Atea Pharmaceuticals, Inc. (AVIR) Earnings Call Transcript & Summary

Thank you. Thank you. Max Skor, Biotech Analyst with Morgan Stanley. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. I'm very happy to welcome the Atea team. Maybe we go through. People on the stage, J.P.?

Sure. Good morning. Jean-Pierre Sommadossi, Founder, Chairman, and CEO. Hello, I'm Janet Hammond, Chief Development Officer. I'm John Davyrka, Head of Commercial Operations. My name is Arantxa Horgan, the Chief Medical Officer. So first, I would like to thank Morgan Stanley for the kind invitation. I appreciate the opportunity to give an update today of our programs. As you know, we recently disclosed a successful program, our first Phase 3 trial for our treatment against hepatitis C, was achieving the FDA-agreed primary endpoint on our SVR-12, and we are very obviously very excited to [see] non-inferiority statistical significance. This was pure standard of care with Epclusa. We believe that we have a best-in-class regimen. Short duration, what's important obviously in that Phase 3, which was performed in North America, predominantly in the U.S. Let's not forget that we were comparing an 8-week treatment against a 12-week treatment for cirrhotic and non-cirrhotic patients, which represented about 90% of the patients in the U.S., and we performed very well from an efficacy and safety standpoint. We look forward to our ex-U.S. trial. We are releasing data very early in Q1 next year. We are fully enrolled. Almost all patients actually have achieved now week 12, which is when they have completed the full treatment. And this second trial will allow us to support the first trial, but also to expand the robustness of the number of patients with genotype 1B, which was mostly in Western Europe; genotype 3, 4, 5, and 6, which are the rare genotypes. A label is essential today as no one is doing genotyping before treatment. We have also a second program. We are very excited about hepatitis C. We are just in the process of completing the single ascending dose. We like the PK; we see the drug exposure and the safety so far. We will complete the multiple ascending dose by the end of the year, and we will be in the proof of concept next year for hepatitis C. So next year will be a very important year because that will be when we anticipate in Q2, very likely June, the filing of our regimen for hepatitis C with the FDA. Again, thank you for allowing us to share those updates. And then the team, Janet, John, and Arantxa, I can go into details on the questions.

That's great. Thank you very much. A lot of exciting things happening at Atea Pharmaceuticals. Maybe we just start with the C4WARD results. Would the team like to highlight the top-line results, key takeaways, any secondary endpoints or safety commentary?

So the C-BEYOND trial, our U.S. trial, we recently have data released from it. And we were very excited to see very robust efficacy with rates of 94-95% with only an 8-week regimen as compared to the standard of care, which was a 12-week regimen. And this is with the attributes of what people are expecting today in the hepatitis C landscape. So that's a short treatment duration, low probability of drug-drug interactions, no food effects, and we saw good tolerability profile, so that's what people are looking for today. In terms of C4WARD, the trial is very well positioned to be a confirmatory trial of what we saw in C-BEYOND. And it's a trial that, as J.P. said, is running ex-U.S. in multiple countries, over 17 countries, and it has a broad scope, global population, and also genetic and viral genetic diversity with different genotypes as J.P. mentioned. So we think that that is going to be a confirmatory trial that is very likely to reproduce the excellent results that we saw in C-BEYOND for two reasons. One is the trial design is closely aligned to C-BEYOND, so basically they have the same primary endpoint, they have a very aligned statistical analysis plan, the same power assumptions. So this makes it very likely to reproduce what we saw in C-BEYOND, but also the strength of C4WARD is that we are going to be seeing the primary endpoint in two populations like we see in C-BEYOND: in the population which is the MITT population, so that's everybody that received one dose, and that's the FDA preference, and we met the primary endpoint there. But also in the per-protocol population, which is a subset, that is the population that adheres to the regimen and to the protocol, and that was the preference of the EMA. And so we think that in that way, because we met both in C-BEYOND, we have a lot of confidence that we're going to be seeing the same results in C4WARD.

