Tvardi Therapeutics Inc (TVRD) 2017 Q3 法說會逐字稿

Good afternoon and welcome to Cara Therapeutics Third Quarter 2017 Financial Results Conference Call. (Operator Instructions) 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 Michael Schaffzin with Stern Investor Relations and welcome to Cara Therapeutics Third Quarter 2017 Financial Results and Update Conference Call. The news release with our third quarter financial results and corporate update became available just after 4 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 future interactions with the FDA and regulatory filings with the FDA regarding our development programs; the timing of the completion and announcement of the results of our ongoing clinical trials; the expected timing and design of our planned clinical trials; the potential for CR845 to be a therapeutic option in multiple pruritus indications; future regulatory development milestones for our product candidates; the size of the markets that are potentially addressable by our product candidates and our expected cash reach. Participating on this call are Dr. Derek Chalmers, Cara President and CEO; and Dr. Mani Mohindru, our Chief Financial Officer. I’ll now turn the call over to Dr. Chalmers.

Okay. Thank you, Michael, and good afternoon, everybody, and thanks for being with us on the call today. This was a highly productive quarter for us here at Cara, as we continue to make significant progress across development programs for our lead peripheral kappa agonist CR845. This afternoon, we'll summarize that overall progress, provide some more color on the upcoming trials and then we will walk through the expected milestones.

We're particularly pleased with the progress made in a pruritus program this quarter, including the completion of our random Phase 2 meeting with the FDA, and we plan to initiate our first pivotal Phase III efficacy trial of I.V. CR845 for the treatment of chronic kidney disease associated pruritus in hemodialysis patients in the U.S. by end of 2017. And I'll summarize the general design of that trial shortly.

Overall, in consultation with the FDA, we have now established the key elements of the Phase III program to support a new drug application for I.V. CR845 for the treatment of moderate-to-severe chronic kidney diseases associated pruritus in hemodialysis patients. This, of course, as we said before, is an unmet need for which there are currently no approved therapies in the U.S. In addition, in the pruritus area, we're very pleased to recently move Oral CR845 forward into Phase I trial in non-hemodialysis patients with earlier stage CKD to support our general plans to expand the use of CR845 for the treatment of moderate-to-severe CKD associated pruritus and CKD stage III to V patients. Data from this trial will inform dose selection and design of the planned placebo-controlled Phase II trial of Oral CR845 in stage III to V CKD patients, which we plan to initiate in Q1 of 2018.

Current CDC estimates indicate that approximately 50% of diagnosed CKD patients are in stage III to V, with an estimated 25% of those patients suffering from moderate-to-severe chronic kidney disease associated pruritus. Given the encouraging Phase II efficacy data, we've observed to date with I.V. CR845 in hemodialysis patients with moderate-to-severe pruritus, we believe that Oral CR845 has the potential to bring meaningful clinical benefit to a large proportion of earlier stage CKD patients with pruritus.

In addition to treating CKD-associated pruritus, we believe that based on this mechanism of action, that is the combined dermal peripheral nerve innervation and anti-inflammatory effects we see with CR845, that the drug has the potential to treat pruritus across the range of medical conditions. In this regard, we're targeting chronic liver disease associated pruritus as a second pruritic clinical population for CR845 development, and we plan to file an I&D for Oral CR845 for symptomatic relief of chronic liver disease associated pruritus later this quarter to enable initiation of a Phase I trial by year-end.

Now returning to our lead pruritus program, let me provide you some greater details on the elements and timing of our planned Phase III program for I.V. CR845 for moderate-to-severe CKD, AP and hemodialysis patients. Based on our discussions with the FDA in Q3 of this year, we plan to conduct 2 placebo-controlled Phase III trials of I.V. CR845 for the treatment of moderate-to-severe CKD AP, the first pivotal trial as planned to initiate in the U.S. by year end 2017, and the second international trial planned for the first half of 2018.

Both trials will be randomized double-blind placebo controlled trials of I.V. CR845 at a dose of 0.5 micrograms per kilo versus placebo administered 3 times per week, that is after scheduled dialysis sessions over a 12-week treatment period. The primary efficacy endpoint will evaluate the change from baseline to week 12 and they average worst daily itch intensity as measured on a numeric rating scale, or NRS scale. Secondary endpoints will measure aspects of quality of life using previously validated self-assessment scales, that is Skindex-10 and the 5-D itch scales. And you remember, we implied both of these scales in our previous completed Phase IIb trial.

