Atea Pharmaceuticals Inc (AVIR) 2021 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Atea Pharmaceuticals First Quarter 2021 Financial Results Conference Call. (Operator Instructions)

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

Thank you, operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals First Quarter '21 Financial Results 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 accompanying slides that we'll be reviewing today on the call by going to the Investors Relations section, then the Event & Presentations area of our website at ir.ateapharma.com.

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

On the call today, Jean-Pierre will provide a recap of our recent scientific publications and presentations for AT-527. Janet will review our clinical progress for AT-527 for the treatment of COVID-19 and AT-752 for the treatment of dengue fever. Andrea will provide us financial update, and Jean-Pierre will review the upcoming milestones.

Before we begin the call, I'd like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties as mentioned on Slide 2. 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 today's 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 today. We continue to make meaningful progress of our mission to discover and develop antiviral drugs for the treatment and prophylaxis of severe viral diseases.

Our pure nucleotide prodrugs have pharmacological properties that are uniquely suited for the treatment and prevention of these viral diseases.

Our drug candidates are designed to target viral polymerase -- RNA polymerase, a highly conserved enzyme critical to the life cycle replication of these viruses. We believe our platform offers many advantages, including potent and selective antiviral activity, convenience of oral administration and scalable manufacturing, all essential when targeting millions of patients worldwide.

As we reported on our last conference call, we have been very active so far this year in publishing and presenting preclinical and clinical results for AT-527. A recap of our scientific communications is on Slide 3 and include publishing a manuscript highlighting potent in vitro activity of AT-527 against SARS-CoV-2 in Antimicrobial Agents and Chemotherapy.

We presented favorable Phase I results in March at the Conference on Retroviruses and Opportunistic Infections, or CROI. These results validate the modeling from our preclinical animal models, which predict the drug lung levels should consistently be above the EC90 level of 0.5 micromolar. Since the respiratory tract is the initiation site of the SARS-CoV-2 replication, this data demonstrates the potential for AT-527 to achieve meaningful drug levels in the lungs.

We were also invited to present the supportive data on AT-527 as a treatment for COVID-19 at the International Conference on Antiviral Research, or ICAR. The overview included Phase I results as well as preclinical data and the underlying mechanistic rationale supporting

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In addition, we have worked very, very diligently to elucidate the dual mechanism of action of AT-527 and the molecular model and unique interactions with AT-9010, the active triphosphate metabolite of AT-527 against SARS-CoV-2 RNA polymerase. A manuscript of this important data is currently in preprint on bioRxiv and has been submitted for peer review. This growing body of preclinical and clinical evidence in support of our antiviral platform is compelling and encourages us to accelerate and expand our development pipeline in the various difficult-to-treat viral diseases.

Let me now turn the call over to Janet who will review our clinical development programs. Janet?

Thank you, Jean-Pierre. On Slide 5, I'll begin with an overview of the ways AT-527, our lead product candidate, may address the challenges that currently exist with the treatment and prevention of COVID-19. We believe that our oral direct-acting antivirals, or DAAs, can play an essential role in the treatment of COVID-19 with their ability to rapidly inhibit viral replication in the early phase of infection and potentially reduce disease progression, which for COVID-19 would lead to a meaningful impact on global health.

We believe that based on AT-527's profile, it has the potential to accelerate time to recovery, prevent or shorten hospitalization and reduce medically attended visits. It also has the potential to reduce the transmission of virus, and hopefully, can impact long-term COVID sequelae.

DAAs maybe used in pre- and post-exposure prophylaxis. These are all key objectives that we aim to evaluate in the clinical program for AT-527 that we are conducting globally with our partner, Roche.

We view the use of a DAA as complementary to COVID vaccines. This is a similar treatment paradigm to influenza. We believe that a multipronged approach, including both prevention and treatment, will be essential for the challenges that we will continue to face with this virus.

Moving to Slide 6. As summarized, we expect it to be an eventful year for AT-527 as highlighted by the multiple global clinical trials we plan to conduct with our partner, Roche. Throughout 2021 and beyond, we will be delivering a series of data readouts that will form our road map to a near-term NDA submission and product launch. We expect interim virology data from the Phase II program later this quarter, and we expect results from the global Phase III trial in the second half of the year. In addition, we anticipate initiating a prophylaxis study.

