Tvardi Therapeutics Inc (TVRD) 2015 Q2 法說會逐字稿

Good day, ladies and gentlemen, welcome to the Cara Therapeutics second-quarter 2015 earnings conference call. (Operator Instructions). As a reminder, this conference call is being recorded. I would like to introduce your host for today's conference, Jesse Baumgartner of Stern Investor Relations. Please go ahead, sir.

Good afternoon, this is Jesse Baumgartner with Stern Investor Relations, and welcome to Cara Therapeutics' second-quarter 2015 earnings conference call. The news release with our second-quarter financial results and corporate update became available at 4:00 PM today and can be found on our 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 the 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 and the reporting of clinical trial results; the potential results of planned clinical trials and future regulatory and development milestones for the Company's product candidates; and the potential regulatory development pathway for CR845 in uremic pruritus.

Statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. (Technical difficulty) 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, 2014, its quarterly report on Form 10-Q for the quarter ended June 30, 2015, 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 obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Now let me turn the call over to Cara President and CEO, Dr. Derek Chalmers.

Okay, thanks, Jesse. Good afternoon, everybody. Thanks for being with us on the call. I am doing today by our Chief Financial Officer, Joe Schoell, and our Chief Medical Officer, Dr. Joseph Stauffer.

So the past few months have certainly been a very busy and productive time for us here at Cara with significant clinical progress for our lead development candidate, CR845, across multiple clinical indications.

Our recent Phase 2 [readout] in uremic pruritus clearly broadens the potential of CR845 to address an additional indication of significant unmet need beyond our core program in acute pain. And we still remain on track to initiate the first of our pivotal trials for IV CR845 in acute pain during this quarter along with our Phase 2 study for oral CR845 in osteoarthritis patients. And we're going to add some color and detail to both those programs in just a moment.

Very importantly, we also recently completed a very successful follow-on offering which raised more than $75 million in net proceeds for the Company which significantly strengthens our balance sheet to provide the projected financial resources required to execute on our clinical plans for both IV and oral CR845.

So I'm going to start with a run through of our recent uremic pruritus data and the next steps there, and then I will let Joseph Stauffer take you through progress in the IV CR845 acute pain program and our upcoming Phase 2 trial for oral CR845 program. And then Joe Schoell will walk you through the numbers before we turn the call over for Q&A.

So starting with your uremic pruritus, just a couple of weeks ago we were very pleased to report positive top-line results from our double-blind randomized placebo-controlled Phase 2 trial of IV CR845 in moderate to severe uremic pruritus.

And just as a reminder on the details of this indication, uremic pruritus is a chronic systemic age condition in patients with renal failure often receiving hemodialysis. There are more than 400,000 patients in the US and 2.2 million globally undergoing hemodialysis. And it is currently estimated that as many as 50% of those patient suffer from renal or uremic pruritus.

There are no approved products in the US for the condition, which can often be severe and resistant to traditional itch medications such as corticosteroids and antihistamines.

So in this Phase 2 study, which enrolled 65 dialysis patients at multiple sites in the US, CR845 achieved statistically significant results on the primary endpoint of reducing worse itch intensity and on the secondary endpoint measuring quality of life improvements.

And those secondary endpoints focused on quality of life measures associated with pruritus burden based on previously validated assessment scales, including the Skindex 10 score, which is made up of three domains that include the disease domain, the mood or emotional distress domain, and also the social functioning domain. And we saw significant trends and indeed statistical significance in one of those domains also.

We're also very excited to see a positive trend on itch-related sleep disturbances as measured right the MOS scale in this study. And we believe that IV CR845 will potentially show a statistically significant benefit here in a larger registration study. And again, we remain very encouraged by the safety data from this study with no CR845-related serious adverse events reported, which adds to our safety results from previous studies in pain indications.

So if you'd like for information and details on these results I would encourage you to go to the Investors section on our website and access the webcast conference call and presentation slide around this data announcement from July 23.

Now moving on to next steps, we plan to meet with the FDA before year-end to discuss the structure and the requirements of a potential registration program for the indication of uremic pruritus which we would expect to initiate in the first half of 2016.

