Trevena, Inc. (NASDAQ:TRVN) Q2 2022 Earnings Conference Call August 11, 2022 8:00 AM ET
Company Participants
Barry Shin – Chief Financial Officer
Carrie Bourdow – President and Chief Executive Officer
Patty Drake – Chief Commercial Officer
Mark Demitrack – Chief Medical Officer
Conference Call Participants
Doug Tsao – H.C. Wainwright
Operator
Greetings, and welcome to Trevena Inc. Second Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Barry Shin, CFO. Please proceed.
Barry Shin
Thanks. Good morning, and welcome, everyone. With me today are Carrie Bourdow, our President and CEO; Patty Drake, our Chief Commercial Officer; and our Chief Medical Officer, Mark Demitrack. As a reminder, OLINVYK was approved by the FDA in August 2020 and indicated in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. The important safety information, including the box warning and full prescribing information, are all available on olinvyk.com. We’ll also be making forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties related to our business, including those covered in our filings with the SEC. We undertake no obligation to update these statements beyond today.
I’ll now turn the call over to Carrie for an overview of our second quarter and recent business accomplishments. Carrie?
Carrie Bourdow
Thank you, Barry. Good morning, everyone, and thanks for joining. Today, we’ll provide an update on OLINVYK progress, upcoming milestones for our pipeline assets, and the corporate actions we’ve taken to ensure our company resources are focused on our highest priorities. Let’s start with an update on OLINVYK. It’s important to acknowledge that the market environment remains challenging. The good news is that hospitals continue to reopen, but the pace remains slow and inconsistent due to the emerging COVID variants and staffing shortages. This impacts the timing of formulary meetings and the cadence of decision-making among hospital key opinion leaders. Despite these challenges, we’ve stayed focused on delivering a robust post-clinical outcomes program, building a first-class field sales force and ensuring we have the appropriate amount of financial and human resources necessary to efficiently drive performance.
A few key highlights from this quarter I’d like to reference. On the clinical front, we announced positive top line cognitive function data last month for OLINVYK. We’ve been speaking with physician experts in the space about the data and they recognize that this is an important outcome for OLINVYK as cognitive function may impact hospital length of stay and other health economic events that potentially drive cost to the overall system. Mark will provide a more comprehensive review of the data during his comments.
Remember that we previously announced positive respiratory physiology data for OLINVYK and we’re on track to complete the Cleveland Clinic Outcomes study looking at respiratory, GI and also cognitive function later this year. We believe these data sets will further strengthen the case for OLINVYK to physicians, formulary committees and payers. We were also very excited to announce a significant contract win in July with Vizient, a leading hospital group purchasing organization. Patty’s team did a great job getting this contract, and she’ll provide more details in her section.
On the business side, we recently announced the decision to reduce costs and realign company resources. This included an approximate 25% reduction in company full-time employees. We also ended the agreement with our contract sales organization, Syneos, and we now have our sales and medical affairs team completely in-house. These decisions enable us to sufficiently resource our ongoing key strategic priorities: driving commercial adoption of OLINVYK and developing TRV045. On the topic of TRV045, this is our novel S1P receptor modulator. We remain on track to complete the Phase I study in the second half of this year.
And as a reminder, we’re developing 045 as a potential treatment for acute and chronic neuropathic pain secondary to diabetic peripheral neuropathy. This is a large market opportunity. Over 5 million people in the U.S. suffer from DNP or diabetic peripheral neuropathy. And there’s a need for new mechanisms of action and more efficacious medications. In addition to neuropathic pain, we’re also working with the NIH to study TRV045 as a potential treatment for epilepsy with possible application in refractory epilepsy and other rare orphan seizure disorders. And today, Mark is excited to share with you an update on that program during his comments. We finished the quarter with $49.5 million in cash, and we believe we have sufficient runway to fund our operating expenses and capital expenditure requirements to mid-2023.
Let me now turn the call over to Patty to talk more about the OLINVYK launch. Patty?
Patty Drake
Thanks, Carrie, and good morning, everybody. On our last call, I shared with you that we were in the midst of negotiation on an important contract. And as you’ve already heard, we closed a multi-year agreement with the largest member-driven health care performance improvement company in the country, Vizient. Vizient’s member network includes 95% of academic medical centers, 50% of acute care hospitals, and 20% of ambulatory surgical centers in the United States. Trevena’s goal is to educate Vizient’s members on the clinical and health economic benefits of OLINVYK, particularly in the difficult-to-treat population of elderly and obese. Additionally, Vizient has already begun communicating this contract to their member hospitals through announcements to their field teams, mostly webinars and newsletters.
