Trevena Inc (TRVN) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Trevena Fourth Quarter and Full Year 2020 Financial Results Conference Call.

I'd now like to hand the conference over to your host today, Mr. Barry Shin, Senior Vice President and Chief Financial Officer.

Good morning, and welcome, everyone. With me today from Trevena are Carrie Bourdow, our President and CEO; Bob Yoder, our Chief Commercial Officer; and our Chief Medical Officer, Mark Demitrack. We also have Dr. Greg Hammer from Stanford University Medical Center with us. Dr. Hammer was an investigator in our Phase III open-label safety study. He'll be sharing his firsthand experience with OLINVYK. At the end of the call, we'll open it up for questions.

As a reminder, we'll be making forward-looking statements within the meaning of federal securities law. These statements are subject to risks and uncertainties related to our business, including those covered in our filings with the SEC. We undertake no obligation to update these statements beyond today.

I'll now turn the call over to Carrie.

Thank you, Barry. Good morning, everyone. Thank you for joining us today. For those of you who are new to us, a little background. Trevena was built from the ground up based on Nobel Prize-winning science around GPCR-selective agonist. With our innovative science, we've built a pipeline that is tackling some of the most urgent diseases in CNS.

Let me provide a few highlights on what we accomplished in 2020. 2020 really was an unprecedented year for Trevena with FDA's approval late last year of OLINVYK, our novel IV analgesic for acute pain, we accomplished what very few companies our size do. We successfully took a drug candidate through the entire discovery, development and commercialization process. We're in the early days of our launch, but what I can say, and Dr. Hammer will speak more to this, is that OLINVYK's unique profile is compelling to physicians, especially as they evaluate OLINVYK for their most challenging acute-pain patients, in both the inpatient hospital setting and in ambulatory surgery centers.

Also, we've now published all the current OLINVYK GI and respiratory safety data versus IV morphine. The data is available in peer-reviewed journals. And this is important because hospital formulary committees will use this data as they review OLINVYK.

Of course, this is a unique time to be launching a new product. We're hearing from our customers that in some areas, they expect the impact of COVID-19 to extend into this year. We're also hearing that elective surgeries in certain regions of the country are starting to return to normal levels and shortages for drugs like morphine continue in hospitals, which may create an opportunity for a new IV analgesic option like OLINVYK, as you'll hear from Bob that we're being very thoughtful in our approach to staffing and commercialization activities.

We've made great progress on our pipeline assets in 2020 as well, and we have a number of key catalysts on the horizon. Let me start with TRV027, which is being studied in COVID patients by Imperial College, and they expect to complete their study in the first half of this year. They'll be reporting top line data soon after.

Also, on track for the first half of this year is our IND filing of TRV045, a novel S1P receptor modulator for the potential treatment of epilepsy and neuropathic chronic pay.

And lastly, I'm pleased to announce that we've identified a novel oral form for TRV250, our new mechanism for acute migraine. We've already started IND-enabling work for the oral because we believe this will be very useful for migraine patients and for other CNS areas that we'd like to explore. Mark will provide additional details on all of these exciting pipeline developments later on the call.

As you can tell, it was an extremely productive year. We ended the year with $109.4 million in cash, which we expect will fund our operations for 2 years through year-end 2022. I'm proud of all that we accomplished last year, especially in light of the challenges that COVID-19 presented to our industry and our communities, and I'd like to thank our employees and our business partners for their amazing focus and resilience on delivering medicines that make a difference for patients.

Now let me turn the call over to Bob to talk more about the OLINVYK launch. Bob?

Thank you, Carrie. It is great to be here this morning to give you an update to the progress we've made with the commercial launch of OLINVYK. Ever since FDA approval and DEA scheduling, the team has been hard at work to build out our launch capabilities and prepare for the field launch this quarter. I am thrilled that we've recently crossed the final milestone with our 40-person customer-facing team fully deployed as of late February. All of our new team members have prior experience in the hospital and ASC study, and many also have experience in the acute pain space. So they are able to leverage prior relationships to facilitate early access with HCPs.

