Tvardi Therapeutics Inc (TVRD) 2018 Q1 法說會逐字稿

Good afternoon, and welcome to Cara Therapeutics First Quarter 2018 Financial Results and Update Conference Call. (Operator Instructions) Please be advised that this call is being recorded at Cara's request.

I will 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' First Quarter 2018 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 in 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 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 and Chief Strategy Officer. I'll now turn the call over to Dr. Chalmers.

Okay. Thank you, Michael, and good afternoon, everybody. Thanks for being with us again on the call.

We've made very significant progress this year as we continue to advance CR845, or difelikefalin, through our various pruritus programs, and we completed the enrollment of our adaptive Phase III trial in acute postoperative pain setting.

During this call, I'll summarize our overall progress, and I'll provide additional insight into our ongoing and planned trials for this year. So let me begin with our lead program, which is KORSUVA injection or I.V. CR845 for the treatment of chronic kidney disease-associated pruritus, or CKD-aP, in patients undergoing hemodialysis.

During the first quarter of 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. This is an FDA-designated breakthrough therapy, of course, addressing a significant unmet need for which there are currently no approved therapies in the U.S. or indeed the EU at this point.

This trial is investigating KORSUVA injection at a dose of 0.5 micrograms per kilogram versus placebo administered 3 times per week after scheduled dialysis sessions over a 12-week treatment period with a 52-week open-label extension phase. The primary efficacy endpoint is the 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 as measured on a numeric rating scale.

As we've shared previously in a post-hoc analysis of our completed Phase IIb trial in 2017, the proportion of patients with an improvement from baseline of weekly mean worst itching intensity score of greater than or equal to 3 points at week 8 in that trial was statistically significantly higher in the KORSUVA treated patients compared to placebo. And those numbers were 64% in KORSUVA-treated patients versus a 29% response rate in placebo. And that was significant at the 0.1 level after 8 weeks.

KALM-1 trial, the Phase III trial, is expected to enroll 350 patients in the U.S. with a prespecified conditional power analysis at approximately 50% enrollment to allow expansion to up to 500 patients. At this point, we project reaching our targeted number of 60 active sites for this trial by the end of this quarter. Additionally, as we indicated in our March call, we also plan to initiate a second global Phase III pivotal trial of similar design and similar size to the KALM-1 trial around mid-2018.

As part of this Phase III program, last year, we initiated a 52-week safety trial of KORSUVA injection administered at the same dose, 0.5 micrograms per kilo, TIW, 3 times a week to hemodialysis patients with CKD-aP. This long-term safety study continues to enroll patients who completed one of our prior Phase II trials as well as de novo patients at a healthy rate. We currently have greater than 100 patients already enrolled, and approximately 40% of these have completed 6 months of KORSUVA treatment. The trial continues to enroll, and the data gathered thus far is in line with the safety profile observed in both our Phase II previous trials.

In addition, we're also pleased with the progress made in Q1 with oral KORSUVA, currently completing a Phase I safety and PK trial in nonhemodialysis patients with earlier stage or Stage 3 to 5 CKD. Currently, available PK data from this trial indicates that within the tablet strengths studied, orally administered KORSUVA can attain plasma exposure similar to those obtained with IV formulation at doses that have been demonstrated previously to be clinically active in providing itch relief in hemodialysis patients with moderate-to-severe pruritus. Based on these data, we plan to initiate a dose-ranging placebo-controlled Phase II trial of oral KORSUVA in Stage 3 to 5 CKD patients a little later this quarter.

Current CDC estimates indicate that approximately 50% of diagnosed CKD patients are in Stage 3 to 5, and an estimated 25% of these patients suffer from moderate-to-severe CKD-associated pruritus.

As we previously indicated, given this mechanism of action on dermal nerve fibers and immune cells, we believe KORSUVA has the potential to address pruritus across a range of medical conditions in addition to CKD and irrespective of the initial trigger or pathophysiology. So in this context, we plan to investigate oral KORSUVA for the treatment of chronic liver disease-associated pruritus. This is another serious unmet medical need with no approved therapies in U.S. So we're currently enrolling our Phase I safety and PK study in patients with chronic liver disease of various pathologies, and we aim to initiate a dose-ranging Phase II trial of oral KORSUVA for the treatment of CLD-aP later in 2018.

