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

My name is Greg Harrison. I'm one of the biotech analysts here at BofA. I also have Mary Kate Davis from the team here with me. It's my pleasure today to introduce Eric Dube, CEO of Travere Therapeutics. Eric, would you like to start off with some opening remarks and then we can get into Q&A?

Sure. Well, first of all, thank you for hosting us today. And I would encourage all of you to take a look at our investor deck on our website for forward-looking statements. What I can say is, we're in a very exciting time of growth for Travere Therapeutics as we look to bring our lead pipeline asset sparsentan to market, as well as to advance an earlier-stage clinical asset. We're a company that's based in San Diego and exclusively focused on rare disease with a particular focus on rare kidney, liver and metabolic disease.

Great. Maybe we can start off with sparsentan? You've filed for approval in IgAN. And could you walk us maybe through the scenarios for the ultimate approval there and the upcoming acceptance that you expect here in the coming weeks?

Sure. Well, we filed our NDA for accelerated approval in March. And so, we do expect to receive an approval or an acceptance of that file later this month. Our base assumption is that, that will be accepted for priority review, in which case, we would expect a PDUFA date in the fourth quarter of this year. That said, we may be given, as you mentioned, scenarios, a standard review, in which case we would expect an approval in the first quarter of next year. We certainly are planning for the earliest possible date as we prepare for expansion of our commercial organization for the earliest possible date this year.

Great. Yes, that leads into the next question, which is, your plans for the commercial launch of sparsentan. Where are you at with that process? And what needs...

Well, I think we're in a great position because we already have an established commercial infrastructure and half of that business is focused on rare nephrology already. So we do have an established infrastructure, both a field-based commercial and medical team, as well as the patient services hub. And so, really, our efforts this year are threefold. The first is, to expand the size of our footprint to ensure that we're ready. And we're looking to expand our current footprint of covering about 2,000 nephrologists in the U.S. to between 6,000 and 7,000 that we believe will cover most of where these patients are being treated. The second aspect is really preparing for a strong commercial access and reimbursement. And what's important there is to keep in mind that our goal with sparsentan is to make it the new standard of care within IgA nephropathy. And in order to do so, we need to make sure that we have broad access within the indication. And so, a lot of our efforts this year to make sure we understand and help educate payers on IgA nephropathy. And we've been very pleased so far with the feedback we've been receiving from payers as they understand the burden of illness for IgAN, they understand the mechanism of action and the profile clinically of sparsentan. And I think they are encouraged by the approach that we're taking. And then the third aspect of our launch preparation this year is really to prepare for the education of the nephrology community. This is a community that typically is more conservative in nature and very focused on the scientific basis of a treatment. It's also a specialty that really hasn't had much innovation over the last few years. So we know that we've got to do quite a bit to prepare for that launch and educating the nephrology community from...

Great. Now, how are you looking at this initial market in IgAN relative to some of the more very rare, ultra-rare indications that you're in currently?

Sure. Well, it certainly is a larger prevalence for a rare condition. So if we look at the estimated prevalence of IgA nephropathy in the U.S. is well over 100,000 patients. What we're doing and what we've done over the last year is to really understand what's the addressable population and what's the right approach for us to take in describing and reaching these patients? And if you look at some of the factors that we've taken to reach the addressable population, we're looking at patients that are -- that have a proteinuria level above 1. And that's very aligned with our Phase 3 clinical trial population. It's also a population that's at greatest risk for progression. We're looking at those patients that are not so far advanced in their disease that they're near dialysis. So we're looking at CKD stage 1 through 3. And then we're looking at those patients that are under the care of a nephrologist. And so, with that, it's allowed us to best estimate the addressable population, which is 30,000 to 50,000 in the U.S. It's also allowed us to understand how many of the nephrologists do we need to reach, how do we describe these patients? And I think all of the work that we've done thus far, including understanding how frequently these patients are seen by their nephrologists gives us a great view of how we prepare for the size of an organization, how we deploy them, but also how we are best describing the type of patient that would benefit from sparsentan. And I think all of that, we will certainly be ready at launch.

