Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH) Q1 2016 Results Earnings Conference Call April 5, 2016 11:00 AM ET
Teri Dahlman - Investor Relations
Guy Macdonald - President and Chief Executive Officer
Patrick Horn - Chief Medical Officer
Christopher Watt - Vice President, Finance
Alan Carr - Needham & Company
Matthew Luchini - BMO
Heather Behanna - Wedbush Securities
Yun Zhong - SunTrust Robinson Humphrey
Stephen Willey - Stifel
Kevin Kedra - Gabelli & Company
Liisa Bayko - JMP Securities
Ed Arce - H.C. Wainright & Company
Good day, ladies and gentlemen, and welcome to the Tetraphase Pharmaceuticals Eravacycline Regulatory Conference Update Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to introduce your host for today's call, Ms. Teri Dahlman. Ma'am, you may begin.
Good afternoon and thank you for joining us today. With me on the call today is our President and CEO, Guy McDonald; our Chief Medical Officer, Dr. Patrick Horn; and our Vice President of Finance, Chris Watt.
On the call today, Guy will discuss the recently received guidance from the US Food and Drug Administration regarding the regulatory path for eravacycline and then we'll open up the call for your questions, for which Pat and Chris will also be available.
Before we begin our formal comments, let me remind you that during today's conference call we will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today’s press release and the company’s filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. Information discussed on today's call is accurate as of today and we do not intend to necessarily update this specific information in the future.
I would now like to turn the call over to Guy Macdonald.
Thank you, Teri, and thank you everyone for joining us today. The purpose of today's call is to discuss the feedback we received from the FDA for eravacycline, our lead antibiotic candidate. In the press release that was issued this afternoon, we announced that the FDA has advised us that data from one additional positive phase 3 clinical trial will be required to support a new drug application or NDA for IV eravacycline.
We are obviously extremely disappointed that the FDA did not agree that our existing clinical data was sufficient for an NDA. We've been working with the Agency since the IGNITE2 data readout to try to find a way to make eravacycline available to patients in the near future. However, we now have a written response from the FDA with a confirmed path forward and we are very committed to the development of eravacycline.
Therefore, based on this feedback, we plan to conduct a pivotal phase 3 clinical trial to evaluate the efficacy and safety of twice-daily IV eravacycline in patients with complicated intra-abdominal infections or cIAI. We are currently finalizing the trial design with the FDA and will be able to provide more details once the protocol is confirmed.
Initiation of this clinical trial is expected to take place early in the fourth quarter of 2016 and top line results could be available as early as the fourth quarter of 2017. Assuming a positive outcome, the data from this study will be used to support the NDA for IV eravacycline as a treatment for patients with cIAI. This development strategy was decided after we determined that a trial evaluating IV eravacycline in cIAI provides the most rapid path to approval with an unrestricted label and, most importantly, the most rapid path to making eravacycline available to patients.
In addition to this phase 3 clinical trial evaluating eravacycline for the treatment of cIAI and as we've previously discussed, we are also planning to conduct a phase 3 clinical trial evaluating the efficacy and safety of once-daily IV eravacycline in patients with complicated urinary tract infections or cUTI. We're currently finalizing the trial design with the FDA and we'll be able to provide more details once the protocol is confirmed. Assuming a positive outcome, data from this study will form the basis for supplemental NDA for IV eravacycline for the treatment of cUTI.
Importantly, we expect that our existing cash resources are sufficient to fund operations through the data read out for the planned phase 3 cIAI clinical trial. We will provide further guidance on our cash runway once we have feedback from the FDA on the two study designs and reviewed the impact of these on our overall budget.
As a reminder, we have completed two phase 3 clinical trials. IGNITE1 evaluated IV eravacycline in cIAI and IGNITE2 evaluated eravacycline as an IV to oral transition therapy in cUTI. The results from these two phase 3 clinical studies were expected to support the submission of an NDA for eravacycline in the treatment of cIAI and cUTI.
In IGNITE1, IV eravacycline was well-tolerated and achieved its primary efficacy endpoint of non-inferiority compared to ertapenem. In IGNITE2, IV to oral eravacycline was well-tolerated, but did not achieve its primary endpoint of non-inferiority compared to levofloxacin.