Okay, so strong efficacy, clean safety profile, maybe drill down a bit more on C4WARD. So it includes a broader geographic and genotype mix than C-BEYOND, which you've noted. How could these population differences affect the results?

So we see that as a strength. I think C4WARD gives us a population that gives us additional strength for the program. One is because of the genetic diversity of the virus. So we'll see multiple genotypes. And we already have experience in vitro that we are pan-genotypic. We can treat all genotypes the same. Further, we also saw pan-genotypic efficacy in our Phase 2 trial where we treated 275 patients, which is quite a lot for a Phase 2 trial, spread across genotypes and included genotype 3, which is the hardest-to-treat genotype, and there we had efficacy rates of about 100% if you took the [population] that was compliant with the drug. And so C4WARD is enriched for genotype 3. That should translate into very strong efficacy as well. So that's from the viral perspective. From the population perspective, it's a more manageable population from the clinical trial perspective. They are more likely to come back to follow up, less likely to have early treatment discontinuations as compared to the United States. We had to do, obviously, a C-BEYOND, a clinical trial in the United States because that's a big medical need, but the population in C-BEYOND in the United States had a lot of issues and challenges. For example, over more than half of them had a history of IV drug use. They had a history of, or they had actually concomitant medication use. 90% of them have, 89% of them have concomitant medication use. They have psychiatric disorders. 10% of them didn't come back or had early discontinuation rates for a variety of reasons, you know, sometimes incarceration, sometimes they just didn't come back for follow-up. So that was a very challenging population for us to do a very rigorous test in the United States. But C4WARD has a population that is easier in that sense, with less of those challenges. So that should decrease the noise, the statistical noise in the trial if the data has less variability, because you don't have all that noise. So that should really be able to help us highlighting our unique profile. Okay.

That's great. So I'll press a little bit on this, but what would C4WARD need to show for the combined analysis to support a compelling superiority claim rather than confirming non-inferiority?

That's a good point, great question. I think that we power these trials for non-inferiority, but I want to remind you, non-inferiority, so the efficacy is matched with Epclusa, but we do it in 8 weeks. And in order to power for non-inferiority, we needed almost 1,000 patients per trial, which is pretty big for a Phase 3 program. And the cure rates are around 95%, 94-95%. So to demonstrate statistical superiority above 95% cure, you will need thousands of patients, and that is really not realistic in a Phase 3 program. And so our goal is really not so much to demonstrate incremental superiority, efficacy superiority, but to have a superior profile overall with this, as you mentioned, diversity: lower risk for drug-drug interactions, which is very important for physicians, no food effect, and short regimen, which is very important for patients because they really have a hard time even making it to 8 weeks, much worse to 12. And so when you put all that together, that's the [strength] of the program because it leads to a simple, practical regimen that physicians can prescribe.

Great. So looking forward, based on or assuming that C4WARD is successful, you move on to submission. Can we talk a bit about the label and, as you noted, the differentiating factors from the two approved therapies? What really resonates with physicians?

Janet? Yes. So from a regulatory perspective, as J.P. mentioned, we're aiming to file the NDA mid-next year, and we're already actively preparing for that regulatory submission with drafting documents, drafting the label, and we're already preparing for that, discussing things with physicians. And I think what we've heard distinctly from everybody has been that a short treatment regimen is the most important factor for achieving cure in patients. And this is what they're looking for above all else. What is also important is a low potential for drug-drug interactions, and we have that also. The other factors which are important are that the regimen should be pan-genotypic. We don't have a protease inhibitor which helps, and the regimen obviously needs to be safe and well-tolerated. And all of that we are able to demonstrate. And so we're in the process of actively working out how to draft a narrative for the regulatory submissions, assuming C4WARD is positive, which will highlight that and provide simple prescribing information for physicians.

And just to add that we are preparing, as you know, Max, we will need just to complete the package for the EMA. It's closely similar, but actually they request some additional environmental and other packages that we are preparing, and we anticipate to file for the EMA end of 2027, so it's about six months.

after we will have filed with the FDA. Okay. Could we talk about potential label scenarios? How should we be framing expectations? Sure. So I think our expectations are that the label should reflect that the regimen is an 8-week regimen for non-cirrhotic patients, 12 weeks for patients with cirrhosis. There are minimal drug-drug interactions. The safety and tolerability are generally excellent. And we are looking for a pan-genotypic regimen. And I think the label should reflect towards that.