Moving to Slide 7. In April, we were excited to announce the initiation of the Phase III MORNINGSKY trial, a global multicenter trial evaluating AT-527 in mild or moderate COVID-19 patients in an outpatient setting. This trial is being conducted with our partner, Roche, and is currently enrolling patients outside of the United States.

We anticipate it will enroll approximately 1,400 adults and adolescents with mild-to-moderate COVID-19. Patients with or without risk factors will be randomized within 5 days of symptom onset. At the time of enrollment, patients must be stable and not require hospitalization.

The primary endpoint evaluating the efficacy of AT-527 compared with placebo will measure the time to alleviation or improvement of COVID-19 symptoms. Other efficacy endpoints will include the number of patients requiring medically attended visits or hospitalization for COVID-19. Additionally, among other secondary and exploratory end points, the study will also identify and/or evaluate biomarkers that are predictive of an antiviral response to AT-527.

Moving to Slide 8. In tandem with the Phase III program, we are continuing to make progress with the ongoing Phase II study in hospitalized patients. We expect to report interim virology data on a meaningful number of patients from the study later this quarter.

I would like to highlight some of the features of our study in the hospitalized setting, which is a placebo-controlled study with strict inclusion criteria such as requiring patients to have been hospitalized within 5 days or less of symptom onset.

In addition, our study includes only patients with moderate COVID-19 who require no or minimal respiratory support. You will recall that this is a Phase II proof-of-concept study and is not statistically powered. We consider this Phase II trial to be a study where we will be able to obtain proof-of-concept for antiviral efficacy and supportive data for dosage, and most importantly, confirm the safety profile of the drug, which was the main reason for conducting this study in a monitored hospital setting.

Moving to Slide 9. The Phase II outpatient trial is evaluating safety, PK and PD and antiviral activity of AT-527 compared with placebo. The continuing supportive data for safety and tolerability is important in the outpatient setting. This is the same setting for the Phase III trial and is the target population where we anticipate the majority of the drug will be used, if approved. Once again, this is a Phase II proof-of-concept study and is not statistically powered. The footprint of this trial is expanding globally, which should alleviate enrollment challenges initially encountered with the U.K. sites.

Let's now turn to AT-752, our program for the treatment and prophylaxis of dengue fever on Slide 11. In March, we initiated a randomized, double-blind, placebo-controlled, single and multi-ascending dose Phase Ia study to evaluate the safety, tolerability and pharmacokinetics of AT-752 in healthy subjects. Subjects enrollment continues to advance.

The Phase Ia study is anticipated to roll up to -- enroll up to 60 patients. The objective of the study is to establish the safety and tolerability of AT-752 and also to support dose selection for future studies of AT-752 as a treatment and prophylaxis of dengue fever. We expect to report data from the Phase I study in the second half of the year.

With that overview, I'll now turn the call over to Andrea for a review of the financials.

Thank you, Janet. As Jonae mentioned in her introductory remarks, earlier this afternoon, we issued a press release containing our financial results for the first quarter of 2021. The statement of operations and balance sheet as of March 31, 2021, are on Slides 13 and 14.

For the first quarter 2021, the increase in research and development expenses in comparison to the first quarter of 2020 was principally driven by an increase in external clinical development and manufacturing expenses, incurred primarily in conjunction with the advancement of AT-527 for the treatment of COVID-19, and to a lesser extent, AT-752, which as you've heard, is being developed for dengue fever. These expenses included our share of costs incurred by Roche and increases in internal spend primarily due to an increase in personnel-related expenses.

The increase in general and administrative expenses was primarily due to expansion of our organization and consists principally an increase in payroll and personnel-related expenses.

I am pleased to report that we ended the first quarter with an exceptionally strong balance sheet to support our clinical development programs. As of the end of the first quarter, cash and cash equivalents were $833.8 million. We anticipate our current cash run rate will take us through 2023 to advance each of our pipeline programs.

Apart from our financial results, I would also like to note that the IPO lockup recently expired and previously restricted shares became available for trading beginning on April 28. As expected, we experienced an increase in trading volume around this event, which continues.

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

Thank you, Andrea. 2021 is off to a strong start, highlighted by the initiation of the global Phase III MORNINGSKY trial of AT-527 in mild-to-moderate COVID-19 patients in the outpatient setting. This was a significant milestone and represents a major advancement toward our goal of providing an easily administered and widely available oral antiviral to help in the fight against this global pandemic.

