Travere Therapeutics, Inc. ($TVTX)

Welcome to this, our second day of our Bank of America Annual Las Vegas Healthcare Conference. On a very toasty day, I am pleased to invite up here on stage with me Travere Therapeutics, Eric Dube, President and CEO; and Peter Heerma, Chief Commercial Officer. Eric, Peter, thank you so much for joining us.

Thanks for hosting us.

Pleasure to be here.

Maybe let's start broadly for investors who may be somewhat new to the story. Eric, can you provide a brief background on Travere and FILSPARI?

Yes, absolutely. And you can go on to our website for a pretty extensive corporate deck with background information as well as forward-looking statements. Travere Therapeutics is a commercial stage rare disease company. We've been focused on developing innovative therapies for rare kidney diseases that really have been devastating for both IgA nephropathy and FSGS communities. And we're very pleased to really pave the way for innovation and hope for these communities. We also have a Phase III program in classical homocystinuria with a pegylated enzyme replacement therapy, pegtibatinase that is now currently enrolling Phase III. And we're really a company that's excited about bringing now the first FDA-approved therapy to the FSGS community. This is a really devastating rare kidney disease. We received FDA approval 30 days ago, and I'm sure we'll be talking about some of the dynamics of that launch. But this has been really a passion of our company and really one that we've stuck through because we know how important a therapy is for these patients that have just a rapid progression to kidney failure.

So obviously, I think recent attention has understandably been centered on this approval in FSGS. So recognizing the launch is still early, what are you seeing so far in terms of initial demand? And how would you characterize early physician awareness of this monumental approval?

Yes. I would say, overall, there has been overwhelmingly positive feedback from the community. To Eric's earlier point, this is the most progressive glomerular disease, and there were no approved therapies so far. So this was highly anticipated by physicians. I just came back from the National Kidney Foundation Conference last week with over 3,000 participants and the feedback was highly consistent and overwhelmingly positive.

The FSGS label specifies patients without nephrotic syndrome. I think there was some concern here initially, but why might it not be that big a deal?

Yes. Let me start with saying like it's for a broad patient population. It's treatment of proteinuria in FSGS patients, broadly independent of etiology that are not currently in the nephrotic syndrome state. And nephrotic syndrome is a dynamic state. It's not a static state. Patient can be in nephrotic syndrome at one point, but with treatment of, for example, diuretics or with steroids, patients stabilize, but having remaining high proteinuria, that patient still remains at high risk, and that's where FILSPARI comes in, which is very consistent to how physicians treat today and also very consistent to the global guidelines KDIGO that was published in 2021.

How challenging do you think it's going to be to educate physicians about sort of managing the system and making sure that patients are in compliance, but still able to receive treatment?

Yes. I think from a physician perspective, I think there's 2 elements, right? There's a patient component, there's a physician component. From the physician component, physicians understand it's a common injury pathway. It's really about podocytopathy independent of etiology that needs to be treated. Physicians understand as well that this is not competing with a steroid, but it's complementary to, and it's more long-term kidney protection. From a patient perspective, this is a highly activated patient community. Many are also connected with NephCure, the patient advocacy organization. So far, I'm expecting that we will see high compliance and persistence as what we saw with IgA nephropathy, also given the patient services that we are providing to this patient community.

In terms of early feedback, have physicians given you a sense of where they intend to use FILSPARI relative to ACE, ARBs or the SGLT2 inhibitors?

Yes. Well, first of all, FILSPARI has a component of angiotensin inhibition. So it's per definition, replacing ACE inhibitors or ARBs or for incident patients, they could go to FILSPARI directly. As I mentioned before, this is the first approved medicine. So I think FILSPARI will be really like an anchor therapy. And to my earlier point, it's about the podocytopathy. So it's hard to say right now, is there a particular subtype where it's used more than others. I think most importantly is that physicians understand the common injury pathway that needs to be treated, and that's what you do with FILSPARI.

You've guided to faster uptake in FSGS versus IgAN. But what does that mean? And sort of how are you measuring sort of your metrics for a successful launch?

Yes, there's a couple of things to take into account. I mean, if you look at the addressable patient population that we anticipate is more than 30,000 at launch. I'm actually expecting that market to grow quite quickly over time with more biopsies, in particular in secondary FSGS as well. If you compare it to IgA nephropathy, where we anticipate about 70,000 patients addressable today. So you have, let's say, roughly half the patient population, but then FSGS is regarded as the most progressive glomerular disease with the highest unmet need. So with IgA nephropathy, we really had to establish the urgency to intervene earlier. That's not needed with FSGS. And on top of that, you build upon 3 years of brand equity. This is basically the same prescriber base. Physicians are very familiar with the profile of FILSPARI. Many have already experience with IgA nephropathy. So taking those components in consideration, even though it's a small patient population, we do anticipate a faster uptake.

