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

Good day, and welcome to the Travere Therapeutics Corporate Update Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Chief Financial Officer, Chris Cline. Please go ahead, sir. Thank you.

Great. Thank you, Cynthia. Good afternoon, and thank you all for joining us on short notice today. We'll be covering a regulatory update for sparsentan in IgA nephropathy. A copy of the press release announcing the update is available on our website. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube; and our Chief Medical Officer, Dr. Jula Inrig; our Senior Vice President of Research and Development, Dr. Bill Rote, will also 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 of the Form 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, October 13, 2022, and Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. Let me now turn the call over to Eric. Eric?

Thank you, Chris, and good afternoon, everyone. Earlier this year, our New Drug Application, or NDA, for accelerated approval of sparsentan in IgA nephropathy was accepted for priority review and granted a PDUFA target action date of November 17, 2022. This update is meant to provide insight into the late-cycle review interactions that were recently completed as part of the NDA process. As you might expect, given where we are in the review process, the details that we'll be able to provide today is going to be somewhat limited because the dialogue with FDA is ongoing, but we will do our best to give you the latest insight into the process and how we plan to move forward. I would like to first highlight that we are continuing to make good progress with the NDA review and have received a draft label. As part of the late-cycle review interactions, however, the FDA requested that we update our proposed risk evaluation mitigation strategy or REMS, to include liver monitoring for sparsentan, consistent with some of the other products in the endothelin receptor antagonist class. We have planned for REMS to monitor the risk of teratogenicity as this is universal across endothelin receptor antagonist, but the requirements for liver monitoring among endothelin receptor antagonist vary and our safety profile has been consistent in not showing liver injury to date. Bill will go into a bit more detail on this shortly. While this request for a broader REMS came unexpectedly, and we now anticipate a 3-month extension of our PDUFA date, our confidence in the potential for sparsentan to be approved and to become a new treatment standard for people living with IgA nephropathy remains high. Most importantly, the strong data supporting the clinical profile of sparsentan is unchanged and the significant need for effective non-immunosuppressive treatment remains. Let me now turn the call over to Jula for a bit more detail on the interactions. Jula?

Thank you, Eric, and good afternoon, everyone. I'll add as much context as I can within the bounds of not being able to share specific data from the ongoing blinded studies of sparsentan. Building on what Eric mentioned, based upon a few cases of asymptomatic ALT, AST elevations in the program's history, the agency has determined that drug-induced liver injury is a potential risk for sparsentan. The agency has acknowledged that there have been no cases of sparsentan related liver injury in the clinical program. However, the FDA indicated that because serious drug-induced liver injury has been seen with other members of the ERA class and sparsentan's database is currently limited to what is available via the accelerated approval pathway for REMS to monitor liver function is warranted. The FDA has also noted in our interactions that there's added caution given this is the first time nephrologists would be using this class of medicines. Our studies include more than 1,200 participants who've received sparsentan, including some who've been on therapy for nearly 7 years. As is common in most studies, abnormal liver tests are an adverse event of interest, and these are monitored closely by us and our data safety monitoring committee. We've been regularly assessing this in our studies. Importantly, to date, in our sparsentan program, we have not seen elevations in bilirubin. There have been no reported clinical diagnoses of sparsentan-related liver injury. And in a few cases with asymptomatic AST/ALT elevation, there's been no evidence of abnormal liver function. We have not experienced any cases of [indiscernible], and there's no evidence suggesting a dose-related effect of AST/ALT elevation with the higher dosing levels in the DUET and DUPLEX studies in FSGS. Importantly, our adverse events with interest related to ALT/AST elevations in both our Phase III studies, spanning nearly 800 participants at the time of the data analysis were comparable between sparsentan and irbesartan. As a result, we believe that the profile of sparsentan remains well suited to address the unmet need for people living with IgA nephropathy. And notably, the agency also indicated that they'd be open to modifying the REMS if occurring data from the program support doing so. We hear now more than ever that physicians need new non-immunosuppressive treatment for their patients who continue to have significant proteinuria and progressive loss of kidney function while living with IgA nephropathy. And sparsentan is the only non-immunosuppressive molecule to date to demonstrate a nearly 50% reduction in proteinuria with a consistent safety profile in a well-consulted pivotal study. We continue to expect nephrologists to ultimately utilize sparsentan pertinent as a new treatment standard for their patients with IgA nephropathy, if approved. Our teams are working diligently on the updated REMS, and we expect to submit that to the FDA in the coming days. As Eric highlighted, the FDA has communicated to us that procedurally, the updated REMS submission is likely to result in a major amendment to the NDA, and that we should, therefore, expect a 3-month extension for their review. We estimate that the new PDUFA target actual date will be on or around February 17, 2023. We anticipate receiving confirmation of this date after we submit the updated REMS and it's been reviewed by the agency. Finally, I will highlight that there have been no request for additional clinical data or studies as part of the application review process, and this update to the PDUFA timing is solely related to the modification to the REMS requirement. We will continue working collaboratively with the FDA on the updated REMS and in parallel on the draft label that we [ received ]. Let me now hand the call back over to Eric for his closing comments. Eric?