Their member-facing catalog also now includes information about OLINVYK. As you’ve heard me say previously, this top-down approach is a key component of our new strategy. We’re looking to expand on this strategy with other key customer groups. As a reminder, another important component of our strategy is a 100% Trevena employee sales force, which is now in full effect. This team is targeting areas of the country where we have good access to customers, and there’s a high market opportunity. As a result, although the baseline is small, we have seen an increase in the number of unique accounts ordering OLINVYK and the number of hospital orders in the first half of this year versus the second half of last year.
The third and final part of our strategy has been focusing on core specialties concentrating on the critical care setting of burn, colorectal and anesthesiology. The burn specialists most appreciate the pain relief their patients achieve on OLINVYK, particularly when they have lengthy hospital stays. And while these are strong clinical argument for the use of OLINVYK, our team is also armed with the health economic benefit that demonstrates a potential cost offset that may be seen across the entire institution. The new cognitive function data and the recent respiratory data has helped us reinforce the potential health economic value of OLINVYK.
So with that, I’ll turn the call over to Mark to discuss this further.
Mark Demitrack
Thanks, Patty. This quarter has been an exciting one for our clinical research accomplishments. With new findings from our post-approval OLINVYK studies and continued progress in the development of TRV045, our novel S1P receptor modulator. I’ll start with our recent news on OLINVYK. At the end of July, as we had promised, we reported the top-line outcomes of the cognitive function study. You may recall that we were prompted to conduct this study based on clinical observations from investigators in our Phase III development program and from clinicians currently using OLINVYK in practice, who’ve noticed that in their experience, use of OLINVYK appeared to have a favorable clinical profile with regard to sedation and other opioid-related central nervous system adverse effects.
These outcomes are meaningful to clinicians in routine practice because they may have implications for a patient’s postoperative recuperation. For instance, if a patient is too sedated or unsteady on their feet while standing, they may remain confined to bed for longer periods of time, thereby delaying their ability to participate in their own recovery. These adverse effects may also lead to downstream increases in length of stay and other potentially important health economic consequences. This study was our first controlled clinical investigation of these phenomena and was performed as a randomized, placebo-controlled crossover study directly comparing two different doses of OLINVYK, 1 and 3 milligrams, with two different doses of IV morphine, 5 and 10 milligrams. There were 23 participants in the study, which was conducted in collaboration with the Netherlands-based Center for Human Drug Research.
We were very pleased with the study’s findings. The primary endpoint was saccadic eye movement peak velocity, a sensitive and valid index of the sedating effects of a medication. On this measure, OLINVYK showed a statistically significant reduced impact compared to IV morphine. In addition, we also saw positive results on several other secondary outcomes, including measures of reaction time, postural stability and eye-hand coordination. While not all of the secondary outcomes were able to demonstrate differences between the drugs, we were impressed with the magnitude and consistency of the results we observed, especially as this was our first formal study of this important clinical domain. We’re now working quickly to submit this data to the peer-reviewed scientific literature and look forward to wider dissemination of these results at upcoming scientific meetings in the coming months.
In early conversations with our KOL advisers, we’re encouraged by the positive responses we’ve received on this work. Given the potential practical implications of these observations for clinical care, we also believe that this data will be a useful addition to the hospital dossier used by our medical team to respond to questions from formulary committee members, and we look forward to making progress in those discussions.
Let me now turn to a discussion of our progress with TRV045, our non-opioid selective S1P receptor modulator. As I previously mentioned, we have multiple opportunities available to us with this compound. We opened our initial IND for 045 to investigate its potential for the treatment of diabetic neuropathic pain. In parallel, we have had an active collaboration with NIH, investigating animal models in another promising target of interest for this compound, refractory epilepsy. I’ll comment on our progress in both of these areas.
Our Phase I development program remains on track to complete by the end of this year. The first two segments of that study, the single ascending dose phase and examination of the effect of co-administration of 045 with food, are both fully enrolled and we’re making progress on the final study segment, which looks at multiple dose administration. Once that work is completed, we’ll consider options to move forward, including a potential proof-of-concept study.
Turning to other major opportunities that TRV045 offers. I’ve spoken in the past about our important collaboration with the NIH’s epilepsy therapy screening program. This collaboration has examined 045 in a number of non-clinical models for refractory epilepsy. I’m pleased to announce that TRV045 has shown positive test results in several of the models studied to date. For example, acute anticonvulsant activity of 045 has been demonstrated in the maximal electroshock model, which has been replicated in three different experiments using both subcutaneous and oral drug administration.
