Trevena, Inc. (NASDAQ:TRVN) Q4 2022 Earnings Call Transcript

Trevena, Inc. (NASDAQ:TRVN) Q4 2022 Earnings Call Transcript March 31, 2023

Operator: Greetings, and welcome to the Trevena Fourth Quarter and Full Year 2022 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Barry Shin, Chief Financial Officer for Trevena. Thank you. You may begin.

Barry Shin : Great. 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 contains oliceridine, an opioid, which is a schedule II controlled substance with a high potential for abuse similar to other opioids is indicated in adults for the management of acute pains fair enough to require an IV opioid analgesic entered from 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. Sedation is an established risk of opioids, including OLINVYK and is reflected in the OLINVYK label, nausea and vomiting were 2 of the most common adverse events reported in the control of clinical trials.

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 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 fourth quarter and recent business accomplishments. Carrie?

Carrie Bourdow : Thank you, Barry. Good morning, everyone, and thanks for joining. As you saw this morning, we announced exciting initial top line data for OLINVYK from VOLITION, the Cleveland clinic led real-world outcome study. We also analyzed electronic medical record data from Wake Forest, one of the VOLITION study sites. This morning, Mark will review top line GI and cognitive outcomes and length of stay from these studies. We anticipate reporting the remaining data sets, including the respiratory outcome data midyear when they’re available. In our commercialization efforts, the hospital market remains challenging, and the continued focus is on managing costs. Hospitals are facing margin pressures due to a whole host of factors.

And we see this playing out in delays from key stakeholders, including pharmacy and therapeutics committees. We are continuing to highlight OLINVYK a key pharmacy and physician meetings and appropriately positioning OLINVYK for complex patients in both the hospital inpatient and ambulatory surgical settings. You’ll hear from Patty that we’re seeing a clear shift to more procedures and more complex patients being treated in ASCs. Our efficient field sales team is engaging with top decision-makers in the ASC setting and the recently secured CMS pass-through status for OLINVYK has strengthened the reimbursement picture. Overall, we continue to focus our attention and resources on the best potential near-term and long-term growth areas for OLINVYK.

Turning to our pipeline. We’re very excited about the progress we’re making with TRV045, our novel S1P receptor modulator. As a reminder, we’re interested in 2 areas: non-opioid treatment of acute and chronic neuropathic pain secondary to diabetic peripheral neuropathy and epilepsy. We’re underway with 2 proof-of-concept studies, a target engagement study and a TMS study looking at brain electrical activity. We’re expecting to complete enrollment for both studies by midyear with top line data in the third quarter. We’ll use the results of these studies to help further inform the path forward for TRV045. In addition to the TRV045 data and OLINVYK commercialization, potential partnering discussions are ongoing, and our partner in China, Nhwa expects a regulatory decision on OLINVYK in the first half of this year.

We have $38.3 million in cash and multiple upcoming milestones. Let me now turn the call over to Patty and Mark to provide more details on OLINVYK and TRV045. Patty?

Patty Drake : Thanks, Carrie, and good morning, everybody. Today, I’ll provide you with a quarterly update on OLINVYK’s performance relative to the market access and field execution parameters that we have discussed with you on previous calls. Let me start with an update on our contract with Vizient. A significant portion of our business continues to flow through Vizient. Their diverse membership and customer base includes academic medical centers, community hospitals and integrated health delivery networks. We believe there may be a long-term potential opportunity with Vizient, but we remind you that it takes time for these types of large GPO contracts to ramp up. As Carrie mentioned, we’ve made progress in our recent initiatives to contract directly with national ambulatory surgical centers or ASC chains.

This is important as there’s a steady shift in the number of surgeries that are happening in ASCs and our field team continues to meet with top ASC providers. We also signed three new specialty distributor agreements in the fourth quarter that are uniquely positioned to support the ambulatory surgical centers. There are several reasons for us to focus on the ASC setting at this time. There’s a growing demand for multi-disciplined facilities in the U.S. Patients are seeking outpatient care because ASC costs are generally lower than equivalent treatment in the inpatient hospital setting. ASCs are conducting more complex procedures. And as a result, there are seven states that are now allowing for longer than 24-hour stays in these facilities.