Even though they've been out in the field less than a month, our team is reporting that HCPs are interested in hearing more about OLINVYK, the first new chemical entity in the IV opioid space in decades, and they are open to having more detailed discussions. We're deploying the customer-facing team across 550 target hospitals and about 500 target ASCs. We have a group of medical science liaisons in the field who are a critical asset in our health economic strategy. Recall, we developed a health economic model that's included in our comprehensive product dossier, which quantifies the overall value that OLINVYK can deliver to the health care system.

Prior to the launch of our field team, we had already received positive feedback on that model in discussions with formulary stakeholders. In hiring our MSLs, we focus on bringing individuals with a strong health economics background, and they'll play a critical role in translating our model into an economic value proposition for OLINVYK.

On the commercial side, we have a mix of regional sales managers and key account managers. This group brings an average of over 20 years of experience in pharma, along with extensive sales leadership and launch experience. They're leading our team of sales reps, all of whom bring deep experience in the acute care hospital and ambulatory surgery center setting. We are really pleased to have this level of expertise and talent supporting our launch of OLINVYK and the introduction of Trevena to our customers.

As we think through the unique challenges of launching a new product during COVID-19, our goal is to put the right resource in the right place at the right time. We're utilizing local and state-level data on hospital protocols and elective surgery trends as well as real-time data from our partner Syneos Health, to help inform our deployment strategy across a range of resources.

In addition, we also deployed a separate cohort of telesales reps who will be focused on orthopedic surgeons in both hospitals and ambulatory surgery centers. We believe this additional promotional channel is an efficient way to drive awareness and adoption of OLINVYK in a key customer group. These telesales reps were previously engaged in the postsurgical pain space with orthopedic surgeons and are very familiar with the outpatient setting of care.

As a reminder, our initial core focus covers approximately 9 million complex patients, a significant market totaling an estimated $1.5 billion addressable market opportunity. Our strategy continues to be focused on replacing conventional IV opioids with OLINVYK in the right patients and surgeries, not on expanding the overall market. We've set a year-end target of 100 formulary wins. And as with any launch in the hospital space, these early months will be focused on laying a strong foundation on which to build momentum. Things like developing customer relationships, initiating formulary discussions and facilitating customer education. We believe that employing a thoughtful and disciplined approach will pay off in the long run for us. And with this strong field team in place, we're in a great position to begin executing on our sales plan.

As Carrie mentioned, we're very encouraged by the inbound interest we've already received from potential customers, and we're starting to see some exciting movement from our early leads. We're in the process of scheduling our first series of speaker programs, and those will begin rolling out in the next few weeks. We believe the opportunity for HCPs to hear from their colleagues about the differentiating features and appropriate patients for OLINVYK will be an important driver of expanded awareness and initial trial.

Many of our initial speakers have experience with OLINVYK via their participation in the Phase III open-label safety study. With our reps in the field less than a month, I am pleased to report that we're in active formulary review discussions with a broad range of institutions and already have some early wins.

On that note, I'd like to introduce Dr. Greg Hammer, a perioperative physician, anesthesiologist and intensivist at Stanford. Dr. Hammer has clinical experience with OLINVYK, and recently submitted it to his institutions' formulary committee for review. We have asked Dr. Hammer to join us this morning to provide his clinical perspective on where he sees OLINVYK fitting into his practice and his experience with the formulary review process at Stanford.

Before he begin, I'd like to remind everyone that OLINVYK is indicated in adults for the management of acute pain, severe enough to acquire an IV opioid analgesic and for whom alternative treatments are not adequate, and I would encourage you to visit olinvyk.com for important safety information, including the box warning and the full prescribing information.

With that, the call -- I'll turn the call over to Dr. Hammer. Dr. Hammer?

Thanks, Bob. It's a pleasure to speak with you all this morning at this early hour out here on the West Coast. I'm happy to be given the opportunity to present a few insights from my perspective as a perioperative physician with respect to OLINVYK and its role in my practice as an anesthesiologist and intensivist at Stanford.