Great. That's helpful. Now, when it comes to reaching out to these physicians, what's your strategy there for both choosing the correct ones that are most likely use sparsentan? Maybe what education is necessary to get them over, maybe some of that conservatism you mentioned? Just how are you thinking about that?

Yes. Well, I think if we take the universe of nephrologists in the U.S., what we've done is, we look at how many of them are seeing patients with IgA nephropathy. We're also looking one step ahead for our next indication in FSGS. And I think what we've been pleased to see is that, there's a large overlap in nephrologists that treat both of these. One aspect that's really unique for these rare diseases is that, most of these patients are under the care of community specialists. They're not being referred to tertiary care specialists like many rare diseases. And so, our approach is to make sure that we do have that broad reach, and we're leveraging one of the strengths that we have already in commercializing within nephrology. The other aspect that we want to do is to make sure that we are educating them and educating them on the mechanism of action. The market research that we have thus far, particularly for those community nephrologists is that, they already understand the mechanism of action of sparsentan because they are 2 known mechanisms of angiotensin blockade and endothelin blockade. So, we believe that there still is education to be done, but we certainly have a strong platform to do so. The other thing that we're focused on or will focus on in our efforts once we are approved is to describe the role that proteinuria plays in the longer-term disease process and why reducing proteinuria in IgA nephropathy is so important. And the good news there is also that most clinicians already use proteinuria as a mechanism for diagnosing these patients, as well as for making treatment decisions. And so, it's going to be very important that we establish those 2 aspects. And I think we certainly are seeing very good progress and feedback so far.

Great. Maybe looking at another aspect of the launch, if approved, what are your expectations for the cadence of the initial uptake in IgAN? And maybe what are your expectations regarding reimbursement?

Sure. Well, I think I'll start with the end in mind and our goal really is to make sparsentan the new standard of care within these diseases. And if we look at IgAN specifically, the -- most of these patients and for those patients that are diagnosed and under the care of nephrologists, over 90% of them are already on an ACE or an ARB. And as I described in the addressable population, those patients are on an ACE or an ARB and yet still have high enough levels of proteinuria that there are significant risk of progressing to end-stage renal disease. And so, our goal is to make sure that we are replacing the role that ACEs and ARBs play currently by switching those patients to sparsentan. That is going to take quite a bit of effort to make sure that we educate, but we're confident that we will get there, but it will be a period of time to make sure given the conservative nature of nephrology. One of the aspects that's going to be critical, as you mentioned, is reimbursement. And so, our focus is to make sure that we have broad access. And our goal in doing so is, of course, to make sure that the experience for the nephrology office and for the patients is seamless. We know that a significant burden for prior offs can be a challenge, particularly for specialty that's not accustomed to a lot of innovative launches. Unlike, let's say, oncologists that are used to multiple launches a year, nephrologists have not been accustomed. So we're very focused on how do we have good reimbursement and support services for these patients. And we believe that based on some of the recent launches in this area, that we have a pretty broad range with which to kind of operate as we think about pricing later this year.

Great. And so, you mentioned that you'd want to make sparsentan maybe the standard of care for IgAN. And maybe just looking at the treatment landscape, is there a potential for maybe a combination in IgAN with sparsentan?

Yes. I mean, I think if we look at how these patients are treated currently, combination therapy is quite common. Most of these patients, I mentioned are already on the ACEs and ARBs. But for those patients that are more rapidly progressing or do have high proteinuria, many of these patients may be on a steroid, a course of steroids even though many nephrologists are reluctant to use steroids chronically for these patients. But we do believe and hear from nephrologists that there will be combination use as we move forward. This is a space that's really exciting. We're sort of on a cusp of an innovation coming into the IgA nephropathy field. And we're very fortunate to be on the front end of that, where we believe sparsentan will be launched. And the mechanisms of actions of the other assets that are in development, we believe are complementary to sparsentan. And so, for those patients that may need additional proteinuria reduction for most of those assets, we believe, could be used on top of sparsentan.

