Atea Pharmaceuticals Inc (AVIR) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the Atea Pharmaceuticals Second Quarter 2023 Financial Results and Business Update Conference Call. (Operator Instructions)

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

Thank you, Operator. Good afternoon, everyone, and welcome to Atea Pharmaceuticals Second Quarter 2023 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 our Chief Executive Officer and Founder, Dr. Jean-Pierre Sommadossi; Chief Development Officer, Dr. Janet Hammond; Dr. Arantxa Horga, Chief Medical Officer; 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 risk 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 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. I will begin on Slide 3. During the first half of the year, we have made considerable progress across our COVID-19 and HCV program. Our COVID-19 program, Fast Track designation for the development of bemnifosbuvir, was granted by the FDA in the second quarter and reflect the continuing unmet medical need that remains for COVID-19 patients. Data today, including multiple data presentations during the first half of the year, support the favorable efficacy, safety and lack of drug interaction profile of bemnifosbuvir.

We believe that bemnifosbuvir has the potential to address the key limitations of current COVID-19 therapies. With the protocol amendment modification that Janet will review today, for our Phase 3 SUNRISE-3 trial, we have adapted our protocol to reflect the current status of the pandemic while still remaining on track with our upcoming near-term milestones, which include an interim analysis around the end of the year, and top line results from the study, anticipated mid-2024. We continue to target an NDA submission by year-end 2024.

As part of a multipronged approach against COVID-19, we're advancing a discovery program focused on the second-generation protease inhibitor that is highly differentiated and has a clinical profile quite unique and well suited for combination with bemnifosbuvir. We are continuing to make progress with this program, and we expect to provide an update around the end of the year.

For our HCV program, I'm pleased to report that in June, we began dosing patients in our Phase 2 study evaluating the combination of bemnifosbuvir and ruzasvir. This was a significant milestone for Atea, and we continue to expect initial results from the lead-in cohort of approximately 60 patients around the end of the year.

Data presented earlier this year at the International Conference on Antiviral Research support the profile of our HCV combination with in vitro data, consistent with a highly competitive profile compared to the current standard of care. Importantly, we're well capitalized and in a strong position to execute on our mission with more than $600 million of cash and cash equivalents, and Andrea will go over the details with you.

I will now turn the call over to Janet for an update on our COVID-19 program.

Good afternoon, everyone. The World Health Organization's current classification of COVID-19 is that it is an established pathogen of concern. And we believe that COVID-19 will remain an ongoing serious endemic issue. COVID-19 mutates faster than influenza, so it's changing more quickly and therefore, better able to evade existing immunity from prior infections. This also causes concerns about the boosters keeping pace with the mutating virus.

Today, a recently identified COVID-19 variant, Eris or EG.5.1, was reported to be the dominant circulating strain in the U.S. Interestingly, it has key mutations that have been linked to the use of monoclonal antibodies, further highlighting how prone the virus is to continued mutation, with the ability to evade even newly generated monoclonal antibodies.

This underscores the important role for direct-acting oral antivirals in the treatment of COVID-19. Importantly to note, bemnifosbuvir has a high barrier to resistance due to its unique mechanism of action, with the same potency against all variants tested, and we're confident that this will be consistently maintained as new variants continue to emerge.

COVID-19 rates continue to fluctuate globally. Japan has been experiencing its ninth wave. And in the last couple of weeks, both the U.S. and Europe are seeing an uptick in infections driven by the heat wave, which is sending people indoors to air conditioned spaces, where COVID-19 transmits more easily.

Turning to Slide 5. Heading into the fall, we are facing a situation of waning immunity to both natural infection and the current vaccines, which is further exacerbated by a low booster uptake and the potential for mismatch between circulating strains and available boosters. Furthermore, in some immunocompromised patients, there is a failure to mount any immune response to the vaccines.

The availability and use of oral antivirals is therefore going to be essential, particularly for the elderly, immunocompromised, and those with underlying risk factors for severe infection. Unfortunately, there is still an unmet need with the currently approved antiviral, due to safety concerns and drug-drug interactions with commonly prescribed medications, which limit their use.

We believe that the compelling profile of bemnifosbuvir is differentiated because of its low risk of drug-drug interactions, and the absence of mutagenicity and embryo-fetal toxicity in preclinical studies. Our goal for COVID-19 is to deliver a safe and effective treatment to the millions of patients for whom the current standard of care is not a suitable option.

Moving to Slide 6. Taking into account the current COVID-19 environment [and] SUNRISE-3, we are adapting the eligibility criteria for the high-risk patient population, and we are also increasing the sample size to recognize the current lower rate of hospitalization and death. The modifications to our study are designed to increase the probability of success in bringing the promising medicines to patients who need it the most.

