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

Good day, and thank you for standing by. Welcome to the Travere Therapeutics Corporate Update Call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I'd now like to hand the conference over to your host today, Mr. Chris Cline. Please go ahead.

Thank you, Liz. Good afternoon, and thank you all for joining us on short notice today to talk about our regulatory update for sparsentan and FSGS. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube; Dr. Bill Rote, Senior Vice President of Research & Development; and our Chief Financial Officer, Laura Clague, will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the Risk Factors section on our forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, May 25, 2021, and Travere specifically disclaims any obligation to update such circumstances to reflect future information, events or circumstances. With that, let me now turn the call over to Eric. Eric?

Thank you, Chris, and good afternoon. Earlier this year, our Phase III DUPLEX Study of sparsentan, the largest study to date in FSGS achieved its interim proteinuria endpoint that was designed to support accelerated approval submissions in the U.S. and Europe. As previously communicated, following receipt of the interim data, we engaged in pre-NDA and MAA pre-submission meetings to discuss accelerated approval submissions for FSGS with the available data set, and we have recently received final minutes. FDA has indicated that the available data from the interim assessment of the DUPLEX Study are not adequate to support an accelerated approval at this time. We believe FDA would like to see additional data and, as a result, we will not be moving ahead with the previously targeted submission in the U.S. this year. So where do we go from here? Importantly, FDA has acknowledged the challenges in studying a drug like sparsentan with acute reductions on eGFR as well as the high unmet need for approved therapies for the treatment of FSGS. And while we are incredibly disappointed that we will not be able to meet our goal of submitting this year, the interactions with FDA lead us to remain optimistic that we still have an opportunity to pursue an accelerated approval submission in the U.S. Specifically, the FDA minutes reflect that it may be possible to submit an application for accelerated approval after additional data accrued in the DUPLEX Study. We believe that based upon our discussions and our analysis of the data to date, there are time points in DUPLEX during the first half of next year that could present meaningful eGFR data and may provide additional predictability to the FDA. While there are additional details to work through, given the complexity of the innovative design of the trial, FDA have encouraged us to formalize these plans and request a follow-up meeting to discuss this option in greater detail. If successful, this could result in a submission for accelerated approval next year for FSGS. We expect a Type A meeting to occur in the third quarter of this year, and we anticipate providing a further update after that interaction. But from where we sit today, I'd like to provide some additional context. Before I provide additional context, I have to remind everyone that the DUPLEX Study is ongoing. And as such, it is imperative that we maintain the study blind and trial integrity, so we will not be able to provide specific data today. As to be expected, our discussions with the agency have been substantially focused on expectations for eGFR data and the predictability of achieving the confirmatory endpoint. As you will recall, based on our previous interactions with the FDA, we expected that their assessment of accelerated approval would be based on the totality of the data, including eGFR data available. As previously reported, eGFR data at the time of the interim analysis were limited. While our assumptions have always been that robust assessment of eGFR would not be available at this stage in the study, we believe a combination of 2 factors are contributing to the limited nature of the eGFR data at the interim assessment. The first is the acute reduction in eGFR that is expected to be seen as a result of sparsentan's mechanism. And the second factor is the enrollment dynamics in DUPLEX, specifically, the fact that a significant number of patients enrolled later in the study. As many of you know from the Phase II DUET Study, it is expected that sparsentan, and to a lesser degree, irbesartan, may cause an acute reduction in eGFR at the outset of initiating therapy. This dynamic is well understood as part of the mechanisms, similar to the well-documented effects of other ERAs, RAS inhibitors and in recent SGLT2 inhibitor publications where additional acute effects were seen when these therapies were added on top of ARBs. It is understood by nephrologists to not be deleterious, to be temporary and reported in the literature that it may confer network protection resulting in long-term benefit in eGFR. This is also consistent with the DUET Study, where we saw that reductions in proteinuria and an initial reduction in eGFR were later associated with stabilization of eGFR in the open-label extension. As for the second factor, enrollment, DUPLEX ended up with a substantial percentage of its total randomizations in the final 6 months of the enrollment period. This is in part due to the high demand at the end of the study and the fact that we ended up with an overenrolled population of approximately 70 additional subjects in the study. In our case, this resulted in a high proportion of the available eGFR data in the interim assessment being weighted to earlier study visits, during which the acute reductions in eGFR are expected to be most prominent. Despite this, we believe that the available data, including