Tvardi Therapeutics Inc (TVRD) 2014 Q1 法說會逐字稿

Good afternoon, and welcome to the Cara Therapeutics first-quarter 2014 conference call. (Operator Instructions). Please be advised that this call is being recorded at Cara's request.

It would now like to turn the conference over to the Cara team. Please proceed.

Good afternoon. This is Jesse Baumgartner with Stern Investor Relations. Welcome to Cara Therapeutics first-quarter 2014 conference call. The news release with our first quarter financial results and corporate update became available at 4 PM today, and can be found in the website at www.CaraTherapeutics.com. You may also listen to a live webcast and replay of today's call on the investors section of the website.

Before we begin, let me remind you that statements made on today's call regarding matters that are not historical facts are forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995. Examples of these forward-looking statements include statements concerning the expected timing for the Company's clinical trials, statements concerning the potential results of planned clinical trials, and future development milestones for the Company's product candidates. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

Risks are described more fully in Cara Therapeutics' filings with the Securities and Exchange Commission, including the risk factors section of the Company's annual report on Form 10-K, for the year ended December 31, 2013, and its other documents subsequently filed with, or furnished to, the SEC. All forward-looking statements made on today's call speak only as of the date on which they are made. Cara Therapeutics undertakes no obligations to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Also we remind you that in light of regulation FD, Cara will only provide material business updates through public communications.

Now let me turn the call over to Cara President and CEO, Dr. Derek Chalmers.

Okay, thanks Jesse, and good afternoon, everyone. Thanks for joining us today on the call. We wanted to provide you with a brief update on our progress here in the first quarter and then a little color around our upcoming milestones. And then we will go through the financials as usual, and then we will move into any questions that you might have thereafter.

So the first quarter of 2014 was really a very important period for us, from both a corporate and a clinical standpoint. On the corporate side, we were able to put the Company in a very secure financial position, with the completion of our IPO at the start of February, which netted approximately $56.2 million for the Company. Turning to the clinical plans, we are very excited about the multiple milestones upcoming this year, as we continue to develop both an IV formulation and an oral formulation of our highly selective peripheral kappa agonist, CR845.

For our IV 845 program, in acute pain, we have recently completed a clinical pharmacokinetic study of 845 in renally impaired subjects. Confirming predominant renal excretion of CR845 and providing the required pre-Phase 3 data for dose adjustment in this population for future clinical trials, and also beyond.

In addition, we expect report top-line data from our human abuse liability, or HAL trial, in the second half of this year and complete the regulatory requirement to allow initiation of Phase 3 registration trials in acute pain by year-end. The HAL trial will test the of abuseability potential of CR845 by determining whether it has any euphoric effects compared to a standard intravenous narcotic, in this case morphine, in non-dependent opioid abusers.

A critical differentiating property of CR845, as you are aware, is a high degree of pharmacological selectivity for the kappa subtype of opioid receptor. And we all know the rewarding properties of opioids and subsequently the potential to cause addiction, is due to the activity at the mu-opioid subtype of receptor.

So because 845 lacks measurable activity at the euphorigenic neuroreceptor, has shown negative effects in clinically predictive and validated animal models of drug [like an], we believe CR845 has significant potential for a lack of abuseability. Such a profile, of course would provide a unique opportunity for product differentiation versus traditional narcotic opioid analgesics.

We have also continued to make progress during the first quarter on developing our oral tablet formulator of CR845, including the completion of preclinical PK and toxicological studies that will enable us to begin Phase 1 single and multiple ascendant dose studies this quarter with expected data readout in the second half of 2014. And the potential analgesic clinical applications for oral CR845 are twofold: first, as a step down treatment for the postoperative patient at discharge, allowing the patient to continue their CR845 treatment in a more convenient formulation for home use; and then, secondly, as an alternative to traditional opioids for the treatment of both acute and chronic pain conditions, including of course chronic inflammatory pain conditions.