We have expanded the global footprint of SUNRISE-3, and we are now targeting approximately 330 clinical trial sites in 30 countries. With COVID waves appearing recurring sporadically and somewhat unpredictably across the world, our goal is to position ourselves best to be ready to capture these waves as they arrive in different geographies and at different times.

The protocol amendment is being reviewed by the FDA and we have started to implement these modifications. Importantly, this amendment should not change the timing guidance for the program, and we continue to anticipate top line results mid-2024, and we are targeting a new drug application submission by year-end 2024.

Slide 7 shows a bit more detail on the latest protocol amendment modification. On the broadened patient population, we have made a number of modifications to the high-risk eligibility criteria. High-risk patients are now classified as being at least 70 years old, which is down from the prior 80, being at least 55 years old with a risk factor, down from 65 with a risk factor, being at least 50 years old with 2 or more risk factors, a new criterion, and being at least 18 years old and the immunocompromised, which is unchanged.

Additionally, we've expanded the study to include patients with decreased renal function. We have addressed the lower rates of hospitalization and death by increasing the sample size to approximately 2,200 patients in the supportive care monotherapy arm. And it is statistically powered to detect a clinically meaningful reduction in hospitalization or death versus placebo, assuming hospitalization rates of 2% to 3% in this patient population.

Lastly, there will now be 2 interim analyses for the DSMB to review, in the supportive care monotherapy arm, at approximately 650 and 1,350 patients, with initial top line data anticipated mid-next year. Please note with the DSMB review, we do not expect to report efficacy results, as these analyses are primarily geared towards safety and futility.

Turning to Slide 8. We are seeing strong operational execution for SUNRISE-3 from our clinical team, and we now have regulatory approvals in approximately 2/3 of the targeted countries. Patient enrollment continues, and we believe we are well positioned to enroll patients as new variants and waves of COVID-19 infection continue to emerge.

In summary, SUNRISE-3 is focusing on the high-risk patients, and its primary endpoint is all-cause hospitalization or death through day 29 in approximately 2,200 patients in the supportive care monotherapy arm.

I'll now hand the call to Arantxa to review our HCV program. Arantxa?

Thank you, Janet. Moving to Slide 10. Let's now discuss our hepatitis C program, a combination of bemnifosbuvir and ruzasvir. We believe that this combination has the potential to improve upon the current standard of care by offering a protease inhibitor-free, shorter duration option for hepatitis C patients with and without cirrhosis. In June, we achieved a major milestone for this program when the first patient was dosed in our Phase II trial. There still remains an unmet need for hepatitis C patients.

According to the World Health Organization, 58 million people globally, have chronic hepatitis C infection, and there are approximately 1.5 million new infections that occur per year. Annually, we lose nearly 300,000 people to hepatitis C-related liver diseases, and more people continue to be infected than cured, despite the availability of the AA treatment options.

The CDC estimates that around 2 million people in the U.S. are infected with hepatitis C, and new infections are almost 4x as high as they were nearly a decade ago. In addition, the reinfection rate can be in the range of 20% in people who inject drugs. We believe that there is a substantial opportunity to improve upon the current standard of care.

As detailed on Slide 11, the combination of bemnifosbuvir and ruzasvir is very potent. It has the potential to be a best-in-class regimen based on its pan-genotypic antiviral potency, low risk for drug-drug interactions, absence of food effect and the potential for a short treatment duration. We are targeting 8 weeks of therapy, and we may explore shorter duration subsequently. This profile, along with the totality of the preclinical data, gives us confidence in the potential for this combination to become the new standard of care.

Recent data presented on our last earnings call, which can be found on our website, show that in vitro bemnifosbuvir is at least 10x more potent than sofosbuvir against all genotype 1a and genotype 3a, NS5A resistance associated variants, or RAVs. Ruzasvir is a potent NS5A inhibitor. In a replicon assay, ruzasvir has demonstrated a more favorable in vitro profile as compared to bemnifosbuvir and similar antiviral activity to pibrentasvir, which is the most potent NS5A inhibitor currently out there. In fact, in the same transient replicon assay, ruzasvir was shown to be 5 to 10-fold more potent than pibrentasvir against all rats. Again, this data can be found on our website.

Slide 12 outlines our Phase 2 open-label study of bemnifosbuvir and ruzasvir in hepatitis C patients. This study is expected to enroll approximately 280 hepatitis C-infected antiviral-naive patients across all genotypes, including a leading cohort of approximately 60 patients. Patients will be administered 550 milligrams of bemnifosbuvir in combination with 180 milligrams of ruzasvir once daily for 8 weeks. The primary endpoint of the study are safety and sustained biological response or SVR at week 12 post treatment.

Other virologic endpoints include virological failure, SVR at week 24 post treatment, and resistance. Dosing patients in this clinical trial is ongoing, with initial data from the leading cohort of approximately 60 patients anticipated around the end of this year.

