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

All right. Welcome, everyone, to the JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by my squad, Malcolm Kuno, Priyanka Grover, [ Raji Pinhei ]. Our next presenting company is Travere Therapeutics. And presenting on behalf of the company, we have CEO, Eric Dube. Eric?

Good morning, everyone. Anupam and JPMorgan, thanks so much for hosting us. I'm Eric, and I am incredibly proud to represent Travere, who has been part of what is a renaissance that's taking place in rare kidney disease. Over the last several decades, rare kidney disease, and particularly, rare glomerular diseases like FSGS and IgA nephropathy, have had some of the lowest levels of innovation in clinical trial activity across all therapeutic areas. But of course, we know that that's changing. And part of that is changing because of the incredible collaborative work over the last 10 years to better clarify endpoints for clinical development. And we see that, that is now bearing fruit within IgA nephropathy. And we are incredibly proud to be part of those efforts and a leader within the RKD space. And it's not just the identification of endpoints that's driving this renewed interest within RKD, but it's also a growing recognition that while rare, these communities contribute disproportionately to the rates of kidney failure and morbidity, particularly amongst young patients. And so we have an effort and a commitment to be part of this renaissance within RKD to contribute to the innovation and hope that we see on the horizon. So today, I'm going to talk through the progress that we're making in RKD as well as another rare disease, homocystinuria, or HCU, that has very little to nothing in clinical development. So you can go on to our website to find more of our materials as well as our forward-looking statements. And here, you'll see a snapshot of the disease areas that we focus on within rare disease. We are focused exclusively in rare disease with programs in IgA nephropathy, FSGS and HCU. Each of these three areas represents well over USD 1 billion peak year potential. But our commitment is driven by a desire to transform the treatment standards for these patients. So many of these patients live daily in fear, and our commitment is to ensure that with innovation and better therapies, they're able to live more with hope than fear. Here's an overview of our pipeline, and I'm going to spend most of the time today on sparsentan, FILSPARI and IgA nephropathy as well as advances that have been made very recently in FSGS. We are just ending an incredible year of exquisite execution in 2024. We received full approval by FDA for FILSPARI for the treatment of IgA nephropathy, and this year, we look to repeat the same execution across three different priorities. Our first is to solidify the foundational role that FILSPARI can play in the treatment of IgA nephropathy. That's based largely on the full approval, the expanded indication statement that we have to be able to serve more patients that live with IgA nephropathy. It's also in anticipation of the draft KDIGO treatment guidelines for IgA nephropathy being published in its final form later this year that really not only call for more aggressive earlier therapy in this disease, but also solidifies the important role that FILSPARI can and should play in the treat paradigm. We also announced yesterday that we have a PDUFA date for an sNDA into FDA for modification of our liver monitoring REMS, so that no patient has a barrier to be able to receive this important medication. Our second priority is in FSGS. We've been on this journey into finding the first therapy approved for FSGS for about 10 years. And we've made significant advances with two of the only clinical trials that have ever been completed within this space that really catalyze the community and regulators to look at and evaluate what are the right end points for this disease. We announced last quarter that we have plans to engage with FDA after a very important independent assessment looking at endpoints. We're on track to be able to provide updates on that engagement by our fourth quarter earnings call next month. And in parallel, our teams are on track with the FDA. That is the second priority for the year. The third priority is around pegtibatinase. This is our pegylated humanized enzyme replacement therapy for the treatment of classical HCU. And that is in Phase III, and we are making good progress on some of the manufacturing scale-up challenges that we talked about last year. So -- in all, our teams are absolutely ready, focused and you can count on another year of strong execution from our team. In parallel, we plan to continue to look at business development to diversify our pipeline, particularly within rare kidney disease. I'm going to first talk about IgA nephropathy. This is an incredibly exciting area as you see so much innovation coming into the space. Travere Therapeutics has been in IgA nephropathy for many years, with culminating in a full approval in September of last year. Now IgA nephropathy historically has been seen as a benign disease, a slowly progressing disease. But with the work that our clinical teams have done working with some of the largest