Trevena Inc (TRVN) 2020 Q3 法說會逐字稿

Greetings. Welcome to the Trevena Conference Call to provide an update on commercial launch activities for OLINVYK. (Operator Instructions) Please note, this conference is being recorded.

I will now turn the conference over to your host, Chief Financial Officer, Barry Shin. You may begin.

Good morning, and welcome, everyone. With me today are Carrie Bourdow, our President and CEO; Bob Yoder, our Chief Commercial Officer; and our Chief Medical Officer, Mark Demitrack.

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 obligations to update these statements beyond today.

During today's call, Carrie will open with introductory remarks and Bob will provide an update on our ongoing launch activities for OLINVYK, which is approved in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. I encourage you to visit olinvyk.com, where you can find important safety information including the box warning and the full prescribing information.

I'll now turn the call over to Carrie.

Thanks, Barry. Good morning, everyone. Thank you for joining us today. As we announced on Friday, we are very pleased that DEA scheduling for OLINVYK is now complete. And as a Schedule II product, OLINVYK can directly replace drugs like IV morphine in the hospital setting. Let me reiterate our confidence in OLINVYK's distinct and compelling profile, a fast 2- to 5-minute onset of action, morphine-like efficacy, no active metabolites and no dosage adjustment in renally impaired patients, a large patient population with significant medical complications.

And OLINVYK has a safety and tolerability profile demonstrated in a wide range of surgeries and challenging patients, including obese and elderly patients. We're excited that we can now make OLINVYK available to physicians in hospitals and ambulatory surgery centers across the country. And we know that they've been waiting to begin using OLINVYK to manage their patients in acute pain.

As I've said on previous calls, we began manufacturing drug product prior to approval so that we could respond quickly to our customers after approval and DEA scheduling. We are now well positioned to have commercial supply OLINVYK available this month. And as you'll hear from Bob, there's also a lot of important work already underway to support the rollout of our customer-facing teams in the first quarter of next year.

We've also continued to make exciting progress with our COVID asset, TRV027 and our ongoing collaboration with Imperial College. Unfortunately, we've all seen the rise of COVID cases in the U.K., and it was important for us to work really closely with Imperial College so that they could begin dosing patients in the 027 study as soon as possible.

Remember that due to the unique mechanism of 027, Imperial College along with the British Heart Foundation, is investigating the potential for 027 to reduce abnormal blood clots and lung damage, 2 of the most severe complications associated with COVID. We are proud to be working with such leading institutions, and we continue to expect top line data from this study in the first quarter of next year.

Before I turn the call over to Bob, let me quickly summarize our financials. Over the past few months, we completed a number of activities to strengthen our balance sheet, including a successful $57.5 million public offering, with the full exercise of the underwriters over-allotment option, and receipt of a $3 million milestone payment from Nhwa, our partner in China. And as a result, I'm pleased to announce that we ended the third quarter with $112.7 million in cash, which we expect to fund our operations for more than 2 years through year-end 2022.

Let me now turn the call over to Bob.

Thanks, Carrie. I am really excited to be here this morning to provide an update on the progress we've made as a commercial organization. With DEA scheduling for OLINVYK now complete, we're able to begin making it available to our customers.

In preparation for this milestone, we've already completed key activities on the supply chain side to ensure we can move product through the trade channel seamlessly once a customer places an order. I am pleased to announce that we have contracts in place with the 3 largest wholesalers who cover the vast majority of the acute care business.

We're working with each wholesaler to ensure product is made available in their respective distribution centers to allow for efficient ordering and delivery to hospitals and ambulatory surgery centers.

You'll recall that leading up to approval, we had already conducted a great deal of market research with formulary stakeholders on the OLINVYK clinical data, including preliminary pricing research. With an approved label, the feedback we've received from key physicians and formulary decision-makers has been positive.

There's clear excitement over OLINVYK's 2- to 5-minute fast onset of action, lack of active metabolites and no need for dosage adjustments in patients with renal impairment. They also appreciate the fact that we are making OLINVYK available in 3 vial configurations that cover PCA as well as bolus dosing options.

