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

Good Morning, everyone. Greg Weisner and Francis Dovel here, associate biotech analysts at TD under Tyler Van Buren. Thank you very much for joining our 45th Annual Health Care Conference. For our first session, we have a hybrid presentation and Q&A with Travere Therapeutics. And it is our pleasure to introduce Dr. Eric Dube, President and CEO and Chris Cline, CFO of Travere. Eric and Chris, it is a pleasure to have you both here. Thank you very much for joining us. I will go ahead and kick it over to you to kick off the presentation when you're ready. Thank you.

All right. Well, thank you very much T.D Cowen team for hosting us. You can look at our website for forward-looking statements. And what I'd like to do is first introduce you to Travere. We are a company that are based in San Diego, focused exclusively in rare disease. And our focus really is to transform the treatment standards in those diseases that have historically had little or no approved therapies. And you can see here the 3 areas that we're focused on currently. IgA nephropathy, which really is emerging as a success story within rare disease where there are now 3 therapies that are approved to fully 1 under accelerated approval. The second disease, FSGS, which is another rare kidney disease, one that is rapidly progressing. And I'll talk a little bit more about that. There is nothing approved to date in FSGS. And then the third area that we're focused on is a rare metabolic disorder called classical homocystinuria, or HCU. There is one older therapy that is approved. But essentially, the current standard of care is a very restrictive diet. We're looking at our pegtibantinase program as a potential to really transform the treatment outlook for that community. Here's an overview of our pipeline and our portfolio, essentially FILSPARI or sparsentan which is commercially available for IgA nephropathy. We have completed a Phase III in FSGS and then we have pegtibantinase in HCU. We also have an older therapy that is currently the standard of care in cystinuria another rare neurologic or kidney disease called THIOLA and cystinuria. For 2025, we have 3 key priorities. The first is to continue the success that we have in launching FILSPARI in IgA nephropathy, both in the U.S. as well as with our partners outside of the U.S. and really establishing a stronger foundational therapy that have historically been played by off-label ACE inhibitors and ARBs. We're looking to continue to increase the breadth of use and really again replace the traditional role that ACEs and ARBs have played, where 90% of patients are on those therapies, and yet 80% of those ever fail at all to achieve remission of their proteinuria, thereby affecting the potential risk of kidney failure. The other aspect of IgA nephropathy is to modify our REMs for liver monitoring. We have a PDUFA date for that modification at the end of August. And while that it's not been a barrier to date for any patient for whom a nephrologist says, this isn't for you, whether you have multiple jobs, you have transportation issues, et cetera. We want to make sure that this innovation is made available for them. Our second priority is to submit an sNDA for FSGS. We're on track to do so by the end or around the end of this quarter. And we're really excited at the potential for FILSPARI to be approved as the first therapy for FSGS, a community that is eager for anything that is going to be effective for their condition. And then finally is to continue our scale-up with pegtibantinase. We ran into a manufacturing challenge last year in the fall. We've made very good progress with our CDMO partners. Really, our focus this year is all of that manufacturing scale up so that we can reinitiate enrollment in our Phase III in 2026. Across all of that, we continue to look at business development, particularly within the rare kidney disease where we are seeing a renaissance within RKD where historically, this has been an area of very, very little innovation and yet is one of the most common causes of kidney failure in this country. If we focus a bit on IgA nephropathy, this is a condition that affects about 150,000 patients in the U.S. The addressable number of patients that we see for FILSPARI is over 70,000. We do expect those numbers to continue to increase with the new draft KDIGO guidelines calling for earlier biopsy. This is a condition that is diagnosed upon biopsy of the kidney, Symptomatology is typically patients see blood in their urine, protein in their urine upon typical screening are diagnosed and then referred to Nephrologist. Historically, these patients are being treated in a two-pronged approach. I mentioned that ACE inhibitors and ARBs based on their ability to reduce proteinuria and are known to be nephroprotective within the broader CKD arena are used in about 90% of patients. The other aspect historically has been steroids. Systemic steroids have been used to be able to reduce the over activation of the immune system. We're now seeing innovation to replace the traditional role that systemic steroids have played. And when we look at the recently published draft KDIGO guidelines, they continue this framework of a two-pronged approach. Those therapies that are kidney directed like FILSPARI and