databases in IgA nephropathy, we now know that that's not the case. These patients are at significant risk if they are not in complete remission of their proteinuria, and the median time to kidney failure after diagnosis is about 10 to 11 years. When you think about patients are typically diagnosed in the prime of their life, in their 20s and 30s, that can be a devastating prognosis, but we are seeing significant innovation and hope on the horizon. If we look historically at how patients with IgA nephropathy are treated, nephrologists understand that IgA nephropathy is essentially a 2-disease model. The first, because patients are diagnosed on biopsy of their kidney, they have damage within their kidney. They essentially have chronic kidney disease, and that requires treatment. Over the last few decades, patients have been treated with RAS inhibitors, ACE inhibitors, and ARBs off-label have been an ineffective standard of care, where the majority of patients are treatment failures, unable to get into complete remission of their proteinuria. And the second part of their disease is an overactivation of their immune system. That is the etiology of IgA nephropathy. And so historically, physicians have used steroids, which we all know can be damaging to the patient from a side-effect standpoint. And while short-term effectiveness has been demonstrated in some clinical trials, there is really an opportunity with innovation on the horizon to be able to address that as well. So as we look to the future, how is the treatment algorithm for IgA nephropathy going to evolve? Well, the framework is going to remain the same, and that is reflected in the draft KDIGO treatment guidelines that were published last year. It is a two-pronged approach where patients are really -- still have an overactivation of the immune system as well as in the kidney. And that overactivation in the kidney is primarily driven by angiotensin and endothelin, and that's where sparsentan comes in. We are looking to replace the traditional role that off-label RAS inhibitors have played because we've demonstrated that by addressing both angiotensin and endothelin, sparsentan is one molecule that addresses both of those. You're able to have a superior benefit on both proteinuria as well as long-term preservation of kidney function, and that was reflected in our Phase III program, which was a head-to-head demonstrating superiority over max dose RAS inhibitors. And so as we look at the KDIGO guidelines, we look at how FILSPARI is now being used, our goal is to become a new foundational therapy. And by foundational, we mean those that are targeted directly the damage in the kidney, and is meant to be used chronically for these patients. Historically, because of the immune suppression nature, the immune overactivated targets are not used chronically to date. And so you need to make sure that you have a combination, but you've got to have that foundational therapy that FILSPARI plays. Now if we look at the overall positioning and profile of FILSPARI, we are well positioned to become that future foundational therapy, replacing essentially what 90% of the patients are being treated on, which is RAS inhibitors. It's a once-a-day medicine that targets both endothelin and angiotensin that essentially has some of the strongest reductions in proteinuria that we've ever seen in a Phase III program, 50% reduction with superior rates of complete remission. That has translated into an accumulating benefit in preserving kidney function over 2 years, which is now reflected in our full approval. It is the only non-immunosuppressive therapy that is approved, and we see a safety profile over 2 years that is comparable to well-established irbesartan. So we're excited about being able to bring a better therapy than RAS inhibitors. And essentially, as we look to the future, what the KDIGO guidelines talk about and what we have projected over the last few years is the future in IgAN is about combination. FILSPARI is better than RAS inhibitors, and we believe that the future is about combination. The KDIGO guidelines say that if a patient is not in complete remission, they should be on simultaneous combination therapy. FILSPARI should direct the kidney and any of the innovation that may be coming that directs the immune system is well positioned to be combined with FILSPARI. As I mentioned, last year was an incredible year for us, and it culminated in the full approval. And as we look at the first quarter of performance after approval, we see that we outperformed every benchmark in rare kidney disease over the last few years. We reached nearly $50 million in net sales in the fourth quarter, reflecting about a 40% growth over the prior quarter. And importantly, that was reflective of underlying demand. We had nearly 700 new patients that were prescribed FILSPARI, and that was driven largely by two components. The first is for those physicians that have prescribed under accelerated approval, they've seen incredible results. The results that you see are rapid, they are sustained and they are meaningful for patients. And that has led physicians to look earlier in the disease for less severe patients in their practice, and that's exactly where we're seeing these