Leaving pruritus and moving along to our ongoing acute postoperative pain program and their adaptive Phase III trial. So I'm very pleased to announce we've completed enrollment in this trial. Database cleaning is currently ongoing. We expect to release this data from this trial towards the end of the quarter. And just as a reminder, this is a 3-arm trial testing 0.5 and 1 micrograms per kilo of I.V. CR845 versus placebo in up to 450 patients undergoing abdominal surgeries. Primary efficacy endpoint is the change in pain intensity over the 24-hour postoperative period using the area under the curve measurement based on the pain score collected at prespecified time points through the 24 hours post-surgery. Secondary endpoints include assessment of postoperative nausea and vomiting as well as the use of rescue medication and the Patient Global Assessment of postsurgical pain. We look forward to sharing both primary and secondary endpoint data from this trial towards the end of this quarter.

And with that summary, I'm going to pass the call on to Mani Mohindru for a summary of our financial results. Mani?

Thank you, Derek. As a reminder, the full financial results for the first quarter of 2018 can also be found in our press release issued today after the market close.

For the first quarter of 2018, we reported net loss of $16.8 million or $0.51 per basic and diluted share compared to a net loss of $22.2 million or $0.81 per basic and diluted share for the same quarter of 2017.

We did not recognize any revenue for the first quarter of this year. Total revenue for the first quarter of 2017 was $911,000. That included a sublicense fee of $843,000 received from our Japanese partner, Maruishi Pharma, in connection with its sublicense agreement with Kissei Pharma, as well as $68,000 for the sale of clinical compound to Maruishi.

R&D expenses, research and development expenses, were $13.4 million in the first quarter of 2018 compared to $20.8 million in the same period of 2017. The lower R&D expenses in 2018 were mainly due to a net decrease in direct clinical trial costs, which were partially offset by increases in stock compensation expense as well as payroll and related costs for R&D personnel.

General and administrative expenses were $3.7 million during the first quarter of 2018 compared to $2.4 million for the same period of 2017. The increase in 2018 was primarily due to increase in stock compensation expense as well as payroll and related costs for G&A personnel.

Other income was $311,000 for the first quarter of 2018 compared to $90,000 for the same period of last year. The increase was primarily related to higher dividend and interest income resulting from a higher average balance of portfolio investments in the 2018 period.

As of March 31 of 2018, our cash, cash equivalents and marketable securities were at $74.5 million compared to $92.6 million at the end of December 31, 2017. The decrease in the balance of cash, cash equivalents and marketable securities primarily resulted from cash used in operations of $18.5 million, partially offset by proceeds of $0.3 million from the exercise of stock options.

Now turning to our financial expectations; based on timing expectations and projected costs of our clinical development plans, we continue to expect that our current cash will be sufficient to fund our operating and CapEx expenses into the first half of 2019, without taking into account any potential milestone payments under our existing collaborations.

With that, I'll turn the call back to the operator for Q&A.

(Operator Instructions) Our first question is from Annabel Samimy of Stifel.

This is Andrew in for Annabelle. I had a few. So starting off, what are you looking for in the oral Phase I PK study? Do you expect to get exact dose equivalents to your IV dose? Or are you looking for a range to take to the Phase II? And my second is, on the Phase III I.V. CKD study, can you tell us, if you do the interim analysis of the first, KALM-1, and have to increase enrollment, one, how would that impact your time line for readout? And secondly, is that a direct indication of the enrollment you would need for the second international study? Or will you also be conducting another look at a different type of enrollment for the second study? And I had a follow-up to that after.

