Atea Pharmaceuticals Inc (AVIR) 2024 Q1 法說會逐字稿

Good afternoon, everyone, and welcome to the Atea Pharmaceuticals first quarter 2024 financial results and business update 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 at Atea Pharmaceuticals. Ms. Barnes, please proceed.

Thank you, and good afternoon, everyone, and welcome to Atea Pharmaceuticals' first quarter 2024 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 we'll be reviewing today by going to the Investors section of our website at ir.ateapharma.com.

With me today from Atea are our Chief Executive Officer and Founder, DrJean-Pierre Sommadossi; Dr. Arantxa Horga, Chief Medical Officer; Chief Development Officer, Dr. Janet Hammond; 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 and 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. 2024 is off to a strong start with the tremendous clinical progress we have made across our program for COVID-19 and HCV, as you can see on slide 3, I will begin first with an overview of our Bemnifosbuvir program for the treatment of COVID-19 trends observed in 2024, provide further evidence that COVID is endemic and easier to stay variants continue to evolve and this winter, we experienced a surge of infections caused by the [HCV1], our strong operational execution led to the rapid and successful enrollment of the only global Phase 3 trial exclusively conducted in high-risk patients ahead of our guidance.

We randomized [2,221] patients into the supportive care monotherapy cohort and only 74 patients into the combination therapy cohort with 77% of total patients enroll in the United States, strikingly the clear preference by the investigators to enroll high-risk patients in the monotherapy cohort highlights the continuing unmet medical need for new oral COVID-19 treatment options for these high-risk patients.

We believe that Bemnifosbuvir has the potential to address many of the key limitations of current COVID-19 therapies, including safety, tolerability, and drug-drug interactions. We look forward to potentially delivering Bemnifosbuvir to millions of patients for whom the current standard of care is not an optimal -- option. We anticipate top line results from Sunrise-3 in the second half of 2024.

Turning now to our Phase 2 program for hepatitis C building on the positive 98% SVR4 rate from the lead-in cohort of 60 patients. We look forward to multiple key near term milestones on this program. We are very excited about the upcoming presentation at EASL next months, which will showcase preclinical and new Phase 2 efficacy data from this lead-in cohort. We also look forward to reporting complete SVR12 results from this ongoing study during the second half of 2024. In addition, we are preparing for the initiation of a Phase 3 study, which we anticipate around the end of this year.

We are currently finalizing the selection of the fixed-dose combination tablets, which will be used in the Phase 3 program as well as for commercialization. Bemnifosbuvir is the most potent nucleotide inhibitor for hepatitis C treatment and Ruzasvir is a highly potent NS5A inhibitor. We believe that the demonstrated synergistic effect of this combination can substantially improve upon the current standard of care for all patients infected with hepatitis C, including those who are the hardest to treat.

And then Arantxa will review our HCV program in greater detail on that. Importantly, we are in a strong financial position to execute our strategy with $541.5 million of cash, cash equivalents and marketable securities at March 31, with our runway now anticipated into 2027. This is based on completing patient enrollment for Sunrise-3 or ahead of schedule and our ongoing financial discipline. Andrea will provide a detailed update on that our financial position during today's call.

With that, I will now turn the call over to Arantxa for an update on our global Phase 2 HCV program.

Thank you, Jean-Pierre. Turning to slide 5. Despite the availability of treatment options, HCV continues to be a health care crisis in the US, HCV is viral disease with unmet medical needs, including the need for a shorter treatment duration, fewer contraindications and less potential for drug-drug interactions. New and reinfection rates annually exceed the cure rates in the US with over 2 million individuals are estimated to be infected.

Moving to slide 6, we believe that the combination of the Bemnifosbuvir versus Ruzasvir have the potential to be a best-in-class treatment regimens by the protease inhibitor free with a short eight week treatment duration. It also has a low risk of drug drag interactions and there is no good effect. The proprietary market research we have conducted on KOLs feedback to date supports our high confidence in this combination therapy, which has the potential to address these remaining unmet needs.

Turning to slide 7, the US HCV market demand grew roughly 5% in 2023 based on the number of patients treated with a market share of the two key HCV treatment options Epclusa, Mavyret remaining stable with an estimated 2 million-plus people in the US living with chronic HCV. There is a large number of patients to be treated. The patient pool continues to be replenished with approximately 100,000 new chronic cases each year. We believe that the best in class profile of Bemnifosbuvir, Ruzasvir, together with the anticipated future government initiatives and removal of access barriers, including certain constraints by payers, we'll increase the number of patients cure for these severe viral disease.

