RETA - Earnings call transcript Q4 2018 | Reata Pharmaceuticals Inc

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Operator

Good day, ladies and gentlemen, and welcome to the Reata Fourth Quarter and Financial Results and Update on Development Programs. And audio recording of the webcast will be available shortly after the call today on Reata’s website at reatapharma.com in the investor section.

Before the company proceeds with its remarks, please note the forward-looking statements disclosure in the company's press release. The company will be making forward-looking statements on today's call. There are many factors that could cause results to differ from expectations, including those noted in the company's SEC filings. guarantees outcomes. not are statements of future Today’s time Please call February speak that any at XX, transcript replay on today's comments made the accurate only be and no also any rereading. may webcast, or note XXXX, longer of as of today,

Instructions] host of prepared [Operator for Vinny Vice we President today's for remarks, like now the open the call, would Following up to Strategy. call will questions. I introduce your Jindal,

may begin. You

Vinny Jindal

today Reata’s Reata our these Thanks XXXX release fourth morning, Demetrius. discuss by welcome Chief call provide Warren quarter found Officer, of Meyer; over summary Chief to now Officer, results, on Colin our results Medical review management’s we Investors Huff; call the be press I'll our release Hello development to to Jason and of our Wilson. press the with a financial the Warren. Officer, to joined Chief website turn Financial and and and This of issued a Executive can a I’m section at programs. reatapharma.com.

Warren Huff

the pipeline, disease. ongoing Good and approved CARDINAL of in and our dominant during no to these year. and reviewing now and FDA are we in pivotal syndrome thank like deadly joining later I’d Friedreich’s today's for us. for call bardoxolone, kidney In our our and two polycystic three to and studying that currently in enrollment therapies begin positioned either There completed for severe kidney this significant trials everyone, proof ataxia. XXXX, Vinny. advancing omaveloxolone have development we’re in by to disease diseases progress disease first includes launch pivotal chronic we the studying morning, patients. XXXX treatments MOXie pivotal you made Alport these caused plan programs rare for Thanks, autosomal which fourth by we

results from in report both year. the to of half We this studies expect topline second

trial that mediated safely blood in eGFR the minute baseline during protein PHOENIX, mean from of in significant term a increased There to The polycystic demonstrating after weeks including of PHOENIX, retained bardoxolone and of blood patrol. treatment in benefit XXXX, improvement failure Aplort Across retained us that decreased one completed benefit also and approval. CKD phase syndrome IgA XX% FSGS bardoxolone after XX. of generate has the term not significant eGFR enrollment are in support XX suggests enrolled an strong dominant by per a pressure. of full primary is XX, cardinal we program, with and in cohorts rare no ml reported patients week weeks urinary long pressure results point may XX-week nephropathy, in all from in designed phase autosomal an kidney concept delay results may proof kidney our following from demonstrating providing patients was and XXX benefit reported positive change improvement that The in Alport four X eGFR CKD eGFR treatment mean forms all after cohort its glomerular patients effect increase statistically eGFR. in meeting improvement end significantly, treatment, in increase treatment by with caused of with X.X four week each drug type data X years X FDA of We’ve of with of on four kidney, function diabetes. evidence from bardoxolone’s guidance placebo-corrected, we syndrome. Regarding approval may experienced two long with patients’ benefit retained support written eGFR retained cohorts XXXX, provided a with portion eGFR eGFR significant accelerated significant, that In in a year

kidney who kidney by retained and was in which CKD impairment year, intention forms patients and entering of to disease were of of function and across pivotal CKD, a for pursue the observed function mitochondrial Importantly, improvements we common mid-XXXX at optimized now of of bardoxolone results Based declining seven of in despite inflammation addresses is announce and the on function. observed finding one increases week bardoxolone a historic thesis of kidney to actively between in initiate significant plans pathway announced we We’ve progression in on commercially. final a in in chronic care. will XX patients forms ADPKD most PHOENIX begin strongly we’ve our correlation these supports the that rare distinct eGFR benefit standard the our study a eGFR fibrosis other improvements observed which driven

