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

Good morning. My name is Carter Gould, senior biopharma analyst. Welcome to Day 2 of the Barclays Global Healthcare Conference. It's my pleasure to welcome Travere Therapeutics to the stage, right on the back end of their recent approval in IgA nephropathy. Joining us from the company is CEO, Eric Dube; Peter Heerma, running Commercial; and Chris Cline. Guys, welcome. And also, let me offer you congratulations from me on the approval.

Thank you very much.

Thank you.

I don't know if you want to make any opening comments or we can just kind of launch into Q&A.

Yes. I mean I'll just very briefly say that this is a really exciting year for Travere, and I think we're set up very well to really transform the company in many ways, transform disease areas that have really been lacking in innovation. And certainly, we started off the year with the approval. And we've got a number of very important catalysts, particularly data readout later this year, which I'm sure we'll talk about. But we're very well positioned as we go through the year. And certainly, as Peter can talk to the first part of the launch has been completely along with our expectations.

Okay. So let me dive into that a little bit. I think it's been 3 weeks. It feels like it's been 3 months. Maybe you can talk through sort of initial weeks of launch of the interactions with the clinical community, kind of what you're hearing and I want to take it there.

Well, to your point, which you're having us. It's week 4 of commercialization. I have to say, so far, the feedback has been very consistent to how we anticipated the market to behave. With regards to the higher the need of patients, patients being seen by the nephrologist but also the high intent to prescribe. And I think all those 3 elements I see back in conversations that I've had with nephrologist in the field myself as well as the feedback that we hear from our field force. If we talk about execution to readiness and how have we been executing since we had approval on February 17, where we have a Friday afternoon approval, we had the -- the materials being approved and the field force being trained by Monday morning, leading to the first prescription within 8 business hours after the approval. So I think that leads to like our readiness to execute but also we were able to ship product to the channel within this second week. So I think strong feedback initial feedback very consistent to the market research and execution is ready and yes, I think, ready to go.

Can you help frame sort of how Axis is looking out of the gates? And I don't know if there are any metrics or even qualitative you can share around sort of the TotalCare portal?

Yes. So TotalCare is say, feel like providing our services to the patients, and that includes malls like a nurse educator that has a conversation with the patient, making sure that the patient understands the product, but also understands the process to get to receiving the product. But it's also helping patients through the reimbursement process as well as with [indiscernible] Initially, as we are seeking to get on the formularies on the schedule with P&T committees, initially, it's the medical extension process, and we have seen some positive and promising feedback from payers already at this moments.

Including patients whose claims have been reimbursed. So I think that's certainly very encouraging. It's early days. It does take time, particularly for rare disease medicines to get coverage, but we are pleased to see how things are moving through so far.

Okay. And when you think about sort of these interactions between patients and clinicians, what does the market reach sort of indicate in terms of like the number of interactions they're going to have to -- need to have to kind of drive a script or start there?

Yes, it depends. I mean that's why you have segmentation in Troyanov as well because you focused initially on those physicians where you have the highest probability of success, and that's based on patient volume as well as the behavior of the physician to prescribe a new medicine as well as the influence that the physician has. So it depends on position to position. I'm pleased with the initial update that we are seeing. But your point is well taken. This is still a rare disease. It's not built to a rare disease. Every nephrologist has a few IgA nephropathy patients, but it's depending on when the physician is seeing the patient and having FILSPARI top of mind at the moment that the description be with.

There's a good segue to the segmentation question. You guys have talked a little bit about this in terms of this fast adopter category, and I think you talked about sort of benchmarking that on prior kind of renal launches, which have been admittedly a bit of a mixed bag of late, and that may even be sort of kind. So I guess I'm trying to understand kind of how you're thinking about that fast adopter kind of categorization and versus those who might wait for the eGFR data to emerge.

Yes. So I talked about the 3 elements of how we think about segmentation. The second one was behavior. And behavior, we started already before like some of the more rare renal products came to the market. So we use it more as a validation. But it's really like what physicians are willing to prescribe new medicine. You also have to realize, like nephrology has seen very little in the last 30 years. And so we trying of like formula that to segment those positions and then validate it with like early prescription uptake from those other rare disease categories. And you're right. I mean, it's a mixed bag and so it allows us to learn as well from some of the uptake from other launches and can do what better for FILSPARI. And the profile of the product is certainly there. Unmet need of the patient is there. And I think the execution capabilities of our team is there as well. So we are very ambitious in what FILSPARI could be for patients and what [indiscernible].