Based on these acute results, TRV045 was advanced into several chronic models. 045 has shown activity in these chronic models and the results have been replicated in two different models in particular, the corneal kindled seizure test and the post-kainic acid spontaneous recurrent seizure model.
Interestingly, at the highest dose tested in the post-kainic acid model, TRV045 reached statistical significance on both of the main test outcomes, a reduction in total seizure burden and an increase in the proportion of animals achieving seizure freedom, the latter being the more stringent endpoint indicating success in that model.
While additional work will continue with NIH, we plan to present this information to the scientific community in the coming months. Also, based on these outcomes, we’re beginning to examine our path forward to study 045 for its potential use for certain epilepsies in humans. We plan to provide FDA with details of the data we have assembled and, if successful, anticipate being IND ready for epilepsy in the coming year. We’re very excited by these results, and we’ll provide further updates as these studies progress.
As you can see, this has been a very active quarter for our research and development team. The investment we made at the beginning of the year is yielding compelling results, and we’re looking forward to further progress to meet the goals that we laid out at the start of this year.
Let me now turn the call over to Barry to discuss our financials before we open it up for Q&A. Barry?
Barry Shin
Thanks, Mark. In the second quarter, we continued to see hospital orders, but reported no new net sale to wholesalers. Our net loss was $15 million or $0.09 per share compared to $14 million or $0.09 per share for the same period last year. These changes were mainly due to costs associated with our ongoing OLINVYK launch. We finished the quarter with $49.5 million in cash equivalents and marketable securities. With our recently announced cost reductions, we believe this will fund our operations and capital expenditures to mid-2023 and past our expected timeline for TRV045 Phase 1 data and OLINVYK post-approval data from our VOLITION study with Cleveland Clinic.
I’d note the cash balance includes proceeds from the first $15 million R-Bridge financing tranche in April, but not from a targeted registered direct offering of preferred shares in late July.
We’ll now open the call for questions after which Carrie will provide some closing remarks. Operator?
Question-and-Answer Session
Operator
At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Jason Butler with JMP Securities. Please go ahead with your question.
Unidentified Analyst
Hi. It’s Roy [ph] on for Jason. Thanks for taking our questions. I had a few on 045, congrats on the positive data. Any feedback from the investigators from the epilepsy study about the compound and the results from the chronic models and how are you thinking to prioritize the indication? Sounds like you’re thinking to go forward in both DNP and epilepsy. And how does the dose form play into it since you’re getting good effect at both the subcutaneous and oral? Thanks.
Carrie Bourdow
Great. Thanks. I’ll let Mark start. And then I may add on a couple of comments. Go ahead, Mark.
Mark Demitrack
So there’s a series of questions in there. Let me make sure I touch on all of them. The studies done in collaboration with NIH’s program. They were as equally encouraged by the results as we are. That’s in part why we’re so happy to announce the results today. So the breadth and pattern of the outcomes is really quite strong. The fact that we see an effect in the acute models, as well as several of the chronic models is really an encouraging pattern of outcome in this array of studies that they do.
So overall, both we and our collaborators at NIH are very encouraged with the results. When we look at the data and compare the dose range that we see efficacy in these models compared to the pain models that we’ve looked at, we’re seeing efficacy across a comparable dose range. So we believe that the – that hard to predict, obviously at this point, but translating to use in the clinic. We would expect comparable dose ranges for either target. So at this point obviously, the opportunities present themselves in both the chronic pain and the epilepsy arena. We’re taking a close look at this data and we’ll have more to say about our thoughts and path forward as we dig into it.
Carrie Bourdow
Yes. And I would say that the Phase 1 program that we’re doing really allows us to pursue either path, as you said both, or to move forward on one into a proof-of-concept study as you’ve mentioned, or as Mark mentioned in his talk. So as Mark indicated, as we complete, as we finish out the Phase 1 study, we’ll provide more guidance on the path forward. Thanks for your questions. Yes.
Unidentified Analyst
Thank you.
Carrie Bourdow
Sorry, was there a follow-up? I didn’t mean to interrupt you.
Unidentified Analyst
I was going to ask, maybe how soon you might think about partnering the compound or discussing potential partnerships?
Carrie Bourdow
We are always interested in partnering. We’re excited about the compound. I think others are excited about the S1P platform in general, but no news to report on that right now.
Unidentified Analyst
Okay. Thank you.
Carrie Bourdow
Thank you.
Operator
Our next question is from Doug Tsao, H.C. Wainwright. Please proceed with your question.
