Tvardi Therapeutics Inc (TVRD) 2015 Q4 法說會逐字稿

Good afternoon and welcome to the Cara Therapeutics fourth-quarter and full-year 2015 earnings conference call. At this time all participants are in a listen-only mode. There will be a question-and-answer session at the end. Please be advised that this call is being recorded at Cara's request.

I would now like to turn the call over to the Cara team. Please proceed.

Good afternoon. This is Jesse Baumgartner with Stern Investor Relations and welcome to Cara Therapeutics fourth-quarter and full-year 2015 earnings conference call. The news release with our fourth-quarter and full-year financial results and corporate update became available at 4:01 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 investor section of our 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 of the Company's meeting with the FDA to discuss the clinical hold for IV CR845 in postoperative pain; the potential resolution of the clinical hold and resumption of the CLIN3001 trial; timing for the Company's other planned clinical trials and the reporting of clinical trial results; the potential results of ongoing and planned clinical trials and future regulatory development milestones for the Company's product candidates and the Company's expected cash reach.

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, 2015 and its other documents subsequently filed with or furnished to the Securities and Exchange Commission.

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 were made except as required by law.

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

Thank you, Jesse. Good afternoon, everybody. Thanks for being with us on the call. I am joined today by our Chief Medical Officer, Joe Stauffer, and our Chief Financial Officer, Joe Schoell. So the agenda for today's call is as follows. I will provide a brief overview of our 2015 highlights and also recent developments. Then Joe Stauffer will walk through the status of our pivotal trial of CR845 in acute postoperative pain as well as the ongoing development plans for our CR845 programs in uremic pruritis and also in chronic pain. Then Joe Schoell will walk through our financials for the fourth quarter before we open up to Q&A.

So 2015 was certainly a very productive year for us at Cara. We continue to execute on our clinical development plan and build out a broader set of indications for CR845. Starting with our lead indication for IV CR845 in acute postoperative pain, we initiated our first adaptive pivotal trial, CLIN3001, in September of last year, examining repeat doses of CR845 administered both prior to and following abdominal surgeries.

As we discussed with you a couple of weeks ago, we recently announced that the trial has been placed on a clinical hold following a limited number of patients reaching a prespecified stopping rule related to increases in serum sodium concentrations to the mild to moderate hyponatremia level that is greater than or equal to 150 millimoles per liter and I will remind you the normal range is 135 to 145 millimoles per liter.

Again to remind you of this, there were no severe adverse events observed in these patients and all sodium levels were resolved to normal levels within 24 hours through standard fluid management protocol. Nevertheless, we are working through a review of safety data by both us and the trial's Independent Data Monitoring Committee and we will be discussing this with the FDA shortly with the aim of re-initiating this trial in Q2 of this year.

So while we look forward to continuing with this study, the past year was also significant because of positive data for CR845 in additional clinical indications. This included the results from our oral CR845 Phase 2a study in osteoarthritis patients that we announced in December of last year showing that CR845 exhibited a dose-related reduction in mean baseline pain score to the end of the two-week treatment period with up to an approximately 34% reduction for the highest tablet strength.

We also observed a statistically significant reduction in mean rescue medication for the highest dose group as well as a very clean safety profile in those patients.

So I will let Joe Stauffer walk through the next steps for this indication in just a moment but obviously the expansion to chronic pain with an oral formulation of CR845 has already exhibited very low abuse potential from our completed human abuse liability trial or indeed any other side effects typically associated with current pain medication we believe opens up a significant opportunity for us within the chronic pain space.

We plan to initiate a multiple dose Phase 2b study in OA patients in the second half of this year and Joe will provide a little color around that protocol in just a moment.

And then finally turning to our program focused on CR845 in the treatment of moderate to severe uremic pruritis and dialysis patients, in Q3 last year we were very pleased to announce data from our Phase 2 trial where CR845 treatment resulted in statistically significant reductions in both the primary endpoint of worst itching or pruritus and secondary endpoints assessing quality of life measurements in these patients.

We believe this data shows the clear potential for CR845 to address what is currently a significant unmet clinical need with no approved therapies for UP in the US or EU and following the results, we held a guidance meeting with the FDA in December of last year to inform our registration program moving forward and again I will let Joe describe shortly the path forward in detail surrounding that program.