week XXX significant our that the topline potential trial, on proceeding in pulmonary in the CTD-PAH. therapy of patients FA. the the be phase mFARS of arterial dose and a we expect design to the ranging part part with completed Based Friedreich's we announced trial we part mg in ataxia X of that baseline Turning with MOXIe, the of XXXX observed modified at LARIAT tissue with approved this dose the approached part become daily optimistic MOXIe, bardoxolone The In to potential results X observed in of scores half in available portion of value we specifically for to has optimal for pivotal is are planned, X enrollment the a omaveloxolone approved results the X connective program, in data the with as modified improvement the MOXIe, bardoxolone first Friedreich's of first of associated Based from XX, trial therapy disease in X.X. corrected a and and we that our XXXX. in ataxia. the to study on and study improvement versus ongoing p mFARS has significance we statistically which placebo hypertension catalyst a believe design first of the of CATALYST omav patients become also

he results, some renowned of recent highlight conducting Block XX as a advisor treating to a has one interface research I’d our Last over patients within medical a with is our perspective critical will as and personnel with call of external the clinical experience number years in month, internal years. over to that turning nephrologist Block community. to with Dr. developments. global Dr. nephrology of the the appointment announced Before world Nephrology. our the him served to and for like as provides Jason extensive developments, Geoff’s of experience affairs serve of community we him Vice review CKD financial Geoff President investigators of lead between in a nephrology standing unique allow

Dr. and Keith for his Keith Genentech Proksch, commercial successful and plans will time team with for ensure several his retire transition. operations effective well Joel’s with Officer. with Joel point industry XX being smooth who Dale experience. Oncology. as Officer to family. of submitted an call and his Regulatory President, veterans as reached has where informed of Affairs Keith Clovis and years, quarter transition spend our opportunity promoted new in the the who be Keith Development Reata unit grow life. months commercial a our full been Dale to seven Senior phase next business Ward, sales, recently of of now retirement, in significant product to over we over Chief his miss this by he’s years retire and with who March of the the resignation financials a leadership as he more I’ll to his Vice him provide and and Hooks, have to us will financial Development Chief and functions job fourth Commercial to Part is with recently year of a use certainly X. continue We turn has Jason With Development. to consultant intention to the will leadership and to our we to that able biotech of serving Operations. as company has Vice in XXXX. Additionally, work joined marketing, Most President, summary senior the wish launch us experience held for level Keith’s recently Global roles assumed

Jason Wilson

the Thanks was or months for Net to three full The revenue. we three for compared of and the in increase same $X.XX morning share, is loss per the period financial Warren. quarter of for collaboration being research In period share We loss over results quarter in related or $X.XX last and net development XXXX, loss longer and was signed increase and for to agreements. in recognized per The the upfront a XX.X the deferred in million net in in no expenses are XXXX that revenue development due an of clinical This our activities and support to is XXXX. higher million license agreements finished performance and is agreement, XXXX. manufacturing a obligation. fourth reported and XX.X the decrease to to payments both the year. the decrease recognized increase expenses year so period revenue ’XX personnel in and recognizing license due license primarily XXXX, expanded ’XX, for is from agreements increase and by we these collaboration an and expenses activities. development The an in it driven

million the December year. this period per the a prior share or per net was activities. net XXXX, due compares primarily The net and to million the candidate ended and in to to expand XX.X manufacturing to months in assets activities XX, product in personnel expenses $X.XX our is year XX.X share, clinical of For or increased XX expanded expenses loss development to for loss increase the for activities, and stage earlier loss related development support portfolio, $X.XX

stock expense expense this X the to respectively, expenses found periods Our measure be million XXXX or for for and cash and expenses December XX, compensation filed XX million and this the ended, release measure non-GAAP months morning. total XX.X the XXX.X define million million excluding can XX, XX.X based compared same reconciliation press of were depreciation operating attached and as to ended non-GAAP XXXX. XX we to expenses A December total based

additional will we grow commercialization. We and in $XXX.X prepare in the based to million continue and for operating our company expect continue increase as we December to cash had advance candidates XX, At product equivalents. our expenses XXXX, to cash development, cash

the call operations data for readouts that ongoing I’ll all We to beyond back Warren. over our with cash the And turn and trials. of three fund clinical registration to of expect through our our current

