Trevena Inc (TRVN) 2013 Q4 法說會逐字稿

Good morning, my name is Kevin and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Trevena year-end 2013 financial results conference call. (Operator Instructions).

I will now turn the call over to Roberto Cuca, Chief Financial Officer for Trevena. You may begin, sir.

Thanks, Kevin. Welcome, everyone, and thank you for joining us for today's call. With me today are Max Gowen, our CEO; Mike Lark, our Chief Scientific Officer; David Soergel, our SVP of Clinical Development; and Bob Prachar, Trevena's Commercial Strategy Consultant.

Before we begin, we wish to inform participants that we will make forward-looking statements on this call which are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. You are cautioned that such forward-looking statements involve risks and uncertainties, including risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, and that we undertake no obligation to update these statements beyond today.

During today's call, Max will provide a review of the events of the past year and discuss important milestones upcoming in 2014. David will then provide a detailed review of our clinical programs. I will review our financial results, and Max will conclude with brief closing comments. We will then open the call for questions.

I would now turn the call over to Max.

Good morning, everyone, and thank you all for joining us this morning. We are delighted to have the opportunity to review our progress over the past year and discuss upcoming events in 2014.

Since the beginning of 2013, we have reported significant achievements across multiple areas of our business. We further validated the clinical potential of our biased ligand approach. We have advanced and expanded our clinical pipeline, and we've substantially strengthened our balance sheet.

Together, these accomplishments demonstrate our progression into a mid-stage drug development company with multiple high-value assets and a proven productive platform, and they pave the way for continued momentum in our clinical portfolio.

As many as you know, Trevena's strategy is to leverage our Advanced Biased Ligand Explorer or ABLE product platform, to identify and develop medicines that target proven G protein-coupled receptors or GPCRs, and offer a differentiated and superior therapeutic profile that is a value to patients and attractive to payers.

We have been very successful in our efforts to date, generating three differentiated product candidates, each addressing a major market opportunity. Two are focused on CNS indications. TRV130, a G protein biased ligand targeting the mu-opioid receptor, is about to enter Phase 2 studies for the IV treatment of moderate to severe pain. While TRV734, an oral follow-on to 130, advanced into the clinic earlier this year.

We are also developing TRV027 a peptide beta arrestin biased ligand that targets the angiotensin II type I receptor. It is in a Phase 2b trial for the treatment of acute heart failure and is optioned to Forest Labs.

Our programs are based on well-established targets that differ from existing GPCR ligands, in that they activate only one of the two signaling pathways downstream at the GPCR, either G protein or beta arrestin mediated signaling. Current GPCR ligands typically lack this signal specificity and, therefore, either activate or inhibit both pathways simultaneously.

And since one of the pathways can be associated with the beneficial therapeutic effect and the other with an undesirable side effect, traditional GPCR drugs can offer a suboptimal therapeutic profile. Our approach may, therefore, translate into an enhanced efficacy and/or safety over current GPCR treatment.

Over the past year, the data imaging from our clinical programs have continued to support and validate our approach. Let's start with TRV130. The trend in postoperative pain treatment has been to add weaker analgesics to standard opioid therapy, in order to reduce the opioid dose and, therefore, the side effect.

Our approach is instead to develop a better opioid with unmatched analgesia, and reduce side effects. The data from our earlier Phase 1 program underscore the potential of our biased ligand to improve therapeutic outcomes as compared to unbiased mu-opioid receptor agonists, such morphine or hydromorphone.

In our recently completed Phase 1b trial, 130 demonstrated superior analgesia and better safety and tolerability versus morphine. These results are consistent with data seen in an earlier Phase 1 study and our preclinical work, and suggests that 130 may reduce patients' pain more effectively, act more quickly and produce less severe GI side effects and risk of respiratory depression, resulting in an improved margin of safety for dosing.

In total, the improved therapeutic profile of TRV130 offers a potentially attractive value proposition and the potential for improved pharmacoeconomics as compared to current mu-opioids. And David will discuss the data in more detail.

Data from our preclinical and clinical studies of 027 also provide validation for our biased ligand approach. Specifically, we have demonstrated its potential to promote beneficial effects on the three key organ systems affected during acute heart failure: decreasing blood pressure through its effects on the vasculature, improving cardiac contractility, and improving renal perfusion.