Maybe if I can add, Carter, if we take a step back and we think about what it typically takes for a launch, you've got to have a strong clinical profile access, and I think those are the key drivers. And we do know naturally that there is sort of a gradient of those physicians that are really eager to adopt versus those that are laggards or late adopters. And I think we assume that that's going to be the case here. With regard to your part of the question around waiting for eGFR data, I'm not quite sure that we've seen that so far. There may be some that are waiting for data. But I think the real exciting thing about what we see ahead of us, particularly in the next years where we don't anticipate any other treatment options to be approved. We're going to have not only 2-year eGFR data, but the whole host of additional data from the PROTECT trial, including longer-term safety, heart endpoints, et cetera. We'll also have data from the open-label extension, including data next year on the combined use of FILSPARI and SGLT2s. So there's going to be a lot of data that's going to be coming over the next 2 years. And I think it's not going to necessarily be about waiting until that information, but a steady increase and I think additional [indiscernible] to be able to support the breadth and depth of FILSPARI use. Our team is executing very well, and we have a sense of urgency to make sure that we have that uptake, particularly in this 2-year lead time that we have. But we do believe that with all of those, including also full approval and likely adoption in guidelines in that time period, to further strengthen the profile and the uptake. So I think that hopefully, that's maybe a broader frame of what we see in terms of the uptake of FILSPARI.

Okay. Maybe switching gears just a little bit as we think about DUPLEX update coming. Just would love to kind of just take a temperature in terms of where your confidence stands today, what data have you guys seen internally relative to the last update and just kind of help frame kind of clinical bar for clinical significance? I know you've done this to some extent in the past.

Yes. I mean I think if we think about FSGS, this is the area of highest unmet need when we think about the broad glomerular diseases. These patients don't really have many effective options, nothing that's approved for them, and it's the most rapidly progressing disease. Our confidence remains high in terms of being able to show a benefit at 2 years and that's really driven by 2 things. One is the evidence that we saw in our Phase II, both in the active control portion as well as long-term extension where we were able to see a very rapid benefit in proteinuria that translated into longer-term benefit in terms of EGFR progression. With regard to our Phase III, which is the second area where we have confidence is that we saw a very consistent and robust reduction in proteinuria at that 9-month mark. While we did have an interim look at the eGFR data as well, we know that eGFR is a long-term measure of kidney function, not necessarily one that physicians are looking at in a shorter term. And so we're confident based on what we saw and what we saw at the second interim that really is consistent with how the sparsentan profile would be expected to perform. And FDA has said that based on the way that the trial is designed and is conducted that it should support full approval once we have the 2-year data. So I think our confidence level remains high, and we're in a position to be able to see those data next quarter.

Okay. And maybe just following up on that, framing kind of clinical significance and how we should think about that clinical significance question for total versus chronic slope? And if, I guess, we'll start there.

Sure. Yes. I mean if we look at the broader landscape of eGFR beyond, but including FSGS, really nephrologists are looking at a minimum improvement, the difference between active control in this case, of 0.7 to 1 milliliter per minute per year, that's going to translate to at least 2 milliliters per minute per year at the end of the 2-year study. That 1 milliliter per minute per year accumulates over time and is clinically meaningful in slowing the progression for a patient entering into kidney failure. So that would really be the threshold for clinical meaningfulness the way that we've designed the trial is to be able to show at least that, so to show a single-digit annual slope difference by the end of 2 years. So that's what we're looking to show. We are powering -- we powered that to look at total slope. That's from a regulatory perspective and what FDA wants to see for EMA and really for nephrologists as a whole, they're really interested in chronic slope because they understand the acute hemodynamic effect that, that is really a limited period of time. And actually for those patients that do have a reduction in eGFR short term, it actually is predictive of a longer-term benefit. We've seen that with ACE and ARBs. We've seen that with SGLT2s. There's no reason to believe that it's different with sparsentan. But again, we'll have the data, and we believe that there will be a benefit both on total and chronic when we see the data next quarter.

And to the extent that there's any sort of mixed signals between the 2, maybe the hemodynamic effect is more variable or extends out a little bit longer. How will FDA sort of address that? Is there any sort of color from your interactions with them on how they'll [indiscernible]?