Slide 8 outlines our Phase 2 single arm open label study of 550 milligrams of Bemnifosbuvir in combination with 180 milligrams of Ruzasvir once daily for eight weeks, we plan to enroll up to 280 treatment-naive patients across all genotypes, including the leading cohort of 60 patients. From the initial 60 patient cohort, sustained biological response or SVR at week four post-treatment. What uses the decision criterion to continue enrollment to complete the Phase 2 study. As a reminder, the primary endpoint of this study is SVR at week 12 post treatment and safety.

Slide 9 before we review this slide, I wanted to provide a brief background on the patient demographics and baseline characteristics. In the leading cohort of 60 patients. He was comprised of non-cirrhotic patients only. However, 10 patients had an advanced stage of fibrosis [F3], which is borderline with the [Ruzasvir]. These final results from the leading cohort were 98%, SVR4 plus treatment across all genotypes involved.

Slide 10 shows the on-treatment vial kinetics of individual patient data from the lead-in cohort by week four on treatment. All 60 patients in the leading cohort had viral load near or below the lower limit of quantification. Therefore, this very rapid kinetics across all genotypes supports an eight week regimen and compare favorably to Mavyret, which is the only approved eight week treatment for HCV.

As turning to slide 11, the combination of Bemnifosbuvir, Ruzasvir was generally safe and well-tolerated in the leading cohort. There were no drug related serious adverse events, no discontinuations and adverse events were mostly mild.

Moving to slide 12, to summarize our HCV efforts supported by positive leading cohort data, we initiated patient enrollment in January for the remainder of the Phase 2 trial, we expect to enroll up to a total of 280 patients at 50 clinical sites across 15 countries, including the US looking ahead. We are very excited about upcoming data presentations at [SAEs], including the new Phase 2 efficacy data from the lead-in cohort.

We expect to report complete Phase 2 SVR 12 results in the second half of this year. Additionally, over the first half of 2024, we're conducting Phase 1 studies in the US for the selection of the best fixed dose combination tablet, which will be evaluated in the Phase 3 program and used for subsequent commercialization. We anticipate that the Phase 3 program will be initiated around the end of this year.

Slide 13, next, I'll turn the call over to Janet to provide an update on our COVID program.

Good afternoon, everyone slide 14. To reiterate Jean-Pierre earlier remarks, COVID-19 continues to be an established pathogen of concern with significant unmet need. Despite the availability of approved vaccines and antiviral treatment options. New variants continues to quickly evolve and the most recent family of variants nicknamed [flut] after that mutations include KP2, which is now the dominant variant, overtaking Germany and the United States. Our goal for COVID is to deliver a safe and effective treatment for the millions of patients for whom the current standard of care is not an optimal option.

Any sense of your [100] robust target product profile with a low risk of drug-drag interactions, favorable safety and tolerability and a distinct mechanism of action with a high barrier to resistance. And the therapeutic area was a $4 billion plus market opportunity and only two antiviral product approved. We believe Bemnifosbuvir compelling clinical profile and overall value proposition presents a strong opportunity for potential market expansion and uptake.

Moving to slide 15. In the first quarter, we completed enrollment in Sunrise-3, our global Phase 3 trial evaluating Bemnifosbuvir for COVID-19 in high-risk patients. Sunrise-3 is currently the only Phase 3 program exclusively in high-risk patients with hospitalization rather than symptom alleviation as the primary endpoint through day 29, the secondary endpoints measure patient outcomes through day 60 post treatment.

I'm pleased to report that patient enrollment finished ahead of our guidance. This is a significant achievement and demonstrates our strong operational execution and preparation to be ready to capitalize on the JN.1 variant search. We enrolled 2,221 patients in the monotherapy cohort and only 74 patients in the combination cohort. We were surprised to see such a high rate of enrollment in the monotherapy cohort. The clear preference by investigators to enroll patients in the monotherapy cohort highlights the major unmet medical need for new oral COVID-19 treatment options for these high-risk patients. In particular, we experienced strong enrollment in the US where sites were responsible 77% of all the patients enrolled.