In combination, we believe these effects may translate into improvements in symptoms and outcomes, such as hospital readmission rates, length of hospital stay, or mortality rates. Based on the strength of the data and potential for 027, last May we entered into an option and license agreement with Forest.

Under the terms of the agreement, Forest took a $30 million equity position in Trevena and received an option to license TRV027 at any time before we deliver our Phase 2b clinical trial results, up to a specified period of time thereafter.

Should Forest's license the compound, they would be responsible for subsequent development, regulatory approval and commercialization expenses. We would receive $65 million license fee and could potentially receive up to an additional $365 million in development and commercialization milestone payments, in addition to tiered royalties of between 10% and 20% on net sales worldwide.

The strategic rationale for this transaction is clear. It provides the late-stage funding of 027 by a strong commercial partner, while potentially generating near-term milestone payments; and over the longer term, a royalty stream that we can invest into our core CNS pipeline. We continue to work closely with the Forest team on the development of 027 as they finalize their ongoing transaction with Actavis.

Another key focus in 2013 was to strengthen our balance sheet to support continued development of our pipeline. The investment from Forest was part of a $60 million Series C financing completed last May. Our January 2014 IPO raised net proceeds of approximately $60 million for Trevena. So together, these provide us with funding to support our clinical activities and corporate operations through 2015.

Currently, we focused on expanding Trevena's experience in late-stage drug development. In January we appointed Dr. Francois Nader, President and CEO of NPS Pharmaceuticals, to our Board of Directors. Many of you know Doctor Nader. He is an industry veteran with a proven track record in drug development, and we are already benefiting from his insights and expertise.

One of the distinguishing features of Trevena is our proven ability to move our programs forward, rapidly and efficiently. For 2014, we plan to build on our momentum by accelerating our clinical initiatives. And these will include preparing to launch two Phase 2 trials for 130, a Phase 2a bunionectomy trial in the second quarter, and a second Phase 2 trial in a soft tissue surgery in the fourth quarter.

Data from the bunionectomy trial are expected in the first quarter of next year and, if positive, will pay the way for advancement into Phase 3.

In February, our third clinical program, 734, advanced into Phase 1, and we expect to report top-line data from this program in the third quarter. We are continuing to leverage our ABLE product platform to deliver additional candidates to our pipeline. And to that end, we plan to select a delta opioid biased ligand to add to our pipeline later in the year.

For 027, we announced the dosing of the first patient for our first 2b trial in acute heart failure. And David will provide additional details on the trial, but I am pleased to report that patient enrollment is proceeding as planned. We are very pleased with the progress we have made over the past year, and we look forward to continued execution of our strategy in 2014.

So let me now turn the call over to David for a review of our programs.

Thanks, Max. We have an extremely productive year on the clinical front, with three candidates now in development. Let me begin with a discussion of our CNS portfolio, starting with TRV130. 130 is in development as a first-line treatment for moderate to severe acute pain where IV administration is preferred, such as postoperative pain.

Postoperative pain represents a large market opportunity with a need for improved therapies that address the limitations of current opioids. According to IMS Health, there were approximately 30 million reimbursement claims made for IV opioids by hospitals in the United States in 2010. And we estimate that three-quarters of the 14 million inpatient claims and half of the 16 million outpatient claims for IV opioids were surgery related.

Opioid analgesics such as morphine and hydromorphone are unbiased mu-opioid agonists. And although they are currently the most effective IV analgesics for moderate to severe acute postoperative pain, their dosing is limited by well-known side effects such as respiratory depression, nausea and vomiting, constipation and postoperative ileus.

130 is designed to elicit a potent analgesic effect with less respiratory depression and constipation compared to morphine and, therefore, offers the potential to provide a highly-efficacious well-tolerated easily-administrated analgesic that becomes the new standard of care opioid and reduces the cost and complexity of pain management in the hospital.

Our data to date have been extremely encouraging and consistent with this expectation. In October, we published results from our Phase 1 ascending dose trial in The Journal of Clinical Pharmacology. Using pupillometry as a measure of pharmacological effect, we identified several doses of 130 which elicited pupil construction similar to that induced by morphine in other studies, but with no incidents of nausea and vomiting. These findings suggest that it may be better tolerated than unbiased opioids like morphine, which frequently produce nausea and vomiting at active doses.

During the fourth quarter, we completed our Phase 1b PK/PD trial, comparing 130 with a high dose of morphine in healthy subjects using the evoked pain model. 130 showed superior analgesia compared to the high dose of morphine, with a higher maximal effect and similar duration of response while causing last respiratory depression, less severe nausea, and less vomiting at these analgesic doses.