And with that, I will now turn the call over to our CFO, Andrea Corcoran, to summarize Atea's financial performance.

Thank you, Arantxa. As Jonae mentioned in her introductory remarks, earlier today we issued a press release containing our financial results for the second quarter of 2023. The statement of operations and balance sheet are on Slides 14 and 15. For the second quarter 2023, each of R&D and G&A expenses remained relatively consistent with the second quarter of 2022. As we further our clinical development of both our COVID-19 and HCV clinical programs in 2023, we do anticipate that R&D expenses will increase in a measured way as these programs advance. We are exercising focused financial discipline to manage spend as we invest in these programs.

At the end of the second quarter of 2023, our cash, cash equivalent and marketable securities balance was $608.1 million. Based on these current plans, we are reiterating our cash guidance with a runway well into 2026.

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

Thank you, Andrea. In conclusion, we have already made considerable clinical and operational progress across our COVID-19 and HCV program so far this year. We have also published and presented significant scientific and clinical evidence in support of the potential of our clinical programs among an audience of leading virologists, ID specialists at several scientific conferences this year. With a number of interim analysis and data readouts coming over the next year, we will continue to highlight the potential for our programs and execute on our mission to improve the treatment landscape for severe renal diseases.

As always, we thank you for your continued interest and support of Atea and as together, we strive to address the unmet medical needs of patients with serious viral infections. With that, Operator, we will now open the call up to your questions.

(Operator Instructions) And it comes from Maxwell Skor with Morgan Stanley.

Could you expand a bit on the expected COVID-19 infection rate driving your interim analysis guidance? Specifically, how is enrollment going so far? And does your guidance expect a wave in the fall?

Janet, do you want to address that question, please?

So enrollment, I think, is in line with the current rate of infections at the moment. And we're very pleased with the progress that we're making in executing on our geographical footprint. So we are well positioned to take advantage of surges as they occur. And we do expect that there will likely be a surge as we move into the winter months.

The infection rate is going to be what it's going to be. It's really the hospitalization rate, which is of most paramount of importance to us, because that's the primary endpoint, obviously, for the trial. I hope that answers your question.

It comes from the line of Umer Raffat or [Jon Choi] with Evercore.

This is Jessica on for Umer and Jon. Just 2 questions for me. So first question is, by lowering the age for the SUNRISE trial, does that mean incorporating younger -- slightly younger patients means healthier patients? And like how would that affect the placebo arm performance?

And then secondly, the previously communicated interim analysis in second half of the year presumably would have given us efficacy data. And now you're saying that interim analysis has moved to year-end/1Q '24. And no efficacy data will be provided. So are we only getting efficacy data for the first time in mid-2024 now?

Okay. Before Janet will further address the question, we always gave a guidance for the end of the year. And we always indicated that it was not leading to an efficacy data analysis by the DSMB, we always indicated our guidance that it was either a safety or futility. And as long as the DSMB indicated that we continue the trial, it was a positive step. So we have not changed any guidance related to release of data or regarding DSMB outcome.

Janet, can you address the rest, please?

Yes. So in regards to lowering the age, I don't think that in this instance, younger is healthier. What we have been experiencing is that we've actually had to exclude patients on the basis of the fact that they were too young. But actually, were well qualified patients and potentially were going to end up in hospital if untreated. And so what we think is that we have actually probably enhanced our ability to enroll the study effectively by allowing in younger patients, but younger patients, as I highlighted, with risk factors. And depending on the age, the number of risk factors is also contingent on that.

So people 50 years and above with 2 risk factors for progression and people 55 and above with at least 1 risk factor for progression. And I think when you look back on the data presented by others, that's advisory communities and so forth, I think you'll see that this is actually a good patient population at -- for particular risk for hospitalization.

And of course it's placebo-controlled, as you mentioned. And so it will affect both arms equally, but we are pretty confident that this ought not to force us to enroll more patients for less hospitalizations that actually allow us to do the study and allow patients in who should actually be eligible for enrollment.

And just to reemphasize, and you can check our first quarter earning release and also our Annual Shareholder Meeting, and the interim analysis was expected Q4 of '23. So Q4 is part of the end of the year. So we went basically a little bit more detail here, but we have not changed any of our guidance.

Comes from the line of Tim Lugo with William Blair.

This is John on for Tim. Maybe just 2 from us. So first, for the HCV program, can you remind us of what data you're planning to release for the lead-in cohort this year? What should we be looking for in those data? And are you planning on making any adjustments to the protocol following those results?

And secondly, can you remind us of the current HCV resistance-associated variant landscape? And how important is the pan-genotypic activity of your combo versus the short duration or other aspects of the profile?

Sure. So Arantxa, you like to address the first question, please, and then I will take the second one.

