Q1 2023 Trevena Inc Earnings Call

Participants

Barry Shin; Senior VP & CFO; Trevena, Inc.

Carrie L. Bourdow; President, CEO & Director; Trevena, Inc.

Mark A. Demitrack; Senior VP & Chief Medical Officer; Trevena, Inc.

Patricia M. Drake; Senior VP & Chief Commercial Officer; Trevena, Inc.

Brandon Richard Folkes; Analyst; Cantor Fitzgerald & Co., Research Division

Douglas Dylan Tsao; MD & Senior Healthcare Analyst; H.C. Wainwright & Co, LLC, Research Division

Presentation

Operator

Hello, and welcome to the Trevena, Inc. First Quarter 2023 Earnings Call. (Operator Instructions) Please note, today's event is being recorded.
I would now like to turn the conference over to Barry Shin, Chief Financial Officer. Please go ahead, sir.

Barry Shin

Thanks, Keith. 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 contains oliceridine, an opioid which is a Schedule II controlled substance with a high potential for abuse similar to other opioids. It's indicated in adults for the management of acute pain severe enough to require an IV opioid analgesic and for whom alternative treatments are inadequate. As with all opioids, serious, life-threatening or fatal respiratory depression may occur in patients treated with OLINVYK as indicated in the box warning. 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 under federal securities law. These statements are subject to risks and uncertainties relating 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 first quarter and recent business accomplishments. Carrie?

Carrie L. Bourdow

Thank you, Barry. Good morning, everyone, and thank you for joining. We are excited about the opportunities and significant upcoming milestones for Trevena this year.
Let's start with the recent news last week. We were pleased to announce that Nhwa received approval for OLINVYK in China and they expect first commercial sale in the third quarter of this year. As a result, Trevena is due to receive a $3 million milestone payment, and we're eligible to receive an additional $15 million upon first commercial sale of OLINVYK in connection with the R-Bridge financing agreement. In the U.S., we continue to build upon the extensive data set for OLINVYK. We announced the initial top line data from the real-world outcome study that we conducted with Cleveland Clinic, and we're on track to report new respiratory and health utilization data and cost analysis from this study this year, although we acknowledge we're not where we need to be as it relates to U.S. OLINVYK sales. You'll hear from Patty additional information to support our belief that the recent strategic shift to focus on ambulatory surgery centers was the right one.
Turning to TRV045, our novel S1P receptor modulator, we're very happy with the progress as we now have 2 proof-of-concept clinical studies underway to support the continued development for potential use of TRV045 in epilepsy and chronic pain, 2 large market opportunities. Study enrollment is going well, and we're expecting top line data in the third quarter of this year. We're also assessing TRV045 in other potential indications such as orphan seizure disorders. Given its unique profile and strong interest from potential partners, TRV045 may be an exciting near-term value driver for Trevena. As you can hear, the upcoming quarter will be a busy one for us.
Let me now turn the call over to Patty and Mark to provide more details on OLINVYK and TRV045. Patty?

Patricia M. Drake

Thank you, Carrie, and good morning, everybody. Today, I'll provide you with a first quarter update on our sell-through performance and the accomplishments of our efficient and effective customer-facing team. We continue to see growing use of OLINVYK by our ASC and hospital end users, though the base remains small, We've also seen initial direct sales flowing through our new specialty distributors that we reported signing agreements with last quarter. We now have been approved on 188 formularies and the majority of our orders in 1Q were from repeat accounts, again, demonstrating that once physicians try the product, they continue to use it in their practice.
Our average order size also increased in the first quarter versus 2022. We saw that increase occur in both new as well as repeat orders. The vast majority of our sales are in the bolus dosing vials, and we see a 60-40 split in the business between our 1 milligram and 2 milligram vials, which is indicative of our recent focus on the ASC setting. As mentioned previously, our efficient focus on the ASC setting is due to several things: the growing demand among patients seeking outpatient care, ASCs conducting more complex procedures where OLINVYK can be a value to the patient, we have good access to surgeons and anesthesiologists who can parlay their ASC experience into the hospital setting, and finally, we're also able to leverage our Vizient contract and CMS pass-through status with this customer base, which is well received.
With that, I'd like to turn the call over to Mark to discuss the customer feedback our medical colleagues are hearing about the VOLITION and ARTEMIS real-world outcomes data. Mark?