Before I turn the call over for clinical review and discussion, I just want to highlight the capital efficient approach that we have taken in our CR845 development programs. With the capital raise from our follow-on offering this past summer, we ended 2015 with approximately $106 million in cash and marketable securities which puts us in a very strong financial position to execute on each of our three CR845 clinical development programs in the coming two years and indeed beyond.

So with that I would like to turn the call over to Joe Stauffer to walk through the plans in each of our clinical programs.

Thank you, Derek. I will be starting with our first adaptive pivotal trial in acute post-op pain, CLIN3001, and just a reminder of the structure of this study, this is a multi-center randomized double-blind placebo-controlled parallel group adaptive design trial with repeated doses of IV CR845 or placebo administered both prior to and following abdominal surgery in male and female patients at approximately 30 sites in the US. The trial is designed to enroll up to 600 patients undergoing various abdominal surgeries.

As we discussed previously, the study accommodates an interim assessment for safety and conditional power across the doses with an adaptation to optimum doses and subsequent progression to complete enrollment.

As Derek noted, following a protocol specified trial safety review after 90 patients had completed dosing, we identified that the prespecified stopping rule related to the number of patients exhibiting increases in serum sodium concentrations to the mild moderate hypernatremia level defined as greater than or equal to 150 millimoles per liter had been reached. The review of the unblinded safety data showed that the four patients were confined to the highest CR845 dose group, that is the 5 microgram per kilogram group. They were asymptomatic and as with our previous experiences, sodium levels resolved to normal levels which is less than 146 millimoles per liter with standard fluid management.

No patients in the other two groups which is the 2 microgram group and the 1 microgram group exhibited serum sodium levels greater than 150.

Importantly the review also showed that there were no CR845 associated serious adverse events thus far in the trial and the safety profile overall has been well in line with what we saw in our earlier Phase 2 pain studies with IV CR845. Right now we are focused on completing the protocol safety data review process with our IDMC, that is the Independent Data Monitoring Committee, and following our anticipated FDA meeting the subject to agreement with the FDA on path forward and we hope to reinitiate the CLIN3001 protocol in Q2 of this year.

Turning to our oral CR845 program in chronic pain, Derek touched on the highlights from our December announcement of the topline Phase 2a data in patients with osteoarthritis of the hip or knee. This was a single blind randomized multiple ascending dose trial designed to evaluate the safety, pharmacokinetics and effectiveness of oral CR845 tablets dosed over a two-week period in OA patients experiencing moderate to severe pain.

We were extremely pleased with the activity seen in this trial including the following highlights. The mean joint pain score, NRS, numeric rating score, exhibited a dose-related reduction from baseline to the end of the two-week treatment period ranging from 25% at the lowest tablet strength which was a 0.25 kilogram up to 34% for the highest, the 5 milligram tablet strength.

50% of the patients in the 5 milligram dose group reported at least a 30% reduction in their pain score at the end of the treatment period. The reduction in pain score in the 5 milligram dose group was accompanied by a statistically significant reduction in mean rescue medication of approximately 80% with an ANOVA of p=0.02 for the 5 milligram versus the lower dose groups.

PK analyses indicated dose proportional exposure of CR845 after oral administration with the 5 milligram dose group exhibiting an approximately fivefold increase mean AUC value compared to the 1 milligram dose group. And very importantly, tablet strengths were generally well-tolerated with no drug-related SAEs.

Looking forward, our next planned trial here is a larger Phase 2b study. This will be designed as a double-blind multiple dose Phase 2b with repeat doses of CR845 administered over an eight-week treatment period in patients with moderate to severe pain which is greater than or equal to 5 on a 10 point scale associated with osteoarthritis. Four treatment arms, oral twice a day doses, placebo and 3 CR845 tablet strengths. This will be approximately 330 patient trial run at about 15 sites in the United States.

Finally as Derek highlighted earlier, we also held a guidance meeting with the FDA in December around our uremic pruritis program following our positive Phase 2 readout in July 2015. As you may recall that trial was designed to evaluate the efficacy of IV CR845 compared to placebo in reducing intensity of itch in dialysis patients over a two-week dosing period.

Highlights from the data showed that IV CR845 achieved statistically significant results on the primary endpoint of reducing worst itch intensity. The trial also demonstrated statistically significant results on the secondary endpoint of quality of life measurements with an additional positive trend on itch-related sleep disturbances and again, IV CR845 was also observed to be well-tolerated during the study with no CR845 related serious adverse events or AEs reported.