patients start forms come from in existing prescribers. The second driver of our growth to date has been in reaching new physicians. There are many nephrologists. Historically, the specialty is seen as a bit more conservative to adopt innovation, and there were some nephrologists that were eager to prescribe, but wanted to wait for full approval. They wanted to see the eGFR data. They wanted to see long-term data. And now with a broader label with outlining those data, we have seen a meaningful increase in new prescribers of FILSPARI in the fourth quarter. Now having full approval is one thing, but having access is another, and this is where I'm particularly proud of our team. Not only do we have a strong head-to-head superiority profile against what most patients are treated with, but we also have a value proposition for payers that has allowed us to increase the quality of access very rapidly since full approval over the last couple of months, where we have 96% of patients access to FILSPARI, and we believe that, that's only going to get stronger as we move forward. Now as we look forward, these are the key growth drivers that we see for FILSPARI. We see that there are at least 70,000 patients in the U.S. alone that could benefit from FILSPARI, and we believe that there is sustainable growth as we move forward because of the broad indication, because of the guidelines that strengthened the positioning of FILSPARI and talk about the superiority over off-label RAS inhibitors that we know fail most patients. We have very strong payer access. Most nephrologists still have yet to prescribe and yet are eager to bring FILSPARI to their practice. And so our team has very access, trust and engagement with the nephrology community to be able to reach patients within their practice. And then also, as we look at the evolution of the IgA nephropathy landscape, while there could be potentially new treatment options on the horizon, we are well positioned to work with them in combination to improve and upgrade not just what's going on in the immune system upstream, but also upgrade what's going on to be able to target the damage within the kidney. If we look beyond the U.S., I'm very proud of the work that we have with our two ex U.S. partners, CSL Vifor, recently launched in a number of markets after EU approval. And we are looking to converting conditional marketing authorization to full approval this year. And we have a partnership with Renalys based in Japan for a number of countries within that region. They're making progress and should have data this year to support filing in that region. Turning our attention to FSGS. This is a disease that is less prevalent than IgA nephropathy, but far more severe and rapidly progressing. This is a disease that often affects children. The median time to kidney failure can be around 5 years, so about twice as rapid as IgA nephropathy. And perhaps what's most cruel is for those patients that are fortunate enough to have a transplant, the recurrence rate is nearly 50%. And so there is an urgent need for medicines that are approved and targeted for FSGS. Our Phase III report out of just over a year ago catalyzed an independent initiative called PARASOL, which is comprised of the FSGS patient community, thought leaders within this space as well as regulators. And they asked the question, if proteinuria -- profound proteinuria reductions don't translate into an eGFR benefit within 2 years, what is the right endpoint? We cannot give up on this community, what is the right endpoint for clinical development? How can we spur innovation in this disease, much like we're now seeing with an IgA nephropathy? And these are the takeaways that we learned last fall from the PARASOL Group. The first is the unmet need is exceedingly clear. This is a community that otherwise will lose a kidney within a number of years. We also know that while FSGS is a panoply of different causes of kidney damage and scarring, we know that the common pathway damage is at the podocyte. You have explosive or nephrotic range proteinuria because the podocyte, which is the main filtering cell in the kidney, is damaged and continues on a progressive decline over time, which leads to essentially kidney failure. And so the podocyte, despite what the ideology of the damage is, is a consistent one. And finally, what perhaps is most important, is that while there has been a historic focus on eGFR as the primary measure of kidney function in these RKD trials, we now know that it would be unfeasible to look at eGFR in a 2-year period for clinical trial. It would be exceedingly difficult to be able to enroll and power these trials. And with a very strong global collaborative effort, we now know that you can -- if you affect profoundly the reduction in proteinuria in these patients, you can have a far better prognosis and slowing the decline towards kidney failure within FSGS alone, which has opened up the potential for further innovation in this disease. And so where that leads us is to reengage with regulators. When we look at our Phase III data, and these are some of the most rigorous thresholds looking at proteinuria compared to max dose RAS inhibition, which is also part of the standard care of FSGS. You see that across