While the time to an NDA filing for eravacycline is longer than we had hoped, we remain convinced that eravacycline has the potential to be an important new antibiotic treatment option for bacterial infections, particularly those caused by multidrug-resistant pathogens. We also remain committed to bringing an oral formulation of eravacycline to market. To that end, we recently commenced an early-stage clinical study designed to advance the oral development program for eravacycline.
Beyond the eravacycline program, we are also advancing our pipeline of novel antibiotic candidates. Earlier this year, we initiated a single-dose phase 1 clinical trial for IV TP271. During the second half of 2016, we anticipate commencing a multiple-dose phase 1 clinical trial as well as a clinical trial evaluating an oral dose formulation.
TP-271 is being developed to combat respiratory disease caused by bacterial biothreat and antibiotic-resistant public health pathogens as well as bacterial pathogens associated with community-acquired bacterial pneumonia. It’s a novel fully synthetic tetracycline antibiotic which is being developed with funding from the National Institute of Health's National Institute of Allergy and Infectious Diseases. TP-271 has received QIDP and fast-track designation from the FDA for the treatment of community-acquired bacterial pneumonia.
From our second generation gram-negative program, we are advancing TP-6076, a preclinical candidate generated from our proprietary technology which allows us to discover tetracycline-derived compounds that are effective against the most urgent multidrug-resistant gram-negative bacterial health threats.
We reported compelling preclinical data for 6076 in April at the European Congress of Clinical Microbiology and Infectious Diseases and remain on track to initiate a phase 1 clinical trial with this candidate in the middle of this year. Along with the continued advancement of these earlier stage pipeline candidates, our focus will be on initiating additional phase 3 clinical trials in both cIAI and cUTI for IV eravacycline. We’re in active discussions with the FDA for both of these protocols and we look forward to communicating study design details once the clinical trial protocols are finalized.
As the rising rate of antibiotic resistance continues to pose a serious threat to human health, the introduction of new antibiotics like eravacycline will be critical. Our successful phase 3 IGNITE1 study for IV eravacycline in cIAI, along with the promising IV-only efficacy data analysis from the IGNITE2 in cUTI give us confidence that eravacycline has the potential to play an important role in treating patients with these serious infections. We look forward to keeping you updated on eravacycline and our other pipeline programs throughout the year.
With that, why don’t we open it up to questions, operator?
[Operator Instructions] Our first question comes from the line of Alan Carr from Needham & Company.
Can you comment on why you're running another intra-abdominal and why not go straight to the UTI and use that as a second trial? What's the rationale there?
I think as Guy points out, when we look at the timeline based on the feasibility and based on the study design specified in the guidance document, we can get the data from an IAI trial and have an NDA submission approximately eight to 12 months sooner than if we did the UTI study alone. So we are planning on doing the UTI study, but then we're planning on the IAI study to allow us to do the filing and get approval.
The approval will be an unrestricted label initially all goes well in intra-abdominal infection. That will allow us to start to get the product on the formulary and start the commercialization activity there. And then as soon as we get the UTI data, we'll be able to file a supplemental NDA and the label expanded to an unrestricted label in UTI as well.
Do you have any less confidence in how a UTI trial would play out than an intra-abdominal trial?
No, not at all. Again, based on the IV-only analysis we did from the UTI study, we're confident and based again on the plasma exposures and the urine levels we see with IV we're confident in our work in urinary tract infection. It really is just driven by the timelines.
Have you had any – I'm wondering where things stand with European regulators. Do you have a sense of what their thoughts might be on the completed phase 3 and phase 2 and whether that's sufficient and then maybe to the extent that you can, can you characterize the discussions with the FDA and the rationale for why the phase 2 in intra-abdominal wasn't sufficient for...
Let me answer the second half first. So there was a lengthy discussion with the FDA in terms of we submitted data, they had more questions, we submitted more data and so they really did an in-depth analysis. I think what it really comes down to is the fact that in our initial discussions with the FDA and the agreement, we had agreed to having two pivotal trials to support the initial NDA, albeit it would be for two different indications. I think now, where we’re now, we have one successful study and in one study that didn't meet the primary endpoint. Based on that, the FDA wants to see two successful studies for an NDA. The FDA, in their written response doesn’t really go into a lot of their thinking and a lot of what they consider; they just give their ultimate response. So that’s where we are with the FDA.