Mark A. Demitrack

Thank you, Patty. We previously announced initial top line results from the VOLITION and ARTEMIS studies conducted in collaboration with investigators at the Cleveland Clinic and at Wake Forest Baptist Health. These data have already been incorporated into our medical information materials and product dossier, allowing health care providers to review the new data on the incidence of delirium, gastrointestinal tolerability outcomes and the length of stay data that I reviewed in last quarter's call.
While still very early, the customers who have reviewed this information find it meaningful real-world evidence that adds to our already published results. Based on the feedback, particularly meaningful to health care providers and hospital administrators is our finding that in the ARTEMIS study, OLINVYK-treated patients showed a statistically significant 1.6-day lower overall hospital length of stay compared to a matched population of patients treated with other intravenous opioids. There was no statistically significant difference in the average duration of time in the PACU in this study. While these analyses do not provide definitive data regarding group differences, as seen in a prospective randomized study, we believe these data bring a unique perspective to understanding how drugs may perform in the real world. We hope to present this data later this year at a major anesthesiology meeting.
We also continue to make significant progress with TRV045, our novel S1P receptor modulator. I've mentioned before some of the key features that we believe make 045's profile unique. In nonclinical studies, unlike other drugs that target the S1P receptor, TRV045 recycles the internalized bound receptor very rapidly back to the cell surface, which results in no receptor desensitization. And as a result, we saw no reduction in peripheral lymphocyte levels, which we would expect would lead to no long-term immunosuppression.
Also important is that TRV045 binds specifically to the subtype 1 of the 5 different S1P receptor subtypes. We believe this receptor specificity is meaningful since the S1P1 receptor is highly expressed on and regulates the function of specific cell targets in the brain, for example, astrocytes and microglial cells. These cells are believed to play a central role in the regulation of brain signaling events, key to the development of chronic pain and also play key roles in the physiology of how seizures develop and how they persist in causing epilepsy.
Finally, our nonclinical safety data with TRV045 showed no changes in blood pressure, heart rate or respiratory function, which have been reported with other drugs that target the S1P receptor. This potential differentiation is now further supported by the evidence seen in our first-in-human Phase I study results that we reported last year. Taken together, these features of TRV045's design open up the possibility of exploring its use in epilepsy and chronic pain, where reduced lymphocytes and immunosuppression would not be desirable features.
Earlier this year, we announced that we began enrollment in 2 proof-of-concept studies for 045. The first study is intended to evaluate S1P receptor mechanism of action and target engagement in the brain and in the periphery using a variety of human experimental pain models. The second study uses transcranial magnetic stimulation to probe the potential effect of TRV045 on cortical excitability in the brain. Both of these studies are nearing completion of enrollment, and we expect to report top line data in the third quarter of this year.
As a final comment, I previously reported the evidence we've generated in our nonclinical work with TRV045, particularly the findings in animal models of epilepsy through our collaboration with NIH's epilepsy therapy screening program. Based on the encouraging findings, NIH has funded new evaluations of TRV045 in additional complex animal models, which are exploring the potential for TRV045 to modify the development of seizures or potentially prevent them from developing in the first place. Building upon evidence from these studies, we've begun exploring the potential application of 045 in certain orphan epilepsy conditions.
As you can see, our research team has made great progress this past year. We're continuing to advance the real-world evidence base for OLINVYK, and we are on the cusp of some important catalysts that will help define the clinical path forward for TRV045, in addition to exploring some further new avenues of potential application for this novel compound in our nonclinical studies. I look forward to updating you in the coming months on all of these fronts.
I'll now turn the call over to Barry to review our third quarter financials. Barry?

Barry Shin

Thanks, Mark. In the first quarter, our net loss was $7.8 million or $0.81 per share compared to $16.4 million or $2.48 per share for the same period last year. This reduced net loss was largely due to cost savings we implemented in 2022. We remain committed to managing our expenses and costs effectively advancing our pipeline. We finished the first quarter with $27.4 million in cash and equivalents, together with a $3 million milestone on OLINVYK Chinese approval and the $15 million financing tranche from R-Bridge upon first commercial sale in China, which Nhwa expects next quarter. This would extend our run rate to mid-2024.
We believe we're funded through many value-driving milestones with several in the very near term. For TRV045, we expect top line data from our proof-of-concept target engagement study using a variety of pain models. We also expect top line data from our proof-of-concept TMS study for seizure disorders. For OLINVYK, we expect to report new respiratory data for the first time from our 200-patient study using continuous respiratory monitoring devices as well as reporting other final data from our VOLITION and ARTEMIS studies. I want to stress that we expect all these milestones for TRV045 and OLINVYK in the upcoming third quarter, if not sooner.
We also continue to investigate partnering and other opportunities for OLINVYK and our pipeline candidates, which will drive additional resources and build shareholder value.
We'll now open the call for questions, after which Carrie will provide some closing remarks. Keith?

Question and Answer Session

Operator

(Operator Instructions) And the first question comes from Doug Tsao with H.C. Wainright.