I manage patients of all ages having cardiothoracic procedures in our heart center. By way of disclosures, I'm a paid consultant with Trevena. The views that I'll be expressing today are my own. I'm not speaking on behalf of Stanford. I have read all of the Phase I through Phase III studies and used OLINVYK in adults having cardiothoracic procedures intravenous Phase III open-label safety study. I feel very familiar with the drug and well-qualified to discuss its use in the perioperative setting.

There has been very little innovation in IV opioid pharmacology in the last few decades, despite the fact that opioids remain an essential component of perioperative management. Until now, all opioids have worked in the same way by binding to a receptor and turning on a switch. Unfortunately, that switch activates pain control pathways, but also a number of unpleasant and serious side effects. These include respiratory depression and GI complications, including nausea and vomiting. OLINVYK is truly novel. It is chemically distinct from conventional IV opioids and does not activate these pathways equally. What I find really exciting is that while OLINVYK is as effective in analgesic drug as morphine and other opioids, it has differentiating features that are important as I manage my clinically challenging patients.

Let me touch on a few of the challenges we face when managing postoperative pain. First, respiratory depression is the most dreaded opioid-related adverse effect. I was very reassured to see that Trevena looked at this in their clinical program. Respiratory depression is very difficult to study in clinical trials. There are no good ways to measure it. So we use substitute measures like oxygen saturation and respiratory rates. Unfortunately, these are rather poor surrogates. In addition, if a patient begins to manifest decrease or obstructive breathing, we cannot simply watch and see how bad it gets in order to document it. We're compelled to intervene, so we lose the ability to evaluate its severity. This makes it hard for us to accurately assess how frequently significant respiratory depression really occurred.

Fortunately, we do have an ingenious way of measuring respiratory depression in healthy subjects, which Trevena did in one of their clinical studies. This is called the ventilatory response to CO2 test. When a person breathes a mixture of air and CO2, or carbon dioxide, they breathe more deeply and frequently to get rid of the CO2. This is an important homeostatic response by the brain and body. Trevena used this method to generate meaningful data to compare OLINVYK's respiratory profile to that of morphine. And this published data will be an important consideration for formulary committees reviewing OLINVYK.

I was also really impressed by the nausea and vomiting adverse event profile with OLINVYK in the Phase III trial. The only thing worse in nausea and vomiting is nausea and vomiting and a fresh surgical incision. Most patients would rather have pain than nausea and vomiting. Based on my own experience as a surgical patient, I am in that camp. Fingers crossed for my shoulder surgery taking place right after this call.

OLINVYK has a rapid onset, no active metabolite and does not have to be dose adjusted in people with kidney disease. These are all really desirable pharmacologic properties of any drug, especially opioids.

We're in the midst of getting OLINVYK added to the formulary at Stanford. The process is pretty simple. A physician makes a request to the formulary committee and a pharmacy, in turn, makes a presentation at the subsequent meeting. The initial target population might be the elderly and obese patients, since a recent publication on the Phase III open-label safety study confirmed that these at-risk groups did not have a higher incidence of respiratory, or GI, side effects compared to young, healthy patients who were on OLINVYK.

This is big. Since even one serious respiratory event can increase hospital stays and hospital costs. Even the cost of GI-related side effects can be great, since nausea and vomiting may well result in prolonged hospitalization and significant patient dissatisfaction.

No opioid is without risk. Fortunately, doctors and pharmacists are well versed in managing those risks. When the formulary committee makes their decisions, they look at all the published data and look for ways to improve patient outcomes and save money. Trevena has done a great job assembling a strong foundation of published data that will help formulary committees evaluate cost offsets, along with considering the clinical benefit of the new drug.

To close, I'm very excited to be able to use OLINVYK, the first new IV opioid, in some time for managing acute pain. I've used it in patients and have seen how they benefited from it, and I look forward to having it available as part of my practice.

Thanks for your attention. I'm happy to turn the mic over to Carrie.

Thank you, Greg. We really appreciate your insights how OLINVYK may help you treat your patients and some of the considerations for your formulary committee.

Let's now move to talk more about our pipeline, and I'll turn the call over to Mark to review some of the key activities. Mark?

