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

[Audio Gap] And I'm currently very pleased to have join me on stage, Eric Dube and Peter Heerma from Travere Therapeutics. Eric is going to start with a presentation, then we'll launch into Q&A. So Eric, the floor is yours.

Excellent. Jason, thanks so much for hosting us, and thank you for indulging me in reviewing a few aspects of Travere that we're very excited about this year. Travere Therapeutics is a rare disease company. We are focused in really transforming the outlook for 3 rare disease communities, 2 in rare kidney disease, the FSGS community and IgA nephropathy, as well as a rare metabolic disorder, classical homocystinuria or HCU. Each of these represent a tremendous advance in the treatment for these conditions, but also potentially transformative for Travere as well. This year, we have 3 key priorities that we believe will set the foundation for both near- and longer-term growth for the company. The first is to continue the successful launch of FILSPARI in IgA nephropathy. In September, we received full approval for IgA nephropathy, and we've seen a significant uptick in demand for the treatment of FILSPARI. And as we look forward, we look to have the final version of the KDIGO treatment guidelines that have placed FILSPARI very well as well as the potential modification of our REMS that will make it just that much easier for patients to access FILSPARI. Our second priority is to establish potentially the first therapy ever approved for FSGS. There is an incredibly high unmet need for this community. And we have submitted an sNDA, and we are expecting to receive notification of that application this month. If we receive priority review, which we've requested, we potentially could have a PDUFA date in September. And then our third priority is in HCU, and that will be for reinitiating enrollment in our Phase III program based on some additional commercial manufacturing scale-up that is ongoing, and we are on track with that program as well. I want to focus primarily on IgA nephropathy. There's a lot going on within this space. It's really exciting to see that, whereas many of these patients were planning for kidney failure within a decade or 2, patients now could potentially live in a world in the next couple of years where you can stave off kidney failure for the rest of their lives. And that's really based on the addition of new therapies to this space. This diagram really reflects the 2 key components of treating this disease. Historically, physicians targeted both directly the injury that's going on in the kidney as well as preventing additional injury from overactivation of the immune system. And the interventions that have historically taken place over decades is RAS inhibition for their nephroprotective properties and steroids to suppress the immune system. With the recent innovation, we're seeing improvements over those standards of care. The first with FILSPARI, we've demonstrated superiority in both kidney function and in proteinuria over RAS inhibition. And then budesonide was also improved as a reformulated steroid. We then also have a new ERA that is also targeting the kidney and then to come, we've got complement inhibitors as well as B cell -- APRIL/BAFF that really target the overactive immune system. The treatment guidelines really advocate for combination therapy. It's not enough to suppress the immune system and prevent injury of the kidney because these patients, by the time they are diagnosed upon biopsy, already have a disease process in the kidney. Essentially, these patients have 2 diseases, 1 of the immune system, 1 in the kidney. And so we really see FILSPARI as uniquely positioned to replace the traditional role that RAS inhibitors have played and can be used in combination with the immune-targeted therapies. And this really outlines some of the key aspects of why we see FILSPARI uniquely positioned within the space. It's 1 pill with 2 mechanisms, a profound reduction in proteinuria. It can be used in combination with many of the other classes of therapies. And we have 2-year data on efficacy and safety to demonstrate what this chronic therapy could look like. If we turn our attention to the next therapy we look to enter, that's FSGS. There's been a lot of advances over the last 12 months in FSGS based on what is called PARASOL. This is a public-private collaboration that really had academics contribute over a dozen different databases to better understand what are the right endpoints for developing therapies within FSGS because eGFR is really not a feasible endpoint given the high variability and heterogeneity within this disease. And what they found was that first, this is a disease, a community that really needs innovation. The therapies that are available are really not effective and the rate of progression to kidney failure is profoundly fast, particularly for children that are disproportionately affected by a genetic type of FSGS. The second is that central to this disease process, regardless of the etiology, these patients have a podocytopathy. They have a progressive loss of the podocytes, which is the filtering cell within the kidney, that leads to progressive kidney dysfunction and increase proteinuria. And that really led this group to demonstrate that proteinuria can independently predict the rates of kidney failure and the risk of kidney failure over time. And that really led to us meeting with the FDA and them agreeing to accept for us to file an sNDA for this condition. And again, this is what we're waiting on this month for notification of that acceptance. And when you look at our Phase III data, it is a really clear relationship. Here, you can see at different increasing -- or decreasing thresholds of proteinuria, you see increasing treatment effect at the most rigorous of those endpoints, complete remission or less than 0.3 grams of protein, something that many nephrologists thought was impossible. We see nearly 2.5-fold increase in the proportion of patients compared to max dose active control RAS inhibitors, a really exciting prospect for this community. And then recently, we were able to replicate in our Phase III program one of the analyses that was done in PARASOL where if you look at what is the rate of actual hard endpoints within 2 years -- this is kidney failure within a 2-year clinical trial setting for those patients that either achieve partial remission or complete remission. And essentially, you are able to reduce the risk of kidney failure in 2 years by 67% to 77%, something again, many nephrologists thought was not possible in a rare disease 2-year trial. So it gives a lot of promise to this community, and we are again expecting to hear from FDA this month. So with that, I will turn it over to Jason to questions that you have.