In general, FSGS patients are generally seen once a quarter. So does that impact the cadence of the launch at all in terms of expectations? Or is there just such overall awareness of this drug coming in that it might not matter as much?

Yes. I think it matters within context of -- and often I get a question like do you expect a bolus? Is there like a high amount of patients that will be treated right away? And how I answered that in the past is I don't really anticipate that given the frequency that those patients are being seen by the nephrologist in average, every 3 months, it can be more frequently, in particular when they are in nephrotic state. I mean sometimes they're in the hospital as well being treated, sometimes with IV steroids as well. But overall, I'm expecting a steady linear uptake.

Yes. I will avoid the word bolus moving forward, gentlemen, for sure. With significant prescriber overlap between the 2 conditions, I guess, how much incremental education is necessary, both around FILSPARI, maybe to navigate the REMS reimbursement program? What's needed there?

Yes. Like I said earlier, like it's a large overlap. It's basically like nephrologists that are focused on glomerular disease are treating both IgA as well as FSGS. So the profile of FILSPARI is well understood. The nephroprotective nature of the drug, I think, is well understood. The injury in FSGS is slightly different than in IgA. IgA is more about the mesangium disease, while FSGS is more about the podocytopathy. So that's an education. The indication that we just talked about, broad FSGS, not actively in nephrotic syndrome. That's an educational element as well. And then there's an important dosing component as well. IgA nephropathy, the indicated dose is 2 weeks, 200 milligram and up-titrated to 400 milligram. With FSGS, it's 400 milligram for 2 weeks and then up-titrate to 800 milligrams. So I think those are the 3 elements that you still need to educate nephrologists on.

Got it. You've mentioned that payer feedback has been generally very, very positive. We've talked about the halo effect, and we'll get into that a little bit more when we talk about IgAN. But is it possible that there's a similar sort of positive payer halo effect there that somehow that facilitates use in IgAN?

Well, let me nuance it first. I mean it's for the launch. So I wouldn't say like all the payers are reimbursing FILSPARI from the get-go. But what we are seeing, and I mentioned it last week in the earnings call is that the initial first pass approval rate for FSGS is higher than what we saw for IgA nephropathy. So if there is a halo effect, it's really on FILSPARI is already included in most of the formularies and payer plans. And payers review both at the product level as well as an indication level. So when you have the product already in the payer plans, it's easier to build upon that and to extend that with the indication. And before it's being evaluated by the P&T committees, often what you see is that authorization criteria are applied for the other indication. And that, I think, explains why we see a higher first pass approval rate so far. But it's 4 weeks and launch, I just want to nuance because the payer plans and P&T committees that's really happening in the next few months.

Well, if anyone is going to hold to that, it's Jackie on the team, Jackie?

So looking ahead, there are additional therapies advancing for FSGS. So how important is FILSPARI's first-to-market advantage in establishing share?

Yes. Well, I think, first of all, it is really important. But I think even more importantly is that we have quite a long leeway until the next potential product comes to the market, and they're not competing. I mean it's complementary to what FILSPARI's mechanism is. I think we're in a very strong position for all the reasons that I just mentioned to create a very strong position in FSGS. And I think it's great for patients that other mechanistic approaches will be evolving over time. And I think this is encouraging as well new innovation for FSGS patients. This is definitely a patient community that needs new innovation. So I'm actually encouraged by that.

So as these programs mature, should we think about them primarily as potential combination partners, competitive thoughts or more of an opportunity to expand the market?

Yes. I think IgA is a good proxy for that. Are you talking about specifically FSGS or?

Yes, FSGS.

Yes. I mean if you look at IgA nephropathy, I think that's typically a market that needs to be developed. When we launched 3 years ago, as I mentioned earlier, that market really needed to be established because historically, physicians thought that as a relatively benign disease. And they felt like even with high proteinuria, patients relatively stable. With the investment that we made in more scientific evidence in the RaDaR data set that was then adopted by the global guideline committee, KDIGO led to a much more rigorous and more ambitious treatment target. That's step one, but then you have to create the noise as well in the education and more companies being in the market will help to really develop that market. And that's exactly what we are seeing in IgA nephropathy. More mechanistic approaches are coming in, more companies bring firepower to educate the nephrology community. And that's actually what you're seeing right now. That market is rapidly growing and we will continue to grow because we're still scratching the surface there.