Great.

So how are we thinking about the -- or how should we be thinking about the EU opportunity and your collaboration with your partner in terms of both the market opportunity, as well as how to get the best launch in your partnership there?

Sure. Well, when we look at the prevalence of IgA nephropathy in Europe, it's even greater. It's about 50,000 to 75,000 patients that we believe are addressable currently. And so, we do see Europe as a very important market to be able to reach these patients. There are no other approved therapies there as well. And so, we believe the unmet need is high. We were looking for a partner that has an established infrastructure and expertise within nephrology. And we were very pleased to partner with Vifor that has relationships with over 80% of the nephrologist within Europe. They have deep expertise with payers, HTA bodies within Europe and also relationships with EMA. So we believe we found the ideal partner that's going to have a strong focus in making sparsentan the new foundational therapy within Europe. Now, we also will continue to collaborate with them as we prepare for that file in the middle of this year, and we're on track to do that.

Great. Maybe we'll move on to FSGS a little bit. Could you walk us through the time lines there as far as your approval? And how that preparation for that commercial launch kind of intersects with that of IgAN?

Sure. Well, with FSGS, we also had a positive Phase 3 data readout last year. It was the interim analysis for our ongoing study. And when we met with the FDA, they had requested an additional analysis of our eGFR data because the data at that point were not mature enough to give them confidence in the predictive value of eGFR, which is the confirmatory endpoint for our trial. And so, where we are today is that, we are on track to provide that additional cut of eGFR data to the FDA this quarter. And when we meet with them this quarter, we essentially will be requesting whether the data, in their view, has the predictive value to support their bar for accelerated approval. And we expect to provide that update publicly in the middle of this year. And our base assumption is that, we will have the ability to submit for Subpart H, in which case, we would look to file that NDA in the middle of this year.

Great. Now, I think you've said you will not likely disclose the eGFR data publicly at that time. But is there any sense of what you can give us of what would be supportive as far as eGFR 2-year application?

That -- so we -- you're correct, we will not be able to provide specifics on the eGFR data because it's an ongoing trial. And through our discussions with the FDA for both of our programs, they've been consistent and clear in saying that they want to ensure that we maintain the blind and the integrity of this trial because we are using the same trial for the Subpart H, as well as the confirmatory endpoint. And so, they said that they would encourage us not to disclose those data. That said, with regard to what they're looking for, they've not been specific in any specific trend or data point that they would be looking for. Essentially, what they're looking for is eGFR data that's going to be likely to predict that 2-year endpoint. And so, we'll hope to provide an update on their perspective once we've met with them later this quarter. And then our standard practice is to communicate that externally once we receive minutes.

Okay. What's your sense of demand within the community of FSGS patients and their physicians for a new treatment like sparsentan?

Well, I think if we start with some of the market research that we did last year, asking nephrologists what's some of the most difficult-to-treat patients are and where they see the highest unmet need. FSGS was the #1 disease followed by IgA nephropathy. So there is a high unmet need. There are no approved therapies for FSGS and there are very few clinical trials in this space. And so, I think there's a real eagerness to have options for these patients, but particularly to have a therapy like sparsentan, where we see a very robust reduction in proteinuria. That is the main efficacy measure that nephrologists look at for FSGS and IgA nephropathy, as well as the favorable tolerability profile where, for the interim analysis, we did see comparability between sparsentan and irbesartan and ARB at active control arm. So, we think that there's high demand. We also believe that there's going to be a need for education in FSGS because there has been very little activity there. But there is an awareness. We know that most nephrologists are aware of these diseases, that they see these patients in their practice. And that's quite unique when you think about rare disease where, for many other specialists, they don't see these patients on a regular basis.

Okay. Great. Now, is this -- would this be a similar market in your view with IgAN where you might be looking at certain subpopulations within? Or would you expect the sparsentan's mechanism be more likely to apply broadly across the spectrum of severity within FSGS?