those that are directed to over-activation of the immune system. In fact, any patient that is biopsied, diagnosed with IgA nephropathy and has proteinuria above 0.5 grams. The KDIGO guidelines call for simultaneous combination therapy to attack both of these approaches. We talk about FILSPARI as a new foundational therapy and what we mean by foundational therapy are those therapies that target the kidney, where the damage is that are nephroprotective in that they provide long-term prevention or protection of eGFR, which is essentially the predictor of how long you have into kidney failure and that can be used in a broad range of patients chronically. Now that places FILSPARI quite nicely in that foundational therapy, and it is non-immunosuppressive which is really important for many patients. That also can be used in combination with any of these other therapies like targeted steroids or any of the potential immunosuppressants B-cell complement that are eventually approved for this condition. So combination therapy with a targeted and a kidney targeted immune system targeted therapy really is the way of the future. Even with all of the potential therapies that are coming, this framework will continue to be the one that drives the treatment paradigm. When we look at the profile of FILSPARI, we are very well positioned to become the new foundational therapy. It is a once-a-day therapy that targets 2 aspects of overactivation within the kidney that are common injury pathways within this disease, angiotensin and endothelin both of them very well characterize in their mechanism within kidney damage. The second is the greatest magnitude of proteinuria that has been seen in a Phase III program. We have 2-year data on safety, 2-year data on the accumulation of preservation of kidney function with eGFR as well as a sustained benefit on proteinuria out to 2 years. It is not immunosuppressive. And again, based on that mechanism, we believe can be used in combination with many of the therapies that are currently in development. When we look at our fourth quarter performance, this is the first quarter since full approval as well as the publication of the draft KDIGO guidelines, we saw a very meaningful inflection in demand with nearly 700 new patients being prescribed FILSPARI as well as inflection of nearly 40% growth quarter-over-quarter with very broad and improving payer access, we continue to expect these dynamics to fuel growth into the future. In fact, these are the key drivers of growth as we look to the future and being able to reach many of those 70,000 patients. It's the broad label, the new broad indication statement under full approval. The support from the KDIGO guidelines as well as the call for earlier diagnosis, earlier biopsy and more aggressive and more combination therapy, we believe this is critically important. The other aspect that is called out in the KDIGO guidelines is that FILSPARI is the only therapy that went head-to-head in a Phase III program. So we have superiority data over the historic foundational therapy of RAS inhibition that is clearly called out in the KDIGO guidelines. And we also see that we can continue to increase the number of nephrologists that are shifting from the use of ACE inhibitors to ARBs and ARBs to FILSPARI as a key growth driver. So all in all, it's a really exciting time in IgA nephropathy and one that I believe will be representative of not just the opportunity of growth for FILSPARI, but also for much of the innovation that's coming to this community. We have 2 partners outside of the U.S. CSL Vifor that has begun to launch FILSPARI within Europe as well as Renalis that is looking at Japan and parts of East and Southeast Asia. We're very pleased with these collaborations and the progress that they have made. Turning our attention to FSGS. This is another rare glomerular disease that affects about half the number of patients as IgA nephropathy. Oftentimes, however, these patients are diagnosed earlier, many times in childhood. And the rate of progression to kidney failure is twice as fast as that in IgA nephropathy. So there is a real sense of urgency for treating these patients with FSGS. The other aspect of this disease that is unique, it is not a linear progression from diagnosis to kidney failure. It is a relapsing and remitting disease, which causes variability in kidney function over time, which has made it a challenge in clinical development. The other aspect is that we have a completed Phase III program, the only Phase III program that's been completed in this disease. It also was a head-to-head study looking at superiority versus max tolerated ACE -- sorry, ARB. And what we saw in that Phase III program is a rapid and sustained reduction in proteinuria and when you look at whether it's the change in proteinuria over time or the proportion of patients that were able to get to thresholds of proteinuria control, including complete remission, you see a superior profile of FILSPARI compared to max-dosed irbesartan. At the end of 2 years, however, we were not able to show a statistically significant difference in eGFR despite a clinically meaningful benefit in that endpoint. This surprised many not just us, but the nephrology community. This galvanized the community of patients and nephrologists, the experts in