We also plan to request breakthrough designation and orphan drug status from the agency for 845 in this indication. And we look forward to keeping you updated on these interactions during the coming months ahead as we solidify what a late stage program will look like.

Now in terms of the other clinical programs, I would like to turn the call over to Joseph Stauffer to go through our acute pain program for IV CR845 along with our upcoming Phase 2 trial for oral CR845 in osteoarthritis. Joe.

Thank you, Derek. As we discussed was our intention during our last earnings call in May, following our end of Phase 2 meeting with the FDA, we have now submitted the protocol for the first adaptive pivotal trial in our Phase 3 program for IV CR845 in acute pain and after FDA input are set to initiate this trial this quarter.

As a reminder, this will be a randomized double-blind placebo-controlled adaptive design trial in approximately 400 to 600 male and female patients undergoing abdominal laparoscopic surgery including laparoscopic hysterectomy and other procedures associated with moderate to severe postoperative pain.

CR845 will be administered both pre- and post-operatively with patients assigned to receive one of three doses of IV CR845 or placebo and the primary efficacy endpoint will be a reduction in pain intensity over 24 hours with secondary endpoints including reductions in postoperative nausea and vomiting as well as standard measurements of rescue medication use and total pain relief over the drug treatment period.

The trial is designed to accommodate an interim assessment of efficacy and safety across doses by an independent monitoring committee with an adaptation to optimum doses at this time point and subsequent progression to complete enrollment and readout in 2016.

We have already received our first IRB approval for this protocol and site recruitment is progressing well. Our planned announcement of trial initiation will include more details on the final protocol design.

Turning to our oral CR845 program, we also still expect to initiate a Phase 2a trial in osteoarthritis patients during this quarter with top-line data projected by end of year. This Phase 2 is designed as a PK safety and effectiveness trial assessing multiple ascending doses of oral CR845 dose BID over a two-week treatment period in patients reporting moderate to severe pain associated with OA.

Trial endpoints include: change from baseline in joint pain using the numeric rating scale NRS; Change from baseline in the Western Ontario and McMaster Osteoarthritis index, WOMAC; as well as other exploratory measurements of changes in inflammatory biomarkers.

This protocol has also received its first IRB approval and we expect to dose our first patients in the near-term. Now let me turn the call over to our Chief Financial Officer, Joe Schoell.

Thanks, Joe. Let me start with our net loss for the quarter -- it was $5.7 million or $0.25 per basic and diluted share for second quarter of 2015 compared to a net loss of $3.6 million or $0.16 per basic and diluted share for the same period of 2014.

License and milestone fees revenue was zero for the second quarter of 2015 compared to $302,000 for the same period of 2014, which related to the license agreement with Maruishi Pharmaceutical Company.

Collaborative revenue was $874,000 for the second quarter of 2014 compared to $526,000 for the same period of 2014, comprising revenue that had been deferred upon entry into the Maruishi license agreement.

Clinical compound revenue was zero for the second quarter of 2015 compared to $132,000 for the same period of 2014 from the sale of clinical compound to Maruishi.

R&D expenses were $4.7 million in the second quarter of 2015 compared to $3.2 million for the same period of 2014. The higher R&D expenses in the second quarter of 2015 were principally due to a net increase in direct preclinical studies and clinical trial costs and consulting services in support of preclinical studies and clinical trials. And an increase in payroll and related costs including stock option expense associated with R&D personnel.

G&A expenses were $1.9 million in the second quarter of 2015 compared to $1.5 million in the same period of 2014. The increase in the second quarter of 2015 was primarily due to increases in professional fees, public Investor Relation costs and increases in payroll and related costs including stock option expense, mostly due to increases in headcount.

At June 30, 2015 cash and cash equivalents were $43.2 million compared to $47.4 million at the end of March 2015. The decrease was principally related to cash and cash equivalents used in operating activities during the second quarter of 2015.

This total does not include our recent public offering of common stock which raised approximately $75.1 million in net proceeds after deducting underwriting discounts and commissions and estimated offering expenses and provides Cara with a projected runway through 2017. Now we will turn back over to the operator for Q&A.

