Tvardi Therapeutics Inc (TVRD) 2017 Q4 法說會逐字稿

Good afternoon, and welcome to Cara Therapeutics Fourth Quarter and Full Year 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 Fourth Quarter and Full Year 2017 Financial Results and Update Conference Call. The news release became available just after 4:00 p.m. 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 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 and development milestones for our product candidates; the timing -- 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; Dr. Mani Mohindru, our Chief Financial Officer and Chief Strategy Officer; and Dr. Joe Stauffer, Cara's CMO.

I'll now turn the call over to Dr. Chalmers.

Okay. Thank you, Michael, and good afternoon, everybody. Thanks for being with us on the call today. So 2017 was certainly a year of significant progress for us here at Cara as we continued to advance CR845 or difelikefalin through both our pruritus and acute pain programs.

During this call this afternoon, I'll summarize our overall progress, provide additional insight into our ongoing and planned trials as well as provide some expected upcoming milestones.

Let me begin with KORSUVA, our conditionally accepted tradename for CR845 for pruritic indications. During 2017, we reported cost of data from a placebo-controlled Phase IIb trial of KORSUVA injection in chronic kidney disease-associated pruritus, or CKD-aP, in patients undergoing hemodialysis. We also received breakthrough therapy designation for KORSUVA for this indication, and we also laid the foundation for initiation of our pivotal Phase III program after a successful end of Phase II meeting in Q3 of last year.

Earlier this year, we started enrolling patients in the U.S. Phase III pivotal trial, also known as KALM-1 to support a new drug application for KORSUVA injection for the treatment of moderate-to-severe CKD-aP in hemodialysis patients, a significant unmet need for which there are currently no approved therapies in the U.S.

In addition, we are also pleased with the progress being made with oral KORSUVA, currently completing assessment in the Phase I trial in nonhemodialysis patients with earlier stage or stage III to V CKD. Data from this trial will inform dose selection and design of the upcoming Phase II trial of oral KORSUVA in stage III to V CKD patients with associated pruritus, and we plan to initiate this Phase III trial on the second quarter of this year.

Current CDC estimates indicate that approximately 50% of diagnosed CKD patients are in stage III to V, with an estimated 25% of these patients suffering from moderate-to-severe associated pruritus. Given KORSUVA's target receptor that is the kappa opioid receptor and its mechanism of action on dermal nerve fibers as well as immune cells, we believe that KORSUVA has the potential to address pruritus across a range of medical conditions irrespective of the initial trigger or the pathophysiology. In this context, we plan to investigate KORSUVA for the treatment of chronic liver disease-associated pruritus, another serious unmet medical need with no approved therapies in the U.S. We've already initiated the Phase I safety in PK study in patients with chronic liver disease of various pathologies, and we aim to initiate a Phase II trial of oral KORSUVA for the treatment of chronic liver disease-associated pruritus later in 2018.

Now let me provide some details and update on our lead pruritus Phase III program KORSUVA for the treatment of moderate-to-severe CKD-aP in hemodialysis patients. The first pivotal Phase III trial has been initiated and that's designed to investigate KORSUVA injection at a dose of 0.5 micrograms per kilo versus placebo, administered 3x per week that is after scheduled dialysis sessions over a 12-week treatment period, with a 52-week open-label extension phase in addition. The primary efficacy endpoint as a proportion of patients achieving at least a 3-point improvement from baseline at week 12 with respect to the weekly mean of the daily worst itching intensity score measured on a Numeric Rating Scale, or NRS. As a reminder, in a post-hoc analysis of our completed Phase IIb trial, there are a proportion of patients with an improvement from baseline and the weekly mean worst itch intensity score of greater than or equal to 3 points at week 8 was statistically significantly higher in the KORSUVA-treated patients compared to placebo: 64% in KORSUVA-treated patients versus 29% in placebo.

Secondary endpoints in the Phase III trial will measure aspects of quality of life using validated self-assessment scales, the Skindex-10 and the 5-D itch, both of these as employed in our previously completed Phase IIb trial. Other secondary endpoints include the proportion of patients achieving at least a 4-point improvement from baseline and weekly mean of the daily 24-hour worst itching NRS score at week 12.

The trial is expected to enroll 350 patients with the prespecified condition -- conditional power analysis at approximately 50% enrollment to allow expansion to up to 500 patients as indicated by that analysis.

As part of this Phase III program, we initiated a 52-week safety trial of KORSUVA injection at a dose of 0.5 micrograms per kilo in HD patients in Q2 of last year. This long-term safety study continues to enroll patients who completed one of our previous Phase II trials as well as the novel patients. Additionally, we also plan to initiate an international Phase III pivotal trial around mid-2018.

So we look forward to updating you on the progress on each of these Phase III trials over the upcoming quarters.