eGFR at the time of the interim assessment, are reflective of and consistent with the data from our Phase II DUET Study that is collected patient data now going out for more than 6 years. We also believe they are consistent with the assumptions used to design DUPLEX, and we continue to believe that the totality of the data in the interim assessment are predictive of a potential difference in treatment effect at 2 years. Further, we believe the data are also bolstered by the durability of proteinuria production seen to date for sparsentan in its development program and by further assessment of proteinuria in the interim assessment, including complete remission trends, which are consistent with what we have seen during the program's history. This provides us with optimism that the data we would potentially look to generate in the first half of next year can provide additional predictability and enable an accelerated approval submission in the U.S. As for our regulatory interactions in Europe, based on our initial MAA pre-submission interactions, we plan to continue on the path for conditional marketing authorization with the available data set. There is the potential that the EMA may evolve their view to be consistent with FDA. But for now, we are progressing ahead and continuing preparations to be ready to submit an application for conditional marketing authorization with the EMA this year as planned. We will provide updates as we discuss the program further with our assigned rapporteurs and co-rapporteurs later this year. When we step back and look at the overall progress of the sparsentan programs, following these recent regulatory interactions, we maintain the same level of confidence in sparsentan's profile, which we believe supports its potential to become a new treatment standard in FSGS and IgA nephropathy. It is possible that we may only experience a delay of approximately 6 months to the first anticipated launch in the U.S. as the PROTECT Study in IgA nephropathy is set to read out next quarter. Today's news does not alter our view of the ability to pursue accelerated approval in IgA nephropathy. I say this because there are important differences in how PROTECT has been designed that may enable a more sufficient interim analysis for FDA. For example, all patients in the PROTECT Study are required to come into the trial on a maximum tolerated dose of ACE or ARB therapy. There's also no washout before randomization in the PROTECT study. And perhaps most importantly, we expect the interim data set overall to be more mature compared to DUPLEX. This is because PROTECT has had a comparatively linear curve enrollment -- enrollment curve and the interim assessment is triggered after the first 280 patients reach 36 weeks in the study. For example, at the time of the interim analysis for PROTECT, we anticipate having a greater number of patients with at least 1 year of eGFR data compared to DUPLEX. We, of course, need to see the data, but we remain optimistic in the study's ability to provide a package that may support an accelerated approval submission based upon our discussions thus far. As a result of the changes of our time lines for FSGS, operationally, we will be shifting many of our launch preparation activities out approximately 6 months. Our teams have done a phenomenal job of developing a plan to successfully launch sparsentan for FSGS. At this point, we will delay the further operationalization of that for the U.S. and look to build upon it for IgA nephropathy at the appropriate time. This means that we no longer anticipate the increases in operating expenses throughout the balance of this year that we had previously forecasted. Instead, we expect operating expenses will likely remain generally consistent with quarter 1 throughout the duration of the year, with the potential for an increase in the fourth quarter following the PROTECT top line readout and a restart of our launch preparation activities. By shifting our launch activities, we anticipate a significant cost avoidance compared to our previous forecast for 2021 and potentially additional cost deferrals in 2022. Importantly, our financial position remains strong. As of March 31, we had more than $520 million on the balance sheet, and we will continue to be disciplined in our spend. We anticipate being able to manage our balance sheet so that we can fund our current operations into 2023. Before opening the call for Q&A, I do want to thank some of our key stakeholders for their continued commitment to bringing sparsentan to people living with FSGS and IgA nephropathy. I'd like to thank the patients, families, caregivers and our investigators and site staff that continue to work very hard to advance our DUPLEX and PROTECT Studies. Their continued participation and dedication to these ongoing studies is critical to being successful in ultimately delivering sparsentan. I'd also like to recognize our employees who focus on bringing sparsentan to patients is unwavering. An incredible amount of momentum has been built by working on the NDA and CMA submissions for FSGS, and we will leverage that to go as quickly as possible in IgA nephropathy and once we have additional direction on FSGS. Lastly, I would also like to thank our many dedicated shareholders. We are at the forefront of bringing the first innovation in decades to these rare renal communities. And at times, this comes with obstacles that we must overcome. Today's news is no doubt disappointing, but it does not deter us or change our confidence in being able to deliver on our goal of making sparsentan a new treatment standard for both FSGS and IgA nephropathy. Your continued support is invaluable to us, and it will ultimately play a key role in making a difference in these patients' lives. Let me now turn the call over to Chris for Q&A. Chris?