The findings from this study will be presented in a poster at The American Pain Society meeting in May. Based on these promising results, we are planning to commence two Phase 2 trials this year. The first is a Phase 2a/b bunionectomy trial on track to start in the second quarter. This will be a robust trial with approximately 400 patients, with the aim of highlighting TRV130's efficacy and tolerability compared to morphine.

The trial will employ an adaptive dose selection design to identify the optimal dose or doses versus morphine, considering both efficacy and tolerability. Results are expected in the first quarter of 2015. If positive, these results will allow us to begin planning for Phase 3 studies in acute, moderate to severe postoperative pain.

We also plan to launch a Phase 2 soft tissue surgery trial in the fourth quarter, utilizing a flexible dosing paradigm. The aim of this study will be to evaluate TRV130's efficacy and tolerability, again in comparison to morphine, but this time using as needed dosing in the soft tissue surgery model.

This study is in the design phase now, and the goal will be to further TRV130's differentiation versus the currently-used opioid agents.

We expanded our clinical stage pain portfolio earlier this year with the initiation of our Phase 1 trial for 734, which takes advantage of the same selective signaling mechanism of action as 130. Our goal is to develop a highly-effective oral analgesic for moderate to severe pain with improved safety and tolerability compared to oxycodone.

In preclinical studies, TRV734 demonstrated an encouraging therapeutic profile, with a potent analgesic effect and a reduced impact on GI motility at equal analgesic doses compared to oxycodone. The Phase 1 trial will evaluate the oral availability, safety, tolerability, pharmacokinetics and pharmacodynamics of single ascending doses of 734 in healthy subjects. The potentially efficacious dose range will be evaluated using pupillometry. The data from this trial are expected in the third quarter of this year.

We also continue to leverage our ABLE product platform to generate additional development opportunities. We are building on our experience in CNS and advancing our delta opioid receptor biased ligand program for Parkinson's Disease, pain or depression.

Our goal is to identify an orally available biased ligand with a strong efficacy profile without the seizure liability generally associated with delta opioid receptor agonists. We expect to select a product candidate from this program later in the year.

Turning now to our TRV027 program. As Max noted, TRV027 is a peptide beta arrestin biased ligand that targets the angiotensin II type 1 receptor or AT1R. When angiotensin II binds to the AT1R, it stimulates cardiac contractility through beta arrestin signaling, and increases blood pressure and causes fluid retention through G protein signaling.

Increased blood pressure and fluid retention strain the heart and damage the kidneys, resulting in multi-organ pathophysiology. Angiotensin receptor blockers or ARBs, therefore, fully block the effects of angiotensin II, decreasing blood pressure and preserving kidney function but preventing the stimulation of cardiac contractility.

We believe that the resulting risk of acutely impairing cardiac function has limited the development of ARBs for the treatment of acute heart failure, despite their well-proven benefits in chronic heart failure.

In contrast, TRV027 selectively blocks G protein signaling at the receptor, reducing blood pressure and increasing kidney perfusion, while activating beta arrestin signaling, promoting cardiac contractility and increasing cardioprotective signaling.

So unlike existing therapies, 027 may benefit all three key organ systems involved in acute heart failure: the blood vessels, the kidneys and the heart.

The data from our preclinical and clinical studies support the product's potential enhanced therapeutic profile. In our Phase 2a trial, TRV027 rapidly and reversibly lowered blood pressure and pulmonary capillary wedge pressure, which is a measure of pressure buildup in the lungs and is correlated with dyspnea.

In a setting of AHF, these beneficial effects on blood pressure and wedge pressure would allow the heart to pump more effectively, thereby enhancing cardiac output. In this trial, 027 also preserved kidney function, which in the context of lower blood pressure is an important characteristic of a vasodilator for AHF.

In January, we announced the dosing of the first patient in our Phase 2b BLAST-AHF trial of 027, a randomized double-blind placebo-controlled trial of 027 with standard of care in patients with AHF. The primary objective of this 500-patient trial is to evaluate the effects of three dose levels of 027 -- 1, 5, and 25 milligrams an hour -- versus placebo with standard of care on a composite of clinically important outcomes: mortality, worsening heart failure, hospital readmission rate, dyspnea, and length of hospital stay.

The results from this study are expected in the second half of 2015. We believe the design of this study will generate the data that will then be needed to optimally design the Phase 3 program.