Yes. I mean I think if I can add, Jackie, one of the most important things that I think we all should be focused on as an industry is reaching these patients sooner. I think what we've seen within kidney disease, particularly if we think about the concept of each kidney has about 1 million nephrons. Once those die, for example, in FSGS, the damage really at the podocyte, the filtering cell, that's it. They're gone. So that's what leads to the progressive nature of these diseases and particularly FSGS. So the idea of being able to reach these patients earlier in their disease, diagnosing them, biopsying them earlier, that really is going to have the greatest meaningful impact on these patients' outlook. So for us to be able to do that is one thing. We're certainly going to be doing that as part of our education campaign and reaching these patients sooner. But that's where as we have more patients -- more therapies coming in, more companies coming in, we hopefully will be able to reach them sooner. We're seeing early signs of that in IgA nephropathy and the data that we've generated in first-line use in IgA nephropathy clearly show that you have a better response the earlier you reach. That really is, I think, what we should be striving for as an industry.

If you think about how you got here, the PARASOL working group is obviously very important in sort of establishing proteinuria as a really good surrogate endpoint for the disease. And so I'm curious Eric, as you've kind of made the rounds, has that message sort of been taken up amongst the greater community that the idea of the willingness to intervene earlier to maintain this proteinuria prevent it from getting worse?

Yes. I mean I think that, that's certainly going to be the approach. We were very encouraged to see the consistent feedback that FDA gave to another company within this space that proteinuria can be used as an endpoint. And I think what we would expect to see is being able to reach patients earlier, the awareness is going to be there. I think the incentive for nephrologists to want to biopsy patients earlier because that's not -- that is a risky procedure. It is a painful procedure. And so I think that's going to help also be able to reach these patients. Hopefully, we'll have more clinical trials within the space. We would expect that now that we have approval of FILSPARI that, that likely will be seen as the foundational therapy in other clinical trials. So I think that, that the space should evolve. And I mean, just look at what we've seen in the IgA nephropathy space over the last 5 years, it's been tremendous. And let's hope that in the foreseeable future that a patient that's diagnosed with IgAN should never have to see kidney failure. That, I think with all of the options that we have in innovation coming and how quickly something like FILSPARI has been adopted within clinical practice, there's no reason to believe we can't see that within FSGS, particularly with something like FILSPARI helping to extend these patients to be able to get to, for example, a clinical trial if they do progress.

Maybe this is too philosophical. But as you think about how IgAN has changed with the KDIGO guidelines moving towards a much more aggressive approach. Is that something that's really, I think, resonating with nephrologists and their willingness to intervene in both IgAN and FSGS earlier?

Yes. Peter, do you want to take that?

Yes, I think that's certainly the case. This is a progressive disease. I mentioned earlier like often physicians historically thought about proteinuria, well, my proteinuria is stable, let's say, 1.5 gram per gram. But the reality that patient is at high risk of progression. That's not a patient that is stable at all. And you need to have the rigor of evidence to show that. And based on the investments we have made, and I think we really spearheaded that early on, the evidence is existing now and you want to build upon that base.

I think one of the easiest ways that we've been able to look at that is what is the median proteinuria level, UPC level at initiation of FILSPARI. We've seen that continue to evolve to earlier levels that still signify patients at risk, but it's encouraging to see that physicians are adopting FILSPARI. And we would expect to see with other therapies coming, other classes of therapies that address the immune side of the disease that we're going to see an acceleration in the adoption of innovation and hopefully be able to reach these patients sooner with a combination to be able to hopefully ideally prevent them from ever reaching kidney failure.

Maybe let's take that question to -- or that topic to just a deeper level. How much of what you've seen over the past 2 years in terms of IgAN's growth is driven by earlier line use?

How it's hard to quantify that. But I think to Eric's earlier point, what we had commented on earlier is that our -- in the accelerated approval phase, we had a proteinuria target of 1.5. With the full approval, that target was eliminated from the indication. And from that moment, we started to see that the median proteinuria baseline treatment started going to the left to lower levels, and that's continuing the case. So it's hard to quantify that like how much is driven by the market development, but it's how the market is developing overall to prevent progression earlier on and with lower proteinuria targets, and that's exactly what we are seeing.

