Travere Therapeutics, Inc. (TVTX) Earnings Call Transcript & Summary

Hi, everyone. Welcome to the Virtual Vegas Bank of America Health Care Conference. I'm Greg Harrison, one of the biotech analysts here at BofA. And it's my pleasure today to welcome Eric Dube, CEO of Travere Therapeutics. Eric, if you'd like to make any opening remarks, please go ahead, and then we can jump into Q&A.

Great, Greg, and thanks so much for hosting me today. As we are now in May, we had a strong start to the year. And as we look to the future and keep that end in mind that we're working towards, we really aim to bring one of the first treatments for FSGS and IgAN to the many patients who are waiting [Audio Gap] for these diseases. In the meantime, we're encouraged by the interim DUPLEX results in FSGS, and we're in the process of engaging with regulators about the submission for this indication. We're also on track to report interim results from our second Phase III, the PROTECT trial, in IgAN in the third quarter of this year. We also have a commercial business with 4 products. And that commercial business, while it encountered some challenges to start the year due to fewer patients visiting their physician due to COVID, we are on track to meet our guidance for growth this year, and we've got a strong balance sheet to support our priorities for the next couple of years.

Great. That's a good intro. So why don't we start by talking about sparsentan? You had the positive data in FSGS and preparing for submission. Maybe you could talk about the -- where you're at in that process and then what the time lines could be for a potential launch.

We're currently working on both the submissions for the U.S. and for the EU, and we're also working on our commercialization plans. And so the -- as I mentioned earlier with regard to the submissions, we're currently engaging with regulators to understand what their expectations are for these files. And we'll be able to provide a bit more detail on that, but we would aim then to provide details on time lines for potential approvals. With regard to commercialization plans, there's really been such little innovation within renal and particularly the rare renal space, that we see several key pillars for our work, including really understanding the needs of nephrologists, particularly community nephrologists that haven't seen much in the way of innovation and education as well as working on the payer value proposition to understand the role that sparsentan can play and potentially staving off some of the really devastating impacts of these diseases like transplantation and dialysis. And also, we want to understand the patient journey. And these are diseases that disproportionately, in fact, affect [Audio Gap] in the U.S., and we want to make sure that we can understand what we need to do to address some of the barriers that they have to diagnosis and accessing quality care. So there's been a lot of great work from our commercial and regulatory teams. And again, as I mentioned, we're on track to provide further updates by the end of this quarter.

Great. Now you mentioned the patient population within FSGS a little bit. How would you characterize the unmet need in these patients? And what is kind of the size of the commercial opportunity that, that leads to?

Sure. Well, if we take a step back and look at this disease, FSGS or focal segmental glomerulosclerosis is a rare glomerular disease that is heterogeneous in nature, and the etiology of the disease that we're focused on is primarily of an unknown origin or genetic. And if we look at the size of the addressable population at the time of launch, it's between 15,000 and 30,000 in the U.S. and 20,000 to 35,000 in Europe, and what we're seeing is [Audio Gap] that's increased. There is currently no approved therapies for these patients. And so they're often given, upon diagnosis, multiple off-label therapies to be able to reduce their proteinuria and ideally to slow the progression of their disease. This is a disease that is highly proteinuric. Oftentimes, patients are identified in the nephrotic-proteinuric range, which is associated with a high risk of progression to end-stage kidney disease. And in fact, when you look across all patients who are diagnosed with FSGS, over half of them will progress to end-stage kidney disease within 10 years. That is despite using several classes of off-label medicines, including ACEs, ARBs and steroids. And when we ask in our market research nephrologists the degree of unmet need, they indicate that only about 8% of their FSGS patients are considered optimally managed. So there's a very high urgency for approved therapies in this condition, particularly those that slow the progression of the disease.

Okay. And you mentioned discussions with physicians. What's your sense of the awareness within both the physician community as well as patients and the demand for a new treatment there?

Sure. Well, we think that there's certainly broad awareness of FSGS. And many of these patients are being treated by community nephrologists. Once diagnosed through biopsy, they're often under the care of a nephrologist, and unlike many other rare diseases, we don't see the types of referral patterns to tertiary specialty centers. So these patients are quite diffusely being seen by nephrologists so that there is an awareness. But unfortunately, because there's been little innovation, there's a lot of unmet need for really educating community nephrologists around how we might be able to better treat these patients, and for us, that's [Audio Gap] ideal achievement of control of proteinuria. So many nephrologists that we speak to, they already recognize the importance of reducing proteinuria in slowing progression. But we are using a rigorous measure of proteinuria efficacy called the FPRE or the FSGS partial remission endpoint in our Phase III program that we believe is a more rigorous measure and potentially can stave off the progression of the disease and the loss of renal function as measured by eGFR over time. So there's quite a bit that we want to educate, and assuming approval, we'll also work to educate on the role that sparsentan can play in slowing this progression and addressing the common pathway of proteinuria and renal damage that these patients face.