With this feedback in hand, we finalized the wholesale acquisition cost or WAC price per vial. Let me start with the PCA dose. For the 30-milliliter vial, the WAC price is $110. For the single dose vials, which will be used multiple times per day, the WAC price is $17.5 for the 1 ml vial and $25.75 for the 2 ml vial.

Given the diversity of settings of care where OLINVYK could be used and the fact that dosing for comfort is highly variable across patients and procedures, we think it's also helpful to frame this in terms of an approximate price range of $100 per day.

An important consideration in the value proposition for OLINVYK is the potential cost offset we believe it will demonstrate in the hospital or ambulatory surgery center setting. When evaluating a new drug, hospitals are focused on 2 objectives: improving patient outcomes and decreasing cost. Adverse events associated with conventional IV opioids like morphine are substantial and place a heavy burden on hospitals.

We have developed a robust health economic model to demonstrate the overall value that OLINVYK can bring to the overall health care system. The model was developed in collaboration with an expert at the Medical University of South Carolina, and we've already received positive feedback in discussions with formulary stakeholders.

I'd like to move on to our ongoing customer engagement activities. As you might imagine, we're closely monitoring the impact of COVID-19 on our ability to conduct traditional face-to-face meetings with our potential customers and our key opinion leaders. What is encouraging is that we're continuing to see strong engagement from physicians across digital platforms.

As I mentioned on our call in August, we'll be kicking off a multichannel educational campaign to ensure we're providing a surround sound engagement, including a channel mix across paid search, digital, print and e-mail. In addition to a full portfolio of print and digital materials, we will be implementing a KOL speaker bureau with virtual capabilities.

The build-out of our customer-facing team is progressing well. We have partnered with Syneos Health, an industry-leading contract sales organization with strong experience in the hospital space. And they'll be providing support for sales, market access and medical centers liaison hiring, as well as bringing critical sales and sales ops support to our team.

We chose Syneos for several reasons. They're able to recruit, train and deploy a field team very quickly, which will enable us to cover all of our target areas at launch. And they also provide us with flexibility to evolve our staffing needs very efficiently as our business grows. I am pleased to say that the recruiting process for all customer-facing roles is underway, and we've been very pleased with the caliber of candidates we are seeing.

As I previously discussed, with our targeted and focused launch, we've identified a subset of approximately 550 hospitals as early adopter institutions, meaning hospitals that conduct a higher percent of the painful procedures where IV opioids play a critical role and who have historically adopted branded products a little more quickly than some of their peers.

In addition, we're targeting around 500 ambulatory surgery centers that are either formally affiliated with our target hospitals or located nearby. These ASCs represent a great opportunity for early use by KOLs as those settings traditionally have a process for adopting new products that's faster than a hospital formulary review.

In many cases, clinicians will get experience with OLINVYK in the outpatient setting and then bring that experience into the hospital formulary discussion and review. Because of our targeted approach, we will be able to cover these accounts very efficiently with a footprint of approximately 40 customer-facing roles split across medical science liaisons, regional account managers and representatives.

Clearly, it's an exciting and very busy time for Trevena. I'm thrilled that we've crossed this final regulatory milestone in getting OLINVYK approved and scheduled, and I very much look forward to making OLINVYK available to the physicians who have been waiting for the differentiated new treatment option.

I'd like to close with a reminder that our objective is to facilitate the use of OLINVYK in the appropriate patients in place of conventional IV opioids like morphine and hydromorphone, and it is not one of expansion of the use of IV opioids. As we continue to move forward, we remain focused on execution and taking the necessary steps to stand up our customer-facing infrastructure and teams quickly and efficiently.

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

(Operator Instructions) And our first question is from Brandon Folkes from Cantor Fitzgerald.

Congratulations on the scheduling and imminent launch. One question we have a lot of discussion with investors on is just given the challenges that hospitals and ASCs have had around COVID, how do you think -- what's your view on the willingness of these centers, maybe change standard operating procedures. Just given that you're going to be launching a new product, there's been 2 schools of thoughts here. One being that centers are trying to minimize any changes to standard operating procedures during COVID. The second, obviously, being that there's so much disruption, it's right to introduce something new there.

So I'd love to just get your thinking on how we should then lay that into a launch ramp for OLINVYK? And then just staying on the COVID theme. Of the 550 quick adopters in the hospitals and the 500 ASCs, you talked about the ASCs adopting quicker and then bringing those into the hospital. How should we think about the hospitals versus the ASCs in terms of revenue pull-through for OLINVYK when we're modeling?