We look forward to sharing interim virology data from the Phase II program for AT-527 later this quarter and reporting data from our Phase Ia study of AT-752, which is being developed for the treatment and prophylaxis of dengue fever in the second half of 2021. We continue to make progress with the other drug candidates in our antiviral pipeline and expect to report progress on these programs later this year.

We remain steadfast in our mission to advance these important programs to the benefit of patients worldwide. We have the right people, the right programs and the right partner to bring these potentially life-saving drugs to market. Importantly, we have the financial resources to support this mission.

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

(Operator Instructions) Your first question is from Eric Joseph from JPMorgan.

Just hoping you could provide a bit of an update on enrollment progress in the Phase II trials, your reiterating time lines for data update later this quarter. Are you -- should we anticipate a full enrollment of both the outpatients and hospitalized studies? Or should we expect sort of a partial number? And if it's the latter, maybe you can kind of guide expectations there. And then I have a follow-up.

Janet?

So thank you for the question. We will -- we're not anticipating that either study will have completed enrollment. We will, I believe, have a substantial number of patients that we will be able to report data on. And we're hoping that this will be able to provide a trend in our understanding of the viral kinetics associated with the drug in our hospitalized study.

As I mentioned earlier, the outpatient study have considerably expanded its footprint, and sites are coming on stream really all the time now. So we anticipate that the enrollment will move forward pretty expeditiously. And actually, the design of that study allows for us to explore different doses. So there will be cohorts of patients that we will look at. And we will have data, we believe, from Roche on an initial cohort from that first dosing cohort to report by the end of the second quarter.

Okay. That's very helpful. And as it relates to the Phase III MORNINGSKY trial, can you talk about the geographic distribution of the participating sites currently? And what gating factors are remaining to facilitate approvals or the initiation of sites in the U.S.? And is there a minimum -- or do you anticipate a minimum number of patients -- patient participation in the U.S. to facilitate registration there?

I'm sorry, Eric, I didn't hear -- do I anticipate what? I didn't hear what you said?

A minimum number of U.S. patient participation to facilitate registration with FDA.

So the study is opened in countries in Europe at the moment, and we are seeing other countries opening up around the world with -- as the CTA gets approved, and -- including Japan. There are more countries still to come. We are making good progress with the FDA, and we anticipate that we will be able to enroll patients in the U.S. in the foreseeable future once we've resolved the issues around that with them. So we anticipate that there should be representation of the U.S. in the study, yes.

Your next question is from Matthew Harrison from Morgan Stanley.

I guess two for me. First, on the first dosing cohort, assuming that's what we get in terms of interim data, can you just maybe help us think about what you know from drug levels and exposure about what you think is reasonable to expect in terms of viral load decline in those patients?

And then, I guess, separately, given some of the enrollment issues that you faced with these initial studies, can you just talk about your confidence around being able to enroll the Phase III quickly?

So the confidence around enrolling the Phase III study is rarely that -- I think it's a very similar population to the outpatient study. We're looking for patients with mild-to-moderate COVID-19. I think it's a lot less interventional, I would say, than the Phase II study, which I think makes it a lot more patient friendly for people to want to participate. We're not collecting the pharmacokinetics, et cetera, and all of the viral loads that we are collecting in the Phase II studies.

So from that perspective, we're pretty confident that this ought to be considerably easier for patients and has a significantly larger footprint because it's less intense and less specialized study. So we believe that, that study will actually enroll considerably faster. And we have more than 150 sites identified for that study. So we anticipate that it ought to be able to go pretty quickly.

With regard to the Phase II studies, the dose selected for those studies were selected on experience with our dosing of AT-527 in hepatitis C and the modeling derived from that and also from some preclinical modeling that we have and also the Phase I study that we conducted in December, which again corroborates the data that we already had and supports the dose that we have already selected for that.

And so we're pretty confident that the dose ought to be the correct dose in order to see a good antiviral effect. And by a good antiviral effect, we're anticipating that we would like to see something in the range of what has been seen with the antibodies and also with (inaudible) and seeing approximately a low drop in viral load in the first 2 days in our study.

Your next question is from Jonathan Miller from Evercore.

Two for me. How should I think about population or inclusion criteria for the post-exposure prophy trial starting later this year? Is this going to be similar to the MAbs or a little bit different? How broad is the utility for that indication?

And then secondly, are there -- what's your latest thoughts on the cadence of demand for an oral antiviral in '22, for instance, given the pandemic course so far this year and where you see it headed?

