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

Ladies and gentlemen, the program is about to begin. Reminder that you can submit questions at any time via the Ask Questions tab on the webcast page. At this time, it is my pleasure to turn the program over to your host, Greg Harrison.

Welcome to Bank of America's SMID Biotech Virtual Conference. I'm Greg Harrison, one of the biotech analysts here at BofA. And today, I'm happy to introduce Travere Therapeutics. We have Chris Cline, CFO; and Peter Heerma, Chief Commercial Officer, with us. Thanks for joining, everybody. And for those of you out there watching, if you'd like to send me questions, I'm happy to ask them on your behalf. Chris, if you'd like to start off with some opening remarks, then we can jump into Q&A.

Sure. Well, first off, thanks Greg and BofA for hosting us. It's great to be here. Peter and I will be making some forward-looking statements. So for full disclosures and risk factors, please visit our SEC filings. But as many of you know, at Travere Therapeutics, we are exclusively focused on delivering life-changing therapies to people living with rare disease. And we're coming to a very exciting period for the company led by the preparations for the first commercial launches from our pipeline, our promising pipeline of rare disease. And really the cornerstone of that is sparsentan, which is the first and only dual endothelin and angiotensin receptor antagonist being developed for 2 rare nephropathies, one being IgA nephropathy and the other being FSGS. And what we're preparing for right now is the PDUFA date for IgA nephropathy, and that's coming up in February 17. And Peter and his team will be able to go into a bit more detail about that. But we're very excited about the potential to position sparsentan as the -- really the standard of care for IgA nephropathy and FSGS in the future, and that work will begin in earnest come February. We're also looking at the potential of a European approval. That file is under review currently, and we expect a decision there in the second half for IgA nephropathy as well. And additionally, for FSGS, we're expecting first half of next year the full 2-year data from our ongoing Phase III DUPLEX study. And if those data progresses, we expect them to -- we anticipate submitting an sNDA in the second half of next year and having 2 indications approved for sparsentan in 2024. So a very exciting time for sparsentan. In addition to that, we also have our pegtibatinase program, which is a novel enzyme replacement therapy targeting classical homocystinuria, or HCU, and we're really excited about what we've seen from Phase I/II there and being able to progress that into Phase III next year. So a lot going on and looking forward to jumping in and talking about it, Greg.

Great. Yes, very exciting time for you guys with the PDUFA coming up. Maybe we could start off with that as you get into the launch and as that progresses, where would you see sparsentan ending up within the treatment landscape in IgAN?

Maybe I'll turn that one to Peter.

Yes, very happy to answer that question, Greg. So I think historically, you have basically seen no innovation in this field, especially in [ long barrier ] disease. And I think we are now entering a renaissance of new treatment options in this field. And I think sparsentan is early on in that renaissance. I think with -- like until today, patients are being treated with RAS inhibition, so generic ACE inhibitors or ARBs and then, if needed, with steroids on top of that. I think we are entering now with new modalities in the future that are in development, more an era of personalized medicine. And I think sparsentan fits very nicely in that upfront treatment paradigm. Because I think what physicians are describing to us what they need to see is a more efficacious upfront treatment, more efficacious than ACE inhibitors or ARBs without going to the steroids path, without having that nonimmunosuppressive profile. And so sparsentan fits nicely in that profile. It allows replacing ACE inhibitors and ARBs while, continuing the ARB inhibition, and then allow also other modalities if needed to be complementary to that. So I think as we move into the new era of new medicine, I think sparsentan is well positioned in the new treatment paradigm. And that's what we also see from our market research. I've been involved in many launches in the past. We see an intensity to treat with sparsentan of 90%. And 90% is the number that you don't often see. In particular, when you think about like the first 6 months of launch, 70% of the physicians indicated they would be prescribing in the first 6 months window. So I'm very excited about the opportunity we have with sparsentan, really establishing a new treatment standard, a new foundation that allows patients to hold that progression of disease.