Okay. And then where would you see sparsentan fitting into the treatment landscape in the near term as the only approved therapy could potentially be standard of care? But then in the longer term, how do you see that playing out [Audio Gap] combination treatments and things like that?

Sure. Well, we see that if approved, sparsentan can be the foundational treatment in FSGS and IgA nephropathy given the profile that we've seen to date. And this is certainly a reflection of what we hear from both academic and community nephrologists. And with regard to severity, when we look at our Phase II DUET study in FSGS, we did see that sparsentan had an effect in reducing proteinuria across baseline levels of proteinuria and eGFR. So we believe that it really does offer potential broad utility for patients with FSGS. And we've done quite a bit of research with nephrologists, and when we ask them what they're looking for in an innovative therapy for FSGS, really the top attributes that they're looking for is to improve the duration of remission that so few patients now are able to achieve, that you can slow the progression of the disease, reduces proteinuria and also [Audio Gap] data because there's just nothing approved and studied that well in this disease today.

Okay. That's helpful. Now we've talked about FSGS, but maybe switch gears to the other indication, IgAN. Maybe you could talk about the level of unmet need there, it seems similar in a lot of respects to FSGS, and the position that sparsentan could fill within that treatment paradigm.

Sure. Well, similarly, IgAN is a rare glomerular disease that is in significant need for approved treatments. There's nothing approved to date. And many of these patients also progress to end-stage renal disease. Albeit IgAN is a lower proteinuric state and it's slower progressing, but many of these patients do reach end-stage kidney disease. The addressable population is larger than FSGS. Across the U.S. and Europe, there's about 75,000 to 120,000 patients that we see as addressable by the time we launch. And similarly to FSGS, in terms of how nephrologists think about these patients and what they are looking for in a treatment, they're also looking for something that can offer a reduction in proteinuria, slowing the progression. And I think the other aspect that clinicians are looking for in both FSGS and IgAN is a non-immunosuppressive therapy. So many of these patients today are being treated with chronic steroids to be able to manage and other therapies that actually may reduce the immune system, which we heard such significant concerns during COVID but also can be directly nephrotoxic. So there really is a hope for something that will offer a different profile longer term.

Okay. And then how should investors be thinking about the commercial opportunity in IgAN relative to that of FSGS?

Sure. Well, I think, similarly, we are aiming to establish sparsentan as a foundational treatment for patients with IgAN because it does address a common pathway for proteinuria, and that's recognized when we speak with nephrologists. It is a larger population. There are other therapies that are in Phase III development in IgAN, so there may be options that these patients and clinicians have. But based on some of the other mechanisms that are being studied, we understand from many of the top nephrologists that sparsentan's profile could be seen as complementary to other therapies in development. So we think that for both FSGS and IgAN nephropathies, sparsentan will have a really important role to play, both are important opportunities for the future of this asset.

Okay. And then a question we get a lot is around expectations for the IgAN interim analysis. Wondering your view on the level of read-through that's appropriate from the FSGS data that came out and how you're thinking about that.

Yes. So I think first, let me caveat to say that these are 2 different Phase III programs, and while quite similar in many respects, in the design of the trial, they are different. And so I would just caution on any specific read-throughs. And we conducted a Phase II study in FSGS that helped to build our Phase III program in that disease. We rely on the experience in FSGS as well as the study of another endothelin receptor blocker in IgAN that showed that when you add an endothelin blockade to RAS inhibition, you see an incremental improvement in proteinuria. So with that said, it's our expectation that we should see a meaningful reduction in proteinuria in the interim IgAN analysis from PROTECT. And I think again, it's because of this common pathway that we see that sparsentan addresses. In each of the trials that we've seen, we see a very meaningful reduction in proteinuria and one that is above and beyond what you would expect with the use of an ACE or an ARB. And one of the differences between these diseases is in FSGS, a lot of the direct injury in the glomerulus is at the site of the podocyte, which is the filtering cell in the glomerulus. And that is injured and continues to worsen over time, which is why you see a progressive proteinuria in FSGS. What we see in IgAN patients is slightly different in that there's an immune complex that is deposited within a glomerulus. That has a direct injury on the glomeruli. And you see a proliferation of mesangial cells and inflammation that then leads to a progressive proteinuria and progressive decline in renal function. We see that in preclinical models, sparsentan is able to improve that inflammation and to slow the mesangial cell proliferation, which can lead to a reduction in proteinuria. So we're optimistic that we're going to see a consistent effect. One important difference between our Phase III trials is the way proteinuria is measured. For each of those, we look at specific disease data in the literature on what [Audio Gap] criteria for this disease and that would be predictive of longer-term eGFR or renal function. And for IgAN, that is a change from baseline in UPC level. And so our aim is to show a significant improvement in proteinuria versus an ARB. Our active control in Phase III is irbesartan. And in the literature that we used to design and power the trial, patients that experienced a 30% reduction in their UPC levels, they show a slowing of their eGFR decline and better renal outcomes. And so that's really our aim, is to delay the progression of this disease. And in fact , in one recent analysis from Dr. Jonathan Barratt at the University of Leicester, a 30% reduction in UPC predicted about a 10-year delay to end-stage kidney disease. So again, we're expecting to see a reduction in proteinuria. We would expect to see superiority over sparsentan alone. And we think that, that would bode well for the longer-term benefit that these patients may see.