Warren Huff

commercial a for syndrome Alport from We’ve and a company begun manufacturing to commercial, regulatory new ataxia. the filing a XXXX for Alport studies XXXX has Thanks we expect syndrome in be ataxia transition a our from could to Friedreich's Reata. that the of from activities Jason. our for for the and omav data year to already stage If bardoxolone clinical transformative of positive, enterprise. support fully application half registrational development support second in the potential drug Friedreich's

launch turn questions. commercial activities over data transition to are Our we’re if concludes call operator the our prepared for make the positioned the and from underway, to now preparation That pivotal are remarks, our studies well positive. I’ll and

Operator

[Operator our question And Nochomovitz from Instructions] Citigroup. first comes with Yigal

You may proceed.

Yigal Nochomovitz

to the and and that week its similar first could a CARDINAL end quarter point ataxia get Friedreich's I in for X the you on I CARDINAL’s we enrollment, end in the MOXIe point, that look had trials November obviously timeframe a study, you and CARDINAL but would and the second that then clinical quarter. clinical MOXIe the third you’ve obviously have it half, question to conclude the XX XX timelines if that the phase the possibly highlighted fourth at and the on believe seem MOXIe’s week study you’re timing, going in CARDINAL

of want want So wouldn’t the some that’s just quarterly timelines appraisal to commit there’s and fair a reporting of you order of to events if if to reason those particular studies? two I that understand why or

Jason Wilson

year. week pivotal our MOXIe is stock having as Yigal. read-outs in right with XX, secondly, and occurred. both the updated necessarily not indicative changes you of the and for actually in of guidance it’s half up Clinical week we’re make Sure XX, XX the when whenever for and second for trial so week read-outs, mentioned, now is time, real pivotal not sticking it’s this read-out trials things of we of not so its as CARDINAL And

Yigal Nochomovitz

Jynarque then characterize as seems the competitive And question very a, modest some respect well be I more benefit. dynamics to it the ADPKD, launching has with would general exceptionally obviously a Otsuka drug it around to and of the

bardoxolone a what and were totally So network receptivity PKD and PKD? about you phase I for and regarding proposition could the be for I’m accrue you’re the what drug X your as helpful together just specifically learning to assuring you that start put market that commercial value move [KOL] and more through curious to you PKD

Colin Meyer

Sure.

So trials I I think to that our nephrologist physician level clinical the dependent say encouraged treatment not with clinical Tolvaptan. FALCON - is PKD. and dependent those enthusiasm the its so of in these targeting for is using there be so participate appear that using trials would for a [KOL] community the the to general not patients are of particular who now most pivotal we’re is actively and upon than more in are trial so expenses who that first

drug you’re use that aware of bardoxolone, PKD and think sure drug the actual though over patients we quite small. the relatively back different, competitors patients background trial there’s competitively their I’m XXX,XXX acceptance them are as at step that But numbers really good diagnosed uptake pivotal so with on that do on potential Tolvaptan, the so so subset are trial about we So the even Tolvaptan broad number not of can we for will bardoxolone. and to in allows least a ADPKD once is patients and FALCON patients these with is the encouraging Tolvaptan be of and think a in for mechanism early only ongoing be versus

Warren Huff

just just Warren. therapy. were to a here. but or think I one going even CKD meaningful that comment, medications, These I just development decades. uptake any unmet new little for for there’s There’s novel it there been be Yigal, mechanism have nothing huge there’s had that no any blood of suggests for need significant so patients pressure it general that had severe of shows this Hi these is forms rare and

Operator

next comes from Adam our Walsh Stifel. with And question

You may proceed.