Douglas Dylan Tsao

I think you said you're on formulary at 188 hospitals. I'm just curious, given the focus now on ASCs, is that still as much as a sort of benchmark performance? And I guess, to the extent that we are still pursuing additional hospital formularies, what's the number that you think you need to sort of hit critical mass?

Carrie L. Bourdow

Doug, thank you. Thank you for the question. So just to clarify first and then I'll turn it over to Patty, that number is hospitals and also integrated systems that include ambulatory surgery centers that have put the drug on formulary. So when they have a formulary meeting and there are more than just 1 physician deciding, right, we count that as part in the larger number. But Patty, I'll let you talk about the hospital focus versus ASC.

Patricia M. Drake

Yes. I mean, Carrie's exactly right. The 188 is reflective of both hospital and ASCs. And as you well know, this is always a process where getting on formulary is simply step 1, Even though that step takes months and months, it is step 1. And after that, we need to get the staff educated through our in-service programs. After that, we have to ensure that we have a smooth distribution channel for a hospital using one of the big 3. We go out to be sure that they've stocked within the right distribution center. And in some of the ASC scenarios, they want their own distribution, not the big 3. We have to establish that, which we talked about in the last quarter. So our base is small, but we're clearly proceeding in and progressing in the right direction, and those trends are what we would want to see, not fast enough and against a very small base, but clearly the right direction.

Douglas Dylan Tsao

Okay. Great. And then for 045, I'm just curious, I think, Mark, you mentioned potentially pursuing rare orphan epilepsies. I'm just curious, sort of how do you sort of go through and think about which ones you might potentially target.

Mark A. Demitrack

Sure. Doug, thank you for the question. The -- our focus, as you probably know, is that amongst the orphan epilepsies, we're kind of interested in the ones that marry up nicely with the presumptive mechanism that we have for 045. And so we've generated a reasonable amount of data to date supporting the theory that anti-inflammatory action in the brain, as I mentioned, astrocytes and microglia being key targets of interest, is the way we think about how the drug will work. That said, then we turn to the array of orphan epilepsies. And there are several in there where anti-inflammatory mechanisms arguably play a critical role. For example, it's well known that infantile spasms, as an example, is an illness where inflammatory mechanisms play a critical role in the overall pathophysiology of perpetuating the seizures in that condition. So that's kind of how we think about this. It's not just sort of going down the list, per se, but trying to have a rational approach based on how we understand -- we think the drug works.

Douglas Dylan Tsao

And I guess maybe when you step back, how do you think about the commercial model? Because sort of the pricing model is sort of very different when we think about sort of orphan epilepsies and rare epilepsies versus indications that have much more prevalent patient population.

Carrie L. Bourdow

Yes. It's a great question, Doug. And as you might imagine, we're doing that work now so that when we have the proof-of-concept data next quarter, we can start to talk more about the path forward for TRV045. But it's a great question. Thankfully, we have some really good folks involved and helping us assess the overall market opportunity. So more to come, right, I guess is really where I'm saying, more to come as we roll out the data.

Operator

And the next question comes from Brandon Folkes with Cantor Fitzgerald.

Brandon Richard Folkes

Now just staying on 045. As we look to -- towards the top line data in the third quarter of this year, how are you thinking about what you may present to the streets and how you may present it? And what I mean by that is, how much data should we expect initially versus perhaps keeping some of that data for a presentation at a scientific conference or journal just given the potential novelty of 045?

Mark A. Demitrack

It's a good question, Brandon. As we've done in the past, when we have new emerging data, we do reveal the top line results. And generally speaking, that's a reasonable approach for any company to take, and it typically does not jeopardize our ability to present it at future meetings. So we'd be sort of going down both those paths simultaneously, disclosing what we found in a timely way to the public as well as working actively to get it into presentations at meetings and ultimately into print for the general scientific committee to community to review and see in detail. So I don't think that's going to present a problem for us. And we'll be as prompt and efficient as we can be in presenting the data.

Carrie L. Bourdow

Yes, I agree. We'll present -- especially because there are proof-of-concept studies, we want to make sure we get the information out there so that we can then talk about the path forward, right? We have these 2 large opportunities. Brandon, you know we at Trevena, we're going down the chronic pain path, and then the NIH began studying TRV045 for epilepsy. And because of that, we have now these 2 opportunities. So I think it will be really important for us to present the proof-of-concept study results for both of the studies at the time we've received them. So great question, though.

Operator

Thank you. And this concludes our question-and-answer session. I would like to return the floor to Carrie Bourdow for any closing comments.

Carrie L. Bourdow

Great. Thank you. Thank you for joining us this morning on the call. As you heard, we have several near-term milestones and we're excited about the upcoming opportunities for Trevena. We look forward to providing you with additional updates. And thank you, that concludes this morning's call.

Operator

Thank you. Now as mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.