Moving along, lastly to our ongoing acute postoperative pain program, on our adaptive Phase III trial, we are nearing completion of enrollment, and we expect to announce top line data from this trial later in the second quarter of this year. As a reminder, this is a 3-arm trial testing 1 and 0.5 micrograms per kilo of I.V. CR845 versus placebo and up to 450 patients undergoing abdominal surgeries. Patients are dosed 1 hour prior to surgery and receive a second dose in the recovery room, along with subsequent doses at 6, 12 and 18 hours postsurgery. The primary efficacy endpoint is the change in pain intensity over the 24-hour postoperative period, using the area under the curve, or AUC, measurement based on the pain score collected at prespecified time points through the 24 hours postsurgery. Secondary endpoints include assessments of postoperative nausea and vomiting as well as use of rescue medication and the patient global assessment of postsurgical pain.

Pain management in the postsurgical setting remains an area of high unmet need, and we look forward to sharing the results of this study during the second quarter of this year.

So as you can see, we have a busy execution year ahead of us with numerous pruritus trials already ongoing and planned trials upcoming as well as our Phase III acute pain trial nearing completion. And we will continue to provide updates on all of these programs in the coming months.

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

Thank you, Derek. As a reminder, the full financial results of our fourth quarter and full year 2017 can also be found on our press release issued today after the market close. For the year ended December 31, 2017, we reported a net loss of $58.1 million, or $1.86 per basic and diluted share, compared to a net loss of $57.3 million, or $2.10 per basic and diluted share, for 2016. For the fourth quarter of 2017, we reported a net loss of $14.2 million, or $0.43 per basic and diluted share, compared to a net loss of $22 million, or $0.81 per basic and diluted share, for the same prior year period. Revenues for the year ended December 31, 2017, were $911,000 as compared to $86,000 in 2016. Revenues in 2017 included a sublicense fee received from our partner, Maruishi Pharmaceuticals, in connection with its sublicense agreement with Kissei Pharma. No license and milestone fee revenues were recognized in 2016.

Revenue for the sale of clinical compound to Maruishi for 2017 was $68,000 as compared to $86,000 in 2016. We did not recognize any revenues during the fourth quarter of either 2017 or 2016.

Research and development expenses were $48.5 million for the year ended December 31, 2017, as compared to $49.3 million in 2016. The lower R&D expenses of -- in 2017 were primarily related to a net decrease in clinical trials, rent and amortization, which were partially offset by increase in stock-based compensation expense and other personnel-related costs. R&D expenses were $11.6 million in the fourth quarter of 2017 compared to $20.3 million for the same period of prior year. The lower fourth quarter R&D expenses were primarily due to lower clinical trial expenses.

General and administrative expenses were $11.9 million in 2017 compared to $9.2 million in the same period 2016. The increase in 2017 was primarily due to increases in payroll and related costs, stock-based compensation expense and other related costs, which were partially offset by decreases in rent and amortization. G&A expenses were $3 million in the fourth quarter of 2017 compared to $2 million in the same period of 2016. The higher fourth quarter G&A expenses were primarily due to higher stock compensation expense and other personnel-related expenses.

Other income was $1.2 million in 2017 compared to $652,000 in 2016, mainly due to higher dividend and interest income on a higher average balance of our investments in 2017. Other income was $368,000 in the fourth quarter of 2017 versus $155,000 for the same period in 2016.

As of December 31, 2017, our cash, cash equivalents and marketable securities were $92.6 million compared to $58.3 million at the end of 2016, resulting from the net proceeds of $86.2 million from our follow-on stock offering in April 2017 as well as from the proceeds of exercise of stock option and from restricted cash that was reclassified to cash, cash equivalents, partially offset by 58 -- $54.8 million of cash used in operations.

Now turning onto our financial expectations. Based on timing expectations and projected costs of our clinical development plan, we expect that our current cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements into the first half of 2019, without given any effect to potential milestone payments under existing collaborations.

With that, I will turn the call back over to the operator for Q&A. Liz?

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

Hopefully, you can hear me. I'm in an airport. (inaudible) KALM-1 study is underway in the States, and I think you mentioned that you were going to start an international study later this year. I'm kind of wondering what the gating steps are to getting that started? And if you could provide any additional color on the size or scope of that study?

Let me say so. So first of all, Charles we can hear, in and out a little bit, but we can hear you. So yes, we are planning a second international study starting midyear. We are -- the size and scope of that study is going to be very similar to the U.S. trial, in terms of design, in terms of endpoints. And right now, we're undergoing the required preparatory steps with CROs to make sure we can get that initiated on time.

And when you consider the regulatory strategy, is that -- is the international study meant to enable an MAA? Or is that meant to provide a second study for the U.S. -- for the FDA and its strategy?