Great. Super helpful. So I wanted to ask [Audio Gap] threshold of proteinuria reduction that you would want to see. You mentioned that 30% level. But in order for you to be confident in approval in this indication as well as having good market uptake, is that the level you're aiming for? Could it be lower or any stat sig superior reduction relative to irbesartan? What are you kind of thinking there as far as what you're hoping to see?

Sure. Well, the way that we designed and powered the PROTECT trial is to show a 30% relative improvement over irbesartan in alone. And we think that, that is going to be important as we have reviewed with regulators how the trial was designed. But also, we believe that, that level of difference will help in predicting the longer-term eGFR treatment difference. With regard to what we would expect to see, overall, there's been a number of trials that have been conducted in IgAN, and they have shown a range of reductions in proteinuria anywhere from maybe 5% to 30%. So if that sort [Audio Gap] irbesartan may reduce proteinuria, we would expect to see a 30% relative improvement over that. So we think that, that would be clinically meaningful with regard to slowing the progression of the disease, but also specifically to the confirmatory eGFR endpoint, that's what we would hope to show.

Okay. And then when you're comparing the IgAN trial with the FSGS trial or when investors and analysts are thinking about the differences or read-through from -- between the 2, are there any other differences that -- aside from the underlying disease, in the trial that it could have an impact on the success of it eventually as far as baseline characteristics of patients and such?

Sure. I'll point you to a couple of differences between the trials. The first, as you point out, is with regard to inclusion/exclusion criteria. Because FSGS is a more proteinuric state than IgAN, the entry criteria for baseline UPC levels is higher [Audio Gap] it's 1.5 gram per gram UPC or greater. And in PROTECT, it would be 1.0 gram per gram or greater. So you might expect to see differences in those baseline characteristics. We also see the demographics of these diseases different. The FSGS disproportionately affects patients of African descent and Latinx patients, whereas IgAN disproportionately affects patients of Asian descent. So there may be some differences there. The other 2 differences, the first is with regard to dosing. We are using a lower dose of sparsentan in the PROTECT study in IgAN. And when we look at our Phase II study in FSGS, we saw that both 400 and 800 milligrams were both effective in reducing proteinuria, but we did see that there were some tolerability differences at 800 milligram, where sort of acute hypotensive effects that you might expect with these classes of medicines. But there's also a difference that's related to the highly protein binding of sparsentan. And because FSGS patients are [Audio Gap] you would expect to see a higher degree of sparsentan losses. Being able to accommodate that, we went with a higher dose in FSGS even though the differences in efficacy between 400 and 800 were not twice. It's more of a kind of the high up the sigmoidal dose response curve. So that is another difference. And then the other difference I'd point out is that -- is based on the KDIGO treatment guidelines. For FSGS, because there are a number of classes of medicines that are used off label, clinicians use a variety of different therapies in those patients, whereas in IgAN, the KDIGO guidelines, at the time we designed the trial, recommended that all patients are optimally dosed or the highest tolerated dose of an ACE or an ARB. And as such, we required all patients to be on max-tolerated dose in the PROTECT trial, whereas, in FSGS, because they would come in on different classes of medicine, we use a 2-week washout period and then randomize patients to either sparsentan or irbesartan.

Got it. Okay. Maybe let's switch gears now [Audio Gap] [ TVT-58 ], which you acquired last fall. Maybe you can talk about how that asset fits into your portfolio and what your expectations are there.