Thanks, Eric. Liz, can we go ahead and open up the line for questions, please?

[Operator Instructions] Our first question comes from Joseph Schwartz with SVB Leerink.

I was wondering if you can talk about what might account for the change in receptivity at the FDA between now and when you established the plan for accelerated approval years ago? Was the hemodynamic reduction in eGFR larger or more protracted than expected? Do you have a good understanding of the eGFR profile that the FDA wants to see ultimately in order to grant accelerated approval?

Joe, thanks for the question. I would say with regard to FPRE and proteinuria, the approach that FDA has taken hasn't changed in that we still see and they view proteinuria as a valid surrogate for FSGS and for IgA nephropathy. And FDA has been consistent in supporting this approach. I think what is important is to recognize that this is a novel surrogate endpoint. And I think we've tried to communicate that it's not just the achievement of FPRE, but it's also in how this is going to predict eGFR over the long term. We believe that we've demonstrated a clear difference that is statistically significant, clinically meaningful on FPRE. And we believe that, that is going to predict a longer-term treatment difference on eGFR. What we've seen now and having the discussions with the actual data with FDA is that they want to see a data set that is more mature and even more predictive of that endpoint at the end of the study. And that's what we'll be working with them over the next couple of months to align on. But they were not ever giving us a very specific standard or threshold for FPRE or eGFR that we would need to show at this interim. It's really in the totality of data and again, what would give them confidence in that 2-year endpoint. I'll hand it over to Bill to see if there's anything else that he'd like to add.

No, I think you've summed it up well. Nothing to add.

Okay. So how did the first half of '22 come about as a proposal? What quantum of data do you expect to have then on eGFR? And what is the trigger you envisioned, when you will look at that and provide it to the FDA?

Sure. Bill, why don't you take that one?

Sure. Sure. Thanks, Joe. The first half of '22 is a proposal, and it's not been accepted by the FDA yet. So that's work-in-progress. We're in discussion with that. The reason we see that as an appropriate time point for a next look in the data from the study from the DUPLEX study is that there's a point in a time when we look at the enrollment curves where we really have a substantial amount of patients through 1 year of data and a larger percentage that have -- well, a larger percentage now, but smaller percentage than at the 1-year point that have completed the 2-year data. It's a point in the curve where there's a critical mass of information. And it makes the most sense if we're going to take another look at the data. We want to make sure that we do it at a time point where we have stronger predictive expectations, but also ability to do it as soon as we can.

Our next question comes from Tim Lugo with William Blair.

It's obviously a disappointment to many of the stakeholders. But can you comment at all what the FDA might have included in their minutes around safety? And also, if you take this look in 2022, what kind of statistical penalties you'll need to take in the trial to make that look?

Bill, why don't you take this one?

Certainly. The discussions that we had in the pre-NDA meeting were really focused on prediction of the 2-year endpoint. There was not significant discussion around safety that was not seen as an issue. And as we've reported, the safety thus far from DUPLEX looks comparable to the comparator arm. Your question around the statistical penalty is an interesting one, and it's part of our discussion going forward in a future Type A meeting. In this case, we're looking at data, but not using it to make decisions about the study, but using it to permit the agency to have a different level of confidence. So the need for an alpha spend is an open question there, and you can make a case. We believe that it may not be required. We're going to need to see as those discussions progress with the agency.

