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Trevena, Inc. (NASDAQ:TRVN)

Q2 2014 Results Earnings Conference Call

August 12, 2014; 10:00 a.m. ET

Executives

Max Gowen - Chief Executive Officer

Roberto Cuca - Chief Financial Officer

Mike Lark - Chief Scientific Officer

David Soergel - SVP of Clinical Development

Bob Prachar - SVP of Commercial & Corporate Strategy

Jonathan Violin - Director of Investor Relations

Analysts

Alan Carr - Needham & Co.

Operator

Good morning ladies and gentlemen, and welcome to the Trevena, Second Quarter 2014 Earnings Conference Call.

At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to turn the conference over your host, Mr. Jonathan Violin, Director of Investor Relations. Mr. Violin you may begin.

Jonathan Violin

Thank you and welcome everyone. Thanks for joining us on today’s call. With me today are Max Gowen, our CEO; Roberto Cuca, our Chief Financial Officer; Mike Lark, our Chief Scientific Officer; David Soergel, our SVP of Clinical Development and Bob Prachar, Trevena’s SVP of Commercial and Corporate Strategy.

Before we begin, we wish to inform participants that we will make forward-looking statements on this call, which are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

You are cautioned that such forward-looking statements involve risks and uncertainties, including risks detailed from time to time in the company’s periodic reports filed with the Securities and Exchange Commission and that we undertake no obligation to update these statements beyond today.

During today’s call, Max will provide a brief overview of some recent corporate highlights. David will then provide a detailed review of our clinical programs. Roberto will review our financial results and Max will conclude with a review of important upcoming milestones. We’ll then open the call for questions.

I’ll now turn the call over to Max.

Max Gowen

Thanks John. Good morning everyone and thanks to you all for joining us. We are delighted to review our recent progress and discuss the status of the programs.

We remain committed to translating our biased ligand platform into a portfolio of novel therapies that target G protein coupled receptor and that offer a superior therapeutic profile for patients, providers and payers. In addition to some exciting clinical progress during the quarter, I’m also happy to share how we’ve continued to evolve as an organization.

As we previously discussed, in April we announced the appointment of Bob Prachar to the position of SVP of Commercial and Corporate Strategy. Bob brings a keen sense of commercial strategy and strong experience from his previous roles at Endo, Shire and Centocor. Bob worked with us fulltime as a consultant beginning in mid-2013 and was instrumental in setting program strategies ahead of our IPO.

In May we appointed John Limongelli as SVP and General Counsel. John comes to us from Cigna Corporation where we was VP and Corporate Secretary, and bring a wealth of experience in public biopharmaceutical companies, having previously held leadership positions at Adolor and Cephalon.

In addition we recently appointed two new members to our Board of Directors. Barbara Yanni, who recently retied as Chief Licensing Officer at Merck brings extensive financial and corporate experience to our Board. Julie McHugh adds remarkable commercial experience from her previous roles, including COO at Endo and President at Centocor, where she oversaw the commercialization of Remicade.

These additions of our Board of Directors reflect the continued maturation of our company as a fully integrated biopharma company, focused on delivering novel differentiated therapies to complement or replace existing inadequate medicines.

As I briefly mentioned, the second quarter saw significant progress in all three of our clinical programs, all of which are on track with our previous guidance, poised to deliver important clinical data in the coming months.

For TRV130 we were pleased to report this morning that our ongoing Phase 2 trial in postoperative pain has progressed from stage A to stage B and we look forward to reporting data at the latest by the first quarter of 2015.

TRV734, our oral clinical candidate for the treatment of moderate-to-severe pain demonstrated CNS activity after oral dosing in its first in human study this quarter and is now advancing to further clinical development.

For TRV027, the BLAST-AHF Trial in acute heart failure remains on track to deliver data by the end of 2015. As you may recall, this program is the subject of an option agreement we entered in 2013 with Forest Labs, now Actavis. We remain closely engaged with our colleagues at Actavis and are benefiting from the input they provide.

I should also note the recent issuance of U.S. patent claims covering methods of use for TRV027, including treatment of acute heart failure. This patent complements the previous issued U.S. patent covering the composition of matter for TRV027 through at least 2031. Together with issued and pending patents worldwide, we believe these patents establish strong protection for the future commercialization of TRV027.

I’m very pleased with each of these developments and with our expert team that continues to deliver important milestones on or ahead of schedule. More broadly, the maturation of our portfolio highlights that our platform has proven to be a valuable engine, delivering three NCEs with positive clinical data.

So, let me now turn the call over to David to provide a more detailed review of our clinical progress.

David Soergel

Thank Max. I’d like to begin with an overview of our CNS programs, starting with TRV130. As you may recall, we believe that TRV130 could replace current intravenous opioids by improving their narrow therapeutic window.

The term therapeutic window refers to the difference between effective doses and doses that cause adverse affects. The narrow therapeutic window of unbiased mu agonists like morphine, hydromorphone and fentanyl makes it difficult to effectively treat patient’s pain without causing complications. These side effects, including respiratory depression, nausea, vomiting, constipation and postoperative ileus often necessitate further medical care and can prolong hospital stay.