all of the different thresholds that we prespecified, you see a superior benefit in the rates of patients that are able to reach these levels of response, all the way down to complete remission of proteinuria less than 0.3. That has been exceedingly difficult to reach for any mechanism. And yet when we look at the data with sparsentan versus active control, the greatest magnitude of benefit here statistically is in that threshold of complete remission. So we continue to remain very confident in the profile in the clinical data and in the strength of our trial design when we plan to engage with FDA. We're on track to provide that update, as I mentioned, by our fourth quarter earnings call next month. And in parallel, our teams are working vigorously to ensure that we can move quickly, assuming FDA is open where we can submit an sNDA. And if all goes to plan, we could potentially have the first medicine approved for this condition by the end of this year. Turning our attention to another therapy that has nothing else in clinical development, classical homocystinuria, HCU, is a rare metabolic disorder. It's a genetic disorder where patients essentially have a defect in their CBS enzyme. This is an enzyme that is essential in metabolizing protein in our diet and is part of newborn screening. Unfortunately, half of the patients that are screened for HCU that have it are missed at newborn screening. And so there is an unmet need, not just for earlier diagnosis, so these patients can effectively manage their diet, but also to make sure that we have more effective therapies. Because essentially the standard of care for these patients is very little to no protein, a terribly tasting medical protein that patients do not like, and also to make sure that you can effectively control their homocysteine levels. Because there's a constellation of symptoms that really are terrible outcomes for these patients, both cognitive and psychiatric as well as lens dislocation and eye problems. And unfortunately, 50% of these patients have an ischemic event before their 30th birthday. And so diet is not enough. And we're really excited about pegtibatinase, which is a pegylated enzyme replacement therapy, which essentially acts like native CBS enzyme. And what we've seen in our composed Phase I/II study is a profound improvement in these patients. We see a 67% reduction in homocysteine levels within a matter of months. And of that, 100% of those patients that have been studied with pegtibatinase were able to get below the target threshold of 100 micromolars of homocysteine. And so we're excited to be able to translate that into Phase III. Just about a year ago, we initiated a Phase III program, and the trial design is, in large part, similar to what we saw in our Phase II, pegtibatinase versus placebo over a number of months to be able to look at a biomarker of total homocysteine levels. We will follow those patients out to 6 months to study the durability of that effect and safety. But two of the most important components of our Phase III program are: one, that we are looking at a lengthy diet stabilization period before randomization to make sure that we are minimizing the variability in the placebo-controlled trial, so that we can optimize those results on total homocysteine level. But what we're most excited about is what we believe has never been done before, which is to protocolize diet and protein tolerance in a sub study for those patients that are able to control their homocysteine levels in their placebo. So they're offered into a sub-study where essentially we're testing whether you can maintain homocysteine levels at a low level and increase diet. This is the number one need that patients and their families have. Imagine what your life would be like if spending time with family and friends did not include food. This is what patients are looking for with pegtibatinase, and we're really excited to have agreed with FDA on a very innovative trial design. So we are in Phase III. We paused enrollment because we had some scale-up challenges as we look to move very quickly in commercial scale-up. And since we announced that over the last few months, we've seen really good progress where we've identified what those challenges are. This is a well-understood challenge that our CDMO partners have seen before, and we are on track to be able to reinitiate movement next year. So stay tuned for updates there. And I'll conclude with a snapshot of our financials. As we show, we have substantial growth in our net revenues with the launch and full approval of FILSPARI. We'll be able to provide updates throughout the year, but we expect that growth to be sustainable. We also closed last year with about $371 million on the balance sheet, which is enough not just to be able to manage our cap structure, but also and most importantly, to support all three of those key strategies or priorities for growth this year. We are well positioned. This is a team that knows how to execute. Even in the most difficult of times, we're able to work through. The wind is now at our backs, and we're excited about what holds in this renaissance for rare kidney disease ahead. So with that, I thank you for your attention, and we'll take any questions.