With the EMA, all our discussions and all of our focus has been with the FDA. So we really haven’t reached out again to the EMA. And now our focus will be on initiating these trials and getting them started. But then we plan to reach out to the EMA.
Is that something you would do after these trials get started or is it something you can do in parallel out of discussion with EMA over the course of this year?
I think we can do them in parallel. Obviously, our primary focus is really going to be getting these trials started, but yes, over the course of the year we can do parallel.
And our next question comes from the line of Ian Somaiya from BMO.
It's Matthew on for Ian. Just a couple of quick questions. So first, I mean I appreciate that the new second phase 3 design is not yet final, but I was just wondering if you might be able to give us, at least in a descriptive sense, anything maybe that the FDA guided toward maybe significant differences that they were looking for versus say IGNITE1 for this study? And then for the phase 3 UTI study, I was wondering if you could just sort of remind us of the potential timelines for that, especially given earlier comments that it's an eight to 12 month potential delay in data in that indication versus cIAI.
Obviously the FSA as well as the EMA have some pretty concise guidelines in terms of what these studies should look like. So from that point of view, we anticipate that this study will look very, very similar to the IGNITE1. We're just finalizing a few of the details with the FDA.
In their review, obviously, they expressed no concerns about the activity in intra-abdominal infection and they actually really encouraged us to do a second study and file an NDA. So I don’t think there is any concern on their part and I don’t think they’re specifically looking for anything else. I think they’re just following their guidance that they need two confirmatory trials in order to get the NDA and that was our original agreement with them.
In terms of the urinary tract infection study, I think right now again since the intra-abdominal infection study will be the time critical to the NDA that's going to be our focus. Once we sort that out and have really finalized that protocol and know when our start time will be, we can give more specific guidance on when the end time for the UTI study will be.
So I guess part of the question had to do with the thought that at least at one point there was potential for the cUTI sNDA to sort of catch up, if you will, to the cIAI NDA, but given what you're saying it sounds like that's probably not a likely outcome anymore. Is that a correct interpretation of what you're saying?
No, not at all. What we’ve said before was that we were planning to do a phase 3 study in complicated UTI with the IV-only formulation when we initially got this feedback on IGNITE2. Based on the discussions with the FDA and our review of the potential development plan options, we’ve now decided that we want to do an intra-abdominal study first and then follow that with an UTI study.
So there hasn’t been any change from that point of view. The addition of the intra-abdominalstudy is new and as we mentioned earlier, based on the design of that study, the size of that study and the timeline, we believe we can complete that significantly faster and get eravacycline to market and to patients quicker.
Our next question comes from the line of Heather Behanna from Wedbush.
Just a couple of follow-ups. One, I know you're still finalizing the protocols for the IAI study, but I was just curious if you think it will pretty much be a carbon copy of IGNITE1 or if the data might allow you to streamline or have a slightly smaller sample size or having that data in hand, if that could influence things to make things go potentially faster for IAI?
I think that’s a good question. Right now, we’re planning on a study that is roughly the same size with the 10% non-inferiority margin, so that we can get unrestricted label. And in terms of the other details again, follow the guidance document so it will look very similar.
And then just you mentioned the unrestricted label a few times. I was just curious would a restricted label be if you did sort of an [indiscernible] had a smaller study, is that where a restricted label would come in?
So our understanding is that when you use a non-inferiority margin greater 10% and that will result in restricted wording in your label.
And then just one last question, I was just curious if you could just give us a little bit more color on why a UTI study takes so much longer to execute?
So there are a number of reasons. And when you do your sample size calculation you take a number of things in. Two of the things you take into effect that really do it is one is your overall clinical response and so if you look at the phase 3 studies, they have – the most recent phase 3 studies, your clinical cures or your responder analysis show responders in the low 80s, maybe 70s in urinary tract infection and in complicated intra-abdominal complicated intra-abdominal, they are in the upper 80s, maybe even 90%. So that’s one thing and that drives some of the sample size.