So even though we spent a modest amount of IV analgesics themselves, approximately $1.3 billion in the G7, we spent nearly four times that amount, $5 billion on the cost of opioid related side effects in the U.S. alone. We believe that a new postop analgesic that could reduce this cost burden will be an attractive option for payers, as well as physicians.

Trevena’s biased ligand platform delivered TRV130, a new molecule that is differentiated versus morphine in pre-clinical and early clinical studies. We recently published the results from our Phase 1b experimental medicine study in a leading journal Pain.

In this healthy volunteer study, TRV130 was more effective than morphine and the evoked-pain analgesia and achieved peak effect more rapidly than a high dose of morphine. In this study morphine caused respiratory depression that outlasted its analgesic effects. This could lead to dangerous accumulation of carbon dioxide in the body when additional doses of morphine are given.

In contrast TRV130 was more analgesic than morphine, but produced only a transient effect on respiration. In addition, TRV130 exhibited better GI tolerability than morphine. Fewer subjects vomited after TRV130 and effective doses of TRV130 produced less severe nausea than morphine.

On the heels of these exciting experimental medicine data, we announced the initiation of a two-stage Phase 2a/b study or TRV130 and post bunionectomy pain this May. This is a multi-center, double blind, adaptive placebo controlled trial, with a goal of evaluating TRV130s efficacy and tolerability in postoperative pain with reference to morphine.

Approximately 400 patients will be recruited, who will undergo first metatarsal bunionectomy and then randomize to receive TRV130, morphine or placebo to manage their post-op pain. Pain intensity and pain relief will be measured using validated rating scales at multiple time points, up to 48 hours.

These measures of efficacy are also appropriate for pivotal Phase 3 studies. The trial is designed to enable Phase 3 development by providing information on dose and interval ranging, while further exploring differentiation of TRV130 versus morphine.

We announced the completion of Part A of the study this morning. 150 patients were enrolled in Part A, who after meeting entry criteria were then randomized into six treatment groups; placebo, morphine or one of four doses of TRV130. Each treatment was given every four hours for 48 hours.

This pilot phase gave us preliminary information to guide the initial dose selection for the first cohort of the adaptive Part B of the study. While the sample size of Part A was not intended to provide statistically robust measures, it did reveal signs of analgesic efficacy, allowing us to start Part B.

In Part B, up to 10 successive cohorts of 25 patients will be randomized to two adaptive dose regiments of 130, morphine and placebo. By the end of the trial we expect to have optimized TRV130’s efficacy and tolerability in comparison to morphine, allowing us to prepare for Phase 3 trials. Recruitment has gone very well so far and we expect to report top line results from this trial in the first quarter of 2015 at the latest.

I’d now like to spend a few minutes on TRV734, our oral follow-on to TRV130. This molecule shares the same novel motive action in pharmacology as TRV130 and is intended to bring the potential benefits of TRV130 to the treatment of acute and chronic moderate to severe pain.

The opioid related adverse events we discussed for postoperative pain are also problematic for oral opioids, although opioid induced constipation becomes more prominent as therapy continues.

Our pre-clinical studies suggest that ligand bias may improve constipation. Both TRV734 and TRV130 had less of an impact on GI motility than morphine and oxycodone, while producing equivalent analgesia.

In June we reported the results of our first time in human study of TRV734, ahead of schedule. This study evaluated the safety, tolerability, pharmacokinetics and pharmacodynamics of TRV734 in healthy volunteers. After oral dosing, TRV734 demonstrated dose related increases in plasma concentration reaching peak concentrations about an hour after dosing.

We use pupil constriction as a biomarker of analgesic efficacy in this study, as we did successfully in TRV130’s early development. At 80 mg and higher, TRV734 produced noticeable effects on pupil constriction and the range of the effect seen with oxycodone in other studies.

The duration of the effect on pupil constriction was approximately four to six hours. The maximum tolerated dose in this study was 250 mg and was a result of opioid related adverse events. Since there was no comparator in this study, we cannot yet conclude that TRV734 differentiates from unbiased opioids like oxycodone, but the range of tolerated doses causing pupil constriction suggests that analgesic efficacy maybe separable from opioid related adverse events.

In light of these data, we announced last week that we’d initiated a multiple ascending dose study of TRV734. This study will include oxycodone, so that we can begin exploring differentiation of TRV734 from the current market leader.

Finally, I’d like to share a brief update on TRV027 and the ongoing BLAST-AHF acute heart failure trial. As you may remember, TRV027 acts as a vasodilator, while simultaneously increasing cardiac performance through its unique biased ligand mechanism of action. Based on pre-clinical and clinical data, we believe this may translate to benefit the three key organ systems affected in acute heart failure; the blood vessels, the kidneys and the heart.

BLAST-AHF is a Phase 2b trial of 027, a randomized, double blind, placebo-controlled trial of TRV027 administered along with standard of care in patients with AHF. We announced the dosing of the first patient in January, here’s where we are now.