Overall, the 0.5 microgram per kilo CR845 dose, the dosing regimen and the primary and secondary endpoint tools for our pivotal Phase III trial design, all met those endpoint, and are completely successful Phase IIb trial of I.V. CR845 in HD patients, with a 0.5-microgram per kilo dose met both primary and it's reduction and secondary quality of life endpoints. And as aside, we're presenting these data from the completed Phase IIb trial this week at the ongoing American Society for Nephrology's Annual Meeting in New Orleans.

Also as part of this Phase III program in Q2 of this year, we initiated a 52-week safety trial of I.V. CR845 at the same dose in HD patients. This long-term safety study continues to enroll patients who completed one of our prior Phase II trials, and we look forward to updating you on a progress in each of these phase III trials over the coming quarters. Moving away from pruritus and on to our ongoing acute postoperative pain program and our adaptive Phase III CLIN3001 trial, where we expect to complete enrollment by year-end or early 2018. As a reminder, this is a three-arm trial testing 1 and 0.5 microgram per kilo of I.V. CR845 versus placebo in up to 450 patients undergone various abdominal surgeries. Patients at dose 1 hour prior to surgery and then receive a second dose in recovery, along with subsequent doses at 6, 12 and 18 hours post-surgery.

The primary efficacy endpoint is a change in pain intensity over the 24-hour postoperative period using the area under the curve or AUC measurement based again on the numeric rating scale score collected at pre-specified time points through 24 hours post surgery. In addition, postoperative nausea and vomiting is also being evaluated as a secondary endpoint as well as use of rescue medication and the patient global assessment of postsurgical pain. So as we said many times in these calls, pain management in the postsurgical setting remains an area of high unmet need, and we look forward to updating you on the timing from (inaudible) from this trial in the coming months. Additionally, within our pain program, we will be presenting data from Oral CR845 has completed Phase IIb trial in patients with osteoarthritis as a late breaking poster in the upcoming meeting of the American College of Rheumatology and that occurs next week in San Diego.

So with that summary, I'll pass the call on to Mani Mohindru for our financial results. Mani?

Thank you, Derek. As a reminder, our financial results for the third quarter can also be found in our press release issued today after the market close. On the third quarter of 2017, we reported a net loss of $12.4 million or $0.38 per basic and diluted share compared to a net loss of $11.5 million or $0.42 per basic and diluted share for the same period of 2016. We reported no revenue for the third quarter of 2017 or the third quarter of 2016. R&D expenses were $9.8 million, including $619,000 of stock option expense in the third quarter of 2017 compared to $9.7 million, including $375,000 in stock option expense for the same period of 2016.

The slight decrease in R&D expenses in the third quarter of 2017 was mainly due to net decrease in direct clinical trial costs, partly offset by increases in stock-based compensation and personnel-related costs.

General and administrative expenses were $3.8 million, including approximately $1.5 million stock option expense in the third quarter of 2017 compared to $21 million, including $402,000 in stock option expense in the same period of 2016. The increase in G&A expenses were primarily related to increases in stock-based compensation, certain personnel-related costs and professional fee. Other income was $375,000 in third quarter of 2017 compared to $176,000 in the third quarter of 2016 due to higher dividend and interest income on a higher average balance of our portfolio of investments in the 2017 period.

As of September 30, 2017, cash, cash equivalents and marketable securities were $103 million compared to $58.3 million at the end of December 2016. The increase in cash, cash equivalents and marketable securities primarily resulted from the net proceeds of $86.2 million from the company's follow-on stock offering in April of 2017 and $1.5 million received from the exercise of stock options, which was partially offset by short $43.4 million of cash used in operations year-to-date.

Our financial guidance remains unchanged versus our prior disclosures. We continue to expect our existing cash, cash equivalents and marketable securities to fund our operating expenses, including our ongoing clinical trials and projected development plans and capital expenditure requirements into 2019 without giving effect to any potential milestone payments under existing collaborations.

Now we'll turn the call back to the operator for Q&A.

(Operator Instructions) Our first question comes from Charles Duncan with Piper Jaffray.

It's Sarah on for Charles. Just 2 quick questions. First, on Phase III design, can you just remind us why you decided to move forward with a single-dose of 0.5 micrograms? And then any color you can provide around the size and number of sites for these trial?

Yes, Sarah. You recall on to the first of those questions, you recall we actually ran 3 doses in our Phase IIb trial, 0.5 being the lowest. Essentially all of those doses were equivalent in terms of response to the primary and secondary endpoints. So it made sense for us to move forward with the minimal effective dose and that was the rational for moving forward with the 0.5. In terms of the latter question, the current thought -- we're going to recruit the first trial, the U.S. trial, we've been looking for approximately up to 80 sites in the U.S. for that particular Phase III trial.

Great. And how many patients?