FSGS to come together to work on a better understanding of this disease and what endpoints may be feasible so that there can be innovation in FSGS like we're now seeing in IgA nephropathy. This group was called -- it's called the PARASOL Group. It is comprised of the patient community, global experts in FSGS as well as regular regulators, including FDA. What they first concluded is looking at many different registries of FSGS. This is the largest analysis of FSGS patients that have been done to date that was reported out in the fall. The first conclusion was eGFR is not a feasible endpoint. It is important clinically, Yes. But is it feasible in a clinical trial of 2 years? No. And that's because it is highly variable that relapsing and remitting nature of this disease makes it very challenging to reduce variability in a clinical trial. But also when you look at the heterogeneity of this disease, you have patients that have primary FSGS that may be immune mediated, there may be patients that have genetic FSGS or of unknown cause. All of that contributes to variability. And in order to power a study within a 2-year period to show a benefit on eGFR, you would need to have nearly 1,000 patients per arm, clearly not possible to be done. The second aspect was to look at this disease and say, what are the other endpoints that could be meaningful. And you have to first look at what is going on in the disease process. And what they concluded was that proteinuria and particularly proteinuria caused by issues with the podocyte, which is the filtering cell within the glomeruli is a common injury pathway within FSGS, regardless of the etiology. It is all about the podocyte, which causes proteinuria, but also proteinuria in and of itself is injurious to the podocyte. And so it really was a narrowing focus on proteinuria. And so the next task of the PARASOL group was to look at whether proteinuria can be an independent predictor of kidney failure, independent of eGFR. Historically, it was proteinuria has a relationship with eGFR, eGFR is a surrogate end point validated certain endpoint for kidney failure. How do we skip eGFR knowing that that's infeasible, the PARASOL group through 20 different databases and thousands of patients clearly show that if you can get patients proteinuria below certain thresholds, you can have a profound reduction in the risk of kidney failure over 8 years. Those data were presented at ASN in the fall, and that really has opened up the opportunity for us to go back to regulators, back to the FDA and say, are we able to submit on our Phase III DUPLEX data. We had a Type C meeting with FDA where we do now have a pathway. And this is the basis and the context in which we will be looking to submit for an sNDA for this indication around the end of this quarter. And these are the data that were published in the New England Journal of Medicine about 1.5 years ago from our Phase III program. When you look at all of the prespecified thresholds of proteinuria all the way down to complete remission of less than 0.3, you can see an increasing treatment effect of sparsentan compared to max-dose irbesartan. A very profound and meaningful in one of the most proteinuric of kidney diseases. Turning our attention finally to classical HCU. This is a genetic disorder that is oftentimes caught at newborn screening, but not always. About half of patients despite being born with classical HCU are missed at newborn screening. And this leads to through eating protein in your normal diet, a toxic accumulation over time of homocystine which leads to issues of vision, mental acuity, bone formation and perhaps most concerning to patients, half of them have an ischemic event by the time they're 30. But the #1 need of patients is not just in controlling their home assisting levels, it's being able to eat a diet. Because the standard of care today is to severely limit your protein and really to have protein intake through a terribly tasting medical protein. So this is an area of significant unmet need, and we're excited with pegylated enzyme replacement therapy that has been shown promise in our Phase I/II COMPOSE study. Here, you can see across different doses and at the target dose that we've taken into Phase III, you see a 67% reduction in homocystine levels, 100% of these patients were able to get below the guideline target of 100 micromolar. Our Phase III program which was aligned with the FDA, really is innovative in 1 particular area. Not only are we looking to replicate the findings in our Phase I/II with a very similar placebo-controlled trial, but also what we're looking at and was one of the first times ever is to protocolize the intake of protein in your diet to be able to address the #1 need that these patients tell us. And so our focus is this year to increase manufacturing scale up for commercial scale, but then be able to reinitiate enrollment next year very quickly. These patients are waiting. We're excited to be able to bring potentially the first therapy that really targets the core defect of HCU. With that, I'll end with a financial snapshot of Travere. We are very well finance to be able to support those 3 priorities. We continue to see growing revenues, and we're excited to be able to bring hope to these 3 communities that have been waiting far too long.