We are extremely pleased with the progress to date of our pipeline, and we look forward to updating you on our development efforts over the course of the year.

I will now turn the call over to Roberto for a review of our financials.

Thanks David. Our financial results for 2013 reflected our continued investment in Trevena's pipeline. Revenue for the year decreased to $135,000 for 2013, versus $808,000 in 2012, as a result of the conclusion of our research grants from the Michael J. Fox Foundation, the NIH, and the conclusion of a research collaboration with Merck Research Labs.

G&A expenses for the full-year 2013 increased to $4.7 million from $3.1 million in 2012. This was driven primarily by an increase in professional fees for legal services, for financial consulting services in connection with business development activities, and expenses incurred in connection with preparing for our initial public offering of common stock.

R&D expenses were $18.8 million in 2013, up from $13.3 million in the prior year. The $5.5 million increase was primarily driven by clinical research expenses and formulation in manufacturing work associated with the continued development of TRV130, clinical research expenses associated with advancement of TVTR027 into a Phase 2b study, and the costs of progressing TRV734 from lead optimization into INV enabling studies during the year.

We reported a net loss attributable to common shareholders of $23.6 million for the year ended December 31, 2013, as compared to a loss of $16 million in 2012. This includes non-cash charges of $334,000 and $317,000 for the accretion of preferred stock in 2013 and 2012, respectively. Following the initial public offering, we now have 26.2 million shares outstanding.

We ended the year with $38 million in cash, which does not reflect the net proceeds of approximately $60 million from our January IPO. We expect that our existing capital resources together with the proceeds from the IPO will be sufficient to fund our operations to the end of 2015.

Let me now turn the call back over to Max for closing comments.

Thank you, Roberto. Trevena is clearly well-positioned with a strong balance sheet to support the continued development of our promising differentiated drug candidates. The data emerging from these programs reinforce my confidence in the biased ligand platform and underscore the potential of each candidate's enhanced therapeutic profile.

Our focus for 2014 is to continue to drive development in the clinic and further release the data clinical potential of each candidate. Over 2014 and into early 2015, we look forward to some key milestones. First, TRV130 Phase 1b data will be presented at The American Pain Society meeting in early May, and we hope to see you all there.

We also plan to initiate our Phase 2ab bunionectomy in the second quarter, with data available in the first quarter of 2015. In the second half of the year, we look forward to reporting top-line data from the TRV734 Phase 1 trial expected in the third quarter, and selecting a clinical candidate from our delta opioid receptor program.

We also plan to initiate our Phase 2a, 2b soft tissue surgery trial for 130 in the fourth quarter. And finally, we will continue driving enrollment in our Phase 2b trial of TRV027.

Thank you all for your continued support of Trevena, and we look forward to updating you on our progress throughout the year. We will now open the call for questions. Kevin.

(Operator Instructions). Ying Huang, Barclays.

Actually [Catherine Freely]. Thanks for taking my question. A couple of quick ones for you guys. For the last HF study, approximately when do you expect the interim analysis to be, and when will you actually be releasing these findings? And then also what you're actually looking for in this interim analysis?

And then secondly, can you -- have you had any discussions with Actavis on TRV027? And if not, do you plan to? And then lastly, if they don't opt it in, what do you think your next steps will be? Thanks.

Thanks, Catherine. So I will let David address the question on the interim analysis. With regard to Actavis, we have continued to have frequent and very positive interactions with the Forest team throughout this process. We have not had any formal interaction yet with Actavis. Our view was that we would wait until the transaction is complete.

David, would you like to address the interim analysis?

Sure, yes. Hi, Catherine. So the interim analysis is not going to be made publicly available. It is essentially an exploratory analysis looking at safety and some signals of efficacy, and some internal decisions based -- looking at different doses may be made at that interim analysis, but it is an adaptation point. So is not going to be made public.

The second question was around when that is going to occur. We are not planning to talk about accrual into the trial at this point. But we are on track right now to recruit the full 500 patients and release the data in the second half of 2015.

Okay, thank you. And then one follow-up for the Actavis part. If they don't opt in, what do you think your next steps will be?

So at this point, we have no reason to think that their view of 027 is going to be any different from the Forest view. I think that we will wait and see what happens and then we will decide what to do at that point.

Okay, thank you.

Biren Amin, Jefferies.