Yes. Based on current statistical analysis, that looks like approximately 150 patients sample size per group. But we're actually going to get to that more precisely when we initiate that Phase III trial.

Okay, great. And just one follow-up. So for the non-hemodialysis and then liver disease associated pruritus, just curious, you envision any efficiencies you can realize here in the clinical development plan, or as of now should we think about each of these needing a separate Phase II and Phase III program?

Now, that's a great question. We certainly envisage efficiencies in relation to CKD patients. And some of those patients are going to be later-stage patients, and most likely also some hemodialysis patients we're going to look at on our oral programs. So there, we're going to see efficiencies in terms of exposures. It's going to be completely different data set in chronic level. It's going to require de novo exposures in the separate Phase II there.

Our next question comes from Annabel Samimy with Stifel.

Just back on the size I'm not sure if you're in a position to talk about this yet, but can you talk to us about the powering of the trial at the 150 per arm trial size? And what exactly you're looking for in terms of difference of placebo and the confidence interval you're looking at?

Yes. Can't go into that in great detail, Annabel. Obviously, all our prior analysis is based on our Phase II data that you've seen across the 3 dosages. And I'll leave it at that. You're going to see more accurate numbers in terms of the sample size when we start the trial.

Okay. And as far as the Phase I that you're initiating for the oral, that -- is that going to be in healthy volunteers? Is that going to be in the renally compromised patients like in the CKD population specifically?

No. That's going to be renally compromised stage III to V patients. And the V stage patients are pre-dialysis.

Okay. So that's why you're doing the dose -- I guess, you're doing the dose finding in Phase I as opposed in the Phase II? I guess, I'm curious why you wouldn't start just into Phase 2 given that you've had an oral formulation already in patients?

That's a great question. And just to imagine, in case there's been a slippage here in terms of the PK for (inaudible). The CR845 is entirely exhibited via the renal route. And so it's very important we design the PK precisely for these various stages of renal function. So we want to make sure we have precise exposure numbers, which of course, we could then match to exposures that give us the efficacy in the same condition in HD patients, and then be confident we're picking the correct dose to take forward for each of those stages of compromised renal function.

Okay. Great. And if I could just ask a question on the Oral CR845 program and pain. I know that when the data initially came out you're thinking about how you can potentially change the dose or modify the trial to continue to pursue this in pain, but I noticed you haven't really talked about when you might pursue the next trial in the oral? Are you waiting for the IV data to read out before you pursue any further development in the oral?

Yes. I do really see those as linked. I know some people like to link those. But I think those are 2 different aspects of the drug. For the OA data, we're really looking at the anti-inflammatory effect we get with CR845. So as I said, we are going to be presenting our data next week at the American Academy of Rheumatology. And we did continue to analyze that, consult with our KOLs. We do believe there's a signal there, could be dug out within that patient group. But as we would like to move forward ideally with a partner on board, we're exploring that particular aspect currently, particularly the idea of a regional partner that could help us with the cost of that. And I think as you could appreciate from the call this afternoon, we're really focused in the near term and moving forward into Phase III with our CKD program for hemodialysis and also finishing off as you indicate the post-op Phase III program. So we still are considering the aspects for OA, we would ideally like to see a partner come on board and help with the expenditure on that next trial.

Our next question comes from Arlinda Lee with Canaccord.

I had a really 2 clarification questions. So on the oral formulations that you're starting, Stage I they're going to be in separate population for the Phase I and the Phase II. Is that correct?

Yes, so the Phase I for CKD stage III to V are in patients who are not necessarily moderate-to-severe pruritic patients. So those are defined by renal function stage III to V CKD patients. The Phase 2 in that population will have an entry criteria that identifies those patients within that range, who also have moderate-to-severe pruritus.

Okay, great. And it than if you have 150 patients each for the U.S. and ex-U.S. Phase III for the I.V. formulation, does that get you to the appropriate number of -- or the appropriate exposure and the number of patients to be able to...

Yes, that's part of the equation. At the moment, we're planning for 1,500 exposures for that program, standard guidance there, with the appropriate exposure level of 1 year and 6 months. So those are certainly part of the plan to get us to that total number.

Okay, great. The last question is, is there any differences that you would expecting in the standard of care U.S. versus ex-U.S. that might impact the outcomes in the 2 different trials?

We don't think so. We're planning our international trial, certainly we have a European component, and we're looking at other if you like Western-type populations to include there, possibly Canada, possibly Australia. So standard of care across that is pretty uniform.

Our next question comes from Ken Trbovich from Janney.

Derek, I kind of curious to hear from a timing standpoint, it certainly seems like you got a visibility on starting the trial. And I know you guys have had excellent results with regard to enrollment studies, once they're up and running. Is there anything about these 80 sites that differs from the prior studies that you've done as it relates to either the nature of the centers or whether they've been involved in the studies that you have done previously?