Access to the surgeons and anesthesiologists is more readily available in this setting and decision-making regarding adding new therapies is far more streamlined. The surgeons can then leverage that experience into future formulary decisions within the hospital setting. Lastly, another potential tailwind for the ASC market is the CMS pass-through designation that OLINVYK received last fall. Given our focus on the ASC opportunity, our top-down contracting efforts, we took measures earlier this year to find an even more efficient deployment of our sales force team focusing on pulling through the contracts we now have in place. With 184 formulary wins so far, we remain actively engaged in in-service programs, training on the use of OLINVYK as well as congresses and speaker programs.

While the base remains very small, the number of cartons per order is increasing as is the reorder rate, which is indicative that once the health care provider experiences the difference with OLINVYK they want to continue to use it. With that, let me turn the call over to Mark to discuss the initial VOLITION and ARTEMIS data and our other clinical programs in more depth.

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Mark Demitrack : Thanks, Patty. I’d like to begin with a review of the initial top line results from the VOLITION study. We’re very pleased with these initial results. VOLITION was designed as a real-world outcome study and was led by the Health Outcomes team at Cleveland Clinic with Wake Forest Baptist Health as the other participating medical center. The study investigated clinical outcomes among OLINVYK treated patients undergoing major noncardiac surgical procedures in an inpatient setting. IV OLINVYK was used as the first-line analgesic during postoperative care, consistent with product labeling. 203 patients were enrolled in this study, very much a real-world population comprised of complex patients who had a moderate to severe burden of medical and surgical risk at the time of enrollment.

I’ll review the main top line findings from the study for the GI and the cognitive outcomes both of which were exploratory aims in the study. The respiratory data is not yet available, and we expect to report these outcomes in the coming months. Our prespecified GI endpoint was the presence of a complete GI response which was met in any patient who did not vomit and did not require use of rescue antiemetics throughout the postoperative period. In VOLITION, 52.2% of OLINVYK treated patients showed a complete GI response. For reference, these outcomes are consistent with the GI tolerability data seen in our pivotal Phase III pooled patient data and represented in our label. Regarding our prespecified cognitive end points, 3.9% of VOLITION patients or 8 of the 203 enrolled patients exhibited symptoms suggesting the presence of delirium, measured using the validated 3D CAM bedside screening tool.

We chose to focus on delirium since it is among the most clinically and economically important events that may complicate and extend postoperative care. The incidence of delirium reported in the scientific literature can vary widely based on the population and treatment settings studied. In a recent meta-analysis of 33 studies in medical in-patients, the overall incidence of delirium was reported as 23%. Among high-risk patients undergoing major surgery, rates of delirium have been reported to exceed 20%. IV opioids are recognized as a contributing factor for delirium risk in the hospital setting. An additional exploratory measure of the patient’s level of agitation or sedation in this study was obtained with the Richmond Agitation-Sedation Scale.

And we found that over 90% of OLINVYK-treated patients were rated as alert and calm at every observation point beginning on the first postoperative morning. We view these exploratory data as consistent with the incidence of delirium observed on the 3D CAM scores. In order to study these outcomes in more detail, we extracted the electronic medical record, or EMR data, from surgical patients treated at the study hospitals around the same period of time that the VOLITION study was conducted. We refer to this EMR data set as the ARTEMIS study. We believe these EMR data bring a unique perspective to an understanding of how drugs perform in the real world. The importance of real-world data sources like these EMR data sets have been discussed by FDA in a variety of contexts and are among the provisions considered in the 21st Century Cures Act to help inform and accelerate the development of new drugs.

At this time, we’ve analyzed the EMR data set extracted from the Wake Forest study site, the largest enrolling site in the VOLITION study, which was comprised of 96 OLINVYK-treated patients. Using a validated propensity score-based matching algorithm, we identified a matched group of 457 comparable surgical patients who were treated with an IV opioid other than OLINVYK for their postoperative acute pain, the control patient population. I’d like to summarize some key findings on the health care utilization of these 2 groups. While there was no significant difference in PACU times, both groups were about 2.5 hours. OLINVYK-treated patients in the ARTEMIS study had a statistically significant 1.6 days or 27% in average hospital length of stay versus the match cohort of surgical patients treated with other IV opioids, including IV morphine, hydromorphone or fentanyl.