Turning to slide 16, I will now review our Sunrise-3 global Phase 3 trial. This trial enrolled high-risk of patients with mild or moderate COVID-19 regardless of vaccination status. Interim onset with five or less days before randomization. As a reminder, this Phase 3 trial was randomized, double-blind and placebo-controlled study drug, either Bemnifosbuvir 550 milligrams BID or placebo was administered concurrently with the [Murphy] available standard of care, including other compatible COVID-19 drugs at the discretion of the investigation.

The primary endpoint for the study is all-cause hospitalization or death through day 29 in the supportive care monotherapy population. The secondary endpoints are COVID-19-related hospitalizations and death. Medicare attended visits and symptom relapse through day 60 post treatment with a fast track designation recent positive data presented at [ESCMID] and stronger than expected enrollment trends specifically seen in the monotherapy cohort. We're pleased with the execution and look forward to providing the results from our Phase 3 trial during the second half of 2024.

Slide 17, I'll now hand the call to John to discuss market opportunity for COVID-19.

Thanks, Janet. Turning to slide 18. The US prescription demand for oral antivirals to treat COVID highly correlates with infection rates. We believe the market opportunity for oral antiviral therapeutics for COVID-19 will continue to remain a multi-billion dollar opportunity for the long run. This is supported by a [QB] retail prescription data indicating between $4 billion and $5 billion of annual revenues between the only two approved oral antivira products, a significant unmet need still exist with limitations due to drug-drug interactions and tolerability with pack fluid and safety concerns with like Lagevrio, we believe in Bemnifosbuvir and its potential to greatly improve the treatment landscape and bring meaningful value to patients and physicians.

I will now turn the call over to Andrea to discuss today's financials.

Thank you, John. As Jean mentioned in her introductory remarks. Earlier today, we issued a press release containing our financial results for the first quarter 2024. The statement of operations and balance sheet are found on slides 20 and 21, there was a market increase in research and development expenses for the first quarter 2024 compared to the corresponding period in 2023. This increase was primarily driven by higher external spend related to the completion of enrollment of our Sunrise-3 clinical trial and advancement of our HCV Phase 2 clinical trial. G&A expenses remained relatively consistent for the first quarter 2024 compared to the first quarter 2023. Interest income also remained relatively consistent for the first quarter 2024 compared to the corresponding in 2023 due to investing in higher yields, marketable securities and higher interest rates.

During 2024, we anticipate our quarter-over-quarter R&D spend to vary as we complete Sunrise-3 and our HCV Phase 2 study and then engage in activities to initiate the HCV Phase 3 program in the fourth quarter of this year. At the end of the first quarter of 2024, our cash, cash equivalent and marketable securities balance was $541.5 million with patient enrollment completed ahead of schedule for Sunrise-3 and our ongoing financial discipline, we now project our cash guidance runway into 2027.

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

Thank you, Andrea. In closing, we have made meaningful progress in the first quarter as a result of strong execution across both program for COVID-19 and HCV our current momentum position set there for an exciting year. Indeed, we have multiple key milestones for both program expected this year, which have the potential to drive significant shareholder value for COVID-19. The include the top line results from Sunrise-3 in the second half of 2024 an NDA target submission expected around year-end.

These milestones followed recent faster than expected enrollment of almost 2,300 patients in our global Phase 3 study exclusively in high-risk patients. As Janet reminded us as part of a multipronged approach against COVID-19, we continue to also make progress with our discovery program focused on the highly differentiated second-generation protease inhibitor, and we expect to provide an update for this program later this year.

For HCV in the first quarter based on the positive 98% SVR4 results in the lead-in cohort of 60 patients, we are now completing enrollment for up to 220 additional patients in the ongoing Phase 2 study. As Arantxa mentioned, we are extremely excited to showcase preclinical and new Phase 2 efficacy results in support of our HCV program at EASL next June -- next month.

Looking ahead, complete SVR12 results for all patients enrolled in the Phase 2 study are anticipated in the second half of 2024, and we are optimistic that this result will reflect the strong SVR4 efficacy data that we have reported. We are targeting Phase 3 program initiation around the end of this year. I'm always impressed with the entire team effort, considering that we are a company with less than 80 employees successfully carrying out two global studies in diseases with multi billion dollar market opportunity with greater efficiency and financial discipline, as Andreas, our share with up. We believe that our product candidates are highly differentiated and have the opportunity, if approved, to feel significant unmet medical needs in the current treatment landscape with strong blockbuster potential.

With that, I will turn the call back over to the operator.

(Operator Instructions) Eric Joseph, JPMorgan.