Yes. So I think I'll answer it in 2 ways. One is, the mechanism of action for sparsentan is such that it has a common pathway for these glomerular diseases that are associated with proteinuria. If you think about proteinuria is a measure of injury within the kidney and specifically within the nephron, we do see that mechanistically the way that sparsentan works is, not only does it lower the pressure within the glomerulus, but it also helps to reduce the destruction of the podocyte, which is the main filtering cell within the glomerulus. It also helps to reduce the inflammation and scarring that occurs progressively in both of these diseases. And so, we do see and clinicians understand that sparsentan has a role to play and why it reduces proteinuria. So I think -- largely, we think that there will be broad utility for the labeled indication. That said, FSGS is a pretty broad and heterogeneous population. And so, our focus is very much on those patients with genetic and primary FSGS, and we will make sure that clinicians understand who those right patients are and that they should expect to see that proteinuria lowering across that population.

Understood. Now, how does that kind of translate into your expectations for a market uptake maybe relative to IgAN? Is there maybe any differences between the 2 and your expectations for how fast the launch could go? How fast patients will get on treatment? Or even the -- how well diagnosed they are?

Sure. Well -- so we've done quite a bit of work also in FSGS to understand the addressable population. And we believe that of the roughly 50,000 patients, there are about 15,000 to 30,000 that we believe are addressable and that is those patients are -- they have proteinuria levels that are above 1.5. They're under the care of a nephrologist with biopsy confirmed FSGS and that they're in CKD stages 1 through 3. And so, we believe that there will be -- that's the population that we're focused on. I think like IgA nephropathy, there is going to be a need for us to educate nephrologists on the mechanism of disease and why sparsentan is well suited for FSGS, our goal is to make sparsentan also the standard of care, the foundational therapy in FSGS, much like we are in IgA nephropathy. But I think the one aspect of FSGS that's different is that, it would be the follow-on indication. There should be some awareness of sparsentan because we will have launched for IG nephropathy as approved before. So there should be greater awareness and likely the access that we could benefit. So a halo effect on a second indication.

Okay. That makes sense. And then how should people be thinking about pricing? There's obviously -- you've demonstrated that patients benefit from the medication. But within the context of potentially combos and maybe patients are already on several drugs, how does that impact your decision on how to price sparsentan?

Sure. Well, I think our focus on pricing really is to support our vision of making sparsentan the new standard of care. In order for us to do that, there needs to be a broad utility within the labeled population. And so, we need to make sure that the access is sufficiently broad. So we are currently working with payers to make sure that we understand their perspective and also to help in educating them about the burden of illness of IgA nephropathy. And we are really pleased that IgA nephropathy is now really on the radar screen of many payers. They understand that these patients, particularly those that we're studying are at the greatest risk of progressing to end-stage renal disease, and they are rather costly to the healthcare system. And so, we want to make sure that we understand and can educate the payers on the burden of illness, but also what it means to reduce proteinuria. When we look at a reduction that we've seen, for example, in our PROTECT study in IgA nephropathy, that can translate to an over 11-year delay to dialysis and end-stage renal disease based on some modeling out of one of the experts, Dr. Barratt's Registry in the U.K. So we want to make sure that we're helping to describe the mechanism of action, the role of proteinuria and the pharmacoeconomic benefit. That all said, we want to be very responsible in how we price sparsentan. We recognize that, again, nephrology is a conservative field. We also recognize that there's likely to be a lot of innovation behind us, and there could be combination therapy. So we want to make sure that we're balancing the -- getting the value for the innovation that we're bringing, but also be very responsible and recognizing that we need to have broad access to ensure our vision.

Great. Let's move on to the pegtibatinase program. Maybe if you could give your thoughts on what led you to acquire this program? And where it fits in with your pipeline? And what you think the opportunity is there?