Looking more closely in the 2 populations, there were comparable proportions of patients who experienced an episode of postoperative vomiting, 24 OLINVYK-treated patients, 99 patients in the controlled group. However, in these subgroups, the reduction in hospital length of stay remained apparent with OLINVYK-treated patients continuing to show a statistically significant 2.1 days or 29% reduction in average length of hospital stay. While the reason for this difference in length of stay is not yet clear, we believe it may be related to the average duration and variability in the duration of vomiting, which were both numerically lower in the OLINVYK treated group. The difference in duration was not statistically different but there was a statistically significant narrower range of variability in the duration of vomiting among the OLINVYK treated patients.

In other words, these data suggest that though there were no significant differences between the groups in whether vomiting occurred, the clinical severity may be lower among patients treated with OLINVYK. With respect to cognitive outcomes and delirium, we use the recognized set of ICD codes recorded in the EMR to assess the presence of delirium or altered consciousness between the groups. In this prespecified endpoint, patients treated with other IV opioids experienced more ICD coded events of delirium and altered consciousness, then patients treated with IV OLINVYK or 4.4% compared to 1.04%. Though this difference was not statistically significant, when delirium occurs, it is a clinically and economically consequential event. Pooling the overall study population, the presence of an ICD code of delirium or altered consciousness in any patient increased the hospital length of stay by an average of 10.5 days.

To summarize, EMR analysis showed that OLINVYK treated patients stayed an average of 1.6 fewer days in the hospital compared to patients treated with other IV opioids. Over half of OLINVYK-treated patients in VOLITION exhibited a complete GI response over 90% were rated as alert and calm at every observation point. And under 4% of OLINVYK-treated patients showed symptoms suggesting delirium. I’ll also note that additional analyses of the respiratory data and the EMR data may not be consistent with the initial data I’m describing today. Nevertheless, we’re encouraged by these results and look forward to reporting more data as soon as they are available. Let me turn my attention now to TRV045. This has been another quarter of significant progress with 045, our novel S1P receptor modulator.

I’m excited to share the continued clinical progress we’ve made over the past few months. In January, we announced that we enrolled the first subject in our first TRV045 proof-of-concept trial, evaluating S1P receptor mechanism of action and target engagement. The goal of this study, a randomized, double-blind, placebo-controlled 4-way crossover study is to build on nonclinical evidence of anti-inflammatory signaling and the potential disease-modifying effect of 045 in the treatment of epilepsy and other CNS disorders. The study is expected to complete enrollment by mid-2023. We’re on track to that target, and we’re approximately halfway through the study enrollment. Based on this progress, we expect to report top line data in the third quarter of this year.

I’m also pleased to announce the initiation of a second proof-of-concept study for TRV045, which began enrolling subjects this month. The second study is a randomized, double-blind, placebo-controlled, 2-way crossover multiple dose study designed to evaluate the pharmacodynamic effect of 045 on cortical excitability in healthy male adults. The study will use transcranial magnetic stimulation, electromyography and electroencephalography to measure the potential effect of 045 on brain function relevant to epilepsy and other CNS . We also expect to have this study fully enrolled by midyear with top line data expected in the third quarter. Both of these proof-of-concept studies are not being conducted under the IND for 045 and all subjects will be enrolled at a study site outside the U.S. Our clinical development team is pleased with the progress we’ve made with 045, and I look forward to updating you on these 2 studies in the coming months.

I’ll now turn the call over to Barry to review our fourth quarter financials. Barry?

Barry Shin : Thanks, Mark. In the fourth quarter, our net loss was $7 million or $0.73 per share compared to $14 million or $2.12 per share for the same period last year. As Patty mentioned, we continue to see usage from ASCs and hospitals, which our distributors are fulfilling from existing inventories. We are focused on tightly managing our expenses and cost effectively advancing our pipeline. We finished the quarter with $38.3 million in cash and marketable securities, which we believe will fund our operations into the fourth quarter of 2023 past expected final VOLITION data for OLINVYK and readouts for our 2 proof-of-concept studies for TRV045. In addition, we may also receive up to $18 million of non-dilutive funding if certain stones are met.