That's a great question. So the primary rationale for going international, and you know this, Charles, is there's a finite number of dialysis centers here in the U.S. And there's a number of ongoing studies. So we like to make sure we can complete these studies as rapidly as possible. So it makes sense for us to look out with the U.S. now compete with ourselves and run the trial in ex-U. S. territories.

Okay. That makes sense. And then final question is on the acute pain study. I appreciate you going through in your prepared remarks what that -- how that's been conducted. This may seem like a silly question, but I'm kind of wondering what you think is the different scenarios that -- what are the different scenarios that you look for? Obviously, the study is either going to work or it's not going to work or maybe it's working, but if any further thoughts on it?

Well, I'm going to let Joe talk to that, Charles.

Charles, so the study -- I think you're right, it's really a black-and-white situation. It's either going to work or it's not going to work. The P value is defined as P less than 0.05 as a positive study based on the primary endpoints that we've already articulated. Obviously, it has to be safe as well. Because that's also a part of a positive study too. So from an efficacy standpoint, we're still blinded. So we don’t know. From the safety standpoint, I look at that data all the time and feeling very comfortable there. And based on what we see in that trial, that tells us next steps. If it's positive, we think about how to design another trial. If it's negative, we have to really consider what we're going to do with postoperative pain.

Okay. That makes sense. And then final question regarding the evolution of the company. I'm just kind of wondering if that shows positive, would you move forward yourselves? Or would it make more sense to focus on CKPD pruritus and really in terms of establishing a commercial presence?

So, Charles, we'll make that decision a little later on when the data comes along, but yes, you're correct, our focus at the minute has certainly come around to pruritus indications. We feel as though there is a large opportunity there that we want to exploit as quickly as possible. And so you see from our pipeline that we have 3 to 4 pruritus studies we're planning to initiate this year. So that is becoming the main focus of the company, and we'll make a decision on the postop trial and the application indication as the data comes along.

That makes a lot of sense to me actually to see the progress hardened upon.

Our next question comes from the line of Annabel Samimy with Stifel.

Congratulations from me on starting your pivotal study. So the current pivotal we see start -- comprises of the efficacy and the 52-week extension. Is that second pivotal trial -- first of all, are the patients from the first trial enrolling into that 52nd-week extension for safety reasons? Were the requirements from the FDA for fulfilling the safety requirements from a long-term safety perspective into that second pivotal study that you're looking at internationally also have to feed into that 52 weeks extension to satisfy those safety requirements? So that's my first question. And also just from the oral perspective, what is the rationale of, I guess, starting 2 Phase Is in different indications rather than identifying the dose in 1 Phase I and then moving into multiple Phase II and different indications? So is that what you're going to be doing for each new indication? And do you also plan on starting early-stage atopic dermatitis given the development field you're starting to feed up in that regard?

Great. Thanks, Annabel. Thanks for the question. So I think you got 3 in there, may be 4 actually.

I probably have.

Yes, I know it's talent -- it's a talent. Let me start with the oral questions, because I think there is an important point to be made here. The reason we won the Phase I in these different patient population all relates to PK differences. So obviously, within the CKD predialysis population, that is stage III to V, they have varying degrees of kidney dysfunction. And so we're being very careful to make sure we can define exposure levels within those patients to very accurately match exposure met levels we know are efficacious in our HD population. So that's the reason to run the Phase I there. Same for the liver population. And these are, as you know, very sick patients. They certainly have liver dysfunction, most of them, the majority also have concomitant kidney dysfunction. And so, again, we want to make sure we get the PK correct there, in terms of exposure before we move into the Phase II studies. That's a little different when we go to dermatological indications. We haven't guided as to which population we're going to look at there. But for the most part, those tend to be younger, somewhat healthier populations. And as you know, we already have completed Phase I studies up to 1-week repeat dosage. And if you like normal individuals with normal kidney functions. So there, we can move a little faster, and we certainly guide as to which patient population we move into there when we decided on -- and decided on the design. Back to your first question on the Phase III program. Yes, you are correct. The patients from both studies will roll into 52-week safety studies, and that's a safety requirement. As you know, from ICH guidelines for chronic therapy, we need to see a 100 exposures with 12-month exposure length and up to 300 exposures at 6 months. Now we do have breakthrough therapy designation for this indication. We will be talking to the agency as we develop a bigger safety database, and those numbers have a possibility of changing. That certainly is something I can't guide to right now, but we do interact with the agency more frequently.

Okay. Just if I can ask a follow-up on it. Did I miss it or did you mention when you're going to start the second Phase III study? I'm just wondering to what extent that second Phase III study is going to hold up completing the 52-week extension portion?

No, we're going to start that midyear. We're actually preparing to get that going right now.

Our next question comes from the line of Alan Carr with Needham & Company.