Okay. Fair enough. And can you -- around EMA, I guess, what's kind of a regulatory precedence where there isn't kind of incrementally more concern around filing for an accelerated approval there?

Well, I think that certainly, there are different processes, and they have conditional marketing approval, which is -- has subtle differences from the third party's accelerated approval from the FDA. Because those -- their rules are different. They may have a different perspective on the data. So we're in the process of having those discussions now, and we'll update when we have more information.

Our next question comes from Carter Gould with Barclays.

All right. Eric, in terms of the messaging around IgAN, pretty strong messaging from you that you don't see an impact there. Can you expand upon some of the -- your level of confidence on that front and if you could provide some color in terms of like what percentage of patients you would expect to be through 1 year? And then just to be clear, as you think then about the sequencing of these potential filings, I guess now, it sounded like you're positioning at least like IgAN could come first now. I just want to make sure I'm characterizing that correctly.

Thanks, Carter, for the questions. And first, to start on sequencing. Yes, you are correct that assuming positive data from the interim readout next quarter, our plans and the time line would be such that IgAN would be submitted first and assuming, again, success that we would be first to market with that indication. Now with regard to the confidence in the program, and I would say that there's a very cautious read-through. We would not read through with this program on how FDA may look at this. Again, we've not discussed the IgAN program and the interim beyond the design of the trial. But when we look at the data and we look at the maturity of the data that we will have at the interim, there will be more patients that have longer-term data. About double the patients will be at 1 year or more in PROTECT compared to DUPLEX at the time of the interim. That is a substantial amount of data to be able to analyze a longer-term endpoints such as eGFR. So we believe that, that's a very important aspect of how we thought about the differences between PROTECT and DUPLEX. But also, as Bill mentioned, why we've looked at the first half of next year as a right point of looking at additional data or providing additional data on eGFR to the FDA.

Our next question comes from Do Kim with BMO Capital Markets.

It seems that you suggest -- or you suggest that the FDA pushback was around the initial reduction in eGFR caused by sparsentan's mechanism. Could you confirm that the irbesartan arm also saw the same effect on eGFR? And if you could let us know if there was a rebound in eGFR in the early enrolled patients.

Do, thanks for your questions. So we'll talk about it in what we understand from the mechanisms. We do understand that both sparsentan as well as ACEs and ARBs as well as other classes that have an acute effect, they do see a stabilization or a reband longer term. I'm not going to be in a position to talk about specific eGFR data from DUPLEX. Again, we want to be very, very careful about not disclosing or unblinding any data there. But I can point you to the broader literature that suggests that this is a known effect within broader classes that have a hemodynamic effect such as ACEs and ARBs.

Okay. And do you think you'll be able to provide an update on the data before potentially refiling with the FDA in the first half of '22?

Well, I think the plan that Bill and team have laid out and what was requested from FDA is that we have a formal meeting soon to be able to align on if we were to provide additional data, what would that look like and when? And that's really the next step for us before we provide further details on timing of submission for accelerated approval. So I would say there certainly would be an additional -- assuming that we align with FDA, that there would be an update. But it would be -- we need to go through and align with them before we provide any further detail or guidance on what that might be or the time line implications. What I will point to you is the time lines of meeting with FDA that we will be looking to do later this year. And as we mentioned, we believe that the right time line for another evaluation of the eGFR data would be the first half of next year. The rest of it will certainly commit to providing you updates once we know more.

Our next question comes from Liisa Bayko with Evercore ISI.

I just wanted to understand a little bit more what exactly FDA is looking for in the eGFR data. So I mean, you have data now, right? It's not mature enough. I mean what does that mean? Do they want to see it return to baseline? Do they want to see it trending upwards? I mean what is the -- what are they looking for in that data to feel comfortable looking at proteinuria? They're obviously not comfortable with what they have right now. So what is it that some -- that kind of more mature data would provide?