(Operator Instructions). Charles Duncan, Piper Jaffray.

And let me first of all offer my congratulations on the recent data and successful equity raise. So, Derek, on IV 845 I had a question about that in terms of laparoscopic surgery. You are including males and females in that study and I'm just wondering if you are going to stratify that study for gender or type of surgery or even severity of baseline pain or do you feel like that is not necessary?

Charles, thanks for the question and thanks for the kind words on the offering. I'm going to let Joe get into the details on that. The basic answer to that is we are going to stratify for surgery type but not for gender. But, Joe, do want to comment on that more specifically?

Sure, I will take that. I think you had three parts there, Charles. So no on stratification for gender, yes on stratification for type of surgery and no on stratification for baseline pain. Everybody -- I think they were the three elements you mentioned.

As long as everybody gets at least a 4 out of 10 or 40 out of 100 on a visual analog scale, then they are allowed to be in the trial. And the purpose here is to look at their pain change over time. And indeed the way we are doing it this time, because we are dosing preop, actually you don't even need pain scores as part of the randomization, right. You are just randomized to a dose, your dose preop and we follow your pain score all the way through.

So our expectation is that they will have 4 out of 10 but it is not required. And the FDA has blessed this protocol. So this is something we are quite comfortable with. The biggest stratification that we have to look at that we want to look at is ventral hernia. That is not a laparoscopic procedure, that is an open procedure and we will stratify there.

Okay, good. So that addresses the old idea that kappas may work better just in females than males.

Right, yes, I mean that is -- that is still a raging debate. I don't know if that has been ever settled and clearly it is something that we don't see and -- at least in the IV pain story. And so, it clearly wasn't the case in our Phase 2 work, although it was mostly female.

So a fair criticism of the Phase 2 program is that we didn't have males in there. So, but pain is pain and we fully expect that we will have a good analgesic response here in at least one of the doses.

Okay. Perhaps I could ask you a quick question on uremic pruritus for the Phase 3. And I know that you haven't yet met with the FDA. But I am wondering if you believe that you will end up evaluating multiple different dose levels. Or do you feel that you have optimized the dose versus response?

So, I can (multiple speakers) start on that one, Derek?

Go ahead, Joe, yes.

So we know that we have got a very nice dose with 1 microgram per kilogram given to these patients three times a week. I could easily see the FDA asking us to optimize and by that I mean go lower. That is a reasonable thing to ask us for. But we will explore that with them once we have our meeting. But I would not see that being an unreasonable thing to do, for them to ask or for even us to want to do.

Okay, that is helpful.

Let me just add to that, Charles. You know from our Phase 2 data we were squeaky clean at that dose and there is no reason we couldn't go higher -- other than pharmacologically looking at the exposure levels we have on this patients. We are most likely at the top of the curve on that and the effect size in that study was very good in terms of drug effect.

But there is no reason we couldn't take that up to the next higher dose if that is something the agency wants to see. I think it is probably more likely they are going to want to see a minimum effective does and, again, that should be no issue.

Okay, that actually addresses that question. My final question is regarding the cash. I think was stated that cash is good through 2017. In your view does that fully fund development of IV 845 at least in a pain indication if not uremic pruritus?

Yes. No, with our projections -- and obviously we have some pretty detailed data on price per patient for both indications. This is going to fund us all the way through to NDA for both acute pain and uremic pruritus for the IV. And importantly, a larger Phase 2b trial for the oral CR845 program.

Awesome, good stuff. Thanks for the added color.

Annabel Samimy, Stifel.

This is Esther Hong in for Annabel Samimy. Congratulations on all of the exciting progress. I just have a quick question on uremic pruritus. Regarding the late breaker abstract at ASN in late November, what additional type of data can we expect to see?

Do you want me to try that one, Derek?

Yes, you go ahead, Joe.

So we will submit the late breaker, obviously it is all going to be mostly top-line stuff. And because it is a late breaker it is going to be our first time at that meeting. So we have to basically just give them the top-line stuff and hopefully that will be accepted.

Obviously the secondary endpoints will be in there too, the sleep scale and the Skindex 10. But I wouldn't necessarily expect to see much more from that. We're also planning on submitting something for a world itch congress as well in Japan and we have to make sure that these two abstracts complement each other.