Okay. So let me start with the first question then, Andrew. So the oral PK study, quite simply, is to make sure we get AUC exposures or general plasma exposure levels that are equivalent or roughly equivalent to what we've seen with our IV administration of CR845. So we know we're getting the receptor coverage that has provided the efficacy in the same class of patients essentially. And as I said earlier, we already know within the tablet strength range we've looked at, we know we can achieve that. We can see AUCs in terms of plasma exposure that looks similar to those that were active in our studies of pruritus in HD patients. So that's looking appropriate. So that based on that data, you're correct, we're going to be following up and moving tablet strengths into the Phase II that cover a range analogous to the coverage we've seen with the IV administration in the Phase II study that we completed. Then on the Phase III trial, yes, the interim -- the idea behind the interim is that we -- as you know, conditional power analysis is done at interim analysis, so we don't look at the numbers there. There's no P value given. It's simply a guidance from the board as to whether we need to increase the sample size to maintain the power we're interested in that relates to the effect size we're modeling based on that end. So at that point, if we do see -- if that recommendation is given, we would increase that. I can't give you any estimates right now on how that would affect the final readout. Obviously, recruitment rates change as we bring active sites onboard. But what we will do as we get through that analysis, we will provide guidance because at that point we're going to have a more accurate assessment of recruitment rates across sites. We will provide guidance as to our projected time line for readout on that trial. Does that answer your question?

Yes. But secondly on that, does -- is that a direct indication of how enrollment -- how much enrollment you would need for the second international study? Kind of what kind of readthrough would you be able to get with that?

No, it doesn't because, as you know, the variability across these trials varies with the patient populations and the sites used and the variability from those patients, so that wouldn't directly relate. So we continue with our standard protocol for the second trial, which, as I said earlier, is modeled on our KALM-1 design, and we do have built-in conditional power analysis there. So we'd start with the model power and the model end, which is 350 patients.

Got it. And my last question, so for that international, could you potentially use that for an international filing? And would you need an active competitor arm? And if you do, does that preclude an international filing?

Well, it depends what you mean by which international agency. We certainly know we can use that data with our Japanese partner for their PMDA submission in Japan. And at this point, we're actually taking guidance on what's required for the EU submission. As you know, it's very difficult to design a trial with an active comparator when we have no drugs that are effective for this condition. But that's something we're actively looking at right now in terms of guidance for the EU.

Our next question is from Alan Carr with Needham & Company.

A couple of them. One of them around -- any comments on what you might be thinking about atopic dermatitis. And then also bigger picture, what are your plans, I guess, with a positive outcome from the pain trial, the Phase III pain trial? And to what extent are you going to be pursuing a pain indication? You've obviously made a big shift towards pruritus. But if there is a positive trial at this phase -- or a positive outcome for this Phase III trial, what might you do with it? Would you outlicense? Or would you work with that and commercialize that on your own in a hospital setting thing?

Yes, so I'll take the second one first, Alan. So we -- so the sequence of events here as planned for the postop indication is we'll have that data this quarter. We'll look at the data. If it's appropriate to go to the FDA and ask for guidance as to what's required for registration, then we'll be doing that. And that's always been our plan in association with this. But as I said on the last call, we're always in active discussions with people that we can partner with to push these indications forward. And that may still be a possibility for the postop pain indication. But that's something we'll certainly announce, if and when that occurs. But at this point, we're just looking forward to getting the data out of that, and then we'll make a decision based on the data analysis. As to the first question on atopic, you're correct, we stated a number of times we're interested in looking at the application of 845 in dermatological conditions. At this point, I can't give you anything more specific on guidance. Atopic dermatitis is certainly an area we're interested in, psoriasis and pruritus -- associated with pruritus, psoriasis is another area. And when we decide on which patient population and which design we favor there, we're certainly going to announce that when we initiate that trial. But that's for a little down the line here in 2018.

Our next question is from Corey Davis of Seaport.

The first one is just a clarification on the Phase I oral study. I think the press release said you'd release top line data later this quarter. But in your comments it sounded like you had kind of already gotten enough PK data to move forward with decisions in Phase II. Is that correct?

Yes. That is correct. We certainly will be announcing the initiation of the Phase II and most likely, as part of that initiation enhancement, we'll provide some background data in relation to the PK that I mentioned earlier.

Did you look at efficacy at all in that study? Or...