Sure. So Liisa, thanks for the question. I'd say, first, if we take a step back, this is a potentially precedent-setting trial for this space. And we believe the FDA is taking the steps to really understand the data and what would be highly predictive of the confirmatory endpoint. And in these discussions, FDA has not given us specific treatment effect that they want to see or a specific trend that they want to see. But that they want to have the data continue to mature so that they'll be able to have a substantive update and that it would be predictive of the 2-year endpoint. That's really what they've provided for us. And I'll ask Bill to provide any further information that I might have missed.

I think you've given a good summary. I think it's really the predictive nature in this type of setting with a surrogate, a novel surrogate going to the -- predicting the 2-year endpoint. And they're also, I think, cognizant of other studies in this space, and precedent is important to them. They want to make sure they're right.

Yes. And again, Liisa, I'll just point out that from our perspective, the data were very heavily weighted to earlier study visits. And based on our understanding of the data and sparsentan's profile and DUET, we believe that the data that we have at the interim are predictive. But we also understand from FDA that they want to see more, and they want to see the data mature further in order for them to be confident that it would be predictive.

Okay. And did they give you some indication that sort of a critical mass at the 1-year time point would constitute sufficient data? Like, what gives you, I guess, confidence that data coming in the first half of the year would meet the criteria they have?

So that's based on our projection of study visits and how long patients will have a follow-up beyond 1 year and beyond. So it's really us coming back to them with that proposal of what is going to be a more mature data set for them to evaluate.

Okay. And then just to clarify, so you think the timing -- you think you'd have this data in the first half of 2022. And would you meet with FDA again to discuss a filing with that data? And if they say yes, then you go ahead and file, so like a filing will come later in 2022? Or when -- if things go according to your sort of tentative plan here, when would you actually be able to submit?

Yes. Great question. I would say, first, a lot of the NDA has already been drafted, and we will be ready well before that to submit, of course, notwithstanding any additional data that they would want to see. I think it's a reasonable expectation that they would want to meet with us before we submit to make sure that we're fully aligned on the data that we would have and that it meets their expectations. But we would be in a position to submit very quickly after gaining that alignment with any new data.

Our next question comes from Michelle Gilson with Canaccord Genuity.

I just wanted to clarify, I guess the FDA -- that the FDA isn't concerned that the data is predictive of the study failing the confirmatory to your endpoint, that, that's not their concern. They just want, I guess, more clarity and additional data to confirm the benefit that you're seeing.

That's right, Michelle. It's really confident that the data would be predictive of the 2-year treatment effect.

Okay. And then just in terms of what you're looking at for PROTECT, you're looking -- you're going to be looking at the eGFR data for all 380 patients in that study, not just the 280 that are included in the interim proteinuria analysis.

That's right. So the interim analysis is based on the 280th patient achieving their 36-week visit, and all data at that time will be included. So you would have more than 280 patients, but at fewer study visits. But because 280 is a greater proportion of the overall sample size, it is -- and also because of the more linear enrollment trends, we believe that will confer a much more mature data set than what we saw at the DUPLEX interim.

Okay. And in terms of IgA nephropathy, there's a better established link between proteinuria and eGFR. Is there -- do you think that, that will play a role in terms of the viability of the PROTECT data or based on your interim analysis? And I guess I'm wondering if the FPRE endpoint itself and its, I guess, validity in terms of predicting eGFR preservation is a key concern and if that could be, I guess, ameliorated in terms of the IgA nephropathy study just based on, I guess, the robustness?

Yes. I think, Michelle, what I -- how I would characterize it is that the link between proteinuria and longer-term eGFR is strong in both diseases, including the FPRE, given how strict that measure is for proteinuria reductions. The literature behind IgAN is even stronger, given that there are a number of clinical trials that have been conducted to support that analysis. And in our discussions with regulators over the years, there is a recognition of that literature and the link with proteinuria for both conditions. So I would say that it's even stronger in IgAN, which, again, gives us confidence that accelerated approval is a clear path for PROTECT, assuming we see positive data next quarter.