Okay. And then just -- it might be a little bit early to ask, but if you are looking at patients, CKD patients who are not on dialysis, is there any issue with the fact that the drug is renally excreted?

I don't think so, not at all in fact. So you are asking about patients who are outpatients with CKD not on dialysis, do we think that there is any issues with their kidneys not working as well?

Correct.

Absolutely not. This drug is very, very clean. As you know, it is not metabolized at all; it is excreted whole through the kidney. And so, based on the safety profile that we saw in the end stage renewal disease patients, we certainly would expect it to be with a similar profile in outpatients.

Thank you.

Esther, just -- if you are asking about appropriate dose adjustment for renally impaired patients, we actually already have that data on stage 2 through stage 4 renally impaired patients as part of our IV program. So we are well aware of dose adjustment ratios in that type of patient.

Oh, great. Okay. Thank you.

Alan Carr, Needham & Company.

Wonder if you could talk a bit more about the Phase 3 in acute pain. You mentioned the timelines for getting the first one going, but I wonder if you can tell us a bit more about your thoughts of the timing for the interim. And then also whether or not there will be two Phase 3's after that or maybe one Phase 3 after that. At what point do you make that decision? Thanks.

I am going to let Joe answer that again, Alan. But the basic idea here is once we optimize the doses at the interim point we are going to start our second Phase 3 trial in 2016. But I will let Joe get into that in a little more detail.

Right. So, we will do an interim assessment in the first half of 2016. And based on that assessment we will pick one dose, maybe two, take that into the next trial. So we are not going to wait for the first trial to complete necessarily. And that next trial right now is planning on going into a bony model, as we have previously discussed.

And whether or not -- I think your next question was are we going to need three trials or two. That is TBD; we certainly left the window open, as we talked about even early last year when I first joined the Company. It is a three shots on goal approach, but we may not need three. And it will really depend upon the strength of the data coming out of this first trial. And what we are still going for though is the broadest label we can get soft tissue and heart tissue.

If we have a marginal response we will consider a third trial. The nice part about doing three trials is at that point we're going to be a lot smarter about which doses are best, which doses are optimal. We will have a lot better sense of what the effect size would be now that we have done a broader trial. And very likely we will not have to power up a trial as big as the one we are doing now.

And it will all happen within -- it is still projected to happen within the time frames that we've previously put out there with a submission to complete by the end of 2017.

With -- so you would make a decision based on the strength of the interim analysis rather to run two or -- one or two extra trials after that. Is that -- have I got that right?

That is correct. And just to be clear it is -- we are not calling it an interim analysis because it is not a formal interim analysis; we call it an interim assessment. Two different things, just clarifying there. We are simply looking for conditional power at this first half of 2016 to make sure that we have got enough strength in the sample size in the doses that we have so that it will carry the day at the end.

And if we have enough strength based on the conditional power we will pick one or two of those doses for the next trial. And based on that power that is when we will have to make a clinical and regulatory judgment as to whether or not we should really tee up two trials at the same time as opposed to just one.

Okay. A separate matter. When you have your discussions with the FDA about uremic pruritus, do you plan to I guess -- do you plan to discuss possibility of what would be needed or to look at the oral formulation in uremic -- in other itch indications or will you just be sticking with IV and uremic pruritus in these dialysis patients?

Sure, we are still developing our strategy there, I think for the moment we are staying focused on the IV drug for uremic pruritus. However, that is something that is always open for discussion. But right now our focus is breakthrough designation, orphan, and what is the overall structure to look like for the IV version of this drug for these end-stage renal disease patients.

All right, thanks very much. Appreciate it.

Chiara Russo, Janney.

I just wanted to just touch quickly on pain. Would you sort of remind us what type of screening criteria you are going to be looking at for the Phase 2a on osteoarthritis?

Sure. So these are patients who have OA of the hip or knee and they have to have pain that is significant enough to warrant them coming into a trial like this and in this case it is kind of classic old-school moderate to severe pain at the minimum, that being 4 out of 10 or greater on a numeric rating scale.