Do you think that same sort of bend towards being much more aggressive earlier is going to help open up the market to branded combination approaches earlier?

Well, I think that's exactly right. I think conceptually, the treatment paradigm remains the same. And what I mean with that, it's a two-pronged approach. Historically, physicians were treating with a nephroprotective treatment being RAS inhibition and then going upstream, impacting the immune mediation with steroids, but now you have superior options. FILSPARI versus ACE and ARBs and FILSPARI is the only treatment that has shown superiority versus a maximally dosed active comparator. And what you see in the other category is that B cells complement inhibitors are replacing the historical steroids. So you have more efficacious and safe treatments in both categories that would allow you to go to a much lower and more rigorous treatment targets. And when I'm speaking to like the guideline committee members, they always tell me as well, like we have to take an example, for example, to rheumatology, where you treat much earlier and much more aggressively. And as a nephrology community, we have to go in the same direction, and that's exactly what you're seeing right now.

I guess for both of you, what are your expectations as far as FILSPARI's ability to become foundational in some of the treatments, especially as the newer sort of more immunologically focused assets, the APRIL/BAFFs come into play?

Well, I mean, I think when we look at the guidelines and we look at what thought leaders in the space are saying, it already is foundational. The positioning within the global guidelines is very clear. And I think reflecting the superior nature of what has historically been foundational ACE inhibitors or ARBs is there. We also have very strong data in combination with SGLT2s, which have demonstrated benefit in IgA nephropathy, and that's what we hear from many physicians saying that really is the ideal combination for foundation. And the guidelines clearly say that it should be used, patients should have a combination targeting the immune system. But I think perhaps most compellingly is how are physicians changing their behavior now and Peter can talk about our uptake given that we now have innovation within the immune space.

Yes. And one thing to add on that is you have to realize once a patient is being referred to the nephrologist, the vast majority of those patients are already in Stage III. That means that half of their kidney function has already been lost. Half of their nephrons died. And so the first thing that the nephrologist wants to do a nephrologist to protect those remaining nephrons. So that's why the nephroprotective treatment is really the foundational component. And then simultaneously, you also want to go upstream to minimize the production of [indiscernible] igA. So I think it's a hand-in-hand approach. But again, those patients have already lost half of their kidney function to start there. That's why we call FILSPARI foundational.

I think that's a great segue into some comments you made at the last earnings call that the combined opportunity between FSGS and IgAN could be upwards of $3 billion. what goes into those assumptions? And what are the key drivers here?

Yes. So if we look at the number of patients that in the U.S. are eligible for FILSPARI in IgA nephropathy, there are about 70,000 patients. And we believe that, that's going to continue to grow as we've talked about the physicians really helping to identify these patients earlier. There's growing awareness about this. And I think there's a greater sense of urgency that patients that may be seen as stable or earlier in their disease still are at significant risk over 10 years, and these are patients that oftentimes are in their 20s or 30s. So they've got an extended period of time that we've got to preserve their kidneys. So we do believe that, that addressable number of patients is going to grow. And with the introduction of other therapies such as B-cell inhibitors, we don't anticipate that, that's going to impede our growth. When you look at the last 2 quarters, when we do have multiple treatment options available for these patients, we've seen our highest number of number of patients being prescribed FILSPARI. So that adoption of innovation on both sides of the treatment guidelines is only accelerating, and we anticipate that, that's going to continue. When we look at the other component of growth for FILSPARI over time, it's FSGS. These patients have been historically been treated with long periods of immunosuppressant and steroids. These patients really have been desperate for something that can be one that is FDA approved, but in many ways, is an option that's better suited for them. And that's really where FILSPARI plays. There's over 30,000 patients today that are addressable, but we believe that with greater awareness, earlier detection, earlier biopsy that those numbers are going to grow just as we're starting to see early signs of that in FSGS. And it will be a number of years before other therapies are likely to be approved for FSGS. We are hopeful that these patients have treatment options that could be used with FILSPARI. But at this point, FILSPARI is the option. And as Peter mentioned, the reception from the nephrologist community has been overwhelmingly positive, and we do believe that the uptake is a sustainable one to be able to reach those numbers. But fundamental to us is a speed of reaching these patients because we know that time matters for these patients and their kidneys.

Maybe just to switch gears a little bit. You obviously have a late-stage development program, as you mentioned earlier, in pegtibatinase. Could you describe a little bit about the opportunity here? And then as you think about top line data next year, what's sort of the benchmarks we should be looking for?