Yes. Some of them have been involved in previous trials, but a lot of de novo sites, as you remember, we are -- our last trial used about 34 active sites across the U.S. There's obviously a large increase in the number for this trial. So there's a lot of de novo sites we're bringing on board. We've been very careful in our site selection. And one of reasons I don't have Julia today is she is on the road meeting new [PIs] and looking for new sites that can efficiently recruit for this particular trial. So a lot of new sites and some of the old sites from the last trial.

Is there any reason to expect it to be much of a difference? I'm just -- historically, these have been rapid to enroll. And I know if that sort of look back at the last study, which started middle of last year and completed nearly part of this year. It's a 9-month horizon that may be is too aggressive as they've got a bunch of new centers coming on. But at the same time, you got more than double the sites. I'm just trying to get a sense for this sort of a reasonable expectation? Is it unreasonable for us to look for data from the study before the end of next year?

No. I understand the question, Ken. The issue with these sites really, as you they are very heterogeneous in both of number of patients within the site on the efficiencies in terms of their clinical trial. So it's very difficult to predict until we get the trial underway as to enrollment rate. So I would prefer to guide to that once we get this Phase III trial kicked off and we see the recruitment rates across the whole range of sites and then will guide as we can early next year as to how we see the endpoints for those particular trial. But you are correct. We've approximately doubled the sites we're going to use for this Phase III versus the Phase IIb.

Okay. And then just last question, the role, if at all, in sort of these major dialysis service providers in these types of studies, does it help? Does it hurt? Does it provide a background for you guys when it comes to looking at the market from a commercial standpoint as you begin the trial process?

Yes, I think it would be impossible to run a clinical trial in the U.S. with either Fresenius or DaVita involved in that, Ken. And we work with both of those groups, so that we get the maximum exposure here in terms of recruitment.

Our last question comes from François Brisebois with Laidlaw.

Just a couple of quick ones here. So for -- on the pain side, for I.V. CR845, enrollment kind of fourth quarter, maybe first quarter, should we still be expecting data in the first quarter '18, or is it more of a first half '18 now?

Yes. So the way that's happened, that's unfortunately as you know we've had a couple of major hurricanes here at the Southern U.S. in the last couple of months. And we've lost some sites both in Texas and Florida. So there hasn't been a little bit of slowing up in our recruitment for that particular trial, which is why we think it may slip a little bit into '18. But we're going to recruit as quickly as we can. Get that fully enrolled and then report data as quickly as we can next year.

Okay. Great. And then lastly, I see, I heard you mentioned, there's not much link between I.V. and oral here for pain. As KOLs and that leads us, just kind of looked at the data, is there any idea of any difference there might happen in OA, whether it's pain of the knee versus the hip? Like (inaudible) to the head or is it still kind of misunderstood why we're working one and not the other?

That's a great question, and obviously something we've asked consistently across KOLs. I think as we said previously in the last call, it's not a response that hasn't been seen before. There has been heterogeneity in terms of the response to NSAIDs between joints. And one explanation we've heard actually from rheumatologist has been the difference in cartilage between the 2 joints. And that knees tend to degenerate faster than hips. And as you know, the target for the kappa agonist is right there on the (inaudible) sites and the cartilage. So one possible explanation is that we use loose target site faster in knee joints than we do in hip. And that's something we're looking at again as we continue to analyze that patient population as to duration of disease between these 2 populations in that Phase IIb trial. So that has one possible explanation as to the difference between the 2 joints.

We have another question from Kenneth Trbovich with Janney.

I didn't want to let you off so easy. So I figured I'd ask, if you don't mind, may be little bit of the sequentially increase in the G&A? I know you talked about year-over-year but the sequential seems like a pretty significant jump?

Yes, so there was one-time stock option expense-related-expense. And that is related -- of approximately $500,000 and that is related to the departure of prior CFO who retired after being at Cara over a decade. So that, that is a one-time expense that we don't anticipate going forward.

And that's fully delineated, you can read, enough time to read it, it but it's in there.

Hard to read it in the 30 minutes between the call -- the release of the press -- press release and the call itself.

I'm not showing any further questions at this time. I would now like to turn the call back over to the Cara team for any further remarks.

Okay. Thank you, and thank you, everybody, for participating in today's call. And also at this time, I'd also like to thank the Cara team for their continued hard work to support the progress of our various programs. I'd like to thank our investigators, and most importantly, the patients and their families continue to participate and support our trials. And with that, we conclude our call, and I look forward to updating you very soon. Thank you, everybody.

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