Thank you, Carrie. With our innovative science and dedicated team, we built a pipeline that is targeting some of the most urgent diseases in CNS. 2021 is certainly shaping up to be an exciting year.

I'd like to start with our newest asset, TRV027, which is being studied in COVID-19 patients. Shortly after the start of the pandemic, a publication out of Duke University highlighted the therapeutic potential of TRV027's selective mechanism of action to restore lung function while blocking the pathway that causes multi-organ damage and abnormal blood clotting in COVID-19 patients.

Several institutions were interested in studying TRV027, and the team at Imperial College London is currently sponsoring and leading a trial in 60 hospitalized adult COVID patients. The primary endpoint is the prevention of abnormal blood clotting, but they're also evaluating overall disease outcome, including lung function. They expect to complete the study in the first half of this year.

With our delta receptor agonist, TRV250, we reported earlier today that we've made significant progress by identifying a novel oral formulation, and we've already embarked on the necessary IND-enabling work to make this oral formulation available for human use. We believe that this will significantly extend our patent for this compound. We continue to believe that the delta receptor is an important therapeutic target because of its broad distribution in brain areas that are key for the regulation of pain, mood and anxiety. With an oral formulation now in hand, alongside the existing subcutaneous formulation, we've been studying up to this point. We are in an advantageous position to continue future development efforts with this compound.

Finally, I would like to comment on our work with TRV045, our S1P receptor modulator. Let me highlight 2 important attributes of this compound. First, it's specific to the type 1 form of the S1P receptor that's prevalent in brain tissue. Secondly, TRV045 appears to have no effect on peripheral lymphocyte trafficking, a common side effect of current S1P modulators on the market that can lead to lymphopenia and immunosuppression. We believe these combined attributes make TRV045 unique among compounds in this space and ideally suited for exploring CNS clinical indications like chronic neuropathic pain or epilepsy.

We've been fortunate to collaborate with the NIH of this program. And while that work is ongoing, we've made progress on our own IND-enabling efforts and are on track to submit our initial IND for TRV045 in the first half of this year. We're excited about the prospects for TRV045 moving forward and for our exploration of S1P pharmacology in general.

Let me now turn the call over to Barry to discuss our financial results for the year. Barry?

Thanks, Mark. For the fourth quarter of 2020, we had a net loss of $11.9 million compared to $6.4 million for the fourth quarter of 2019. This increase in net loss is mainly due to preparations for the commercial launch of OLINVYK.

Our operating expense was $12.1 million in the fourth quarter of 2020, and we expect this to increase moderately in 2021 as we deploy our customer-facing team and commercialize OLINVYK. We significantly strengthened our financial position last year with an oversubscribed $57.5 million public offering in August as well as receipt of a $3 million milestone payment from Nhwa, our partner in China. As a result, I'm pleased to report cash and equivalents of $109.4 million at year-end 2020, which we expect will fund our operations through the fourth quarter of 2022. This includes 2 years of OLINVYK commercialization and progress across our pipeline.

We'll now open the call for questions, after which Carrie will provide some closing remarks. Operator?

(Operator Instructions) Our first question comes from the line of Dana Flanders with Guggenheim.

Great. Congratulations on all the progress. I had just two quick questions, if I could. First, I was wondering if you could give us a little more color on some of the formulary processes undergoing right now. And wondering how many are actually reviewing OLINVYK, if you can share that. And then, I guess, across some of the early wins you're seeing, are there any restrictions in place for OLINVYK among the target patient population that you'd expect to see use?

And then my second question, apologies if I missed this, but just on TRV027, any reason for the delay in data? I think originally, it was 1Q of this year, and now you're saying first half of '21. I'm wondering if you have any color on that.

Dana, thank you for the question. So I'll start and then if Bob and Mark want to jump in as well. On the color for the formulary wins, I mean, it's pretty early, right, for us. We just got our field sales organization, our MSLs, out. What I can say, interestingly enough, is that we have not had major restrictions placed on the drug. One of the larger institutions that put the drug on formulary was interested in it for a particular patient group that decided not to put restrictions on it. So I thought that was really, really interesting. So more to come, obviously, as we continue with the launch processes, we'll be providing additional updates.