Sure. Well, again, we are very focused on rare kidney, liver and metabolic diseases. And based on some of the work that we did in other metabolic diseases, we did see that homocystinuria was an area of high unmet need. And this was a program that was owned by a private company. It was not by many radar screens. But we did understand the disease. We also were really excited about some of the preclinical and the early clinical data that the company was developing and really met our standard of being an area of high unmet need, a very clear mechanism of action. This is a pegylated enzyme replacement therapy. It really is meant to reduce homocystine -- total homocystine levels by replacing the defective CBS enzyme. CBS enzyme really is there to metabolize protein in our diet. And for these patients, they have a progressive accumulation of homocystine throughout their life that can lead to bone malformation, dislocation of your eye lens, thrombosis and cognitive defects. And so, we did see the unmet need. We also saw a very clear mechanistic rationale. I mean, it's a very straightforward enzyme replacement strategy. And again, as I mentioned, the clinical data was very exciting. So we were very pleased to report the positive proof-of-concept data in December of last year.

Great. Now, what would a pivotal trial in this indication look like? I'm just trying to get a sense of size, time lines, that sort of thing.

Sure. Well, I think it's a little bit early for me to describe specifics because we are in the process of engaging with regulators about the trial design, the exposure requirements, as well as endpoint. That said, we're in that process with FDA, and we're really pleased with the progress so far. Our hope is that, we would be able to use a biomarker like total homocystine levels as the primary endpoint. And certainly, we'll be using the data from our ongoing Phase 2 to help in powering that. But we'll certainly provide updates later this year as we move through and gain alignment with regulators.

Great. Now, let's maybe discuss the base business a little bit. You have several approved products. And some are starting to face some more generic competition. So how should we be thinking about the trend there and the potential durability of those franchisees?

Sure. Well, first, I have to say I'm really pleased with the execution of our commercial organization. We have 4 products in our commercial organization. And while they are older products, they're considered the standards of care within these rare and ultra-rare diseases. 2 of those products, Thiola and Thiola EC are used to treat cystinuria. And as you mentioned, we have a generic entrant of Thiola that entered the market about a year ago. We've had some impact to our revenues within our Thiola portfolio. That said, we've been able to maintain most of the revenues there. And so, it's been -- it's difficult for us to be able to predict what that -- what the revenues would be moving forward. And so, we've not provided specific guidance for our revenues this year. It's a transitional year as we move to the potential launch of sparsentan in the fourth quarter. And then the other 2 products are within our bile acid portfolio for ultra-rare conditions, and we continue to see revenue growth and are not aware of any potential generic or otherwise, competitors entering into that market. So we would expect to see continued growth. And our growth across that entire portfolio is purely based on our ability to find new patients. We've not taken a price increase across those in the last 7 years. And so, I think that really demonstrates our ability within the rare disease space to be able to find these rare and ultra-rare conditions. And I think that's essential for any rare disease company to do.

Great. Okay. One last question from us is, what are your plans as far as business development activity, in-licensing new products, maybe even life cycle management for sparsentan down the road? Are you seeing more attractive deals in the current environment? Or is this more the time to maybe conserve capital and just focus on execution of what you're doing now?

Well, I'd say, our #1 priority is to prepare for a successful launch of sparsentan in IgA nephropathy, which could come as early as the fourth quarter of this year. And so, we believe that we have the balance sheet to be able to do that. And we are continuing to look at the landscape, particularly within the rare nephrology space, where it's really an exciting kind of wave of science that's behind sparsentan. So we are continuing to look, but we are also going to be incredibly disciplined to make sure that there's an unmet need. There's a clear scientific rationale and that the value makes sense financially. There's a lot out there, but I'd say we're going to be very selective, and I think we've got a great team to be able to decipher what would make sense for us. And we also believe that we have an incredible amount of value as we think about the global clinical trial footprint and the infrastructure that we have for any asset that we bring in. But we're going to be very choiceful about what we decide to transact.

Great. Well, with that, I think our time is about up. So, Eric, I'd like to thank you for joining us today, and thank all of you for joining us as well.

Great. Thank you.

Thanks.

Great. Thank you.