So you can certainly speak to what FDA has shared with us, how they look at the data, I think that they'll say they need to see the data. But what they said, particularly when they asked us to change the end point, the primary endpoint from chronic to total is we believe they want content across all of the programs in this space and total slope is probably the one that is going to be the one most consistent across different mechanisms of action. They have said that it's unfortunate, they have to select one, but that they will be looking at chronic scope as well, and they do want to look at the totality of data. . And the reason they want to look at that in the context of FSGS is because they said that FSGS is really hard. It's heterogeneous. And in the DUPLEX study, just as an example of the heterogeneity, it's one of really the only studies within the glomerular space, where we're enrolling pediatric patients. And they have a very different clinical profile. And it's important to be able to look at all of the data at the end of the study to be able to see what the benefit is. Again, I think taking a step back, we're confident the way that the trial design will see a benefit in total slope. But in the instance, we find ourselves with the difference between total and chronic, it's likely that it's going to be benefiting a greater treatment effect on chronic. And we believe that in the context of how nephrologists really look at these diseases in these patients, that's really what's going to matter is that chronic slope. And that's what we've seen in being reported from other large trials such as EMPA CKD and DAPA CKD.

Okay. And when we get the top line data from DUPLEX, how have you guys thought about how much actual data is going to be in the press release? Clearly has commercial implications now, but that's always balanced against the what the coal community would love to kind of hold it back for the presentation in order publication. How do you think about that balance on it, now that that's kind of tangible impact on Peter's target there?

Sure. Well, I think we first have to separate -- Peter's focus has got to be an IgA nephropathy. We don't want him or seem to be focused on FSGS until we get approval. But there's always that balance of that tension between wanting to disclose much more at top line in a press release versus really what preserving that for a high-impact peer-reviewed journal or conference. And we're really eager. I think the nephrology community is eager to see this. This really is a landmark trial. It's the largest trial, could be one of the only in FSGS. And so we do want to make sure that we have the broadest impact possible. But we are committed to making sure that we provide that top line enough data and enough information to be able to make sense of this, particularly in that question, as you say, between chronic slope and total slope. It's important to point out that while FDA is looking at total slope, EMA has been consistent in wanting to look at chronic slopes. We do need to provide information on both of those, and we would, as you would expect, to say something about the safety and tolerability as well. I think beyond that, we really need to preserve until we see the data and making sure that we listen to the PIs on what they see as important for manuscript.

Okay. And then I think, somewhat lost this mix on the focus on the launch in DUPLEX and PROTECT, is there are other data sets going to merge. You talked a little bit around combo with SGLT2. We've also got sparsentan coming on. So I guess we take a little bit broader view of the data cadence here. Can you talk about how those data sets might help wash out even further the profile of FILSPARI?

Sure. Well, I think strategically, if we think about what are the questions that nephrologists are considering in the use of sparsentan it's the breadth of the use. I mean we really do see that sparsentan can and likely will become the foundational therapy replacing the role largely the paces in or to play the standard of care, upon which other therapies and classes can be added. We think that FILSPARI has -- and sparsentan has that potential. So we will be looking at in the open-label extension, where patients may be added on other therapies, including SGLT2s, we have a separate study that will be initiated this year and reporting out next year, looking at the addition of sports entente on top of SGLT2 use. And that really was born out of what we consistently hear from nephrologists is the eagerness to understand the combination where nephrologists are predicting that that's likely to be the most common combination in IgA nephropathy. FILSPARI plus SGLT2. So we'll have those data. With regard to sparsenta, that really is, I think, one of the most exciting. It's a small study, but it's a study looking at what happens when you treat a patient that has recent in their diagnosis that has not been treated with ACE or ARB and is given FILSPARI. What happens in terms of proteinuria eGFR, but what also happens upon repeat biopsy when you look structurally at what's going on in the kidney or on MRI. So there's going to be some very interesting data that really has not been done before. But given how difficult and risky biopsy doing repeat biopsy, you can imagine that it's going to be a small study, and it's going to be much more informative about what we think is going on beyond the known hemodynamics as well as the impact on proteinuria. So a very exciting study that we think is going to help inform the field but also really is much more about what's going on mechanistically beyond what we've seen or at least validating what we've seen in animal models.

And remind me how proteinuria [indiscernible] is patients being ported?

So we would expect them to be proteinuria, so probably within the same range as what we see with PROTECT, but they'll be earlier in their -- likely earlier in their disease progress because they will have been recently diagnosed. So I think more to come on there. But I think some of the things that we're now starting to hear from nephrologists much more is that they are eager to see the role of dual inhibition, including endothelin because there's growing recognition that with overactivation of endothelin that really is a driver of fibrosis and inflammation within the kidney. And I think that we'll be able to hopefully show within patients that you see a beneficial effect with the person to use.

