Trevena, Inc. (NASDAQ:TRVN) Q1 2023 Earnings Call Transcript May 15, 2023

Trevena, Inc. beats earnings expectations. Reported EPS is $-0.81, expectations were $-0.98.

Operator: Hello and welcome to Trevena, Inc. First Quarter 2023 Earnings Call. All participants will be in listen only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [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 to control 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 BOXED WARNING. The important safety information, including the BOXED 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 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 were 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 repertory and health utilization data and cost analysis from this study this year. Although we acknowledge we’re not where we need 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 two proof-of-concept clinical studies underway to support the continued development for potential use of TRV045 in epilepsy and chronic pain, two 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 and 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?

Patty Drake: Thank you, Carrie, and good morning, everybody. Today, I’ll provide you with the 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, or 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. ASC is conducting more complex procedures where OLINVYK can be of 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 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 healthcare 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 healthcare 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 non-clinical 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 five 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 non-clinical 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 1 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 two 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’ve previously reported the evidence we’ve generated in our non-clinical 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 began 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 non-clinical 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 cost effectively advancing 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 [indiscernible] expects next quarter. This would extend our runway 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 would drive additional resources and build shareholder value. We’ll now open the call for questions after which, Carrie will provide some closing remarks.

Keith?

Q&A Session

Operator: Yes. Thank you. At this time, we will begin the question-and-answer session. [Operator Instructions] And the first question comes from Doug Tsao with H.C. Wainwright.

Operator: Okay. Thank you. And the next question comes from Brandon Folkes with Cantor Fitzgerald.

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