We did not. It was a pure PK and safety analysis. In fact, we didn't have any entry criteria related to pruritus for those subjects.

That was my next question. So they were CKD patients but not necessarily pruritus patients.

Correct.

Okay. And on the Phase III study for postop pain, do both of the different active arms have to hit statistical significance for the trial to be successful or could either one hit?

No, either one. If either one hits, then we -- then it's successful.

And are you allowed to pool the active arms to show statistical significance?

Well, we can certainly look at that as a post-hoc analysis. But as designed, this is per drug dose analysis versus placebo.

Okay. And then I think the last question -- unless I come up with another one -- would be the effect size that you're hoping to get from the IV dialysis study. Does that have to be as large as it was in your post-hoc Phase IIb study that was roughly -- would you say, 64% versus 29%, or could the differential be less and still hit statistical significance?

It could be less. And then we haven't gone into the details of how we power that. But basically, we look to all dosages in our Phase II and modeled the effect size based on the response we saw across the dose range there. And then power the -- as I said earlier, up to 90% power to see that effect size.

Okay. And I'm sorry, last one, I promise. You didn't give any specific time lines for when you'd expect to see data. I know it would depend on whether or not you update enrollment. But if you don't, is that something you could finish in early '19? Or would it be later than that?

Yes, we are going to guide to that. As I said earlier, once we get all our sites active, we think that could be later this quarter as a target. And as we guide later in the year, and we see the recruitment rates from each of these sites, then we will be guiding as to when we project top line readout from that trial.

(Operator Instructions) Our next question is from François Brisebois of Laidlaw.

Just a couple here. This is going off what Alan said a little bit. So it definitely seems like the emphasis went from pain to pruritus. I was just wondering when that transition started? Does that have anything to do with the OA trial? And then on that case, in terms of OA, any interest from partnership there or any discussions you guys can talk about?

Yes. As to the latter part, we can't talk about specifics on ongoing discussions. But as I said earlier, we are constantly talking to people, both in terms of regional deals for CR845 that make sense for us and also deals related specifically to indications. So those are things that are ongoing for us. In terms of pain versus pruritus, it's clear our lead program at the minute is CKD-associated pruritus in hemodialysis patients. We have a breakthrough designation for that. We have a terrific response rate in a group of patients that have nothing else available for that condition. So the data itself has guided us towards what we're trying to push faster here and move along. We also think there's an application in pain, and so that's why I've said repeatedly, when we see the data and we can model off that, that's still an area we're interested in, most likely pushing forward with a partner, we'd like to particularly specify spending our own internal funds on pushing pruritus along, but we still have an interest in potential pain levels for CR845.

Okay, that's helpful. And then in terms of the placebo response, you mentioned the CKD-aP, the post-hoc look, the efficacy was great, the placebo response was almost around 30%. Can you just remind us what you did to try to work on that placebo response and bring it down to a minimum for the Phase III here?

François, are you talking about placebo response from our Phase II trial in hemodialysis patients?

Yes, you mentioned the efficacy. And basically, the placebo responders were about 28%, I believe you said. And I was just wondering if you had done anything -- how do you deal with the placebo response there for CKD-aP? And why is it so high?

Yes. So that's actually not tremendously high for this type of patient reported outcome endpoint. Somewhere between 20% and 30%, both for pain trials and for pruritus trials, is a kind of standard response there. So that's not particularly high placebo response. And the most important aspect of that set of data emphasized earlier is the difference between placebo and the 845 response. And as you saw, with a 64% response in drug versus less than 50% of that in placebo, that's a significant effect size there, a significant benefit of drug over and above what we can see with placebo. So it's the difference that's important and can you achieve that difference. And that really drives the effect of the drug there.

And that does conclude our Q&A session for today. I would like to turn the call back over to Mr. Derek Chalmers for any further remarks.

Okay. So thank you, everybody, for participating on the call. I'd also like to thank the Cara team for their continued hard work here at Cara, our study investigators and, most importantly, the patients who continue to participate in our trials every day. So thank you, everybody, and have a good evening.

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