Okay. And then as we get towards the back end of the year and we get the 2-year PROTECT data, is that in any way sort of a stage gauge for additional commercial spend, additional sales force? How do you think then about what that may be potentially unlocks for you?

Yes. I think we all said with the field force that we have. So we wouldn't anticipate to have more reps in the field after having a 2-year data needed for FSGS. I think we are well set obviously 80-plus fit we have, very experienced and seasoned in nephrology. So I think we have a good touch point with the nephrology community. No need for the additional investments [indiscernible]

I think the one thing maybe I'll balance is that we do see this as an incredible opportunity to educate the field. I mean these are 2 landmark trials reporting out within a year. So I think from an infrastructure perspective, we're very well positioned. There may be some variable spend in terms of education and growing awareness. But I think that's something that we've already anticipated as part of what Peter's team is doing but there may be some additional spend there once we see the data. But that will be over time and minimal compared to the infrastructure cost that we've already invested.

Okay. Maybe switching gears the rest of the pipeline portfolio, maybe on homosenuria, I thought the updates that continue to emerge from the Phase II, I thought were very compelling. We're still waiting on Cohort 6. Can you talk around kind of how Cohort 6 is going to fit into potential incisions you need to make around the Phase III?

Yes. So I think with Cohort 5, we were really excited to be able to see that for every single patient with pegtibatinase, within a matter of weeks, they were able to get below 100 micromolars of total homocystine, which really is the threshold within the guidelines that help to reduce the risk of these patients. Really what we want to see with the Cohort 6 is can we see further improvement how much further can we get because the #1 need that these patients express to us is not just to control their home assisting levels, but actually is to normalize their diet. I mean these patients have to have an incredibly restrictive diet that really impedes their quality of life. And so if there's something that we can do to help in that regard, it would be very meaningful for these patients. The second objective of Cohort 6 is to be able to study a lyophilized formulation, which would be the commercial form. So to be able to have clinical data that we to regulators will be important. We've not slowed down in terms of those engagements with regulators, while cohort fix is completing. So we do have those engagements around trial design, et cetera. We're in position to be able to provide Cohort 6 data this year and to be able to finalize Phase III trial design after engaging with European and U.S. regulators. So will hopefully be in a position to start a Phase III later this year.

Can you give some sense on some scenarios around how long that Phase III might be in terms of what regulators want to see?

Yes, it's a great question. I think certainly, a lot of what regulators want to see is in terms of overall safety exposure, that's something that we would be discussing with them. But we also, within this disease, have to really balance the desire to have longer-term efficacy data with the risk that you have when standard of care really is a restrictive diet that if you have a patient that is in the trial and liberalizes their diet, you can compromise the variability of total home system, which we expect would be the primary endpoint. So those are the discussions we have is what is the right length of time to be able to minimize that risk but also to be able to satisfy regulatory and payer needs around long-term evidence.

Okay. And when you think about appropriate comps or appropriate benchmarks from other kind of enzyme replacement therapies or similar kind of indications, are there certain ones that just sort of bubble up and say, "Hey, like this is a good proxy for kind of what we're looking at in terms of market dynamics, peak size, things like that?"

Yes. I think the one that's perhaps the most relevant here is PKU, kit in urea because of the patients are largely treated very similarly. In fact, many homocystinuria patients were part of the PKU community until we really started to see their own HCU community emerge in terms of standard of care, diet, et cetera. So I think that's one that we're learning a lot from. We also have some experience within that disease. So we've certainly been leveraging a lot of those learnings as we move forward.

Okay. In the final minute here, did complete raise recently. Can you talk about where that takes your cash runway out to? And just as you take Chris a little bit, can that get you to potentially profitability?

Thanks for the agitation Carter. Not at all. So what I would say is it's a little bit early for us to be talking about profitability. And really, I mean, you've heard some of the exciting milestones that we have in front of us this year. And when we look at all that, that's going to help shape that trajectory. And so we'll come back in the future on how we're thinking about profitability. But when I look at the financial foundation overall, we've got a very strong balance sheet. We ended the year with $450 million in canton equivalents. And then we completed, as you highlighted, a recent Follow-On offering where we raised an additional $230 million in gross proceeds. And so with that, our expectation is that we'll be able to manage the balance sheet into 2025, and that includes all of these exciting milestones that we'll really be able to shape the story for us.

Okay. Well, last to watch. Looking forward to tracking those so far as scripts. So thank you very much, Eric and team.

Great. Thank you.