Okay. That's helpful. Within the overall patient population, who do you think are the best candidates for treatment with sparsentan among all IgAN patients?

Yes. I think -- I mean, what we have disclosed earlier, the way we think about the market opportunity, that there is about 30,000 to 50,000 that we see as addressable upfront. I think, in particular, the prevalent patients that have consistent high proteinuria, higher than 1 grams per gram, I think is the patient population where physicians would like to prescribe sparsentan. That's a patient population that now has not responded well to ACE inhibitors or ARBs, or have not been able to go lower than that target. So that's a patient profile that is currently being treated with steroids for a shorter duration of time. That's where we see an initial uptake of sparsentan based on the feedback that we're getting from physicians.

Okay. Great. And then the launch is coming up within the next couple of months. Where do you stand with preparation for the launch as we get closer to the PDUFA?

Yes. Great question. And I think one of the points where Travere is a little bit distinguished versus other biotech companies is that we have an established commercial infrastructure. We have already 3 products on the market. So we built upon strength, and we don't have to start like building a whole new commercial organization from scratch. In particular, as we have been -- having Thiola with cystinuria, basically genetic kidney stones and the nephrologist already was a goal point for us. Over the past year, we have further established an organization. We have fully recruited with our field teams, both in medical affairs as well as commercial, and I mean that the broader commercial organization, not only the nephrology reps, but also the account management teams, et cetera. So fully recruited and trained. We would have been ready for a November '17 launch, and we will be even more ready come February 17.

Okay. Great. So for these IgAN patients, how often do they typically see their nephrologists? And how does that impact your expectations for the initial uptake?

Yes, that's a great question. I think overall, over half of the patients, over 50% of the patients, are being seen by the nephrology at a quarterly basis or even more often. When you talk about moderately progressing patients, they're often being seen at a quarterly base or 4 times a year. But more rapid progressing patient profile, they even may be seeing at a monthly base for sparsentan. So I think that also allows then -- you don't have to wait until the physician has to see the patient again. There is already a common touch point of the patient with the nephrology that, I think, will allow also a certain uptake for sparsentan.

Okay. And then sparsentan would not be used with an ACE or an ARB. So what does your market research tell you about how willing patients and physicians are to discontinue that to begin sparsentan therapy?

Yes, it is interesting. I mean in the past 30 years, like ACE inhibitors as well as ARBs, basically RAS inhibition has been the standard of care. So you may have expected like a certain reluctance to move to like a new treatment modality there. And so on this particular point, we did quite some research on barriers and drivers that may withhold prescribing sparsentan. I'm very pleased, actually, that physicians look at it at the opposite direction. They see like, hey, this is a product that can still inhibit the angiotensin pathway, but it adds another bad actor in the progression of disease being endothelin. And so that cross start between endothelin and angiotensin inhibiting both at the same time, physicians don't see an obstacle in changing the current treatment habit of ACE inhibitors and ARBs towards sparsentan. So based on the research, I'm actually very pleased with that output.

Okay. Great. And then how about with the dual mechanism, how are you thinking about the advantage there and -- relative to whether patients could take 2 separate drugs to get the same mechanism of action?

Yes. To my earlier point, I mean, as we are entering like a renaissance of new treatment modalities, and you look especially in IgA nephropathy, you have so many new mode of actions in different disease and development programs. I think we are moving towards more personalized medicine, where you may have multiple modalities being used to get patients to the target to halt the progression of disease. I think sparsentan, as I mentioned earlier, I think it's upfront in that disease -- in the treatment paradigm, you inhibit 2 pathways with one pill. I think that is really important because you -- what we often see is that RAS inhibition, even though it is recommended in the guidelines to go to the maximum-tolerated RAS inhibition, in daily practice, you often don't see that maximum-tolerated dose being utilized. And I think a good example of that is our PROTECT data, where patients were on maximum-tolerated RAS inhibition. But you even saw in the irbesartan arm, the control arm of us, that you saw a 15% additional reduction in proteinuria. So what it tells us is that even though physicians think that patients are on maximum-tolerated RAS inhibition, often they are not. And I think with sparsentan, you allow that maximum-tolerated RAS inhibition, but also -- in concert with that, also inhibiting the endothelin pathway. So I think you have more holistic solution in one pill that also allows them additional modalities if needed. So I think that is a very important aspect that sparsentan brings to world to bear.