Any preliminary guidance on when you might have data from these Phase III trials? And then in pruritus, if you -- well, the first one that you just started, when do you think you will have data from those? And then also with regard to the Phase II/III postoperative pain trial that's wrapping up, can you comment a bit more about any of the blinded data, which you see from a safety perspective? And can you also comment maybe on the baseline characteristics of patients there versus some of the other trials? And the last one is around skin. It sounds like you're in the process of sorting out which indications you might pursue, but what are the time line's around making a decision on that? And when you might start some trials on those indications?

Thanks, Alan. So I'll let our resident anesthesiologist talk about the postop safety data we have so far. The other 2 questions. In terms of the skin indication, that's something we'll guide to in the next couple of quarters. That's something we're aiming to initiate, hopefully, in 2018. But we will guide to that as we decide on the design and the patient population there. And I've forgotten what was your first question?

That was around Phase.

Yes, when we expect to see Phase III data? As you know, Alan, we just initiated that trial. We expect to have 60 to 80 segs as part of that enrollment process. Again, once we get up and running, and we see the recruitment rates from these various segs, we will guide to when we expect to see the data from that first pivotal trial. And on the postop safety, Joe is going to give you some color.

Yes. On the safety on the postop, Alan, I'm expecting no surprises there. I mean, we get -- we've the benefit of looking at that data all the time throughout the course of the trial. I'm feeling quite comfortable there from a safety perspective that we have our hands around the safety and risk-benefit profile here of the drug. As far as the efficacy goes, still blended. And as far as the timing goes, it's second quarter.

And the overall baseline characteristics of the patient population in this trial. How does that come over?

On the postop pain, they're relatively healthy patients, ASA 1 to 2, sometimes 3s going into the OR. Hysterectomy will represent around half the trial. And the other half of the trial will be ventral hernias.

Our next question comes from the line of Arlinda Lee with Canaccord.

Maybe I'll follow up on the postoperative pain trial. When did you complete that enrollment? And then on the oral Phase I, can you maybe provide additional information about what the timing might be and what the data set might look like? I.e. are you going to indicate maybe different doses by different renal functions? And how that might play into your plans for additional trial? And then lastly, I guess, on the pivotal, if that trial can be expanded to 500 patients, I'm kind of curious about the timing of the second pivotal trial and how that factors into -- or how might be enrollment -- or the enrollment pace, I guess, is the first trial impact the second?

3 questions, Arlinda.

3 questions, Arlinda. Let me take the last one first and then I can talk about oral and then Joe can talk about postop. So the last one is what is the -- the whole rationale for moving into international trial is to avoid the issue you just raised, which is competition with our sales essentially, either for an open-label or for first pivotal Phase III. So that is the rationale. We think we have a good handle on which territories will provide the most patients with the U.S., and we're running to get that trial initiated by around about midyear this year. So we think that does help us in terms of recruitment rate. On the oral Phase I, I presume you mean the CKD stage III to V patients. That data will have -- we're well into the trial, and we will release that data, and you will see exposure data relatively speaking towards -- the exposure data relative exposures we see in HD patients treated with an I.V. So in other words, we're looking for tablet strengths that give us equivalent exposures to dose which we know are active in HD patients. Predominantly, in the moderate -- moderately impaired CKD patients and obviously, the HD patient is much more analogous to what we've seen with the I.V. in HD patients. So predominantly, it's going to be moderate impairment, and you will see a comparison of exposure levels, tablets strengths that match I.V. exposures in HD patients. And then on your postop trial, Joe?

You asked about enrollment. So enrollment will finish up in the second quarter, and we will report our data in the second quarter.

Early second quarter?

Well, you have to complete enrollment before you can report out data, right? So early second quarter. I think Derek made that in the comments is when we expect to complete enrollment, and then we'll read out the trial later in the second quarter.

Our next question comes from the line of Michael [John] with Seaport Global Securities.

Just a quick question on patients on peritoneal dialysis. Do you see these patients being treated with the oral formulation or for the I.V. for pruritus?

Yes. Joe is going to take that one.

Yes, peritoneal dialysis are not patients that we're looking at in any of our trials. So we can only really speculate as to what types of drugs they would use. Obviously, if they're an outpatient and they are able to take an oral medication, that would certainly be appropriate for them. But, again, that will be in the future. Right now, we're focused on either dialysis patients or patients who are chronic kidney disease patients who are not yet on peritoneal dialysis.

And I'm showing no further questions in queue at this time. I would like to turn the call back to Dr. Chalmers for closing remarks.

Okay. Thank you, Liz. And thank you, everybody, for participating in today's call. I'd also like to thank the Cara team for their continued hard work to support the progress of our various programs, our investigators and most importantly, the patients who continue to participate in our trials. So thank you, everybody, and have a very good evening. Thank you.

Thank you.

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