Thank you, Jula. While this unexpected extension of 3 months is disappointing, especially for the IgA nephropathy community, it ultimately does not change the strength of the clinical data that supports sparsentan or our ambition to deliver a new treatment standard to patients facing a progression of IgA nephropathy with no currently approved non-immunosuppressive treatments available. We remain steadfast in our confidence in sparsentan. We know the path in rare disease is rarely straightforward, and we are well positioned to absorb this extension. Our financial foundation remains strong. We plan to report our third quarter earnings at the end of the month but we currently expect to continue managing the balance sheet that there is no change in our previously guided cash runway into 2024, and I am proud of the progress our organization has made over the course of the year to be well positioned for the originally planned launch next month. We have an experienced and talented team that will utilize the extra time to be even more prepared for the expected successful launch of sparsentan in the beginning of next year. Now let me turn the call over to Chris for Q&A. Chris?

Thanks, Eric. Cynthia, can we go ahead and open up the lines for Q&A, please?

[Operator Instructions] We will take our first question from Carter Gould from Barclays.

Great. I guess for Eric and Jula, I know you probably don't want to comment on specifics of what the REMS may include, but I guess just looking at some of the other products, monthly liver monitoring doesn't seem like too big of a leap. Can you just talk about how that monitoring may disrupt, I guess, how these patients are cared for today? What additional aspect might be for patients in the current kind of regular interactions with their nephrologists? Any insight on that front would be helpful.

Yes, Carter, thank you for the question. I'll provide some overview, and then I'll ask Jula to provide anything further. I think it's important first to point out that the discussions about the REMS elements are continuing. And so we're in the midst of that. So we wouldn't be in a position to be able to describe specifically what our REMS will look like. I think we'll be able to provide that upon approval. What I can say is that the team has done a really thorough job to assess what are the elements of other REMS, both within the class of endothelin receptor antagonist as well as others within the rare renal or similar disease areas. And there is variability, and I'll ask Jula to speak a little bit about that. Fundamentally, one of the things that we see is that it hasn't impeded the demand in many ways for an effective therapy, particularly where there's a high unmet need. And so we believe and it further reinforces our confidence through some of these analogs that we can have a successful launch with sparsentan. And I think there are going to be key elements that we need to think about in the design and implementation of this that are going to be very seamless for both the patients as well as their clinicians. Jula, do you want to add anything further?

Yes. There are different elements to the REMS that we are negotiating, as Eric mentioned. And there's different frequency in which you might monitor patients. I will add the way in which we monitor within our clinical trials consistent with clinical practice, which is every 3 months. And there's different precedents for how you monitor in other REMS. And there's some successful uptake of other molecules within the rare kidney disease space, which has more frequent monitoring. We've seen that within rare kidney disease settings. And we do believe that there are such an unmet need for these patients that it shouldn't indeed uptake. We've seen such a great magnitude of proteinuria reduction. There's such a high unmet need, and we believe that with implementation of REMS and the frequency of monitoring, we believe that there's still going to be a significant need for therapy.

We will take the next question from the line of Joseph Schwartz with from SVB Securities.

I was wondering if you can share any thoughts on how your REMS might work at an operational level in terms of the systems and processes that are required in order to -- for this to function and determine whether patients are able to be dispensed medication. Do you know how to set up the systems and processes or how you might do that, and -- just to perform all these operations? And does the 3-month PDUFA delay give you enough time to do so for that way when sparsentan is launched, hopefully, patients, physicians and pharmacies have a seamless experience?

Yes. Let me add 2 things and then I'll ask Jula to provide her perspective because her team has been working, as you can imagine, on a lot of these details. The first is that we've been planning to implement to REMS as we know all aspects or all medicines approved in the endothelin receptor class of having REMS for teratogenicity. So this is something that we've been planning from day 1. Those elements, those vendors, those processes are already in place. This is simply an addition to it. We need to make sure, and Jula can speak to what that might mean from a nephrologist perspective and from a liver monitoring perspective. But the thing that I would also add is that is going to require some additional education for our field-based team once approved. We do recognize that, that's going to lead to a more gradual uptake in many practices as they become familiar with this. But again, we do have the benefit of learning from others that have REMS, particularly within rare renal to know what works and what feedback nephrologists would have that they like or would see improvements upon. Jula, do you want to add further?