Hi guys, thanks for taking my questions. I guess just on the 130 program, and the soft tissue Phase 2 pain study that you anticipate starting in Q4, what is going to drive your choice of the soft tissue model? Thanks.

Hi Biren, thank you for the question. And the person who will be figuring that out is David, so I will pass that to him.

Thanks. Hi Biren. A lot of different considerations come into play when you're thinking about designing a trial, especially in Phase 2. So as we have done with the bunionectomy study, we have clearly identified what questions we need to ask with that study and we have designed the trial to yield those results.

So in Phase 2, what we try to do is use very well validated and controlled models to be able to minimize variability and enhance the robustness of the data from the study. And this is sort of a well trodden path within opioid drug development over the last 20 or 30 years.

So therefore we have gone with a bunionectomy study to start with. There are a couple of different approaches you can use for a soft tissue or visceral pain model and we are evaluating those based on the type of data that we want to generate from the study. So we're basically in the design stage right now.

Got it. And I guess, based on your timeline, it seems that the Phase 3 for 130 is going to be based on the bunionectomy trial readout versus a soft tissue trial readout. Why not wait for the Phase 2 soft tissue readout before starting Phase 3?

I think the point is that at the end of the bunionectomy study we will know how strong the data could look like in a Phase 3 program as we move forward. So it would be the time to start planning for that Phase 3 program. So that is what we would expect to do.

We would get the data from the bunionectomy trial, ramp up all of the operational machinery that we have to do including drug production, identifying sites, writing protocols, engaging with regulators and so forth before we'd embark on that study. But with those data we think we'd have a very strong set to talk about.

Great. Thanks for taking my question.

Alan Carr, Needham & Co.

Hi, thanks for taking my question. I will ask about the two earlier ones. It can comment on what you really expect from this -- the 734 Phase 1 trial, what comes next after that? And then also can you talk about the delta program as well in terms of characteristics I guess you're looking for in (inaudible) some of the challenges that the industry has faced with this target? Thanks.

Thank you. I am sorry, Alan, could I just ask you to repeat the question around 734? I didn't quite catch it.

734, your expectations there and do you have any plans after that for the next trial?

I think David can take that.

So for 734 the trial we are running right now is a single offending dose study. So we are evaluating TRV734's pharmacokinetics, its tolerability. And then we're using -- as I said in the presentation, we're using pupillometry to assess the potentially effective dose range.

So like we did with TRV130, we use pupillometry to characterize the drug's CNS penetration and engagement of the receptor, the [mutant] receptor. So this is a very nicely validated biomarker from [new] agonist. So we're using that in this trial as well.

Next would be to consider a multiple ascending dose study and paving the way into a Phase 2 program.

In the [MAN] trial will you be exploring a bit more in terms of efficacy and that sort of thing or just more pupillometry there?

Well, we haven't really designed the trial yet, but what we have done in the past, especially in early phase studies, is enrolled healthy subjects and used evoke pain models like the cold pain test or pupillometry or other sort of experimental methods to assess differentiation.

Okay, thanks. And then with respect to the delta program --?

Yes, so the delta opioid receptor has very interesting and attractive pharmacology associated with it. And this has been studied now for a few decades. So it is biologically -- the biological activity of delta agonists has been shown in a variety of different disease models including models of Parkinson's disease, various pain states including neuropathic pain as well as in models of depression.

But the issue that is always prevented later stage development of delta agonists has been seizure which is in on target side effect. And we think that the biased ligand approach, based on delta that we have developed at Trevena, will allow us to separate these two activities, the positive pharmacological effects and the seizure side effect. And so that is the work that we are doing right now in optimizing the candidate.

And your timing for bringing that one to the clinic you think?

We think we should be ready for the clinic by the end of 2015 -- the end of 2015.

Great, thanks very much.

Jason Butler, JMP Securities.

Hi guys, thanks for taking the question. Just another question on 734. Just given recent news flow and FDA actions in the opioid space related to opioid abuse deterrent technologies, how are you thinking about the development program of 734 with or without that kind of language in the label?

Thanks, Jason. Our view is that drugs for chronic use are likely to require technologies that prevent its misuse. And so, we anticipate that we will need to take care of that somewhere along the way in middle stage development.

Okay, great. Thanks for taking the question.

I am not showing any further questions at this time. I'd like to turn the conference back over to Max for closing remarks.

Thanks very much, everyone, for joining us today. And as you know, we are always available to take any other questions you might have.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.