Okay, and then moving on, I know I'm not going to press you on a price, but how are we thinking about pricing this?

this regimen. So, right now, we haven't released anything on pricing, but we plan to be competitive within the pricing regimen.

and closely matching to what the two competitors currently are. Okay. But I think a question for myself is just understanding the broader markets. Can you speak to the market research that you're doing internally, what you're hearing from KOLs, and how that's evolving over time?

Sure. So we've done initial market research directly with the highest prescribers in the U.S. based off of our Phase 2 data. What they have told us is that when they looked at the profile that Janet and Arantxa so eloquently described, that they showed great preference. In fact, over 80% said they would be interested in writing it, and the fact that the majority of their patients they would like to prescribe it to. When you start to ask them why, what they begin to address is the exact profile: to have something that's very potent, less likely to cause drug-drug interactions, and to be the shortest possible course of therapy. So from that perspective, that's how we're looking at the market. I just want to point out that when we start looking at our launch strategy, it really is grounded in the fact that we are looking at the diagnosed and treated patient population. In other words, historically, the number of patients that have been treated. However, we believe that with this profile, we really have the opportunity to address a lot of those patients who are diagnosed but do not seek treatment. And it kind of ties into what physicians are doing themselves. What are they doing to get more patients treated? Because it is a problem, and that's when they're coming up with their "test and treat" model of care. Simply put, a patient is diagnosed and treated at the same time. To provide some historical perspective, a typical patient was diagnosed and might not receive treatment for months. And it kind of explains why you may have 160,000 new patients each year diagnosed, but only half of them are being treated. So if you do this new "test and treat" model, what most KOLs will tell you is that they can try to get more of those patients treated. The one thing that may have been holding them back in the past is the profile of what's currently available. You really do need a drug where the physicians feel comfortable prescribing, not likely to see DDIs, and also something really convenient for a patient to take. And so we're really confident that as the U.S. moves towards the "test and treat" model, our drug will really have the best profile for that.

And can you talk about the incidence population or the prevalence population both in the United States and then Europe?

Well, so, you know, for the U.S., what I can tell you is just some general numbers. It's estimated that you have roughly 4 million people that are infected in the United States. That number continues to grow. It's estimated, as I said, around 160,000 new chronic infections each year, with only half of them being treated. So the number continues to grow. It is becoming even more of a growing health concern, because eventually a large percentage of those patients will go on to develop hepatocellular carcinoma if they're not treated. So, hence the interest in the government to start to take a look at that, the interest in physicians to try to treat more of those diagnosed patients. And how should we think about the cirrhotic versus non-cirrhotic patients? Well, I'll let my colleagues talk about that, but from a commercial perspective, by far the majority in the United States is, you know, they're a typical average type patient, and they're not cirrhotic patients.

I think that what I'd like to add also is, and that's why the C4WARD will be very important. As you probably know, Max, compensated cirrhosis genotype 3 are the most difficult patients to treat. And we are excited with our regimen. We are also evaluating patients with resistant mutation. So this type of patient will tell us if we are doing [well]. Probably, there is no sufficient power, sorry about that, to look for superiority. We'll have a pretty good idea how we compete in terms of those cirrhotic GT3 against Epclusa and Mavyret. Physicians don't like to put compensated patients on Mavyret for many reasons, you know, in terms of the presence of protease inhibitors. So, we believe that that also will be one of the major advantages of our regimen. And when could we get an update around that? That when we have the C4WARD data, very likely we can disclose that C4WARD, almost 50% of the C4WARD patients are genotype 3, and with a lot of existing genotype 3.

That's helpful. And maybe if you can just walk us through, specifically in the United States, where are these patients located? Are they concentrated at specific treatment centers? How should we think about the role?