That’s $3 million from our partner Nhwa on Chinese approval of OLINVYK and $15 million from R-Bridge on first commercial sale of OLINVYK in China, and Nhwa has informed us they expect regulatory decision on OLINVYK in the first half of this year. I’d note that $18 million of expected non-dilutive funding with less than 9 million shares currently outstanding, and this would meaningfully extend our runway. In this environment, we also continue to investigate partnering and other opportunities, which may provide additional resources and build shareholder value. We’ll now open the call for questions, after which Carrie will provide some closing remarks. Operator?

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Q&A Session

Operator: Our first question comes from the line of Jason Butler with JMP Securities.

Jason Butler : Congrats on the progress. I had a couple on 045 and then one on OLINVYK. Just for the magnetic stimulation trial, are there precedents or controls that you can point to hear that, that could give a benchmark of a magnitude of change that would be predictive of clinical benefit? And then I know that you may want to hold off on this until you have the data, but just any thoughts about the broader strategy in epilepsy, whether you’re focused on broader focal onset seizure for example, populations versus rare genetic populations?

Carrie Bourdow : Yes. Let me have Mark go ahead and answer the first question around the TMS.

Mark Demitrack : Yes. Thank you, Jason. With regard to the TMS paradigm, it actually is a very well-validated paradigm in — used in drug development. So both from the point of view of its validation as well as its experimental use with a variety of antiepileptics that are either in development or already on the market, we have a good sense of the endpoints and the size that we would expect to see that would be relevant from a clinical perspective. It’s really a body of work that allows us to — once we get our results be able to place them in context with what we would expect to see in future clinical studies. So we’re very pleased with the model. I think it can be quite useful.

Carrie Bourdow : And then with regard to the broader strategy, I mean, as you said, we’re not quite ready to declare yet. We also will be getting some additional nonclinical data that will help us make additional decisions right around rare versus local. So more to come on that, but we’re also very pleased with the progress we’re making with 045.

Jason Butler : Great. And then just on the ARTEMIS results for OLINVYK. With the — nice to see the 1.6 day reduction in hospital stay versus other IV opioids. Was there a specific driver there? So was it more driven by GI or delirium or other cognitive effects? Or was it a mixture of all of them?

Mark Demitrack : It’s a great question, Jason. And that’s why we drilled into the character of the vomiting signal. And it’s why I emphasized in the remarks the impact of delirium overall. So I think the answer to your question is that while I can’t draw a direct line for you between a specific event and its specific impact on the duration of hospital stay. I think what we can speculate is that these are certainly contributors to the overall trajectory in the hospital. But obviously, it’s a very complicated — it’s a very complicated set of factors. Obviously, there’s multiple things going on during the hospital stay. I would emphasize though it’s sort of — I said this in my words, but just to point out, the thing that’s so remarkable about the finding is it’s a pretty good, large representative data set from a homogeneous single site sample, well-matched and highly statistically significant at 1.6-day extension length of stay.

I didn’t mention the p-value, but it’s got three 0s and 1 in it. So we’re really quite excited about the finding. And I think to answer your question in more detail, is really the kind of work that’s ahead of us and looking more closely at the data.

Carrie Bourdow : Yes, we were pretty — we were very excited about that data point in particular, the 1.6 days. That’s — yes, that’s a meaningful difference.

Jason Butler : Thanks, Carrie, and congrats on the results.

Operator: Our next question comes from the line of Brandon Folkes with Cantor Fitzgerald.

Brandon Folkes : Congratulations on the progress. Maybe just one from me. Can we just take a step back on OLINVYK and think about this? Obviously, you continue to generate pretty good data on the product. It’s obviously tough to get — it’s a tough space to be selling a product. But what do you think sort of is the hurdle as we move forward here to maybe sort of getting people to switch across to OLINVYK? Is it just continued generation of data? Why is sort of the data that lies ahead or we have in hand potentially sort of more impactful than the data we’ve had in the past. Just any feedback from the field that you think sort of could actually drive revenue pull-through as we go forward?