Perfect. Well, thank you so much for that great introduction. Maybe let's start with IgAN because, as you said, full approval, we've seen robust sequential growth. But how does growth look like throughout the rest of this year and the next, considering all the levers you just mentioned?

Peter, do you want to take that?

Yes, I can take that. I think a meaningful impact we saw after our full approval last year in September. We basically grew the new patient start forms, increased about 40%, and that trajectory continues in Q1 as well. In particular, as we move to where the majority of the patients reside, I mean, initially, within the accelerated approval, you have a label that direct physicians to treat patients at 1.5 proteinuria levels or higher. Now that we have no proteinuria restriction in the label anymore, we see that the median is moving to the left, to lower proteinuria levels, below 1.5. And based on our research, that's where the majority of the patients reside. Like 70% of the market opportunity is below 1.5, and that's where we see us moving. So I think that allows for a very meaningful continued growth opportunity in the future.

You bring up a good point, especially with the KDIGO guidelines. It seems like the guidelines are codifying what we sort of knew from the start that earlier intervention is better here. But to what extent is this really driving growth? Are there prescribers out there that really don't subscribe to that notion or are somewhat skeptical of it?

Yes. It's a good question. You have to realize, like historically, there was no data that really showed like what is the progression of this patient population. It's still a rare disease. Every nephrologist has a handful of patients of -- with IgA nephropathy. But the course of progression was not really well understood. When we entered this market space -- this is one of the investments we made with the RaDaR data set in the U.K., 2,500 patients that were longitudinal followed. And that actually showed that this is a much more progressive disease than physicians have thought historically. And that data set has now been repeated in the U.S. as well. That was the reason why the global guidelines now has a much more aggressive treatment target than what we had in the past. Like 1 gram per gram was considered to be a good level. Now what the guidelines say is you have to go to 0.5, preferably 0.3. And you have to treat those patients earlier and more aggressively. And we see that translation right now. But it's an evolution. The market is evolving. This is really like a market in development. And I think the heavy lifting we have been doing, and now we can kind of like move into that lower proteinuria category. We're still -- and I'm saying lower proteinuria level, but still substantial risk. Just to give you an indication, like a patient with a proteinuria level of 0.9 historically was considered like within the target. That patient still has doubled the rate of progression compared to a patient that has a proteinuria level of 0.44. And so this is a younger patient population. I mean the majority of the patients is male in the 30s, in the midst of their productive life. If you have doubled the rate of progression towards kidney failure, that is significant. And I think now with that data, we have a strong story to tell that there are better treatment options like FILSPARI to treat those patients earlier on.

Got it. So a 2-part question. When do you think we'll be able to see the finalized version of the guidelines? And then, I guess, to what extent -- what proportion of prescribers are already starting to embrace that sort of mentality?

Yes. It's a good question. I would say -- when is it being finalized? The latest I heard is it's in the late summer, early fall that the publication will be there. From a thought leader perspective, they are very involved with the KDIGO guidelines, but the community in nephrology is a little more remote. So I think once you have the full publication, you can provide much more exposure to that community and see more an urgency to treat and to act earlier on.