Sure. Well, we were really excited to be able to find this program and to bring it into Travere because we do see that it's a great fit. This is a disease of high unmet need. It's a rare disease. We believe that there are probably about 7,000 addressable patients now between the U.S. and Europe. And a couple of the aspects that we felt were important about this program and its fit is that many of these patients are identified in newborn screening -- well, just over half of patients are identified with newborn screening. And many of these patients are under the care of or being seen by pediatric geneticists and at pediatric institutions. And we already have a field force through our CHOLBAM sales team that works with pediatric geneticists and many specialists within pediatric hospitals. So we do have a nice infrastructure there. That really [Audio Gap] we could be a good owner of this asset, which we now have an INN name, pegtibatinase.

Got it. Now given the potential of sparsentan relative to your existing commercial business, you could see your revenue profile become pretty concentrated eventually as that asset grows. How are you thinking about building a pipeline that would be capable of diversifying your revenue base over the long term?

Sure. Well, we have a nice diversified business now with sparsentan in development, pegtibatinase behind, and then we have several assets that are commercially available in the U.S. And we have a strong strategy to leverage our experience and infrastructure within rare disease, specifically late-stage development and commercialization. And so we think that any business development will further strengthen our portfolio and our position as a leader within the rare disease community. And our focus is really to continue to evaluate those potential assets where there's high unmet need and it may not necessarily be on the radar of... [Audio Gap]

Okay. Yes. So when you look at future BD activity, what is your [Audio Gap] those opportunities that you just spoke about? And what type of therapeutic areas would you be considering? Would it be limited to renal? Or could you go beyond that?

Yes. So I would say we're very much focused on rare renal disease, hepatic disease and metabolic rare diseases, and so our focus starts there. And we'll be looking at other companies that may have an asset that -- for example, with Orphan Technologies, they did a great job in the early development of this asset that came out of academia but really didn't have the infrastructure or expertise to take it to the next phase of development. We'd be looking at those kind of assets, whether they are academic collaborations. We have early discovery collaborations with NCATS, the NIH as well as with rare disease patient organizations. So that's sort of how we're thinking about it and the types of diseases. And of course, through any of our business development activities, we would be really sensitive to not [Audio Gap] or with pegtibatinase over the next couple of years.

Great. Yes, that was going to be my next question, is what is the urgency to add to the portfolio? And how do you balance that with not taking your eye off the ball with the sparsentan launch?

Yes. Well, our top priority is to ensure that we're successful with sparsentan in the clinic and with regulators. So we will do what we need to avoid any of that distraction. So we don't see that there is an urgent need for business development, but we continue to evaluate the landscape to ensure that we know what is out there. And if the timing is right, the value is right and the fit is there for us, then we'll certainly be opportunistic with that type of asset, most like we did with pegtibatinase.

Okay. And then maybe we can wrap up by talking about your existing commercial business. And you discussed kind of the headwind a little bit that you saw [Audio Gap] the impact that you saw from COVID on the base business. And would you expect the reduction in cases to be more -- almost a tailwind throughout the rest of the year? You've said that you can still achieve your guidance of, I think, mid-single-digit growth for the year.

Yes. Well, let me start by talking a little bit about what we saw with this business and these patients last year during COVID. Last year, we saw the strong momentum going into the first quarter of last year before we really started to see the impact of COVID. In the first quarter, we saw a lot of patients starting to request multiple months' worth of these therapies because, for many of them, they're already immunocompromised or they have a very heightened sensitivity to going into the hospital. For example, cystinuria patients, if they have a kidney stone event and require surgery or the removal of the kidney, that could be very scary when you think about what was going on in the hospitals with the increase of COVID cases. So that was part of the dynamic that we saw at the first part of last year, which really led to something that would not be repeatable in the first quarter this year from a growth standpoint. But then throughout the entirety of last year, we did see very strong growth in new patient acquisition, where we increased -- we grew our business by the teens. And so it was a very strong year for us. When we started to see the COVID cases increase in the fall, we started to see a loss of that momentum of identifying new patients at the back end of this last year and the first part of this year. But that certainly has changed, and the momentum in March and April has certainly improved. And as you point out, Greg, as we start to see the cases improve with COVID and patients are able to then start going back to visit their physician, we think that we'll still have a strong opportunity to grow our business. And that's why we reiterated our guidance for growth this year.

Great. Well, with that, we're just about out of time. It goes so fast with just a half hour to chat, but this was super helpful. And I'd like to thank everyone on the line for watching. And Eric, thank you for coming to talk about the Travere story.

Excellent. Thank you so much, Greg. I appreciate the time.

Great. Take care, everyone.