Carrie Bourdow : Brandon, it’s a great question. I’ll start, and then I’ll have Patty dive in as well. So the couple of things. As you said, we’ve had — we put some data out, right, the head-to-head data that we previously. I will say those data sets while they’ve been generally supportive and they’ve been part of the discussions we’re having with formulary committees, they’ve been smaller data sets and healthy volunteers. This new data set is really what we’ve been hearing from our customers that they’ve been looking for it, right, real-world data in patients, robust from large academic medical centers, the added benefit then of having the electronic medical record process data around length of stay also helps that discussion.

So we’re directly answering the question that we’ve had, frankly, since launch. Where is the real-world data? Can you show us how this might impact or benefit the cost system? I will also say, though, that the inpatient setting is struggling, right? Margins are tight. We’re still seeing hospital formulary delays. And with the focus on costs, they’re very comfortable using IV morphine, IV hydromorphone. So it’s going to take something like this data set to really think breakdown some of those barriers. And you hear what Patty is describing is, we’re still trying to drive experience. And the fastest way for us to do that is in the ambulatory surgery centers, because hospitals are still experiencing delay. So it’s not — we’re not where we’d like to be.

We’re doing everything we can to sort of get things moving. It’s not necessarily additional data beyond this big data set because, as Mark said, we’re still going to be collecting data from this data set because we are also managing our expenses and looking to 045 in the pipeline. But Patty, I don’t know what are you seeing in the field?

Patty Drake: You said it very well. The inpatient setting is extremely difficult because of residual effects of the pandemic. ASCs represent an opportunity for us because of the reasons I listed with the more complex surgeries happening. It’s a growing area of health care in general. We have access to those people and they can get experience that they can parlay them into a hospital setting. What I’m most excited about in terms of the data that Mark has been able to generate with the team is exactly what you’re talking about length of stays in area that’s of critical importance to the inpatient setting and having such definitive data coming out is important. Now it’s going to take some time because we have to let medical do what they do first.

And that is that this data needs to get into our dossier. We’re going to be presenting it at congresses, published, et cetera. It takes time before it comes into the commercial hands for active promotion, but we’re certainly looking forward to having that happen, and we’ll certainly pursue that aggressively.

Brandon Folkes : And a follow-up on that, if I may. Do you expect the hospitals or ASC systems to want to run their own experience trials right on the back of this data as well would expect this data to sort of be sufficient out there given its real-world data to actually drive sort of use?

Carrie Bourdow : Yes. I’m pointing to Mark because he’s had — we — this data, as you can imagine, is fresh off the press. But you’ve had some conversations — yes.

Mark Demitrack : We’ve had conversations with providers from time to time about an interest in observing a cohort of patients in their hands as they use OLINVYK. We have not had any formal data output from those conversations at this point. I do think that the data we have is different than what we’ve had in our Phase III studies that we’ve presented and talked with providers about in that. This is actual real-world experience and use of the product. The idea of extracting the information from directly from an institution’s medical record and analyzing it that way is a fundamentally different type of information. And I think providers recognize that. So while certainly personal experience is pretty compelling for any clinician, the ability to look at data like this is, I think, an important incremental step in the type of data and the quality of the data that we’re providing to providers.

Carrie Bourdow : I mean I also think because it’s Cleveland Clinic and Wake Forest, 2 really well-recognized institutions, that carries a lot of weight, right? It’s hard for me to say that another large academic medical center wouldn’t want to try to do a repeat, but at least with some of the major institutions we’re calling on, the community, community teaching, I think this data is going to carry the way.

Brandon Folkes : Congrats on the progress.

Operator: Our next question comes from the line of Douglas Tsao with H.C. Wainwright.

Douglas Tsao : Just curious, as you move into the ASC, I know there’s been some sort of thought that it was perhaps a slightly less attractive market just given the volume of drug use. I’m just curious, how far can the ASC get you with pass-through status as well as the addition of complex studies. I mean can this sort of be a platform that can get you sort of approaching breakeven with OLINVYK?