This recent meeting near the end of 2015 with the FDA was designed to inform our registration path for IV CR845 and coming out of that interaction we have been planning our first large trial in this indication. The trial will be a two-part Phase 2/3 adaptive design in hemodialysis patients exhibiting moderate to severe uremic pruritis.

Part A will be randomized double-blind placebo-controlled study of three doses of IV CR845 administered three times a week after dialysis over a period treatment of up to eight weeks. Part B will be randomized double-blind placebo-controlled study of one optimized dose of IV CR845 administered three times a week over a 12-week treatment period. The primary endpoint will be reduction in worst itching scores from baseline values measured on a standard NRS alongside secondary quantitative quality-of-life endpoints. We expect to initiate this trial in the first half of this year at multiple sites in the US.

Concurrently with this IV CR845 trial, we will also be initiating a PK safety trial of multiple doses of oral CR845 in hemodialysis patients in order to define bioequivalent tablet strengths that will inform our ability to develop an oral tablet formulation for this clinical indication.

In summary, we are very encouraged by the rapid clinical development progress made during 2015 in each of our clinical indications and although it is unfortunate that we are facing the clinical hold on the postoperative pain trial, we are optimistic that following the completion of our safety review and FDA meeting we will be able to resume the trial promptly.

We look forward to reporting on our clinical progress as we execute our plans throughout the coming year.

With that, I will turn it over to Joe Schoell for the financials.

Thanks, Joe. As a reminder, the full financial results for both the fourth quarter and the full-year 2015 can be found in our press release issued today after the market close. The following is a summary of the fourth-quarter results.

We reported a net loss of $9.5 million or $0.35 per basic and diluted share for the fourth quarter of 2015 compared to a loss of $4.2 million or $0.18 per basic and fully diluted share for the same period of 2014. We did not recognize any revenue during the fourth quarter of 2015. For the fourth quarter of 2014, we had collaborative revenue of $399,000 comprising of revenue that had been deferred upon entry into a license agreement with Maruishi Pharmaceutical Company. And clinical compound revenue was $515,000 from the sale of clinical compound to Maruishi.

R&D expenses were $7.6 million in the fourth quarter of 2015 compared to $3.5 million in the same period in 2014. The higher R&D expenses in the fourth quarter of 2015 were principally due to an increase in direct preclinical and clinical trial costs, consultant services in support of the preclinical studies and clinical trial costs and an increase in payroll and related costs for R&D personnel.

General and administrative expenses were $2.2 million in the fourth quarter of 2015 compared to $1.8 million in the same period of 2014. The increase in the fourth quarter of 2015 was primarily due to increases in payroll and related costs and stock option expense. Those costs, those increases in costs were partially offset by decreases in professional and consulting fees.

At December 31, 2015, cash, cash equivalents and marketable securities totaled $106.7 million compared to $52.7 million at December 31, 2014. The increase in the balance of cash, cash equivalents and marketable securities resulted from the receipt, the net proceeds of $75.2 million from the follow-on offering of common stock which closed in August 2015, also cash received from exercise of stock options of $300,000 and partially offset by $21.5 million of cash used in operations.

Turning to our financial guidance based on the timing expectations and projected cost for current clinical development plans, we expect that our existing cash, cash equivalents and marketable securities as of December 31, 2015 will be sufficient for the Company to fund its operating expenses and capital expenditure requirements through the end of the first quarter of 2018 without giving effect to any potential milestone payments under existing collaborations.

Now we will open it up to Q&A. Operator? Thank you.

(Operator Instructions). Annabel Samimy, Stifel.

Thanks for taking my question and for the update. I just had a couple of additional questions on clinical halts. So I understand that the timing of the clinical holds is really contingent on the IDMB review completion and then further submission to the FDA. With some of the recommendations that we have talked about in the past, I guess one of the things I was curious about is if you hadn't had the protocol violations in the trial, it doesn't seem like we would be here today with the clinical halt. So is there a possibility that dropping the dose is too grave a step or adjustment in this trial? If that is the case, can you explain how dropping the dose won't compromise the efficacy? Thanks.