Makes sense. There's yet another growth lever, I don't think you mentioned, but the REMS. And you're on track for FDA decision kind of early fall here. But has the REMS been an issue, you think, to uptake?

Well, what I would say, like if you look at our performance and you compare it to other recent rare nephrology products, and I'm thinking about Aurinia, Calliditas, chemocentrics, we have outperformed those products while they didn't have REMS and we had REMS. Having said that, this is a rapidly evolving marketplace. And there is more products in the market right now, and we want to make sure that we are competitive on all fronts. I believe we have a superior profile to other products. But we want to make sure that we remain competitive. And in particular, when you go to lower proteinuria levels, you can expect that the motivation to go through REMS may be less. And physicians are a little more restricted as well if a patient would be compliant. This is the time to further ease in that REMS, and I think we are on track in doing so. So I think the timing is actually right on.

Got it. And we'd be remiss if we didn't point out that atrasentan was just approved without a REMS. Is there sort of a sense that regulators who may have earlier been acting out of a sense of an abundance of caution has sort of shifted their thinking?

Well, it's tough for us to speak for the regulators. I think what we saw was encouraging that they are looking at the data and are not being as focused on through accelerated approval, they're going to limit everything. What they've said consistently to us is that with additional exposure and assuming continued no cases of drug-induced liver injury Hy's law that they would be open to looking at whether the REMS is needed. And we do have an sNDA, as you said, with a PDUFA date of late August to be able to modify. And I think with that end, we recently announced that we can now rule out less than 1 in 1,000 with still no cases of Hy's law that ultimately, we believe that our strategy to remove the REMS should be successful.

Do you think, though, that the approval gives you some sort of ammunition when you're talking with regulators about sort of a progression forward at least?

Well, I think it certainly helps, but we do know FDA is evidence-based. And we want to focus the rationale on the exposure, on the safety profile that we have. And with the file that we have submitted with FSGS, FSGS patients in our trial were treated at double the dose. So they've got higher exposure to drug and still consistent levels of AST/ALT elevation than active control irbesartan, something that's commonly used in a very large data set, and still no cases of Hy's law. So we want to first focus on the evidence, but certainly the rationale of having other recently approved, accelerated approved therapies with no REMS certainly gives us further motivation.

Great. And then longer term, you mentioned on your slides, there's the potential that FILSPARI could be foundational within the treatment paradigm. And so I'm curious, how are you thinking about building that case, whether implicitly or explicitly, over the next few years?

Sure. Well, if we think about foundational therapy, I think it's important for us to be able to frame what we mean by that. A foundational therapy is one that is meant to be used chronically across a very broad and the broadest set of patients. Certainly, with the indication that we -- statement that we've received under full approval, we have a very broad indication. We also, through our clinical development program, have a very unique set of trials. The first is the only trial looking at treatment-naive patients. This is a repeat biopsy study looking at patients that have never been on RAS inhibition. And we're able to look at not just what's going on functionally, but also structurally within the kidney. And we're seeing some very exciting results coming out of that trial. And for example, if you are able to intervene with FILSPARI early for an IgAN patient, you get nearly 2/3 of these patients into complete remission with a stabilization of eGFR. It's an incredibly exciting set of data. But we're also looking at the other spectrum. For patients that are post transplant and have recurrent disease, this is a really high unmet need. And we are initiating 2 studies looking at post-transplant patients. And there have been some case studies demonstrating some really promising results with FILSPARI. So we want to be able to look broadly across this, but we also want to have evidence to be able to support the combination of FILSPARI with others. We have 2 studies that have successfully read out in the combination of SGLT2 showing additive benefit and a consistent safety profile. And we're eager to be able to collaborate with other companies within this profile -- within this space, for example, with B cell once those are available commercially. That's really what we mean by foundational is broadly for chronic use and to be used in combination.

It would seem that there's quite a bit of, I guess, clinical support for combining FILSPARI with SGLT2s and the B cell inhibitors. But when you think about it, this is a practical consideration when it comes to cost, is that likely to be a hurdle here?

Peter, do you want to take that?

Maybe you can start, and I'll build on.