Hi there, it's Billy on for Eric. Thanks for taking our question. And I know before you've mentioned about how and HCV trial you've been rolling, [cirrhotic] patients I'm just wondering kind of on a percentage basis, how sizable this would be of the 220 patients

Arantxa can you answer the question, please?

Yes. Well, you know, it depends on how many we enroll. We have targets in the protocol and our targets would be to enroll, at least 10% between 10% and 20%. And it's a target.

Okay. Thank you. And then kind of looking a bit further ahead with the HCV trial, what exactly how would you describe the pathway for registration for this? And is it something you'd look potentially to do yourselves or look for a partner to progress?

Okay. First, as you anticipate, we will have to end of Phase 2 meeting with the regulators. We anticipate that we will need two trials two Phase 3 trials. We anticipate that one of the two very likely would be against a comparator since we anticipate that the trial will be including HCV, HIV co-infected patient, very likely because of the drug-drug interaction was Mavyret we'll anticipate that the regulators will agree with us that he will be a head-to-head against Epclusa but obviously I cannot speak for the regulators. And we anticipate, as you heard from Andrea, we have a very strong balance sheet and for the Phase 3 clinical program we will be in a strong position to execute ourself of the Phase 3 program, and we have already operations in many countries in terms of regulatory approval for the Phase 2 which, I guess, that to move into the Phase 3 program, including the United States. So we anticipate that we will do ourselves our Phase 3 program.

Thanks taking our questions.

(Operator Instructions) Maxwell Skor, Morgan Stanley.

Great. Thank you. I was wondering if you would provide any thoughts on Shionogi's recent Phase 3 update, which they missed on the primary and their intention to meet the FDA also which secondary endpoints in Sunrise-3 trial, would you call out as particularly important given the competitive landscape? Thank you Very much.

Thank you Max , Janet?

Thank you. Yes, so with regard to the Shionogi Phase 3 trial. I think our information is much the same as yours. I think to some extent, symptom endpoint has been a case which has not been successful for companies developing and trial drugs in this space. And so I think some of the things which are different from that trial than us were really, I think, first and foremost that they selected to go after this as the primary endpoint, I think they were to point out that they did succeed on a subset of this instance, however, it's obviously disappointing to see them failing on the key primary endpoint.

We have, as I mentioned, an in hospitalization because we have strong proof of principle on that from our morning [Chegg Study] and our population is different from those that we enrolled exclusively high-risk patients of hospitalization continues to be a problem. And however, I think that and obviously hospitalization hasn't been as common as it was previously should also good. So I think in regard secondary endpoints, we have endpoints which are comparable to what others have in terms of looking for reductions in viral load in patients looking also for substantial evidence of viral rebound. And this is something which has been described, I think and both in placebo and increased patients. And we have a commitment to look at that also looking for evidence of emergence of resistance and also looking for hospitalizations and medically attended visits all the way to day [60]. I think those are the key end points [extension].

Great. Thank you.

(Operator Instructions) Umer Raffat, Evercore ISI

Hi, guys, it's John on for Umer. I would like to start with the expectation is to do two Phase 3 internally. So does your current run rate guidance to 27 include two Phase 3 for HCV? And then secondly, obviously, you need to have that meeting with the FDA, but do you have a sense of what the time line for the registrational program could be if your assumptions of a trial design are all true? And how long do you think these trials would take to run.

And then just lastly on the EASL data that was coming up later this month, we are going to include new data on the lead-in cohort is that going to include long term SVR legacy [R12] for that lead-in cohort or or just a fuller details of SVR4?

And thank you, John. Just to address your second part of the question, we were presenting new Phase 2 efficacy data. As you know, the embargo for abstracts lifted on May 22, and we would be excited to present the data on June 5, we cannot say more than that, not to break the the embargo on the EASL.

Andrea, can you go over into some of the finance or the budget in terms of what we include on to go all the way to 2027 -- and then I will take over regulatory part, go head, Andrea.

Yes, John. So in answer to your question. Our guidance does anticipate that we will have a two phase 3 trials and they will be completed during that window of time with our existing resources.

And regarding time lines, whether so it completes the end of the Phase 2 and the agreement with the regulators, obviously first in the US and in Europe. But this would be global trials and we have to do with several regulators. So I think we will have a better view in 2025 and share what we see as the time lines are, John.

Makes sense. Just one final one, I guess on Sunrise. You're guiding to data in second half. It fair to assume that since you've got full enrollment and it's a one month primary endpoint that's going to be on the early side in second half that in the later slide.