Yes. Yes. Definitely, that makes sense. So maybe we can talk a little bit about the announcement that there will be a REMS program for sparsentan for liver monitoring. Given that that's not due to anything specifically seen with sparsentan in terms of AEs, what feedback are you guys getting from physicians, maybe patients, as far as their willingness to -- or how big of an obstacle REMS could be in getting patients on drug?

Yes. A couple of points I want to point you to. I think we did quite some market research before and after the announcement of the liver monitoring REMS. But we also have the opportunity to meet with a lot of physicians during ASN, which was a weeks after the announcement. And I think the feedback has been very consistent. Even though on the front you would prefer not to have that additional REMS program, the high unmet need and the little options that physicians have to treat those patients, the REMS program is certainly not an obstacle for physicians to treat those patients. And that's when we see also the intent to treat within the first 6 months was 70% prior to the announcement of the liver monitoring REMs, and remained 70% after that as well. Where you see a little bit a shift is that physicians may start to prescribe a little bit later or the process to have the first patient field may be a little bit later. I think there's 2 aspects there that we are really focused on. One is education, education of the physician upfront. So the physician knows what to do with how to certify himself or herself for the program. And then there is the operationalization to making sure that the patient has done the lab work prior to the first [ field -- the bar ]. So I think there may be a little bit of a shift later, but the intention to prescribe has not changed due to the liver monitoring program.

Yes. Okay. That's the general feedback we've gotten, too, in our conversations. Maybe we can move on to pricing. Obviously, I know you're limited in what you disclosed as far as what the price will be of sparsentan. But are there any analogs you can point to when you're thinking about the pricing strategy in IgAN? And how does the addition of FSGS down the road influence that decision process?

Yes. Very good. Well, as you mentioned, we haven't disclosed any pricing levels yet. When we think about pricing, we think about it holistically in the strategic context like not only for IgA nephropathy right now, but also down the road for FSGS. Over the last few years, our investment has really been in building that evidence package to have that solid value proposition. How we thought about this is, first, to establish the burden of disease, and there is both a humanistic component as well as an economic component. Also, allowing to have the conversation with payers to make insightful for them, like what the cost associated with the disease is today. An additional value component that we have really been focused on is like what is the potential value of sparsentan, what does it mean to have significant lowering effect on proteinuria. And maybe you recall there that we had shown earlier, that 30% reduction in proteinuria -- additional reduction in proteinuria could result in a delay of progression to disease to end-stage kidney disease of over 10 years towards dialysis. So very strong value package to provide. To the point that you're making like what our benchmarks, I think within rare nephrology over the last few years, we have had multiple products that came to the market. And I think that allows us a broad spectrum and flexibility in how we think about pricing also not only initially for IgA nephropathy, but also down the road for FSGS.

Got it. Okay. And then when we're looking at the FSGS eGFR data that's expected, there's now some preliminary evidence in literature relating to proteinuria reduction and eGFR in this disease. How has that impacted your confidence in the outcome of that data when it's released?