So on the partnership front, we are pleased to announce that Maruishi Pharma, our Japanese collaborator, successfully completed both single- and multiple-ascending dose phase 1 trials of IV CR845 in Japan. This partnership is continuing to progress well, and we anticipate receiving development milestone payments during 2014.

As part of that license agreement, we were also very excited to announce in March that we expect to file a third IND later this quarter for CR845 in uremic pruritus. This is a non-pain indication experiences by dialysis patients where we believe the anti-itch properties of 845 could provide an important therapeutic approach, with no presently approved products in the US, or, indeed, the EU for this condition.

We previously completed a Phase 1 trial of 845 in dialysis patients that established a favorable safety and tolerability profile. And we look forward to initiating proof of concept studies of the anti-pruritic potential of 845 in this particular patient population.

So with that brief summary, I would like to turn the call over to Josef, who is going to take you through the financial results.

Thank you, Derek. For the first quarter of 2014, we reported a net loss of available to common stockholders of $3.4 million, or $0.22 per basic and diluted share, compared to net loss available to common stockholders of $1.7 million, or $0.48 per basic and diluted share, for the same period last year. The weighted average number of shares used in the per share calculations increased to 15.7 million shares from 3.7 million shares for the respective periods, due to common shares sold in the Company's IPO and the common shares issued upon automatic conversion of our convertible preferred shares in connection with the IPO.

We currently have approximately 22.6 million shares outstanding.

Revenues were $0.2 million in the first quarter of 2014, consisting primarily of recognition of a portion of the deferred revenue relating to the license agreement with Maruishi Pharmaceuticals Company Ltd. entered into in April. We did not generate any revenue during the first quarter of 2013.

R&D expenses were $2.2 million in the first quarter of 2014, compared to 0.9 million in the same period last year. The higher R&D expenses in the first quarter were principally due to direct preclinical studies and clinical trial costs and consulting services in support of preclinical studies and clinical trials. The increase in clinical trial costs resulted from the Phase 1 IV CR845 renal impairment trial, drug manufacturing, and preclinical studies related oral tablets of CR845.

G&A expenses were $1.4 million in the first quarter of 2014 compared to $0.6 million in the same period last year. The increase in the first quarter of 2014 was primarily due to an increase in accounting, legal, and consulting professional fees, insurance costs, and public investor relation costs related to becoming a public company.

Net increase income was $22,000 in the first quarter of 2014 compared to $1.1 million of interest expense in the first quarter of 2013. The decrease in interest expense was primarily due to the conversion of the convertible promissory notes during the third quarter of 2013, which had generated in interest expense in 2013.

We ended the quarter with cash and cash equivalents totaling $67 million compared to $12.4 million at December 31, 2013. The balance at the end of the first quarter included the net proceeds from our recent complete IPO in February, which raised approximately $56.2 million, net of underwriting discounts, commissions, and offering expenses.

Now, let's turn back -- turn the call back to the operator for any Q&A. Operator?

Thank you. (Operator Instructions). Alan Carr, Needham & Company.

Hi. Thanks for taking my questions. I was wondering if you can comment if anything we learn from the Maruishi Phase 1 trial that might derisk the upcoming proof of concept trial for you later this year. Or was it just a Phase 1 in healthy volunteers?

And then also, I wonder if you could talk a bit more about some of the regulatory work that was needed before you could start the abuse liability trial, and whether or not that is all cleared up now, thanks.

On the Phase 1 Maruishi trial, it's just a standard single- and multiple-ascendant dose in normal individuals. So what it did confirm is we didn't see anything that we that was and also already recorded from Cara's initial Phase 1 studies with single and multiple. So there was no unusual patient population to look at there.

On the latter, we are ready to go on the HAL. The issue with HAL is simply we solicited info from the controlled substance staff and the DEA to make sure we get this right. At the end of the day we think this is a crucial aspect in differentiating this compound from standard narcotics. And as I have previously said, we directly asked the FDA what it would take to get a recommendation of nonscheduling for this molecule. So we would like to make sure that the CSS are in complete agreement with our protocol before we institute that. And that is simply what we are waiting on. The frustration is we really don't have a clock on them in that regard. We've asked for their input and we are waiting on it.