Sure. Well, so classical homocystinuria, HCU is a genetic metabolic disease. It is part of newborn screening because there is a much older therapy that is approved. It's betaine for these patients. It's not -- not all patients respond to this and don't tolerate it that well, but that's what allowed it to be part of newborn screening. And unfortunately, as part of newborn screening, half of newborns that have HCU are missed. So the estimates that we have today of about 35,000 patients that are diagnosed, being seen by a specialist and are not controlled, we believe that, that's an underestimate because so many patients may not be diagnosed until later in childhood or early adulthood. For those patients that are not well controlled, you see a toxic accumulation of homocysteine that leads to dislocation of their lens and eye problems, bone malformation and growth of bones. 25% of these patients have an ischemic event by the time they turn 16 and half of them by the time they turn 30. And unfortunately, for many of these patients, that is fatal. So there really is a real need beyond how these patients are being treated, which is with a very strict limitation of protein in their diet, a really expensive and terrible tasting protein powder. And for some patients, about half of the patients, they're responsive to high doses of vitamin B6, which is a cofactor for any remaining enzyme that the patients have to be able to metabolize the amino acids in their diet. And so really where pegtibatinase fits in is to replace that native CBS enzyme. It is a pegylated humanized enzyme replacement therapy. And what we hear from patients and from their physicians is really the goal is twofold. One, reduce total homocysteine to safer levels and the guidelines currently say that the level should be below 100 micromolar and that leads to your question around what does good look like in a clinical trial. The second goal is really driven by the experience of patients. They want to be able to have at least moments in their life to be able to eat with their friends, with their family rather than feeling like they have to strictly control all of the protein. A typical patient will say, I'm able to have 10 grams of protein a day. I'd encourage you with our focus and our culture of high protein, everything, that is a reminder for these patients of how difficult their condition is, and many of them say they never get used to it. So we really have 2 goals in our Phase III program. The first from a regulatory standpoint and from a clinical standpoint is to see a reduction in their total homocysteine. In our Phase I/II study at the target dose that we brought into Phase III, we saw a 67% reduction in total homocysteine, 100% of patients in that -- at that dose were able to get below the guideline goal and 50% of them will be able to get even lower at below 50 micromolar. So our goal is to be able to replicate that. And the trial design and time line and the endpoint is similar in Phase III. So we have every confidence that we'll be able to manage that. And one of the key risks in a study like this is patients eating some of the higher protein. Part of what we've done in this trial design is to make sure that we stabilize their diet before they're randomized. The second goal in our Phase III program is a sub-study to look at are we able to protocolize an increase in protein intake for those patients that are able to get control of their total homocysteine. So that less from a regulatory standpoint, but it is incredibly important for this community that's looking for something not just to manage the risk, but also manage day-to-day living.

Maybe we have about a couple of minutes left, but just curious in terms of the overall health of the business. Obviously, FILSPARI is doing extremely well, healthy balance sheet. What's the appetite for further business development, whether it's internal or external?

Yes. Well, I think, first, we're really excited about the 3 opportunities for sustainable growth moving forward in IgA nephropathy, FSGS and HCU. But we are looking at beyond that. We will be focusing our business development efforts within rare disease, particularly within areas that we really can bring expertise and experience, so rare kidney, rare metabolic disease and then really looking at post proof of concept, so we can leverage the clinical development and regulatory experience that we have as well as the very strong commercial expertise that Peter's team brings. And that's our approach to business development.

Any sort of time lines investors should be sort of thinking about here?

So hard to be able to pinpoint that on business development. What I would say is that our teams are absolutely focused on executing strongly on the launch and in enrolling our HARMONY Study with pegtibatinase, but we do have folks that are actively looking for what's next for us.

Perfect. I think that -- and maybe just squeeze in one more. Look, it's been a fantastic year for you in terms of IgAN patient starts, the approval in FSGS. How do you benchmark success second half of this year?

Well, I think what I would say is that we're going to continue to report on the number of new patients that are prescribed FILSPARI. So that's the most important measure for us is reaching these patients that really need something better for their kidneys. The other aspect is we are absolutely focused on enrolling our Phase III program. So we have guided to top line data with pegtibatinase in the second half of next year. While we won't be providing enrollment updates, we will certainly remind that, that is a key target for us going into next year.

Wonderful. Eric, Peter, thank you so much for joining us.

Great. Thank you.

Thank you.