For those in the audience, please feel free to chime in, raise your hand if you have a question. So maybe to start. Can you give us a little bit of insight on what we can expect for FILSPARI's performance throughout 2025? And do you anticipate a similar quarter-over-quarter growth trajectory to what was observed in 2024.

Certainly. Well, when we look at the drivers of growth within the IgA nephropathy arena, we do expect that most of these patients still are not in remission. And so there's a tremendous opportunity for newer therapies like FILSPARI to be able to reach these patients. Again, most of these patients are still not at remission and are on, in effect, ACE for ARB and so this is the key area that our team is focused on is to replace that and upgrade that foundational therapy. We do expect there to be a similar level of demand like we saw in the fourth quarter. In terms of quarter-over-quarter growth, no, that, I don't expect to see a 40% growth every quarter. We do expect to see that level of demand like we solved with the 693. With that said, we've been incredibly pleased with the level of compliance and persistence with these patients because of the benefit they're seeing. So we do expect that any additional demand that we see will fuel very strong revenue growth into the future.

And with the supplementary NDA acceptance in hand, what is the likelihood that the FILSPARI REMS modification will be updated? And furthermore, what steps remain towards the goal for removal of the REMS?

Certainly. So we have had discussions with FDA along the way, including when we first learned that we would begin a REMS for liver monitoring. And when we met with them about the opportunity to move -- to modify the REMS, we understood what they needed to see from us, including all of the exposure data. To date, we have still not seen cases of drug-induced liver injury and our request was to shift from monthly monitoring for the first year to quarterly monitoring, which better aligns with how the majority of these patients see their nephrologist. With regard to full removal, we have a requirement, a post-marketing requirement to study these patients, 3,000 patients for 2 years of exposure. We're well on our way to be able to do that, and that's the point at which we would go back to them. Again, assuming the consistent safety profile we've seen to date, we would go back and request full removal.

Okay. Great. And the IgA nephropathy landscape is evolving with several similar or mechanistically differentiated therapies nearing approval or in late-stage trials. So how do you anticipate FILSPARI will be positioned as these new options emerge?

Sure. Well, look, it's a really exciting time for IgA nephropathy. And if you think about going back to the illustration, you've got therapies that are targeting the kidney like ACEs and ARBs FILSPARI. You have those therapies that target the immune system, which causes the kidney damage. Historically steroids, systemic steroids and now a whole different number of classes. That combination therapy will continue. Our focus is to replace the role that ACEs and ARBs play because most of those patients are [ ASR ] failures. So there is plenty of room, particularly with the guidelines now calling for simultaneous combination therapy across those 2 approaches, there's a lot of opportunity for growth and I think the opportunity for many companies to educate nephrologists about the innovation and the need to be more aggressive with the therapy. For context, nephrologists were historically trained that IgAN was a slowly progressing disease. That is clearly not the case when you look at the rates of kidney failure, you typically will see someone diagnosed in their 30s, and they're told they have 10 years. That's something that we definitely need to change.

And maybe considering the potential H1 regulatory decision around atrasentan, do you think that atrasentan will or will not get a similar REMS?

Well, it remains to be seen. I think if we look at what FDA gave us on the rationale for a REMS for liver monitoring, this is a therapy that is in the broad ERA class. ERA class under primary arterial -- pulmonary arterial hypertension does have a history of liver damage and so out of an abundance of caution, particularly under accelerated approval where your safety package and your efficacy package are not yet fully characterized. That's what was the rationale. We are prepared either way, but what happens with their approval. And again, the profile that we have for FILSPARI is very clear.