Let's see. I think you also asked about 027 and the delay in the data. So this is a study, as you remember, that's being run by Imperial College in London, and they're partnering with British Heart Foundation. I think you're seeing this a lot with COVID studies. It's such an interesting disease. There are peaks and valleys and how studies are recruiting. And frankly, this one is not up to us, right? This is really more Imperial College driving the processes. So we've been really pleased with Imperial College and all that they're doing. They're one of the top institutions with regard to COVID, but there's not really any additional information around the timing.

Mark, anything you'd like to add? I know you're really close to the team there at Imperial College.

Yes, Dana, just to echo what Carrie was saying. As you know, the cases and the prevalence of COVID is somewhat of an unpredictable course. There's been peaks and valleys over time. It's also, obviously, a very clinically challenging population to treat. But as Carrie said, the team in Imperial College is directing this study. And so we follow their lead and their guidance as to the progress that they're making on that work.

Bob, anything you'd like to add on the formulary colors?

No, I think you covered it, I think.

Yes.

Yes. Yes, I think we're good.

Our next question comes from Brandon Folkes with Cantor Fitzgerald.

Congratulations on all the progress. Maybe just following on from the formulary editions question. Can you give any color in terms of where you've had the early wins and kind of maybe where you are or have dates set for reviews? Are these academic centers, community hospitals? Any color there would be helpful.

And then secondly, as you're deploying reps into the field, how should we think about maybe the percentage of reps that are allowed sort of face-to-face with customers?

Great. Thank you, Brandon. So again, on the color of the formularies, let's see what I can say is that we've been really pleased with the reviews at both ambulatory surgery centers and hospital institutions. And you heard Dr. Hammer from Stanford described the process at his institution, which is a large academic medical center. You can hear his interests at -- and potentially the way in which he'll go about getting Stanford on -- or getting OLINVYK on the Stanford formulary. I think that's pretty similar to what we've heard from other academic medical centers.

You remember that we are targeting with our field sales organization, more the community, community teaching organizations because they tend to have less processes in place or less processes as it relates to formulary committees. But we had quite a few investigators that were involved in the open-label safety study in ATHENA, like Dr. Hammer, that want to get OLINVYK on formulary really quickly. So more to come. Obviously, as we get a little bit more information, we'll certainly be providing that.

And then I think you had a question around the reps, and I'll let Bob handle that.

Great. Yes. Thanks, Brandon, for the question. So it's a good question about the percent allowed face-to-face. The first thing I'd say is it's highly regionally specific. It really does vary quite a bit depending on where you are in the country and what's happening there. I will say that we've -- we trained and resourced our folks to be effective in either setting.

So during the training process and in the creation of resources, we put things together so they could be effective in both the virtual engagement with customers through the CRM platform and things like that and live. And certainly, the guidance is live where and when you can and then certainly, virtual, if you need to fall back on that platform. So I think nationally, if you look at some national audit data, the range is probably 50-50 national, but I would say that's high variable and localized.

Our next question comes from Jason Butler with JMP Securities.

Just a couple. Dr. Hammer, a question for you, if I can. Appreciate your perspective on OLINVYK. Can you maybe give us any thoughts beyond using your hospital, the types of institutions that make sense for the company to focus on first? And how they can best message the drug's value proposition?

Sure. Well, I think, as I said, initially targeting the elderly and obese populations, which are very importantly high-risk couple of populations in all hospitals essentially based on the data from Phase III study that there's no incremental respiratory depression or increase in -- or rather, there's no increase in nausea and vomiting in that elderly group. So I think that's -- those are 2 excellent population to target. So wherever those patients are housed, I think, are good targets.

My sense is that once physicians get familiar with using the drug in those populations, for example, and in other high-risk populations, such as those who are recently excavated, but need opioid analgesia and others at risk with respiratory diseases and so on that once people are familiar with using the drug, dosing the drug, using it as a bolus and PCA that it's useful spread. I saw the same thing with the transition from thiopental to propofol did induction drug in anesthesia.