Thanks. Thanks, Eric. I just want to remind folks, there's three ways to ask the question, right? So you can raise your hand, which is the old school way. And I'll call, and you can shoot me an e-mail and ask on your behalf or you can send it in the question portal, and I'll ask on your behalf as well. But maybe I'll just start out. Eric, what are your expectations? Or how are you thinking about your base case scenario around the REMS you're supposed to get an update in August, right?

That's right.

So how are you thinking about -- how should we think about that?

Sure. Well, maybe I'll just very briefly talk about conversation that we had with the FDA when they told us that they were adding a liver monitoring REMS at February of last -- 2023. They said that under accelerated approval, you don't have a full data package either for safety or for efficacy. And historically, there have been some liver safety issues within the broader endothelin class, particularly within pulmonary arterial hypertension. And -- so they are giving us this liver monitoring REMS, but they said, with additional data, we will revisit the need for this. Well, we now have additional data. We have two completed Phase II studies -- or Phase III studies, including our FSGS study at double the dose. And we still do not see cases of drug-induced liver injury Hy's law. And so we have a broader data set, including an efficacy data set, to go back to the FDA. And that was the basis for us having the conversation last year about their openness for this sNDA. We since submitted that sNDA, and that's where they've given us the PDUFA date of August 28 of this year. Our base case and the request that we had is to change the frequency of liver monitoring. Now to date, the patients are required in the first year of treatment to have their liver monitoring every month, and after the first year, every 3 months. Now it has not been an issue. When you look at the performance that we posted last year, the strongest performance that we've seen in rare kidney disease. In fact, the two best rare kidney disease launches, us and a medicine for ADPKD, both have REMS. And so it's not been a barrier for the patients that we've been able to treat. However, we also recognize that while most patients are seeing their nephrologists frequently, there are some patients that are not able to go in and get their blood drawn every month. Some patients that have two jobs that have mobility issues, we want to make sure that that's not a barrier because we do not see that there is a safety issue that monthly testing would be able to mitigate versus quarterly. And so our base case and our request is to move from monthly to quarterly. And we believe that, that will open up the aperture for us to be able to serve more patients that we've not been able to to-date.

So quarterly and year 1 basically?

That's right. That's right. Now we do have a second step in this, which is to request full removal of the liver monitoring REMS. FDA indicated that they were open to that when they approved us in 2023, and that really is just going to take additional exposure. And with the strong commercial success that we've seen, we're making very good strides in being able to reach those thresholds to go back to the agency.

We have an e-mail question here, which is, competitively, what are your thoughts on the potential of sparsentan to get approval without REMS?

Yes. I mean, I think it's a question that we certainly have had and have asked ourselves. That is really only a question that FDA will be able to answer. With that said, we have done planning for us to continue to serve patients and to be that foundational best-in-class therapy. We are prepared to be the lead endothelin receptor blocker in this class regardless of what their label looks like. And that's not just based on what that -- what their REMS looks like. As we've demonstrated, we are able to serve and reach these patients with a REMS, but also in the broader profile that we offer with FILSPARI.

Another e-mail question that we have is, what are your views on potential for sparsentan and IgAN in a post biologics world? Do you think payers will be able to reimburse a combo?

So it's a great question, and it's one that we have been planning for, for at least 5 years. We've known that we've been in the space and plan to be in a combination world. We understand what the disease looks like. We understand that nephrologists are going to need to use combination therapy, and that's exactly what was reflected in the updated KDIGO guidelines, simultaneous combination therapy with a kidney directed and an immune directed. So that is the treatment algorithm of the future. The question on payer access really is going to come down to the value proposition and pricing of future treatment options in the immuno space. We took an approach to ensure that we have a strong value proposition, including the pricing, to ensure that we have broad access for patients that are early in their disease, to those patients that require chronic therapy later in their disease. That is what a foundational therapy really is about. And what we've seen thus far from payers is incredibly encouraging. We have not just broad access, but the quality of our access in terms of prior authorization, and step edit criteria reflect that payers understand the value. And that's in large part because we have head-to-head data showing superiority. That's what payers really want. We're the only medicine that is able to say we are superior to the alternatives in that class. And I think it's going to be imperative for the other companies to be able to demonstrate that for them to get access.

Questions from the audience? [ PG ]?