Sure. So dropping the dose is certainly a reasonable thing to do and obviously that higher dose. And in terms of the other two remaining doses, don't forget that the 1 microgram per kilogram arm was also efficacious in our itch programs. That is also consistent with efficacy that we have from preclinical evidence. And the other thing that we have working in our favor here is that we also have a preplanned look at the data as part of the original protocol and then it will be part of the follow on protocol to take the interim assessment look for conditional power.

So that is how we protect our flank and downside so to speak for efficacy failure once we get to about 50, 60 patients randomized per arm.

Okay, that is helpful. Thanks. And then on the uremic pruritis trial, you gave us the study design. It is going to be two-part, Phase 2/3. With these two parts, are you going to have any additional clinical trial requirements after that?

Since it is an NCE, we will very likely have to do another pivotal trial as well and following the same type of requirements that we would expect from any NCE, you can expect that we will have to have a similar type of database as well, 1500 total exposures as part of the entire program. So to sum that up, it would be this trial plus another pivotal trial Phase 3.

Okay, and so if that is the case then can you sort of the give us an idea of when we might be looking at this in terms of potential filing?

So in terms of filing the NDA?

I think it is too early to say, Annabel, until we get this initiated and actually look at recruitment rates for the number of sites we are going to have involved here. We will give guidance on that as we get underway and we know how quickly we can recruit patients into these trials.

Okay, great. Thank you.

Charles Duncan, Piper Jaffray.

This is Sarah on for Charles. So in terms of the clinical hold besides from the cases of hypernatremia, are you otherwise encouraged by the interim look at safety of CR845?

Very much so. I mean none of these patients, none of any of the patients had serious adverse events related to serum sodium. So very encouraging and that is similar to what we had seen before in previous trials.

Great. Thanks. And then what do you believe the agency is working on or looking for in advance of a meeting with you next quarter?

So what they will look for is our proposal based on the IDMC recommended guidance and our agreement to that guidance that we will likely come up with a dosing scheme that makes sense that keeps patients less than the 150 target.

Thank you for taking my questions.

Alan Carr, Needham & Company.

Thanks for taking my questions. One about UP, would these Phase 3 trials in uremic pruritis be run in serial or could you do them where they would just be staggered? And then with your hope to reinitiate the Phase 3 or 2/3 in postoperative pain in second quarter, what are your thoughts on timelines to the interim assessment and the final results from that trial?

Sure. So the first part of your question was related to UP and we would run those staggered because we want to optimize the dose. The second part of your question was related to the IV pain trial, is that correct?

Yes.

And you are looking for timing there. We'll have a better sense of what that timing looks like once we meet with the FDA, finalize the protocol going forward, get a handle on sample size and get up and running. So we will be able to comment with more clarity once we have had that meeting.

Is it appropriate to assume that when you started this one back in September, should we just -- and you I think had been guiding for finishing it in 3Q, should we just shift everything out six months or what sort of factors might influence that?

I don't know if it is necessary to assume that at this point. We have to see what the size of the trial looks like. I would anticipate the trial size gets smaller which is good and smarter which is also good. But as I said, I will have a better sense of what that looks like once we have got agreement with the agency what the full scope of the trial looks like.

And then last one in terms of revenues for 2016, are there any milestones that you all expect from Maruishi or CKD this year or maybe you can give us an update on where they stand with clinical development over there?

As far as milestones from Maruishi, Alan, we don't expect any in 2016. There will be in 2017 though.

All right. Thanks very much.

Ken Trbovich, Janney.

Thanks for taking the question. Just wanted to follow up on the discussion for uremic pruritis. I think part of the curiosity that I have is the design or the intention to go forward with an oral formulation study before you have even figured out what the optimal dose is on the ID side. Can you kind of help us understand how you are trying to bracket that?

Yes, I will let Joe talk about that clinically, Ken. But the thought there for us in a market sense and for reimbursement of this product ultimately as you are well aware, an intravenous product in the US is essentially automatically within the bundle payment. And as you are also aware, an oral medication is automatically out with the bundle payment and falls into Medicare Part D.

So this is part of a [stet] program we are trying to initiate to essentially validate the oral in these patients so that not only we can think about transferring from IV to oral for uremic pruritis and then it makes it much, much easier to walk that back to chronic kidney disease obviously. But also ultimately to possibly expand beyond dialysis associated pruritus and to those other conditions that you are well aware of associated with liver disease and endocrine disorders and so on where there is a very, very significant unmet need in terms of general pruritus. So that is our initial step in validating that formulation with an ability to move to that formulation for UP and possibly other conditions.

