Atea Pharmaceuticals team for any closing remarks.

Again, thank you all for joining us today.

And thank you for your participation in today's conference. This does conclude the program. You may now disconnect.