Carrie Bourdow : Yes, it’s a great question, Doug. Let me start, and if Patty has an additional comment. So as you said, the inpatient is still really where the bulk of the opportunity is for OLINVYK. But in the ASCs, two things are happening. One, the more — those complex patients, that’s really sort of OLINVYK’s sweet spot. They’re starting to move more and more out there. And ASCs are now — it’s not just the volume over a 24-hour period. But the time in which patients are staying in the ASC is growing. So that does make the opportunity a little more attractive for OLINVYK. I would still say, though, that the goal for us is to leverage pass-through, the great data that we have and get the use, get the experience in ambulatory surgery centers so that those physicians bring that experience back into the inpatient setting.

But I’ll tell you, I’m seeing a lot more opportunity on OLINVYK in the ASCs than I did at launch just because of the shifting dynamics and the shifting inpatients. Patty, I mean, you’re out and you’ve been visiting a lot of these top ASCs?

Patty Drake: Yes. Well, I’ve had customers directly saying that why they would love to have this on their hospital formulary that is a very difficult and lengthy process for them where they can get in an ambulatory surgical center, the immediate experience, and it doesn’t take as long for them to get that process going. So that’s exactly what we’re doing is trying to be opportunistic here and follow where the health care trend is going in both more complex surgeries, the length of stay is elongating, so they get even more experience and then they are very interested in that and parlaying that into their hospital setting.

Douglas Tsao : And then just in terms of the length of stay data that you saw, it sounds like you have some signs that the GI was the primary driver. Do you have a sense of whether cognition contributed to the reduction of length of stay as well?

Mark Demitrack : Yes, Doug, let me address that. I want to be clear — the exploration of what accounts for the improvement in length of stay. I believe that the GI tolerability is the circumstantial data that I presented would suggest that it’s playing a role. I wouldn’t necessarily call it the primary driver because if you look at the impact of delirium, while — as I pointed out, the incidence of delirium as declared by the provider in their ICD codes in the record, it’s low. On the other hand, when it occurs, it’s an enormous event. 10.5-day extension of length of stay in — on average in patients who experience an episode of delirium, you don’t need many of those to contribute significantly to a prolonged length of stay.

So trying to get — as mentioning in the answer to Jason, trying to sort of be very specific about the proportion contribution from these different issues to length of stay is kind of — is very hard to do. But I think the circumstantially, the data would argue that these 2 features are certainly playing a role amongst other factors. And again, we’re going to keep looking at this data more closely to help give a little bit more color to what’s behind this.

Carrie Bourdow : And Doug, let me just say that from my perspective, certainly, I was very excited about the entire data set. But the cognition, the delirium data is extremely interesting to me, right? It’s not an area that we had studied previously in our Phase III studies. We had done the head-to-head study in healthy volunteers earlier, I guess, last year when we announced the results. So this now data set in patients in a real-world setting was very impressive to me. So more to come, I think, on this area for us.

Douglas Tsao : And one quick follow-up. In terms of delirium, does that an onset after a single dose of morphine or is it something that is a result of sort of the repeated use? And if you stop using the morphine just the delirium to see its fairly quickly?

Mark Demitrack : Again, a good question. And as you know, delirium is kind of a final common pathway brain dysfunction event. So in a hospital setting, there are typically multiple factors that are likely at play, the use of an IV opioid being an important but only one of multiple factors. So it really is very specific to a patient as to whether or not altering the drug regimen is going to be the key that will abort the delirium in a particular patient. So that’s — it’s a little bit more complicated because of the multiple factors that are involved. But again, IV opioids are recognized to play an important contributing role amongst other factors in the risk of delirium in a hospitalized patient.

Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Ms. Bourdow for any final comments. Great.

Carrie Bourdow : Thank you. And again, thank you for your questions. As you hear, it was a busy quarter for us, and we’re excited that we’re starting to see initial OLINVYK results from the VOLITION study. We’re continuing to make great progress on TRV045, our novel S1P receptor modulator. We have multiple upcoming milestones, including the regulatory update from Nhwa in the first half of this year that they’re expecting. So we’ll continue to update you as we learn more. Thank you again for tuning in this morning.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.