Yes. So I think the overall rationale for our approach with pricing is for broad access because in order for us to be able to achieve our vision of foundational therapy, you need to have broad access for patients. You need to make it easy for the patient as well as their provider. And so this was a fundamental part of pricing. We also had assumed years ago that there will be combination use because, again, we understand the disease process. Particularly for IgAN patients, you have essentially 2 diseases, a disease of the immune system, a disease of the kidney. And so we assume that the future is going to be combination therapy innovation, both for nephroprotective therapies as well as immune-targeted therapies. We can't control nor foresee what other companies will do for pricing. But our approach with payers is to be able to provide something that provide -- that suggests broad access, but also health economic value for being able to reduce the risk of kidney failure, which is high in IgAN, even higher in FSGS. So we've seen anecdotally that physicians are able to successfully get FILSPARI and other branded rare disease therapies used in combination. We suspect with strong data, a good health economic story and KDIGO guidelines that strongly advocate for earlier intervention with combination to get patients into complete remission, which does change the trajectory and prognosis for these patients, we think that there will be increased combination in the future.

Yes. I think in particular, on the last point, with more ambitious treatment targets, basically full remission, that's where KDIGO is pointing to, you will see more combination. But that doesn't mean that combination is starting together 2 novel therapies on the same day. So there's still a sequencing aspect. I think from a payer perspective, building on what Eric said, we are priced for broad access, but not only that, we have the highest rigor of evidence, and that's what the payer wants. The payer wants to see the highest rigor of evidence, direct, head-to-head, active comparator trials. FILSPARI has that. Other new entries won't have that. The second component is the translation of proteinuria benefit in long-term kidney preservation. We have that long-term data as well. So I think we have a very strong position that is articulated in the formularies and the payer plans that FILSPARI is in. And so likely, I think that's why foundational treatment concept is really important to understand because you start with FILSPARI, targeted kidney injury. Take in mind, 75% of the patients that are being referred to the nephrologist already have lost about half of their kidney function. So the first thing that the nephrologist wants to do is to protect those remaining nephrons and then add on, if the reduction is not leading to complete remission.

Got it. On the time we have left -- obviously, I think the big focus for a lot of investors is the opportunity in FSGS. Can you maybe describe what sort of brought regulators around to kind of the thinking of PARASOL there?

Sure. Well, I think the timing was everything, I believe, here. So in the ASN, the fall of 2023, we had simultaneous presentations and publications of both of our Phase III, the PROTECT trial in IgAN and in the same session at ASN, the Phase III DUPLEX trial in FSGS. And what you see in both of these trials, which were 2-year trials comparing sparsentan to max dose active control irbesartan, you see a profound reduction in proteinuria that is sustained out to 2 years. In both of those trials, you also see a treatment effect on eGFR's annual slope of about 1 milliliter per minute per year. However, in FSGS, you saw the P value that was not significant. And it was like a light bulb went off within the expert community at that time to say, the only thing that's different is the variability. The variability on eGFR in the FSGS trial was about double that in IgA nephropathy. And for those treating clinicians, it made complete sense because the FSGS community is much more heterogeneous. It can be genetic. It can be immune mediated. It can be of unknown cause. It can be secondary to another condition. And so it was really that moment where the community, both the expert community, regulators and the patient community said, we need to go back to the drawing board because if eGFR is not going to work in a 2-year trial, we may never get innovation within FSGS. And so that's really where there was a call to the academic community, say, if anyone has registry data, database for FSGS, donate it. We can pool that and look at what could predict hard endpoints, kidney failure over a longer period of time. And that's what, as I shared on the slide, went from eGFR is not going to work. You would need to, in a 2-year trial, have over 900 patients per arm in order to show a treatment effect to overcome that variability in FSGS. And what they were able to show is that if you were able to get a profound reduction in proteinuria, you can independently predict kidney failure within an 8-year period of time. A 2-year reduction in proteinuria predicts 8-year kidney failure. And that's really what led us to where we are today and FDA saying that they're open to proteinuria as an endpoint. They've not only shared that with us, but another company that is in Phase III with FSGS.

Makes sense. It seems like, again, the agency's thinking is evolving over time. But do you have a sense of what the prescribers, at least for FSGS, are thinking along the same lines?