Thanks, Brandon. I appreciate the question. So let me talk just a little bit about the introduction of a new agent, and then I'll turn it over to Bob that can talk a little bit more about how he's thinking about the launch in terms of COVID.

So one of the things that we say about OLINVYK is that -- and one of the things that we worked really hard to do is to make this as easy as possible for physicians. They don't really have to do anything new. They -- in fact, we have the OLINVYK morphine conversion right in the label. By that I mean that if they're used to using morphine 5 milligrams, about 1 milligram of OLINVYK is equal to 5 milligrams in morphine. So -- and we've made the vial so that there's no refrigeration, no reconstitution. They'll be housed in the same pyxis unit as morphine. Pharmacies will be doing the same sort of things. So there's not anything different. They're not having to use -- go outside of sort of their treatment continuum. That's the first piece.

The second piece is that we got broad indication statement, broad dosing administration. We're putting out the 3 vials to allow for flexible treatment of the patients. I think that's important what we heard. And then lastly, remember that with our open-label safety study, ATHENA, we have a lot of physicians who have already used OLINVYK in that safety trial and they've been waiting for it, right? So they've already sort of pinpointed the types of patients that -- where they'd like to use the drug.

Certainly, we are looking at the hospitals that may be have slowed in terms of elective surgeries. But what we're hearing is that hospitals are trying to manage their business, and they're continuing to move forward, in particular with things like orthopedic surgeries and some of the colorectal surgeries. So Bob, I'll let you talk a little bit more about some of the things you're thinking about as you think about the launch ramp.

Yes, sure. Yes, but I may also add to that, Brandon, there's high regional variation around that as well. So we'll be keeping a close eye on that in terms of our deployment and things like that as well. And I think what I'm hearing when I speak to some KOLs is that they learned a lot early on in the COVID crisis that I think they're applying now about their processes and how to be efficient moving forward.

In terms of the split between ASCs and hospitals, if you look at the number of patients, there are certainly more patients in the outpatient setting, the ambulatory surgery center setting. And in fact, hospitals are pushing more procedures out to the outpatient setting because it's a lower cost setting of care. But -- so there's more patients in the outpatient setting.

However, those patients are getting dosed less frequently and with lower dosages than the inpatient setting. So on balance, over the longer run, while there'll be early use in the outpatient setting, over time, the bigger chunk of our business will come from the inpatient setting because any individual patient is getting dosed longer and with higher doses than you might see in the outpatient setting. Does that help?

Very helpful.

Our next question is from Devin Geiman with Guggenheim.

This is Devin on for Dana Flanders at Guggenheim. Just one, and then I'll have a follow-up. I guess with the batches that you now have available, and I know you guys have been ramping manufacturing capacity pre-approval, what are the gating factors for launch this quarter now that you have, I guess, DEA scheduling? And then just one follow-up after that.

So we can make drug available. We'll be -- as we said on the call, we'll be putting drug in the channel this month. Physicians can order it. We won't have our field team deployed until first quarter of next year. So I think that's a lot of it. And we'll be adding to our website. We'll be pushing out pharmacy newsletters. But as far as a big sort of push, I guess, that probably will take place early first quarter.

Bob, I know you've been working really closely with the wholesalers and may be able to add some color.

Yes. Yes, absolutely, Devin. So we have -- as I mentioned, we have contracts with all 3 of the big -- the big 3 wholesalers and we're now talking with them, their buyers and talking about initial stocking and -- across their distribution centers and things like that. So we'll be ready as product becomes available to support their needs across their distribution centers.

Okay. Great. That's very helpful. And then as far as access onto formulary for, I guess, hospitals and ASCs, I know you guys announced that you have done some diligence in pharmacoeconomic data. Is there any plans to formally release that data, whether it be through a publication or through presentation, like press release? Just trying to get a sense if that will be publicly available?