Well, I'll just echo what Eric said. We have the benefit that we've known that we're going to have a teratogenicity monitoring REMS and have been doing that education to make it as simple as possible with regards to educating the physicians for their initial sign-up and then working with the pharmacist for the continued monitoring and to make it as simple as the process as we possibly can. So we have that added benefit. And so adding this, it's just an additional monitoring aspect of it. And we're learning as much can from others who have gone before us to make sure that we don't add additional burdens to the physicians and their providers and to patients with regards to making sure we have the systems in place for education and monitoring without adding additional burden.

We will take the next question from the line of Greg Harrison from Bank of America.

Are you able to give any maybe broader comments on the draft label without going into specifics? Just is it in line with what your expectations or hopes would have been going into the review process?

So Greg, thanks for the question. I would say it's going to be challenging for us to comment on any specifics of the label given that its draft, and we still are in discussions with FDA. Certainly, we'll be in a position to provide all of that upon approval. I think what we can do is maybe have Bill share a little bit about some of the insights we've gleaned from the agency through the late-cycle meeting and how they're thinking about labeling approval. And I think, again, I'll reiterate that we were very pleased to receive a draft label on schedule from the FDA. Bill?

Yes, certainly. And again, without going into specifics, we've been encouraged by the energy and the collaboration on the other side of the table, the engagement and the dialogue. I think that I can share that the agency's perspective keeps in mind and keeps in focus that this has accelerated approval and that it's a partial data set on which they are facing their decision-making. And I think that shapes some of their stance in this space, and I think the REMS may be part of that as well. But happy with the progress, happy with the interaction and the pace on the other side and the continued collaboration from the agency.

And there have been no surprises, I think, fundamentally. I think what we're sharing with you today are just the aspect that really does have a material impact on timing.

We will take the next question from the line of Liisa Bayko from Evercore ISI.

This is just a topic, but sparsentan. Can you maybe talk about where you are with kind of the hiring of sales force and kind of like the commercial ramp? And like how much spend can we push out given this delay. So just curious kind of where you are with that?

Yes, Liisa, thank you for the question. So what I can characterize is that our plans to be ready for an approval on November 17, we're absolutely on track. And that meant the hiring of our field force team to be ready. They are ready, they are trained. And I think what we want to do is make sure that we use this additional 3 months to further prepare them. They are very experienced, most of them have rare and nephrology experience. So it's about continuing to build their expertise and their relationships. With regard to spend that could be pushed out, I'll ask Chris to share that, but that certainly is an exercise that we're looking at for variable spend that you would imagine would be associated with the launch.

Yes, happy to do that, Eric, and thanks for the question, Liisa. I would say it's a little early for me to go into any kind of specifics on that. There will be, of course, some variable spend that just goes with the timing of launch and investment and certain activities that go along with that, that will be shut out a few months. And we'll likely be able to go into a bit more detail on that when we report our third quarter earnings later on this month. So happy to go into more detail then.

Okay. And then what about inspections or anything on those lines? Have you -- are you done with most of the manufacturing facilities with the CMC inspections? Does any -- something come up here that...

Sorry, Liisa. Bill, would you like to take that?

Sure. Without getting into specifics, we have had some of our inspections that are complete and behind us. I don't think I'm in a position where I can characterize what remains or what the outcome of those are that would be inappropriate at this stage of the game, but that process continues.

We will take the next question from the line of Maury Raycroft from Jefferies.

Just wondering if you can clarify if there were any liver monitoring data in your prior REMS submission. And are you providing more specifics on proportion of patients with liver enzyme elevations in PROTECT? And what do you have to show in the confirmatory data to get the REMS removed?

So I'll ask Jula to take those. So the -- I think the question, Maury, if I'm understanding it correctly, is what did we put in our draft label with regard to liver monitoring. What were the rates in PROTECT and anything else that we have shared or can share with regard to liver safety. Is that correct?

That's correct.

So Maury, when we looked on our data and our initial data submission, and as I said, we looked at adverse events of interest, their AST/ALT elevation. We plan perfectly due to the known class effect. And as you know, most therapies you want to plan that so you can have a comparison. We saw similar rates across sparsentan, irbesartan. And so we did not have this in our label that we submitted to the FDA because we didn't see it as a concern. When they came back to us. They recommended this could be additive as a potential risk due to the class effect and then raise this as an issue at the late-cycle meeting with regards to the level of monitoring being a consideration to have in the REMS. and that is when the first time that this has got to that level of monitoring to avoid potential risk and how we can manage it that way. With regards to rates, I can't give you the numbers, but as you can imagine, the low numbers that we saw and the similarity, we didn't raise it as a concern that we felt like needed to be monitored at the level and rigor that would require to be a risk within our label.