Sure, no, I understand with regard to the intention from a reimbursement standpoint and even outside of UP potentially but obviously this PK study isn't going to help you with outside of UP. I guess what I'm really try to get at is the first study tested three doses and had the same Part A, Part B design and the Part B design highly affected at a 1 microgram dose. And so I guess I'm a little puzzled around first, the FDA's request that you guys do a three dose study. And then secondly when we talk about the PK study, are you just looking at it purely from an oral proof of concept in that patient population or is this really trying to refine a specific dose because it is not clear to me that you would be able to target a specific dose until this first trial is completed?

On the first part of that question and Joe can chip in on this, standard protocol for the FDA to look for dose responsiveness and establishment of minimal effective dose and that is why we are going to look at a dose range in the first 2/3 trial.

The second part is the simplest way to look at it, Ken, is we are trying to find a tablet strength that can mirror or match AUCs we know are effective from our intravenous studies and that is something we can run with a PK trial in these patients. We haven't done it before in these patients simply to establish that we can get bioequivalence if you like in terms of exposure. And then define the tablet strength or strengths that we would predict would be active in this group, that is the main reason to run that trial.

Okay, and then the three doses are they the same three doses that we saw in the earlier study?

The three doses in terms of the intravenous trial, they are going to be anchored around the 1 microgram per kilo and I think as we've said before, it is highly likely we would like to look at a dose lower than that to define the floor and it is also highly likely we would look at a dose higher than that.

Right. And I guess the reason I'm asking is the earlier study was 0.5 and 2.5 so I'm just trying to confirm whether or not we are talking about the same doses or you are looking at different doses outside of those two that were already tested?

That is undecided at this point, Ken, but we will certainly guide to that when we know final dosages.

Okay and then last question, I know the question with regard to timeline on the program overall was considered too long in the distance to sort of refine. But could you give us an expectation on your perspective in terms of how quickly this particular study could be completed because I know you and a competitor both had fairly rapid enrollment in earlier studies. So I just didn't know what you thought the timeline for completion of this study would be on the IV side?

As with the IV post-op, Ken, I think we like to guide to that once we are up and running and we know how quickly sites are recruiting, then we will make a guidance on that. But we aim to get that study up and running first half of this year so you are not too far away from more refined guidance once we get that study underway.

Sounds good. Appreciate the time.

Chiara Russo, Cantor Fitzgerald.

Thank you for taking my question. Just kind of probably back tracking and I apologize if this has already been addressed. I jumped on the call late. But I was wondering if you could just walk us through sort of the dose equivalent math if you will around the 2 microgram and the 5 microgram, why sort of efficacy here is looked at for areas under the curve versus CMAX and why you feel comfortable sort of translating that 1 microgram dose that you saw in pruritus over to the pain trial? Thank you.

Sure, so I will start with the back end of your question first. Pain and itch travel along the same receptors on the A delta and C fibers on an ascending pathway whether it is coming from your skin or whether it is coming from a surgical insult and we know that the 1 microgram per kilogram is quite efficacious even with only I think 30 patients per treatment arm in that IV UP study.

And then like fashion, so extrapolate that then out to what we knew in the bunionectomy trial of bony model inflammatory painful model, in that situation we had 5 micrograms per kilogram at Q8 dosing. We saw nice efficacy there as well but we needed to go lower, we wanted to go lower because we thought we could even optimize the doses lower. In other words, deliver analgesia at efficacy at a lower dose. It is a very potent drug and not have to deal with side effects going forward. Clearly we have one of those side effects at the 5 micrograms but it doesn't scare me or bother me at all actually at this point yet about the 1 and the 2 because what I just said on IV itch. And we will be able to take a look at that dose again in the interim assessment once we get a healthier complement of patients per treatment arm to see about conditional power.

If indeed we have conditional power that makes us feel comfortable going forward, then we continue that study. If we don't, we readjust depending upon what we see.

Okay. All right. Great. Thank you, guys.

There are no further questions. I would like to turn the call over to Derek Chalmers for any closing remarks.

Thank you everybody for participating in today's call and we look forward to updating you again very, very soon. So thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.