Doug Tsao
Hi, good morning. Thanks for taking the questions. Just on TRV045, just curious in terms of the path forward, in particular, in epilepsy. How much is determined by you, as well as in collaboration with NIH in that indication? And how much support may they provide down the road in terms of actual patient studies?
Carrie Bourdow
Go ahead, Mark. Yes.
Mark Demitrack
Well, let me be clear that the collaboration that we have with NIH was under the Epilepsy Therapy Screening Program, which is an industry NIH collaborative program that’s been in place since 1975. And this program is entirely focused on animal model development. So that information is information that we basically own, if you will. So the collaboration is really limited to the nonclinical work at this time. That program does not play a role in clinical development activities. So the path forward that we would take in clinical development as I mentioned a moment ago, is something that we’re going to take look at. Whether or not there are other opportunities for partnership with NIH or with other outside organizations on that development is something that we’ll be able to comment on as we move forward.
Carrie Bourdow
Yes., Doug, we own the data, yes. We’ll be able to – we’re sort of on our own deciding the strategic implications of the data and how we want to move forward. But great question. Yes.
Doug Tsao
Okay. And so at this point, you – given the signal you’ve seen, it sounds like the signals were for both acute as well as chronic development. So at this point, would you most likely make a choice between the two or is that something that would still be determined based on some of the Phase 1 data and what you learn there in terms of the exposures and the profile?
Mark Demitrack
When you say make a choice, are you talking between pain and epilepsy or between acute and chronic?
Doug Tsao
Epilepsy between – in epilepsy, between sort of acute treatment to seizures versus sort of chronic prevention of seizures?
Mark Demitrack
Well, broadly speaking, these data, the outcome that we see, has implications for administration as a chronically administered antiepileptic. So the question of – amongst refractory epilepsy targets which ones would be most suitable is something that we’re going to take a look at and we’ll have more to comment on in the coming months.
Doug Tsao
Okay. And then just on the Vizient contract, congrats on executing that, how quickly do you think that might begin to affect sales?
Carrie Bourdow
Yes, Patty, I know you’ve been chatting with that team, so any comments you’d like to make on some of the things they’re working on?
Patty Drake
Yes, for sure. I mean, it’s obviously early days into the contract. But as I shared with you, they’ve done some communicating to their field teams, but also the communication to their member base, their very large member base. And they do have, in their field team, [indiscernible] that actually go out and represent the value proposition of the product, including OLINVYK and that would include also the health economic data that’s beneficial for them.
Another aspect of OLINVYK that they find attractive as a large group purchasing organization is when there are shortages. There are shortages of morphine, there are shortages of fentanyl at times. Now they have another product that they could offer when those happen.
Carrie Bourdow
Yes. And Doug, I will say I got to give credit to Patty and her team as well. We have run a list of customers that we’re calling on that are part of the Vizient membership team, and that’s also something that we’ve begun to execute around. So we’d like to get this moving as quickly as possible. But with organizations like this, it may take a little bit of time as Patty is indicating.
Doug Tsao
Okay. I mean, given Vizient’s sort of representation, I think in the past, you sort of targeted community hospitals a little bit more than acute medical centers. Does that change given Vizient’s membership?
Carrie Bourdow
I think we can actually get sort of two shots on goal. Our folks can continue to focus on community and ASCs, although I will say Vizient has a pretty good footprint in the ASCs as well. One thing I was really interested in with Vizient is that they have a large membership of academic medical centers. And that’s been an area where I’ve been surprised at how some of the AMCs have jumped on with OLINVYK. I think maybe in part some of the patient population that’s coming into academic medical centers, they may be a little more complex, right? It may fit the profile of OLINVYK. So I think this is where Vizient is going to help us in the AMCs and our folks will continue to focus on those community and ambulatory surgery centers.
Doug Tsao
Okay, great. Thank you very much.
Carrie Bourdow
Thanks.
Operator
Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would now like to turn the call back over to Carrie Bourdow for closing remarks.
Carrie Bourdow
Great. Thank you. And thank you for your questions and for joining us this morning. As I said at the outset of the call, we’ve made choices around our business for OLINVYK, although they are certainly outside factors that continue to impact the launch. We’ve secured now a contract with Vizient, the largest member-driven healthcare performance improvement company in the country, as you heard us discuss. And we’ve just announced this new cognitive data that will potentially set OLINVYK apart with more data coming out of the Cleveland Clinic and Wake Forest to come.
We made strategic decisions to efficiently drive OLINVYK performance, continue to advance TRV045 to these important milestones and extend our cash runway. And we look forward to updating you on our continued progress. So thank you again for joining us on the call.
Operator
This concludes today’s conference. You may disconnect your lines at this time. Thank you for participation.
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