Janet?

I think I have mentioned we've enrolled approximately 2,300 patients in the trials is a considerable amount of data that needs to be cleaned. And we said the second half of the year. And when you try to knowing exactly when that hits will provide, I think more specific guidance. I think that's the best I can do for now.

And don't forget, John, we need to go to 60 days also, not just 30 days. And obviously there is a significant cleanup, but I say summer numbers today we are talking about just for sentiment, I think [700,000] report. So just to put an example it's pretty major.

Understood. Thanks.

(Operator Instructions) Tim Lugo, William Blair.

Thanks for taking my question. And I know you mentioned you don't want to break the EASL embargo. Can you discuss the kind of what broadly the fixed dose combo HCV looks like I know, BEM, the thoughts there being dosed at 550 megs once a day and RZR is 180 today is the case, does roughly a combination of what the convert and look like and yeah lets to start there.

Sure, look on we would it would be a tablet and we don't want to have a huge tablet, the 1.2, 1.3 gram. So we believe that two tablets will be the ideal formulation once-a-day, obviously. And again, we have several formulations. We have excellent data in [dogs] under several conditions we have completed already one fixed dose combination. We anticipate to have one or two more actually the next one will start in the next couple of weeks. So as you can see, we want to maximize our goal is to get very close to 100% drug exposure for both of BEM and Ruzasvir, without any food effect, basically, that's our goal, Tim.

Okay. That makes a lot of sense. And can we expect some data maybe not visible, but in the decompensated [cirrhotics], I know that seems to be a real unmet need.

Well, you know, your right for decompensated -- Arantxa . So I think I'll answer you want to address that question.

So we are now enrolling our content to see what is in Phase 2, but the plans for decompensation it will be something that we'll do later.

Understood thank you.

Yeah look, Tim, as you can appreciate. Okay. And I think that's right now, maybe that is not indicated in the decomp because of the presence of the PIs, as you know, we will have and you anticipate that, unfortunately, there will be some dust in Phase 3 with decompensated patients. So it's clear that we want to complete the Phase 3 trial and then very likely very shortly after it will be a head-to-head against [Ruzasvir]. So that patient population cannot and particularly of a placebo control study. So definitely something that we look forward to move rapidly because of the need of those patients.

Fantastic. Thank you.

(Operator Instructions) Roanna Ruiz, Leerink Partners.

Hi, everyone. This is Rosa on for Ruiz. A couple of questions on HCV can you have a sense for how large of a safety database you'll need for registration and thinking about the decompensated cirrhosis patients that was mentioned, can you give us a sense of the percentage of these patients as they make up like the total HCV population.

Arantxa you want to address the question, please?

Yeah. So regarding the safety database for a combination antiviral like this, usually, it's around 5,000 patients at the recommended dose. And length of treatment. So that's roughly what the Phase 3 program we have to have plus what we are already involved in on in Phase 2.

And the second question was the percentage of decompensated patients. I cannot give you the exact percentage in the United States, but it's really less and less and it's really quite few there is some still in usually Asia, some Asian countries. But in the United States, it represents a really small amount of have patients with HCV right now.

Got it. Thanks. And then thinking about current rates of hospitalization for COVID-19. Are you guys still using the assumption of like maybe 2% to 3% currently?

Janet ?

We're thinking about it really in the -- in terms of achieving a statistically significant difference in hospitalizations and death. And we have hard for something around a 50%, which is comparable to what others have seen. I think on our assumptions on that is not going to delist from the (inaudible) I think I can talk to myself but decreasing. You'll recall we did actually expand our sample size and about a year ago, I suppose, and to accommodate.

Got it. Thanks. And then a last one on your cash runway. Does your current assumption include partnering out your COVID program as the only option. Or would you consider or does that build in launching yourself Potentially for COVID?

Andrea?

So it does anticipate that we will have a partner for COVID-19. But nonetheless, we do anticipate that there will be some initial commercialization activity, which means individually will engage.

Including large scale manufacturing if I may add.

Okay, thanks so much.

Thank you.

Thank you. I'm currently showing no further questions at this time. I'd like to hand the conference back to Mr. Jean-Pierre Sommadossi for closing remarks.

Again, thank you all for joining our first quarter 2024 earnings conference call and thank you for your continued support. Thank you.

This concludes today's conference call. Thank you. For your participation you may now disconnect. Everyone, have a wonderful day.