Thiopental was $0.50 for a syringe and propofol was $8.50. But it was appropriately and successfully marketed as a drug that resulted in earlier awakening and more rapid readiness for recovery and discharge. And so we started using it for that purpose. And pretty soon, it was being used for all kinds of different indications because people got familiar with it and liked the pharmacokinetics, liked the safety. And so I believe the same thing is going to happen with OLINVYK.

Great. And then a question on TRV045. Can you give us any high-level thoughts on the scope of the Phase I program as well as the single and multiple ascending PK work? Are there any PD markers you'll be evaluating? And any potential to include patients in the Phase I program in addition to healthy volunteers?

Thanks, Jason. Mark?

Sure. Jason, so at this point, we've not described the details of the Phase I program, as you know. So in addition -- but in addition, I think, you can imagine that in addition to the standard information that we would need to collect, given the targets that are under consideration, we'd obviously look pretty carefully at several experimental models that could be used for PD endpoints. And some of those may well be more appropriate in individuals with a disease state for us to look at. So it is certainly something that's on our radar screen, but we haven't discussed details of the program at this stage.

And Jason, I appreciate the question. I'm going to build actually on the question that you asked around OLINVYK as well because one of the things I think that we spend so much time talking about what our initial focus is. But let me just tell you, as you know, that we received a broad indication statement. It's the broadest indication statement that we could have received.

And when you look at the open-label safety study that Dr. Hammer was involved in, OLINVYK was used in everything from medical pain. So things like sickle cell, pancreatitis, broken arms in the emergency room, all the way to some of the more severe procedures that you hear us talk about, colectomies, total hip, total knees. In multiple settings, emergency room, we actually had a lot of plastic surgeons that were involved in the study, so things like breast augmentation or facial surgeries. And in particular, in some of those areas, plastics, right, those are cash-paying patients. So we have patent life on OLINVYK out until 2032 without any extensions.

You hear Dr. Hammer's excitement of using it in an academic medical center like Stanford. But I really -- I do agree with him that we're really just getting started with the potential opportunity for OLINVYK. So I appreciate the question.

Our next question comes from the line of Douglas Tsao with H.C. Wainwright.

Chris Bialas on for Doug Tsao. So I actually have two. I was wondering if you could maybe tell us which surgical indications are you seeing the most and least uptake in right now? And if you had any formulary losses, what are some of the reasons for that? And how do you plan to overcome these in the future?

Chris, I don't think we have much information around the surgical indications. You hear we have anesthesiologists that are asking to have the drug placed on formulary. Our focus is also on the surgery areas are colorectal, orthopedic and gynecologic. So those are really the 3 main areas. And they use a lot of IV opioids, use a lot of drugs with -- like IV morphine or IV hydromorphone. We've not had formulary losses yet. It's early, right? It's early days. So we'll be able to provide a little bit more color on that.

And as I said earlier, as you heard Bob say, we're just getting our field sales organization out, our medical science liaisons. There were a lot of physicians that were involved in the early open-label safety study that have been waiting for the drug. So those, as you might imagine, are the first group of physicians to advocate for the drug on formulary. So again, early days, right? We'll provide additional color as we move through the launch.

That concludes today's question-and-answer session. I'd like to turn the call back to Carrie Bourdow for closing remarks.

Thank you. Thank you all for your questions. And as you heard from us today, we are excited to now be underway in our full commercial launch of OLINVYK. The feedback and interest, as we've stated, that we've received from physicians like Dr. Hammer, reiterate our confidence in OLINVYK's differentiated clinical profile. And we obviously are committed to delivering this novel therapeutic option to patients in hospitals and ambulatory surgery centers across the country.

Additionally, as you heard, we're prepared to take the pipeline across a number of key milestones, and we look forward to sharing additional updates with you as we achieve success on all these fronts, continue to grow as an innovative CNS company. So thank you very much for joining us today, and that concludes today's call.

Ladies and gentlemen, this concludes today's program. Thank you for participating. You may now disconnect.