Yes. It's a great question, Greg. First off, we're very excited about the data coming in the first half of next year from DUPLEX. There's a couple of things that I would highlight. One being the link between proteinuria and eGFR has been consistent in both FSGS and IgA. And really what -- when we speak with the nephrology community, they've managed to reducing proteinuria as part of the treatment because they know it ties clearly to eGFR benefit over the long term and kidney survival long term. And so when we look at our program and you think back to what we showed at the interim assessment, which was 42% responder rate for the FPRE endpoint, and that's getting patients below 1.5 grams per gram and a greater than 40% reduction from baseline, versus a [ responder rate ] of 26%, there's a statistically significant meaningful difference there between those arms, which would convey that you should expect to see a difference in eGFR at the end of the study. And there's also been additional support that we recently reported out at ASN coming out of our DUET open-label extension. And those data were particularly exciting for a couple of reasons. One, we have a long-standing database now where we have patients in that particular dataset were going out to almost 5 years. But we have some patients in the study that have been out for longer than 7 years at this point. And what we've seen is a very consistent response in terms of the reduction of proteinuria that's been very durable. And you can see at the -- around the 2-year mark, around 60% of those patients who are in the study achieved that FPRE endpoint. And roughly 40% of patients achieve complete remission, which is getting patients below 0.3 grams per gram. So that's very encouraging for the overall view of sparsentan being able to meaningfully reduce proteinuria. In addition to that, when we look at the eGFR that came out of that same analyses for nearly 5 years, what we see is a chronic slope difference or a decline of about 4 ml per minute per year over that period. And that's very important because the natural history would suggest that in that patient population, without a significant proteinuria reduction, you would expect them to be closer to a 7 to 10 ml per minute per year decline. And so when we think about what's clinically meaningful for the nephrology community, 0.75, 1 ml per minute per year, that's really what clinicians tend to look to as what's clinically meaningful. And if the data continue to evolve in the way that's consistent with sparsentan's history, what we're seeing from that open label experience, we should be in a very good position come next year to support an sNDA filing and have a second indication for FSGS in '24.

Got it. That makes sense. Let's talk about your next program, pegtibatinase. You've shown some good data there to this point already. It looks like it has a lot of potential high unmet need in this disease. What should we expect to see prior to the start of Phase III, if there would be any other incremental data to come out?

Yes. Another great question, Greg. And I would just go back for 1 second to the data that we have presented for the Phase I/II in COMPOSE. And really, that's the first time that we've seen pegtibatinase experience in patients with HCU. And what we saw there was a dose-dependent response across the dose cohorts. And really, what we saw in -- beginning in the top 2 dose cohorts was a meaningful reduction in total homocysteine levels. And when you think about patients with classical homocystinuria, they have elevated levels of total homocysteine and really you want to get them down as far as you can. And we hear regularly from clinicians that getting them below 100 micromoles, if they're above that, is going to be a critical position to get them to. Because we know that if you can get them below 100 micromoles, that you're likely to avoid some of these clinical outcomes like thrombotic events or ocular lens dislocation or density issue. So we were very pleased to see, especially in that high-dose cohort, a roughly 55% reduction from baseline. And you're talking about patients that were very high in their total homocysteine levels. So they're starting at around 180, 185 micromole, we got them below that important 100 micromole level with that 55% reduction, and they were able to maintain that over the 12-week period. So very encouraging data and is what's helping support our belief that pegtibatinase has the potential to become the first disease-modifying approach in HCU if we're successful in Phase III. And so really what we've been focusing on over the past year is engaging with regulators. And also, as you mentioned, conducting an additional cohort. So we are looking at one additional cohort, cohort 6, and that's going to be a higher dose of pegtibatinase, and that is part of what we would expect to be able to provide more on next year. And when I think about the overall news flow or information that we would expect to provide, it will be finding, in that cohort 6, some additional data from cohorts 1 through 5, because we've had patients that have been in the study now for longer in open-label extension, and then also the regulatory pathway and what we expect for the Phase III design.

Great. Yes, that was going to be my next question. How are those conversations evolving with the FDA for the pivotal trial there?