Yes. So regarding the leading cohort, we are looking at safety, tolerability and efficacy as well, and that we are expecting to have that ready by -- around the year-end.

So we're going to resistance, actually, we are working very hard to try to find emergent resistance after 16, 18 passages with bemnifosbuvir, still at a very difficult time to find anything that key mutation signature for bemnifosbuvir on HCV. That's further demonstrating a high viral resistance of this drug against HCV. And I should [also] say, in the same way with other RNA viruses.

But with that said, and this is in our website, you see that as compared to sofosbuvir, that is losing some GTC potency with [soburahav]. Our drug basically does not dodge. So the EC90 remain exactly the same around at 20 [dynamole], EC50 around 2 dynamole , which is 10 to 50x more potent than sofosbuvir regardless of [birad] and including the 282 mutation, which is the key signature for sofosbuvir.

I think by the end of the year, we will have probably a very defined molecular mechanism. It's a multipronged as we have shown with -- against coronavirus. We have some very interesting data that are confirmed now that bemnifosbuvir is targeting several key molecular sites. And not just chain termination like sofosbuvir, but also other molecular site that are critical for HCV replication. We'll probably share -- we definitely will share with [this feed] by the end of the year.

And we are very pleased with ruzasvir when we compare the feature against [reprafosvir]. And we know that for ruzasvir, it's an excellent NS5A but it is combined with a protease inhibitor, and we all know the issues for protease inhibitors in terms of drug-drug interactions through the fact of resistance and others. So that's why we feel very strongly that we have a potential best-in-class regimen. And as Arantxa has indicated, we feel very confident that the 8 weeks will be very effective. And then after -- depending on biokinetics, actually, I think I mentioned in previous call that [Annan Persol] was really the leading expert of biokinetics is going to work with us and to determine if we can go even to shorter duration than 8 weeks, which would be obviously very transformational for an HCV combo.

(Operator Instructions) And it comes from Roanna Ruiz with Leerink Partners.

This is Nik Gasic on for Roanna Ruiz. Maybe first on your COVID-19 program. I guess given the evolving landscape, what's the new bar for efficacy in the upcoming Phase III trial? What sort of reduction in hospitalizations and deaths would you consider clinically meaningful? And then I have a quick follow-up on the enrollment criteria.

Sure. Janet, do you want to take the question, please?

So yes, I think -- I mean, it's an interesting question. I think it needs to be clinically meaningful. And I think it's obviously also determined to some extent by the virulence of the circulating variants, and I think that has changed over time. I think just to remind you, the treatment response rate or protection against hospitalization with Paxlovid during the Omicron variant time was between 58% and 78%, and we anticipate our efficacy to be competitive with what they have been able to show.

Very helpful. Also, I noticed that you mentioned that you're allowing enrollment of patients with decreased renal function now. I'm curious, what degree of renal impairment are you allowing? And do you anticipate needing to modify the dose of bemnifosbuvir in these patients?

Janet?

So we're in the process of working through our renal study, which is part of the normal NDA package. And we have now enrolled patients and established the pharmacokinetics on patients with creatinine clearances down to 30. And so patients who have those types of levels of renal dysfunction are eligible now to be enrolled in our trial.

And looking at other nucleoside analogues that have been used for the treatment of COVID, we don't think that we're going to need to modify the dose. But we're in the process still of understanding that as we work our way through patients with further levels of renal decompensation.

Got it. Janet. One more, if I may. Thinking about your longer-term plans for bemnifosbuvir, what's your outlook on possible partnerships in COVID-19, both in the U.S. or maybe outside of the U.S.?

John, do you want to take it, and I will add a little twist after, but go ahead, John.

Sure. So I think for -- we still remain consistent in what we have been projecting, and that is for ex U.S. markets, we'll be looking for partnerships. And for the U.S. market, we will likely be looking to co-promote with an appropriate partner, and those activities continue.

J.P.

Yes. Basically, look, as you know, it's -- so far, the COVID market is 90% in the U.S. We are -- we have a strong balance sheet. And really the rationale why we go well into 2026 and not further than that is because we already account for a robust launch ourselves, if needed. So we are obviously, as Andrea indicated, very careful about our balance sheet and how we are going to spend with our programs.

But in the same time, we have the muscle, especially in the U.S., obviously, as John indicated, not outside the U.S. But especially in the U.S., we're still at 90%. With $8 billion we have the muscle to go out with a very robust launch. And that's why basically you see our runway to only 3 years and not longer than that with $600 million.

And I don't see any questions in the queue. I will turn the call back to Jean-Pierre Sommadossi for his final comments.

Thank you again for joining us today, and I appreciate, obviously, your support. Thank you.

Thank you, ladies and gentlemen. With that, we conclude today's program. You may now disconnect.