Sure. Peter, do you want to take that?

Yes. There is so much excitement for FILSPARI in FSGS patients. And you have to realize this is basically the same prescriber base as IgA nephropathy. And what I often hear basically in every conversation that I have with nephrologists, we are excited of what FILSPARI is doing for my IgAN patients. I'm even more excited what it could mean for FSGS. I mean this is a patient population that has had no treatment. There's no approved treatments. And this is the most progressive glomerular disease. Patients are often symptomatic. And so for that reason, physicians are really excited about the opportunity. And that provides such a great platform for us because the opportunity is tremendous. The need is really high. And we have done everything in the last 2 years from brand awareness, building experience, the payer access that allows for a very rapid uptake in this patient population.

Yes. And maybe 2 things. One is the brand awareness we're doing is in IgAN. But I think there certainly will be clinical experience and recognition if and when we're approved.

Good clarification.

Thank you. The second thing is just to further understand how nephrologists think about proteinuria as an independent marker. These are physicians that are seeing oftentimes nephrotic range proteinuria for their FSGS patients and active loss of kidney function. And so there -- this is -- you don't need to convince the average nephrologist that reducing proteinuria for these patients is meaningful. I think that there certainly is a recognition that eGFR is important. But from a clinical trial perspective, that's very different than their goals in practice, which is get these patients' proteinuria down.

Great. You sort of touched upon the next question. But how much of a lateral is FSGS from IgAN in terms of the launch? I mean what do you need to do, I guess, beyond what you're doing now in IgAN? And where could some of the more, I guess, bigger headwinds be?

Yes. As I mentioned before, like IgA nephropathy, we really had to establish that urgency to act and to act more quickly and more aggressively. For FSGS, that's not the case. Every nephrologist understands the progressive nature of the disease and that those patients are symptomatic. And I think there is one target group that we didn't talk about, that's pediatric patients. In particular, for that patient population, there is nothing. We are seeking an approval for patients 8 years and older. And I'm really excited for the parents of those children that now finally have an opportunity to treat those patients more effectively.

Any sense in terms of timing and when you'll get feedback from FDA?

On the sNDA?

On the sNDA for FSGS.

Yes, this month is what we're expecting.

Great. Well, we have just a few minutes left. You mentioned during the big health care conference in January potential of looking externally for maybe a next leg of growth here. Maybe not just that, but in terms of thinking about the capital allocation priorities moving forward, what do those look like for you?

Sure. Well, first, let me say that for our 3 priorities that we believe will fuel the growth of the company for years to come, we are well capitalized. We've got growing revenues and cash balance of $322 million at the end of last quarter. As we look forward beyond those 3 priorities, we certainly are interested in building out our pipeline. We think that there are many other rare diseases, including within rare kidney disease, that don't have therapies approved or very ineffective therapies. And that's really where we see the core capabilities of Travere in working with the community and regulators on identifying the right endpoints, successfully completing clinical programs, and of course, the commercial success that we've seen with Peter's team. Those are the elements that we're thinking through. The other aspect is timing. We have a lot on our plate this year. We want to make sure that we are executing and continue to execute exquisitely. But certainly, as we look forward, we would look to expand our pipeline, and we hope to have options to be able to finance that.

Got it. Well, give you an opportunity to toot your own horn here. But Travere has done a lot in the past year or so in terms of executing both on the commercial front, on the regulatory front, certainly within the community. I mean what is the ideal asset for you? I mean what can you leverage all of your strengths for and move forward with? Is it another, for example, asset in IgAN?

Probably not in IgAN. I think that, that is going to be a community that will be very well served with all of the options that are in development. There are other communities that really are looking to, for example, what was done with PARASOL and say, can we be next? I think about the Alport syndrome community. I think about ADPKD. There are others within the rare glomerular space. But I also think the work that we've done within HCU, I think, gives hope to other communities that are adjacent to that where there may not be anything approved. And they look at what we've done to be able to help raise awareness, identify regulatory pathways that may not have been there to date. And those are the things that give hope to the rare community. That's what we do at Travere, and that's what we look to do in the future.

Great. We're just about out of time. So Peter and Eric, thank you so much for joining us. Really appreciate it.

Thank you very much.