Our next question comes from Maury Raycroft with Jefferies.

So for the Type A meeting expected to occur in 3Q '21, can you clarify if you will have the ability to discuss a more recent cut of data, either in a blinded or unblinded manner? I guess is there anything new that you're taking to that Type A meeting that you can specify?

So Maury, there is no other planned analysis or cut of the data beyond what we had at 36 weeks. And so we would not be in a position to unblind the study further for the Type A and certainly without having full alignment with the agency. So really, we're looking at the Type A meeting is really the opportunity for us to align on any additional data that they would want to see beyond that point.

Got it. So basically, it's going to be you guys showing them your projections and hoping to align on potentially first half of 2022.

That's right. And really, it's about showing them the -- how the data will mature to ensure that at that point in the first half of next year, that they would have sufficient data to have confidence that eGFR will be predictive of the 2 years. That's really what we're looking to align at this next meeting.

[Operator Instructions] Our next question comes from Laura Chico with Wedbush.

I guess I just wanted to follow up on the conversation regarding FPRE and FSGS and IgAN. Eric, I think you made some comments that there's clearly, I think, a more well-entrenched story around proteinuria and IgAN, maybe a little less so in FSGS. I guess I'm still a little confused on what gives you confidence that EMA would not have similar concerns around the FPRE endpoint. And then one other clarification on communication strategy. It would seem like there would be some benefit to helping educate the community a little bit more about FPRE as a surrogate marker. So I guess I'm kind of curious if there is any consideration for changing the communication strategy in terms of maybe presenting some of the detailed DUPLEX data?

Thanks, Laura. Great questions. Let me make sure that I characterize FPRE clearly. The literature and our assessment as well as independent assessments of proteinuria and FSGS very clearly show that there is a link between proteinuria reduction and eGFR, including complete remission and FPRE. And we believe that, that's well understood by regulators, including the EMA. And that's certainly recognized by some of the top nephrologists. So I would say that there's not a weak link. It is clearly there, and it is robust in demonstrating that proteinuria reductions in FSGS will predict eGFR. Really, what does it say here is, are the data mature enough on eGFR to give FDA confidence that it is predictive. And so that's what I would suggest. With regard to communications, I think it's a very good point and certainly is a critical part of our launch strategy in supporting the education of nephrologists for them to understand the importance of FPRE. We believe that based on our work with nephrologists that they understand the importance of proteinuria. Many of them look at just reducing proteinuria as much as they can. But now with the established literature and with the first Phase III program to actually evaluate FPRE in a clinical trial setting, there is an opportunity for us to educate, and that's very much part of our work from here on out.

Our next question comes from Greg Harrison with Bank of America.

Just one follow-up on IgAN. Have you discussed the filing requirements recently with the FDA? And if so, what was the agreement there? And understanding that the data package in IgAN will be more mature than it was with FSGS, how confident are you that the FDA will be supportive of filing on that data for IgAN?

Greg, thanks for the question. Bill, why don't you take this one?

Certainly. It's been sometime since we've had the discussion with the agency on IgA nephropathy. At our last discussions there, we aligned on the overall strategy and the plan. They are consistent with what we've done with DUPLEX in that there's a proteinuria endpoint. It's a change in proteinuria at 36 weeks and how that relates to a change in eGFR or protection of eGFR at 2 years. So that's been established and is a consistent endpoint for us. I don't see that as an issue.

We're showing no further questions in queue at this time. I'd like to turn the call back to Chris Cline for closing remarks.

Great. Thank you, again, everybody, for joining us on short notice. This concludes our call. We look forward to providing you updates throughout the balance of the year and continuing our open dialogue on these programs. Thank you, and have a good night.

This concludes today's conference call. Thank you for participating. You may now disconnect.