Adam Walsh

mid-year got just discuss one maybe quick then can compare also a on you’re the I to and first to the is factors contrast just couple you initiate the ones, trial gaining of community terms trial and thinking the as CARDINAL trial about ADPKD, and design the you pivotal And the joining how that that’s Dr. other, Geoff you to company, expect would nephrology outreach in of pivotal overtime? to just can his early then speak now. ramp playout and be ongoing that Block one in to

Colin Meyer

supply FALCON regulators, and and all is operationally, nephrology have, work has design, sites which starts now that our and US be or already and quarter starting (inaudible) heavily that’s of initiate sites it to is on underway. and and of packaged meeting trials, the leveraging our views our and local and at the Obviously trials, with dosing the made do and receiving kits activity trial all contracting and where well. execution standard all the the globally it’s so gaining statutory and track as feedback, drug for very sites we’re all to in of obviously The ADPKD we at any that obviously soon same investigators so the identifying so so all with we at and with to so mid-year, going so existing our obviously just

they on ongoing As very comparing far syndrome, Alport FALCON are trial as design as contrasting the to of and a CARDINAL similar.

allowed the been could tolerate have so were to using study enter documented are accelerated per actively as before than minute being a same some other those of simply (inaudible) that difference eGFR points. very able obviously that support background those two years X the duration on language prior are eGFR same the eligibility loss is So trial. ensuring ml The range the eGFR per they is and in based of with that Tolvaptan. approval mirrors progressing one-year ensure criteria our There’s heavily we end eGFR critical there slight the Tolvaptan patients with read-out patients they similar similar that that end eligibility of how with define FALCON entry, price We XX. for total the a eGFR higher patients to XX and Tolvaptan same, year

affairs question Block having titration overall, and team fantastic and schedule, previously its uses pleasure visit once KOLs a address of it Medical myself so global our then that many with the knowhow of our and to so Geoff, been And been about he’s joined same And the did in have your operational VP between again same Geoff and extending design, if have. relationships not not and basic we so schedule lastly, notable same joining; we it’s our leverages CKD. most relationships

see him programs. trials for we XX actually clinical so so provides others in patients join drug obviously as our joining rationale dating he’s the enthusiasm our experience several And compelling approximately with a and years first-hand has pretty to it treated back he with and

Operator

And from our comes with question Maury Jefferies. Raycroft next

You may proceed.

Maury Raycroft

than For and out or just than on commenting different XX the less CARDINAL if maxing any get you doses I’m at there. patients are patients on and on based PHOENIX, and AGR wondering AGR break out max different mgs. doses you eGFR difference XXX greater by those guys XXmgs XXX efficacy

Colin Meyer

meaningful seen any max differences on a a dose, in max not mg In we based dose. have eGFR was had We change same XX trials prior difference. there since it’s the

a suppress few probably which at more large also it trial in conducted more factors includes little is a the amount that before we this of patients to believe and or BEACON, so of noted proteinuria. a to We where dose a loss response. dose of information lesser patients ranging have due higher likely with proteinuria have proteinuria a given We need proteinuria this lot

patients of when proteinuria the excreting there lost urine be high are is more and exposures protein. levels of to lower appears in then of drug protein patients the of with is those heavily potentially proteinuria We also so they lastly acute less drug our believe that an and if to show patients and more for probably capacity fibrosis, patients is high levels in because have bound higher levels there improvement,

out we we patients with higher analysis And we they (inaudible) our trial that current CARDINAL break dose should the but also PHOENIX. see being reason our higher levels status. able trials, our to all simply similar ratchet so a if from proteinuria a have for BEACON we a that's and don't those out, effect both in of conducted of series borne efficacy identified that and up of to and trial regardless similar were for reasons ongoing it So

Maury Raycroft

that So at setting the you don’t CARDINAL playing variable to all. BX anticipate

Colin Meyer

its and efficacy that different across see No, we and now think we the groups. fact favorable, in similar