The other thing is the number of patients you have to enroll to get the right number of patients in the micro-ITT population. So in our phase – in our IGNITGE1 study in IAI, we had in the upper 80%s, 80%. So 85%, I can’t remember the exact number, but 85% to 88% were in the micro-ITT population, where in urinary tract infection that was down in the mix 60%s. So that just means for urinary tract infection you have to enroll a fair number of patients who won’t have base line package and won’t quality for the micro-ITT population. So those are the two biggest drivers of the increase in sample size.
Our next question comes from the line of Edward Nash from SunTrust.
This is Yun Zhong for Edward. So just want a follow up question to an earlier one, and I wanted to confirm if the choice of cIAI instead of UTI to support the initial approval is your voluntary selection now based on the FDA’s request? If you’ve chosen cUTI and cIAI when trial for each indication to support approval for both indications, the FDA would have been okay with the original strategy to when you study for both indications.
Yes, and that in fact was our original agreement with them and that follows their guidance for developing drugs in gram negative infections. So you can do two pivotal trials in different indications, for example IAI and UTI. Andin those two trials if positive we’d consider supportive of each other and that would be enough to file an NDA for both indications and that’s been our original submission with the FDA.
Okay. So that hasn’t changed, but I think you probably knew that cIAI study would take shorter than the UTI study, but you never plan – we’ve never talked about the plan for additional cIAI studies until you had discussion with the FDA. So I wonder what information or what discussion led you make that final decision to run an addition to cIAI?
During the discussion, we had been hopeful that we would be able to come to an agreement with the Agency about a path forward for filing with IAI with the currently available data without doing another clinical trial. And then we were going to work on that submission, while we were running the UTI which would be a supplement in the NDA.
And then the FDA has said they need two trials to consider an NDA. And so that’s what laid us – again, when we consider that the timeline to that original NDA is contingent upon completing another trial in that we’re and that’s when the lengthy time of the trials get out and it makes sense to us and it seems to be the best for Tetraphase to do intra-abdominal infection study with a shorter timeline.
And our next question comes from the line of Stephen Willey from Stifel.
Stephen Willey – Stifel
I guess just with respect – I know it's kind of the same question asked over and over again but just with respect to the decision I guess for another cIAI study, the context of it being a shorter study, I guess if I just looked at the enrollments timelines for IGNITE1, I think the timeline from initiation of the enrollment to data announcement it was, I think, probably somewhere on the order of 15 months and I think it was sub a year for IGNITE2. So I guess I'm just wondering why it may take too longer now to mobilize another phase 3 cUTI study?
So there were a couple of reasons for that. So if you look at the actual enrollment timeline for IGNITE1, the IAI study, the patient enrollment timelines were significantly shorter. But it took us a fair amount of time then from the time the last patient out until we had data released. And that was something that we worked hard on and in short that significantly for IGNITE2, the UTI study.
The other thing is you know, again, if you recall this study design for IGNITE2, the pivotal part actually followed on the lead in part and the lead in part allowed us the time for the regulatory approvals and all of that that was required to start it. So by the time we actually started the pivotal part, the patient enrollment took roughly a year and then we had the data read out about three to four months later.
Now, we won't have that lead in part. We have to start from scratch for both the intra-abdominal infection study and the UTI study. Since there are fewer patients for intra-abdominal, we need fewer site, we need fewer regulatory submission and again, based on our feasibility and based on the timelines we can generate the intra-abdominal study, we’ll be significantly shorter.
And then I was just wondering if there's anything you can say about the oral development program a little bit, I think you just talked about initiating recently on the earnings press release. I'm just curious if there's anything you can say to the current design of the phase 1 study and I guess some of the alternative formulations of drug that you might be evaluating.
Again, [indiscernible] study, as we’ve said, is really to confirm and really expand on the findings from the phase 3 study. So we’re doing an IV oral step-down using the external conditions of the phase 3 study in a phase 1 unit where we can really get much more rigorous PK. Right now, the phase 3 UTI study showed that the oral dosing had kind of an underperformance and it really drove the overall study result.
Our assumption is that that’s due to decreased exposure with oral. And we have some indication of that from PK from this study itself, but we really want to confirm that. And then once we get that and look at that magnitude, then we’re going to do a follow-on study to look at some different things to really overcome that and see what we can do. So we really don't know the full oral development program until we get the results from those two studies. But we anticipate certainly by the end of this year that we should have a much more flushed out final plan for getting it back into the clinic.