Yes. Overall, we've been very pleased with how those discussions have progressed. And if you take a step back, the goal really was to have total homocysteine be used as a biomarker, because the clinical endpoints in classical homocystinuria can be challenging to study in a relatively short-term study. And so we initiated the progress or the process in the beginning of the year to go through the biomarker validation with FDA, did very well with that. And then we were granted breakthrough therapy designation. And so that's encouraging for a number of different reasons. One, it gives broader engagement with the FDA. And two, it really is going to help streamline our efforts to finalize the regulatory path and set up a study that's going to ultimately have the best chance of success. And we heard very consistently that total homocysteine was something that should be utilized in this pathway. And so we were pleased to recently gain alignment on utilizing that biomarker as a primary endpoint for a Phase III. We're in the process now of finalizing some of the additional elements of what the study will look like and any other parameters that FDA may want to see in conjunction with that, and that will all go into initiating a Phase III, which we expect to come next year. So very pleased with the progress thus far. We've still got a little bit of work to do, but all signs are on track for us to be able to be in a position next year to initiate.

Okay. That's great. And then when thinking about the legacy commercial business versus R&D efforts for the pipeline, including sparsentan, how do you prioritize the focus of the business and where your efforts lie?

Peter, maybe I'll pass that on you.

Yes. Well, clearly, the greatest value for the organization lies in the pipeline. Sparsentan initially, that's the main focus right now, and then eventually on pegtibatinase as well, where we think has great potential. But we are very pleased with the continued performance of our legacy products as well. Despite some generic competition that we have seen, I think we have hold up quite nicely, which also tells you about the strength of our commercial team and how we are able to leverage the opportunity that we have been having. And that also provides a nice revenue base for the investment that we are making in the pipeline. But the way I think about the legacy product is more the strategic value of having the established commercial infrastructure that goes not only -- and I was talking about the field forces and the medical affairs and -- before, but it's also like the hub services, our health economic department, access in general. So I think we have the broader infrastructure that provides strategic value for the longer run as well. And the continuous learning that we see from the field from interactions with physicians, but also what we are learning from the hub services model, specialty pharmacy, et cetera, so I think that whole infrastructure that we have, that is something that we continuously further optimize, and we can do that based on the expertise and the experience that we have had.

Okay. Great. And then when thinking about capital allocation, what's the strategy at this point? I know you have your hands full a little bit with the sparsentan launch execution and you have a promising product in pegtibatinase. Is BD a focus now? And if so, what sort of external programs are you evaluating or would fit the type of mold of something that you'd like to bring in?

Sure. So I would say that there's certainly no shortage of activity going on at Travere. And so we're certainly cognizant of that. That means we're continuing to evaluate other programs and potential partnerships and otherwise. And really, that's a core component to how we think about continuing to diversify our growth opportunities, right? That's been an area where we've had success historically and really in doing that being very disciplined and thoughtful in how we go about it. And as we continue those efforts, we will, of course, stay very focused in the rare space and in those areas where we have the greatest expertise. But first and foremost, I would say that we're not going to do anything in the near term that is really going to distract from the potential or the focus of the execution for sparsentan. That's really priority number one, and that's sort of our guiding light at the moment. But we're continuing to evaluate, and that will remain a critical component of how we operate.

Great. And with the last couple of minutes, I have to ask this as it's important for all SMIDs. But how should we think about your cash position runway, need for external financing, just given the market environment that we're still in?

Sure. So we ended the third quarter with $506 million in cash on the balance sheet. And really that positions us with a runway that we believe we can manage the balance sheet well into 2024. And so it's exciting because we have a great financial foundation going into a year with a lot of great catalysts, right? So when we think about next year, we have the IgAN PDUFA date in February, followed by a potential approval for IgA nephropathy in the second half of the year, as well as DUPLEX data for FSGS coming and a potential sNDA submission later on in the year, as well as the advancement effect of pegtibatinase. So there's a lot going on and some great things to invest in, but also some really great opportunities to create meaningful value going forward.

Great. Well, with that, I think we'll end the Q&A. But Chris and Peter, thank you so much for spending this time with us today. It's been really helpful. And take care, everybody.

All right. Thank you, Greg. Thank you everybody.