Maury Raycroft

of study, the only was study can with question with relationship you as the running its XX. just status rolling X comments study phase seeing Kirin Any as posted that on, AYAME how other side the update or on up as as it well? and goes, be clinicaltrials.gov will but if December one provide Kirin and The in far a AYAME be I’m it on and Japan other is will regions recruiting in anticipate out recruiting only

Warren Huff

I’ll comment Colin on AYAME the then the relationship on comment let and program.

us Our relationship well pivotal as they want been on as and have in as trial development AYAME. very Colin supportive to rights excellent, have conducting diabetic CATALYST in status? study their question bardoxolone their to you you as commercial in Southeast has got and with Asia. conducting know they Kirin the in phase They to and nephropathy Japan PAH CARDINAL you comment the are trial X own in been

Colin Meyer

Sure. comments they’re the updated making on their quarter began the actively think progress. in publicly KHK. And enrolling now second I it to similar by commented clinicaltrials.gov status, but great and not same their many appears they’ve be trial for and the believe and I don’t is before They

Japan have only estimate the them. first that they I working that the real in trial data think been XXXX, we’ve closely and will with So of they gives half

Warren Huff

validated Notably decline for they including studies newly CKD points now they large XX% in are eGFR cooperating, end-to-end

Operator

Skorney comes with question next Baird. our Brian from And

You may proceed.

Unidentified Analyst

plans you of wondering bit of is This go we the little readouts as study a respect the to bardoxolone trial a I the sales with for around half in on of Brian. force detail year? build come in out was to dialing Jack to if to CARDINAL pivotal this could second

Warren Huff

plan who rights the As team of members IMBRUVICA of United brought Chief community, XXX% in as terms force you we directly specialty we We’ve Officer, see doing States ago been been the of And nephrology for on sale our CKD done of United the has launched senior Dawn’s on we’ve we’ve a all to we’ve working can launch. made of putting will place. to think well. been our and for the the know been and applications We Dawn leadership. build while payer work really the in market our prepare adding assessment of current been States deals, preliminary for all commercial Commercial kind how in retained a and plan, force Pharmacyclics we’ve Bir front targeting that progress commercial the sales the and bardoxolone sizing the you as I key stage in that in a

Operator

comes Cantor. question from next our with Charles Duncan And

may You proceed.

Charles Duncan

had follow-up I and question on a then bardoxolone a on omaveloxolone.

as bardoxolone, for, clinical that premature patient is when but terms question, call considering of anticipate first wondering specifically value well drive I’m a as pricing a clinical out that Tolvaptan think are bardoxolone benefit you think levels just there different a to pricing. when different think is its The clinical as its bardoxolone, potential and of you about of that or mechanistically benefit potentially in kind you in drivers as approved you the which metric do maybe good of kind for it, of well to

so really I’m pharmacoeconomic asking not you asking far value pricing, you about bardoxolone. I’m for Now about

Colin Meyer

trial year the for ml serves which was approval a April pivotal trial in about Tolvaptan bardoxolone. distinct to per The mechanism profile do the Tolvaptan is is different, benchmark, between competitor, Tolvaptan good it but think when reprise X.XX the the you so US Charles year in I is profile you the one retained but alluded view efficacy the think here minutes. for not completely as we benefit about last basis as and in the as very of

X.X spend down patients Tolvaptan And from patients the still per Tolvaptan they the X.X, and placebo. minute Our they when withdrawn, was were interestingly on drug about about more down were so down before doing baseline. actually and placebos were ml were were

that’s increases seen trials which and affect durable of GFR years on when tested we’ve drug for bardoxolone the is and in so that improves it about been half patients longest And that is duration after we’ve and we’ve what of of two actually in the are the a our if and the context slowing one in not is patients trials. we’ve recovered on its so from a trials average progression versus believe across different very bardoxolone retained paradigm. of least it’s the that our and far baseline tested progression above halted We (inaudible) at so population. has portion

from appropriately major very So a and figured or from since trial following safety and safety very use carefully perspective good to our without drug, using out and tolerability its then any a our how efficacy patients had different, we’ve perspective BEACON profile (inaudible) safety based design and signals issues. its

of so large we is drug. in that as from And [mockery] it see the due some which more because different profile to of patients not tolerated mechanism amount a Tolvaptan the of

so specifically agree paradigm. on a pricing with you, overall it’s good won’t different say it comment So serves except very we to a We as benchmark.