And our next question comes from the line of Kevin Kedra from Gabelli.
Just wondering if you can comment, I know you said that you're still in discussions with the FDA on the final design, but would you be looking at the same active comparators so I guess ertapenem that you used in IGNITE1? Then also on the status of the oral, I know it's looking out pretty far but is your sense that the FDA would only need to see a single trial to bring that to market or would there need to be two studies with oral dosing or IV to oral in order to bring that to market?
So in terms of comparator, I think what we clearly done is stick with the carbapenem comparator and whether that's ertapenem or meropenem in one or the other IAI or UTI studies is kind of one of things we’re finalizing our discussion on. But we think carbapenem now have become a pretty much a standard of care in these indications, so we’re going to stick with those.
The other question was on the oral and I think a lot of that will depend upon what we're able to show and what we’re able to demonstrate with PK and what our development path forward is. Once we get that, then we’ll have more discussions with the FDA and it could vary anything from, like you said, a single study to look at the oral, it could be that the timelines for all development will allow us to include it back in to the complicated urinary tract infection study if it’s still ongoing. But I think there are a number of possibilities with the oral and getting it back into a patient population and ultimately getting it approved [that will] only to discuss with the FDA.
And you mentioned that this pathway is going to give you unrestricted pathway to approval. Was there any discussion with the FDA as to getting restricted or limited access approval and was that just not on the table for them or is that something that you guys didn't see value in doing?
So I think it’s not restricted access. It’s restricted wording in the label. And so our understanding again is that anything other than a 10% non-inferiority margin will have wording in the label such as for use when there are no or limited other options available. I think for us, we think that eravacycline is obviously a broad spectrum antibiotic, it treats – not only treats these multi-drug pathogens, but it also treats a number of other pathogens. There is some potential especially in sites with high-resistance that it will not just be a last line use. It could advance up into maybe some empiric use. So I think our thinking on that is it really would be a disservice to eravacycline to get that limited language in the label.
Our next question comes from the line of Liisa Bayko from JMP Securities.
I'm just wondering given how you think things are panning out now, maybe you could give us your sense for relative cost of the study and remind us of your cash position.
I mean, obviously it’s a little premature since we haven’t finalized the study design, but I guess to remind you for IGNITE1 it was in the $25 million range and IGNITE2 was in the $30 million range. So we wouldn’t expect them to be significantly different. I think as we mentioned before you saw in our last earnings call we had just under $190 million in cash. Clearly, we see that money taking us at least through the data from the intra-abdominal study and further than that. We’ll be in a much better position once we finalize the study design, look at what we need to still be doing from a commercial perspective for the rest of this year and come back with better guidance on our cash. But certainly it will easily take us through the intra-abdominal study.
[Operator Instructions] And our next question comes from the line of Ed Arce from H.C. Wainright & Company.
I apologize if this has already been asked. I joined a bit late. Just wondering, thinking through the current forward path that you have laid out and the scenario, assuming that the IAI trial that you're planning is successful and you move forward with a submission to the FDA with that, how does that change in how you plan through the commercial launch with that single indication and how will that affect the planning that you've made to date, if at all?
It’s a good question, Ed. I mean, clearly we both have been looking differently [indiscernible] going with two indications. But I think we clearly see there is a very good way forward to start with intra-abdominal infection. We would look at having a very focused field force to start that off. I think as most people are familiar, formularies is on the [hull] in the antibiotic world only meet every six to 12 months. So during that first year, we clearly have a great opportunity to get eravacycline on formulary using the intra-abdominal indication and data to drive that.
And probably by the time we’re getting on some of the major formularies, that’s when the UTI indication would kick in. So we would work very hard on the formulary status and uptake where we get on formulary and then build a sale force out beyond that once we have the second indication. So I think it makes a lot of sense to do it that way.
And I’m showing no further questions at this time. I would like to turn the call back to Teri Dahlman for any closing remarks.
Thank you again for your time today. We’ll be in the office and available if you have follow-up questions.
Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. You may all disconnect. Everyone, have a great day.
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