Are you doing any radiological --

No, we are not.

-- assessments? No.

No. We don't need to do that kind of stuff in this kind of trial. I note those are some of the assessments that are done for nerve growth factor, that type of thing. We don't seem to have -- or we don't think that we have the type of issues potentially that nerve growth factors had. I am not so sure they even had issues. But that is not necessary for this trial and it won't be necessary for a 2b trial or even a Phase 3 pivotal.

Okay, okay. And for the process going forward with the oral in OA it would only require I believe one Phase 3 if the Phase 2b reads out positive, do I have that correct?

That is a good question. I think it is a new chemical entity. So technically you do need two Phase 3 pivotal's replicate evidence. This first trial is just a little two-week PK trial. That (multiple speakers).

Sure, sure, yes.

Yes, the second trial that you talked about, that will be certainly a broader trial yet to be determined. It will be placebo-controlled against very likely two doses. Whether or not we have to do one or two trials after that, that is a further discussion with the FDA at an end of Phase 2 meeting. So you should always plan for at least two but it is an NCE.

Sure, sure. Okay, okay. That works. And my last question is with the uremic pruritus, obviously you guys have some competition in the UP space and I was wondering if you think any of your competitor's data potentially jeopardizes you guys getting breakthrough designation in the indication?

So, my view is, no. We have something that is quite unique and dosed in a unique way as an NCE. And I think the competitors that are out there, I am not so sure they are a new chemical entity. And with the data that we have got in terms of its signal strength and in terms of its very clean safety profile, while there is no guarantees what the agency is going to give us or someone else, I like our odds.

But again, breakthrough designations are an individual discussion with that division and we haven't even been there yet. So, I don't want to speculate until we go. Once we come out of that meeting I will have a better sense of where we are at. I don't know if Derek wants to add any further color to that.

Yes, Chiara, just to add to that, I see no -- we're really the only Company developing a selective kappa agonist for this indication. And moreover the only Company developing it peripherally I think, selective kappa agonist. So it really is a novel mechanism for an unmet need.

And clearly we have no CNF issues with this medication. And so, that gives us an advantage I think over any competition that is out there and there really isn't any pharmacologically that are anywhere close in selectivity or peripheral action to CR845.

Okay, all right, great. That was all I had. Thanks, guys.

(Operator Instructions). Jim Molloy, Laidlaw Capital Market.

Hi, this is actually Frank on for Jim, thanks for taking the question. Just wondering if you can -- obviously right now you guys are going to focus more on the IV CR845 for pruritus. But I was wondering in terms of market size, how should we be looking at the oral version for general pruritus compared to just uremic pruritus?

Yes, thanks, Frank. Let me start there and maybe Joe will want to add some. But the most obvious place to move with our pruritus program, if you like, is down the ladder in terms of renal failure. And we are very much interested in the chronic kidney disease population. Much larger population, about 9 million patients in the US. High incidence of pruritus, again refractory to traditional treatments. So there's about 30% incidence in that population.

So we kind of started doing our homework on that population in terms of what would be appropriate formulations for treatment there and how often these people see their physicians and began to think a little bit more about how we would like to approach that population in terms of formulation and dosaging. But that is something clearly we think is, if you like, an obvious place to move.

We clearly have a very important anti-pruritic effect certainly in this renal disease patient population. And I think we covered this when we talked specifically about the UP data, the mechanism of action here, as I said, being peripheral, if you like, at the end stage of the pruritus cascade actually on the C fibers in the dermis and the epidermis. And those immune cells in the dermis really to our mind speak to a broad applicability for this mechanism across multiple indications associated with pruritus.

And that is clearly somewhere we could ultimately move with this medication. But our first thoughts are rolling back to chronic kidney disease and we are looking at the possibilities of which formulations are appropriate there, oral, subcutaneous, maybe some other depo type preparations might be a possibility. And that is something we will certainly inform our investors on as we move forward there.

Thank you.

Thank you, I am not showing any further questions in queue. I would like to turn the call back over to management for any further remarks.

I would just like to say thank you, everybody, for joining us on the call today and we look forward to updating you very, very soon on our clinical progress. Thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a wonderful day.