Charles Duncan

to That’s and in you when go pharmacoeconomic other set that like of creating of it value are there pricing sounds terms drug. considerations lot a helpful, for

regarding for at positive question another will someone you’ve omav, where seems sales be necessary like is, lot to both was to and separate forwarding accommodate bardoxolone, to with or the my fast your I an on sufficient you second be think half possibly to you And drive ask there then asking me it on NDA is omav late force in patient I omaveloxolone, least question experience of question a salesforce is omav? strategy data the the that omav? Let on able back but guess and got that the would commercialization think partially omav, that secondarily drugs for a do

Colin Meyer

would approval the we’re I’ll perceived omav in question team NDA of in would omav around and the Ataxia We prior commercial come the force for MOXIe submission both study definitely part be Friedreich’s if we the leadership of product for that need And not additional the designed positive. senior along have I neglected for support obviously representing in if We’ve would be separate. the the Charles mention the running would functions X medical similar see the guidance the the that sales on from work of and Friedreich’s obviously of the commercial same specialties. in they is activities and commercial to two positive. community both affairs those. for of omav could the force conducting while the process to targeting different neurology functions application, support two sales separate same a FDA Ataxia

Operator

have comes with [Operator from Thalmann. Instructions] Matt And we Kaplan a question Ladenburg

may You proceed.

Matt Kaplan

in us We’ve been us a bardoxolone, wanted a give in year. zero spending bit later you Can lot I in given on little of readout a omaveloxolone, time X X MOXIe on terms to remind phase patients just for - change patient in more (inaudible) the this just terms the study the and part in we’re population, terms looking of and (inaudible) how for of the study, this what the its powered? sense

Colin Meyer

of and used by score is the the exam FARS FARS modified the the is neurologist. point modified the end trial a primary Matt, neurological that’s Sure

detract their that’s and data progression. FARS natural large to enrolled these these modified points X for a scores. typically history amount You of patients these patients patients see up patients that their demonstrate study in generated progress is a thousand a There a of few X terms at to these progress What’s is known rate years patients about in annually. XX to how track of

statistical is this we’ve patient. trial variability which expectations a for show if be or to and the X.X And we X.X our that is assuming and check is would difference, and line that clinically points, approximately should able months our to of with progression we meaningful the so think X change, what represent in significant about so powered trial one year

Matt Kaplan

Friedreich’s potentially of beyond of now other terms terms omaveloxolone your indications then in And what that Ataxia, are in thoughts compound? for

Colin Meyer

few a are on omav’s they different There underline effect mitochondrial functions. Sure. all basically settings,

series seek. forms which the which to so been shown to neurologic functions that with whole a One to drugs of there be (inaudible). of improved has natural of Ataxia is other fairly where and many obviously mitochondrial would setting But in those rare, of a conditions other is are new

that can from data showing patient have We rescue (inaudible) omav function. biopsies mitochondrial

from biopsies Parkinson’s mitochondrial function. (inaudible) We can disease also that rescue a have omav

We epilepsy also in (inaudible) intriguing that’s various have striking. pre-clinically models very

a we’re could bardoxolone. series that there’s nephrology space basically like just but so that of there indications are mitochondrial with neurological pathogenesis common (inaudible) dysfunction different of forms think affect. that are the have disease many There of currently we many, And omav in a

Operator

Ladies of our today’s Q&A concludes and now gentlemen, portion this call.

today concludes all reminder, today’s you will webcast audio after investor todays call website a call. shortly a This disconnect. be of our reatapharma.com great in Everyone day. have section. gentlemen, Ladies Reata’s now available As program, and an attending recording the thank may for you at the and on

Reata Pharmaceuticals (RETA) 28 Feb 192018 Q4 Earnings call transcript