Yes, yes, absolutely. It's a really great point. So we -- as Bob mentioned, we're working with a health economist at the Medical School of South Carolina, and she's looking forward to publishing this information. We intend to have the data available, and we will be publishing it before our field sales organization gets out, whether it's accepted for publication and we can make that information known. But for now, I think we're starting to put a lot of information in our pharmacy newsletters. And as we do that, we'll begin adding it to our corporate deck so that we can talk about it publicly, but it's a great point. We absolutely intend to publish.

And our next question is from Jason Butler with JMP Securities.

I had a couple on OLINVYK and then a follow-up on the 027 COVID program. So for OLINVYK, can you just break down a little bit more for us, your assumptions that go into that average WAC pricing of $100 a day? Just trying to get a sense of how much bolus use you're expecting versus PCA?

And then in terms of formulary reviews, anything you're hearing from the field about how the pandemic is impacting the ability of hospitals to conduct formulary approvals or delays around that process?

Sure. So I'll start on the pricing, and I'll turn it over to Bob who can close on the pricing and then talk a little bit more about what he's hearing. So in terms of bolus and PCA use, the majority of the use is bolus. It's about 65%, 70% bolus use in hospitals across the country. Certain hospitals are slightly different. But -- so the bulk is bolus, PCA dosing is about 30% or so.

Pain -- acute pain is has a wide variety of surgeries and patient types. And so when we think about that $100 a day, we're thinking about everything from orthopedic surgery, which, as Bob mentioned, may have fewer vials but may have higher doses, all the way to colorectal surgeries, for instance, that -- where patients are dosed with multiple vials per day and actually over the course of the treatment in the hospital setting.

So in terms of that $100 a day price point, you think about orthopedic being maybe around $70 a day or so. Colorectal, gynecologic, some of those longer-term surgeries may be closer to $130 or so. And that's the mix between the 1 mg and the 2 mg. Some of this is based on our ATHENA study, which was modeled after the real world use, and a lot of it is based on market research that we've done, discussions that we've had with ATHENA stakeholders and how they treat acute pain patients in the hospital setting.

Does that help, Jason? That gives you some sense of the wide range of surgeries that we're thinking about. Bob, anything else that you want to add on that one? And then I'll let you address the question around the -- what you're hearing around formulary adoption during the COVID pandemic.

Yes. I don't think anything else to add to the pricing one. I think that covers it. In terms of the pandemic, Jason, it's so -- like I said before, it's certainly highly variable by region. But I -- when I'm talking to physicians, they are saying that they're getting sort of back to business and they've learned a lot the first time through with the COVID spikes, and they know they need to keep things running this time around. So I've heard that they're sort of getting back to business as usual in terms of formulary.

That being said, the cycle still is roughly 6 to 12 months before you -- once a product is reviewed for formulary approval and then used before that. So -- but again, I think we're going to keep a close eye on it, and we're going to make sure that we allow that insight to inform our deployment and things like that. But at this point, it seems like they're sort of managing through it.

Great. And then just on 027, can you just remind us of the patient characteristics and endpoints that you're assessing and we'll have data from in the first quarter?

Sure. Mark, do you want to talk a little bit about 027?

Sure. Jason, thank you for the question. The patients that are enrolled in this study are patients who are hospitalized with a confirmed diagnosis of COVID, and these are adults. So they age 18 or older. So it really is a fairly broad net. But as you know, in the U.K., in particular, to get into the hospital, patients generally are fairly ill and acute with the illness at the time of entry.

The primary outcome measure that Imperial College is looking at is an intermediate marker of clotting. They're using a measure called D-dimer, which is one of the main laboratory components that's used to monitor coagulopathy and risk for clotting. And then important secondary outcomes are key recovery milestones, either progress of the disease to greater morbidity or time to improvement and time to discharge, also measures of pulmonary function are being assessed in this study.

So it's a fairly broad look at the clinical milestones as well as the intermediate milestone of coagulopathy.

And these patients are nonventilated, Jason, but if they become ventilated while they're in the hospital, then we'll, of course, continue to treat them. I think one important point is, if you remember, when we first started the study, this is -- the requirement was patients had to be over the age of 65. And then Imperial College actually broadened that to patients over the age of 18. And I think that speaks to -- I know in the conversations we've had with them, it speaks to the fact that we're seeing, in particular, the abnormal blood clots in younger and younger patients. And so I think this will be one of the first studies that look at such a wide range in age in terms of blood clots and lung function.