And are there any plans to assess FILSPARI with add-on April or B-cell modulators? Or do you think that they will largely play in different segments of the market potentially?

Well, I think we are very eager with FILSPARI as a new foundational therapy to be able to demonstrate the benefit with other classes. We've done so with SGLT2s, we've studied also within our trials what the combination with steroids looks like. It's very difficult to do those combination studies before you have full approval, but we certainly are open and eager to be able to do that. With that said, when we look at those therapies that are coming behind us in the very near term, all of those are likely to be approved under accelerated approval. What that means is that they're likely to be limited in their indication segment to the most severe patients, those up 1.5 grams of protein and above. But also these companies will not be able to discuss their eGFR data until full approval. So when we look at that segment of patients that are 1.5 grams and above, that's about 30% of the addressable population. And so there's going to be, I'd say, much more dynamism within that segment, which will be decreasing because when you look at the therapies that are available now under full approval, FILSPARI Tarpeyo, you're able to address that and reduce their proteinuria so that, that is a segment that is going to be decreasing. The broader number of patients that are -- that have IgAN are likely to grow. Those less than 1.5. And so yes, they will come -- there will be combination therapy, but where they compete will be very different from those that have full approval.

Sure. Absolutely. Great. And for the next part of the Q&A, I'll kick it over to my colleague, Francis to ask some questions about FSGS.

Yes. So moving on to FSGS what do you believe to be the probability of success that the FDA will accept the sNDA for FILSPARI and FSGS.

Certainly. Well, I can't speak and we don't typically speak about our regulatory interactions. What I can say is that we had a Type C meeting after the PARASOL group reported out, and we believe that we've aligned on a path forward for submission and what we understand is that we have all of the data that are needed for that and the FDA wanted to be able to have us provide that package of data in the broader context of PARASOL to be able to understand the potential benefit. So that's really where we are, and we're eager to be able to give that filing to the FDA within the next month.

Wonderful. And then what do you believe to be the peak sales opportunity for FILSPARI and FSGS? And how does that compare to the opportunity in IgAN?

Well, both opportunities are very meaningful. And most importantly for us is that FILSPARI sell for these patients is incredibly meaningful and an improvement over what they can offer to date. When we look at the size of the opportunity in FSGS, we believe that financially, it could be even greater than IgA nephropathy for several reasons. The first is Nephrologists know that this is a devastating and rapidly progressing disease. There is a high sense of urgency. And so we think that the uptake will be fast. We already have established quite a bit of clinical experience, there's a broad awareness of FILSPARI based on IgA nephropathy, and payers also have experienced with FILSPARI. We also have a target dose that is double that of IgA nephropathy. And while we're not in a position just yet to talk about pricing, you can assume that the pricing per patient will be higher in FSGS, all leading to estimates that we believe will be higher. The other aspect is we do hope that our potential approval accelerates other companies wanting to go into FSGS because this is also one that we believe will be needing combination. But there is nothing on the competitive landscape for many years behind us.

Okay. So to wrap up, what do you believe are some of the most underappreciated upsides of Travere?

Certainly. Well, certainly, FSGS is one that we are absolutely laser focused. This is a community that is really watching what we can do for them. There's nothing else for them. I think there's certainly been a growing recognition about the possibility of being approved in FSGS. But I think the other aspect is in IgA nephropathy. I think there's been a lot of focus on the potential for new immune-mediated therapies to come. But I think that there has got to be a recognition that this is nephrologists see the future of IgAN as a combination. This is not one therapy is going to solve it for patients. And so we are absolutely focused on making sure that FILSPARI becomes a core part of that combination therapy. And I think that that's underappreciated when you think about how rapidly and how broadly the IgAN market is going to grow in the future.

Great. Well, so with that, Eric and Chris, we thank you both for your time and thank you to the audience for attending our conference. Everyone, have a great rest of the day.

Thank you.