But we anticipate that should be soon based on their historical rates of response. But other than that we are ready to go on the HAL, and there's nothing holding us up there.

Great. Thanks very much.

Charles Duncan, Piper Jaffray.

Hi. It's Roy in for Charles. Thanks for taking the question. Just a couple quick ones. Can you comment on how far you expect the current cash balance to get you in terms of clinical timelines? And does that include milestones from partners? And can you remind us what those potential milestones are? Thank you.

High, Roy. Thanks for calling in. Cash balance guesses all the way through the NDA for the IV so that's two Phase 3 trials, approximately 600 patients each in acute pain, and the required supporting trials for that. And it gets us to a runway to the end of 2016. So that is on the IV side.

On the oral side, as we just discussed, we are going to be through our Phase 1 oral studies, single- and multiple-ascendant dose, with the novel tablet formulation. You'll recall we had already run a Phase 1 with an oral capsule form to proof concepts. We move that to the more commercially viable tablet form. So we will have that done this year. And it also allows us to perform POC study in an acute pain setting with the same funding.

So it gets us through the NDA with the IV for acute pain, oral up to POC for an acute indication. As I have just discussed, we are running a uremic pruritus POC phase 2. That was always part of our agreement with Maruishi. But there may be opportunity beyond Japan in that case.

And I think the last part of your question related to milestones. That does include milestones for Maruishi. Those are predominantly milestones related to, for example, the completion of their Phase 1 trial with IV, as we've just discussed; the initiation of a UP trial in Japan with the compound; the initiation of a Phase 3 in Japan subsequent submission of an NDA. In total, I believe that was --

In total, between Maruishi, CKD, it's around (inaudible).

$13 million, Roy.

I think we had in the, Charles, we had that in the 10-K.

Okay. Great. Thank you.

(Operator Instructions). Chiara Russo, Janney Capital Markets.

Just wanted to -- a question about the Phase 3 starting in the second half of 2014. I was wondering if you could give us perhaps a little color on in terms of spend and how that is going to ramp up.

Spend and how it is going to ramp up -- the cost of those Phase 3's, they are both acute trials, one or two days. One day for a lap hysterectomy trial, and two days for a standard bunion trial. Approximately $12 million each for those trials. Beyond that, there isn't any large expenditure the other clinical trials require or supportive, principally cardiovascular safety trial and some other PK work that we may run through in an elderly population. And then the other costs of course are related to CMC requirements to get there. And we are presently confirming the viability of the manufacturing process for the drug substance. And we are initiating process validation this year for API manufacturing. And then we are going to initiate transfer of manufacturing from our UK facility for Patheon that we use for this over to a European facility. And that will provide us with a viable road for commercial supply. So all of that is rolled into the budget that we -- that is in the 10-K, and we are well-funded to meet all those requirements and still have a runway beyond NDA submission of somewhere around 12 months.

Great. Thank you. And in the uremic pruritus, are you -- I know you guys are looking to file the IND around second quarter of this year. Obviously, very forward-looking here, but do you think you are going to end up keeping that kind of indication in house? Or would you look more to partner that out?

It really depends on how that develops, Chiara. There certainly is a viable route to commercialization, particularly as there has been a change in the reimbursement laws fairly recently relating to bundling costs associate with dialysis here in the States, where there has been a delay or negation in fact of inclusion of oral medications in the bundling, which is going to be an inhibitory factor for full commercial development in the States. So that is a lot of change recently. And so there is a viable option there. And there's always been at it viable option in the EU. So it is something we may look at depending on how that develops, how the data looks. And we will take it at that point. We will base it on how the data looks, and it may be somewhere we will go.

All right. Great, great. Thank you so much.

Thank you. There are no further questions in queue at this time. I will turn the call back over to Derek Chalmers for closing remarks.

Well, thank you, everyone for participating in today's call. We look forward to talking to you again at the end of the second quarter call. Look forward to your questions then. Take care, everyone. Thanks for calling.

Take care.

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect. Everyone, have a great day.