Great. That's really helpful. And congrats again on the progress.

Thank you, Jason. We appreciate it.

And our next question is from Douglas Tsao with H.C. Wainwright.

Just curious -- can you maybe walk through the process and timing for getting the various reimbursement codes, and in particular, getting pass-through status? And how you think that potentially benefits you or informs the launch strategy?

Sure. I appreciate it. Bob?

Sure. Doug, thanks for the question. Let me start inpatient. It's fairly straightforward for inpatients. So upon first commercial -- and by the way, this is -- this would be the process any new product launching would follow through. So nothing unique for us. But upon first commercial sale, we'll file the paperwork for a miscellaneous J code. And when that's assigned, that J code will be used in the inpatient setting in the DRG. But again, it's not really a reimbursement issue because, obviously, the DRG is reimbursed at the procedure level.

In the outpatient setting, what will happen is we'll apply for a miscellaneous C code, that's granted. And for the first quarter or 2, and it depends on the submission timing, customers will get reimbursed at 95% of AWP. And then at some point, when the CMS does the review, they'll come back and either grant or not grant pass-through status. If we get pass-through status, we get a permanent C code, and for the next 2 to 3 years, that gets rolled into the reimbursement for the -- they get reimbursed at basically ASP plus 6%.

If it's not granted -- a pass-through is not granted, Doug, then we default back to the J code. And basically, whenever they get reimbursed for the outpatient procedure, OLINVYK would be part -- it have to cover that just as if just like an inpatient setting. So those are the 2 paths on which we're on.

Your question around what it means in terms of pass-through getting it or not, it's certainly advantageous to get it, but it's not a business hindrance. There's a lot of successful products in the outpatient setting that have not gotten it. (inaudible) comes to mind. So that one did not receive pass-through status and still did quite well within the outpatient setting.

And I think what it defaults back to is, I think we'll have a very compelling clinical profile in the outpatient setting, that I think clinicians will find advantageous, and will use it and look for other ways to optimize their reimbursement within the APC code. Does that...

Yes, we're certainly going to apply for pass-through status, Doug. And so we'll update you all as we continue to get those time lines.

Okay. And I mean did that sort of -- thinking about the sort of bulk possibilities, sort of think effect how you priced OLINVYK above the $100 per day?

That's certainly factored in, correct.

Okay.

Yes. Thinking about the inpatient-outpatient business that we talked about earlier, yes.

And then just one final question, and I don't know if you touched on it, I'm jumping a couple of calls this morning. But in terms of timing of starting to have formulary meetings, has that begun? And do you have a sense of how long -- if you sort of think about that, your target universe of accounts and especially the ATHENA sites, how long before you'll be able to have had those formulary meetings -- formulary committee meetings for most of those targets?

Yes. So we have already gotten inbound interest from various groups in part, as you mentioned, because of ATHENA, because people have been waiting for the drug. And as Bob said, there's, in some cases, some ambulatory surgery centers that are looking to add it on more quickly. So in the inpatient setting, it's normally -- formulary reviews normally are around 6 to 12 months depending on the hospital.

As you've heard, our targeting -- we're in that community-teaching bulk of hospitals that tend to put drugs on formulary a little bit more quickly. We've also analyzed the early adopter hospitals. We won't have feet on the street, right? We won't have our customer-facing team on the street until the first quarter. So while we've gotten some inbound interest from physicians and formulary stakeholders that know the drug, I think the bulk of the formulary scheduling, if you will, will start to happen in early first quarter.

And we have reached the end of the question-and-answer session. I'll now turn the call over to CEO, Carrie Bourdow, for closing remarks.

Thank you. And thank you all for your questions. As you've heard from all of us this morning, this is truly a transformational time for Trevena. We're assembling a strong and experienced OLINVYK launch leadership team. You hear that we're executing on our tactical plans to ensure drug product availability beginning this month. And we're moving forward to build-out of our field team for deployment next year.

In parallel, I think what you've also heard is that our pipeline remains a top priority and we'll be supporting Imperial College as they continue to enroll COVID patients for the TRV027 study. We look forward to sharing additional updates with you as we make progress across all fronts.

And I thank you again for joining us. That concludes today's call.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.