We received health authority approval in 11 countries and two-thirds of planned sites globally have been opened. We’ll continue to activate additional sites over the course of the next few months and anticipate that the data will be available in the fourth quarter of 2015. We expect to provide more guidance on the timing of the trial on the next quarterly call.

The study design uses an innovative composite endpoint that captures clinical events important to patients, physicians, payers and the FDA, including worsening heart failure, which the FDA highlighted as a potentially approvable end point at the recent Serelaxin outcome.

As you heard, we’ve been quite busy. We’re excited about the progress with each of our programs and we look forward to sharing more with you in future calls.

Now I’ll pass the call to Roberto to review our financials.

Roberto Cuca

Thanks Dave. We disclosed key financial measures earlier today in our press release and will be filing full financial statements later today in our Form 10-Q. For now I’ll summarize a few of the headline numbers.

Net loss attributable to common shareholders at the end of the second quarter was $11.5 million or $0.44 per share, as compared with the net loss of $4.8 million or $6.30 per share for the second quarter of 2013.

Research and development expenses were $9 million in the second quarter of this year versus $3.5 million in the second quarter of 2013. The increase was primarily driven by clinical research expenses associated with the January 2014 initiation of the Phase 2b study for TRV027 and a May 2014 initiation of the Phase 2a/b study or TRV130.

General and administrative expenses were $2.5 million for the quarter versus $900,000 in the prior year’s quarter. This increase is primarily attributable to higher employee headcount, stock option compensation expense and public company operating costs following the company’s January 2014 initial public offering.

Cash and cash equivalents totaled $81.6 million as of June 30, 2014. We continue to expect that this will be sufficient to fund operations through the end of 2015 and we remain on track to meet previously announced milestones for the delivery of important data from all three of our clinical programs during this time.

I’ll now turn the call back to Max for closing remarks.

Max Gowen

Thanks Roberto and thanks also to David. As you’ve heard, it’s been a productive quarter for us and I’d like to close our call with a summary of our key objectives for the next several quarters.

The TRV130, we expect to report data from Part B of the ongoing bunionectomy study at the latest in the first quarter of 2015 and will have more precise guidance for you as Part B progresses. We plan to initiate a soft tissue surgery study for TRV130, using as needed dosing by the end of 2014 and will speak more about the design of that trial next quarter.

For TRV734 we expect to have results from the ongoing multiple ascending dose study in the first half of 2015 and again, as the trial progress we’ll have more precise guidance for that timing.

For TRV027, data from the Phase 2b, BLAST-AHF Trial is expected in the second half of 2015. This data triggers Actavis’s option exercise decision and if the option is exercised we would receive a significant upfront payment and downstream milestones royalties.

Finally, from our platform we expect to nominate a candidate molecule targeting the delta opioid receptor for a CNS disorder later this year. We look forward to continued progress and to updating you on our programs over the course of the year.

Thanks all of you for your interest and for your time today. And we can now open the call for questions. Operator.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question is from Alan Carr with Needham & Co. Your line is open.

Alan Carr - Needham & Co.

Hi, thanks for taking my questions. A couple of them. One of them is – I’m wondering if you can comment at all on the move from Part A to Part B with the TRV130 trial, maybe with two doses you started off with in Part B.

And then also, can you comment a bit, you mentioned earlier in your prepared comments about Actavis being involved in the 027 trial. I’m wondering if you could comment on the extent that they are involved.

And then the third is, around Abuse Liability Trial, at what point would you be thinking about doing one of those for the two pain programs. Thanks.

Max Gowen

Hi, Alan. Thanks very much for those questions. So I will direct the first question about the Part A to Part B on to David.

David Soergel

Hi Alan, thanks for your question. So as we’ve discussed in the past, this trial is designed as an adaptive dose ranging study. So we are going to be exploring a range of doses in Part B and potentially changing doses every week. So we’re not providing the precise doses that we’re starting off with, because that’s just a starting point for the trial.

Max Gowen

Thanks David. I’ll pick up on the Actavis question; you were asking about their level of involvement in the 027 program. So as you know, we have designed and are running the clinical trial and obviously we have quite a lot of updating conversations with Actavis. I’d say where they are more involved is on the CMC side, as they are thinking about how to prepare CMC activities for later stage development and then ultimately launch and we’ve also been working together on some activities which we hope might give us some additional IP coverage. So those are the real areas of working together.

On the Abuse Liability studies for 130 and 734, we don’t currently have plans to launch those trials of those studies. We know that they do need to be done. We’ll probably schedule those later on in development once we have our Phase 2 data.

Alan Carr - Needham & Co.

Okay. Thanks for taking my questions.

Operator

Thank you. And I’m not showing any further questions. Please proceed with any closing remarks.

Max Gowen

Well, thank you all for joining today’s call. As always we’re available to answer any other questions after the call and you can certainly direct those through John. So thanks very much everyone.

Operator

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.

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Source: Trevena (TRVN) CEO Max Gowen on Q2 2014 Results - Earnings Call Transcript

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