So I'll answer the first question and then, John, perhaps you might want to answer the second. So with regard to the inclusion-type criteria for our prophylaxis study, we're still actually working on that protocol. So I can't really comment or give you too much in the way of specifics, but we believe that we anticipate that we will enroll patients down into their teams in our Phase III study.

So we anticipate a broad population. We believe that the drug interaction profile for our drug is going to be pretty benign. So we would anticipate that this would allow for many patients or people infected with the disease to qualify to take the drug. John, over to you.

John?

Sure. So as far as for the ongoing demand, for this year and into next year, we continue to see a need for both an oral antiviral and for a vaccine for a couple of reasons. One is the vaccination rates, obviously, vary particularly in the United States. Two, the introduction of various -- the variants that we continue to see evolve. And with that, even the need that most companies have said that there will likely be a need for a booster. So for all of those reasons, we continue to see that there -- the need will continue.

I think what's important also just to add to that, John, is that with our Phase III, we will also have a follow-up study that would evaluate the impact of direct-acting antivirals such as AT-527 on the long-term sequela that, as you know, is becoming a major issue in 30% to 40% of individuals that got COVID-19. So that will even emphasize if the data are positive, the importance of the DAA also to deal with the long-term sequela of disease.

And Jonathan, one thing I forgot to mention, of course, there was that you just started asking about post-exposure prophylaxis. And in this case, you're seeing testing ramp up around the world. And with that, I think you'll see a lot of asymptomatic cases that will be identified opening up for a direct-acting antiviral as well.

Makes sense. One more maybe factual question. Do you have plans for interim analysis in the Phase III? And if so, what might those look like?

Janet?

We will determine whether we need to do an interim analysis at some point. I think the protocol is written flexibly at the present time, but I don't think I can really comment further.

Your next question is Tim Lugo from William Blair.

Congratulations on the progress. For MORNINGSKY, I understand patients are within 5 days of symptoms. But I don't see any language about risk factors similar to the Phase II program. Can you just maybe clarify the decisions on not kind of enriching for a risk factor?

And also, how much sequence data will you be collecting in the trial? I understand it's going to be easier to run, so you don't want to be cumbersome. But it does seem like there's a risk if you're assuming MAb-like trial behavior, whereas when the MAb trials are run, obviously, the genomic makeup of circulating virus right now is significantly different. So maybe just touch upon that.

So thank you. So with regard to risk factors, we believe that the profile of our drug allows us to look for a broad patient base to treat. And so the MORNINGSKY study is designed to enroll up to 40% of patients with mild-to-moderate COVID-19 without risk factors. And at least -- I should have said instead of up to, I should have said at least, and at least 40% of patients with risk factors and then the remaining 20% will fall where they may.

So we plan to capture both populations in that study really to understand how the drug works in both populations. And we think that's important. And as Jean-Pierre mentioned already, we think that a direct-acting antiviral has considerable benefit for people with and without risk factors potentially.

And then with regard to sequencing, we plan to sequence all patients on entry to the study, and there are other time points during the study when they will undergo sequencing. So we do plan to have that information available, but not to the same degree of intensity that we're doing in the Phase II studies, obviously.

Great to hear. And maybe just touching upon sequencing and the variants of concern, can you maybe globally just talk about targeting the RNA polymerase versus some of the other classes of antivirals out there? And what should be a relatively conserved target?

Tim, from what we see today, actually, unfortunately, India is going to be a breeding ground for variants. And so far, the variants from India that have been reported do not affect the NiRAN function and do not affect at least what we are -- what we have seen so far in any of the amino acids or our drug by the -- in the RdRP active sites. So we continue to believe that our drug should be very potent against all variants, as Janet has indicated.

In the past, the Phase II hospitalized patient is enrolling patients in South Africa and Brazil and in Eastern Europe, where there was significant variants' percentage. Finally, the NIAID contract lab adds the variants now in December, as I say. We anticipate that they would evaluate AT-511, the free base of 527 in, in vitro systems.

So I cannot promise that we will have also the in vitro data by the end of June, together with the interim virology data. But definitely, we will have very early in the third quarter, which obviously would be important to demonstrate also for our Phase III. And as soon as we hope to have the Indian variants available, we'll do the same.

And lastly, all our Phase II, especially the hospitalized patient, with the global entrant, we have full sequencing at baseline and also after treatment.

I'm showing no further questions at this time. I would now like to turn the conference back to Jean-Pierre Sommadossi.

I'm sorry. So thank you very much for your attention, and we appreciate. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.