TCDA (2020 - Q4)

Hello. And welcome to the Tricida Fourth Quarter Financial Results and Business Update Conference. My name is Michelle, and I will be the operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. I would now like to turn the call over to Jackie Cossmon, Tricida Senior Vice President of Investor Relations and Communications. Ms. Cossmon, you may begin. Jackie C

Thank you, Michelle. Good afternoon. And thank you for joining the Tricida fourth quarter 2020 financial results and business update conference call. In today’s call, Gerrit Klaerner, our Founder, CEO and President, will discuss the response from the Office of New Drugs or OND of the U.S. Food and Drug Administration or FDA to our formal dispute resolution request or FDRR, also referred to as the Appeal. And Geoff Parker, our COO and CFO, will then discuss our financial results for the fourth quarter and our financial guidance.

Thank you, Jackie, and thank you all for joining us today. Our primary goal for this call is to discuss the response from the OND to our FDRR that was submitted in December of last year. I’ll move right into the decision and the key points from the Appeal denied letter or ADL from the OND. By way of background, we submitted the Appeal solely requesting that the ONB find that the magnitude of serum bicarbonate change seen in the TRCA-301 and TRCA-301E trial, which I refer to as 301 and 301E, is reasonably likely to predict clinical benefit in the treatment of metabolic acidosis in patients with CKD and that trial can therefore serve as the basis for accelerated approval. In summary, the OND denied our Appeal. In the letter the OND address the issue of magnetic of serum bicarbonate change we had focused on but also addressed other deficiencies identified in the serum, namely, the reliability of the data from the 301 and 301E trial due to the non-dis -- due to the disproportionate impact of data from a single high-enrolling clinical site on the trial’s results and the applicability of the trial results to the U.S. patient population given that the majority of the subjects in the trial were enrolled in sites outside of the United States or were in regions that the FDA does not consider U.S.-like, such as Eastern Europe.

Thank you, Gerrit, and thanks, everyone for joining us on the call today. Research and development expense was $27.3 million for the three months ended December 31, 2020, and $148.4 million for the year ended December 31, 2020. General and administrative expense was $21.8 million for the three months ended December 31, 2020, and $103 million for the year ended December 31, 2020. Net loss was $264.8 million for the year ended December 31, 2020. Non-GAAP net loss was $214.4 million for this period. As of December 31, 2020, cash, cash equivalents and investments were $332.3 million. We currently have $75 million in a debt facility with Hercules which is interest only until April of 2022 and has a final maturity of April -- of October 2023 and $200 million in convertible senior notes due in 2027. Tricida currently has the financial resources to fund its operations into at least mid-2022, prior to modifying any of its material agreements. We are in advanced discussions to modify certain of these agreements and if successful, would extend the company’s financial resources beyond mid-2022. As Gerrit has discussed, we are evaluating several options with respect to the VALOR trials that are focused on obtaining prior to the end of 2022 additional data on the effect of veverimer on CKD progression, physical functioning and serum bicarbonate. These options include the possibility of stopping the trial early for administrative reasons, which would allow analysis of the data using all alpha remaining at that time. Our goal is to obtain this data from the VALOR trial within the timeframe of our existing capital resources. With that, I’ll turn the call over to Gerrit for some final comments.

Yeah. There’s obviously a disappointing outcome that does provide greater clarity from the FDA on the accelerated approval path. And I have to really highlight that the term accelerated here is a regulatory term and not a temporal term. I think that the message we want you to walk away with is that, providing on the basis of positive renal outcome data is really what this team here is truly believing in and this is working on, while keeping all other options viable. So this is really a key time for the company and bringing help and belief to the 3 million patients in United States with metabolic acidosis and chronic kidney disease is our ultimate goal and we’ll continue to work towards that and be as excited and we stand by, I think, the strength of our data and our compound. And with that, Operator, we can now open up the call to questions.

Thank you, sir. The first question in the queue it comes from Graig Suvannavejh from Goldman Sachs. Please go ahead, sir. Your line is open.

Hi, everyone. This is Jack on the line for Graig. So I really appreciate all the color on the ongoing discussions with the agency. I’m curious though it sounds as if kind of the main concern with 301/301E was really the regional makeup of the trials, whether it was resembling the U.S. patient population or not. So, with that in mind, I mean, do you feel like serum bicarb change is still potentially an approvable endpoints or do you really think that these progression is the way to go at this point? And then I have follow-up.

Jack, I mean, I think, we’ve characterized and I think our view has not changed that the key concerns and issues that we had to address from FDA were around the magnitude of effect, the durability of effect and the applicability to the U.S. population. I think that hasn’t changed. And we think that the particular issue around the single side is part of that overarching kind of concern. We believe that -- there still is a path on the basis of serum bicarb as a surrogate. I think sort of what -- however, the current state of play per OND is that we would need all randomized subjects, 1,600 subjects with one year data, and in our book that as a likelihood that that could occur later than potential early readout from in terms of the interim analysis in terms of renal progression. So I hope that answers your question.

Yeah. Yeah. That’s really helpful. And then maybe more specifically on some of OND’s concerns about sort of the powering assumptions behind VALOR. Let’s say, theoretically, they’re potentially right about there maybe not being as much legal room. How would that inform potentially stopping the trial early in 2022, if it turns out that the trial at that point might be 50% powered or less, would you still think about going that route or would -- if there’s some kind of threshold of percent powered, where you’d feel comfortable stopping the trial for administrative reasons?

Yeah. Just to be clear, the powering assumptions is obviously and also the upfront assumptions. And what we’ve learned is that, unfortunately, we’ve always had a very interactive and iterative relationship with the Cardiorenal Division of advancing sort of the VALOR’s models. However, the FDRR really has to focus on -- only on information that’s in -- that in the NDA -- in the original NDA submission. And so we really feel strongly that, that some of those earlier versions of the powering assumptions and the interpretation of the serum bicarb results were not the most up-to-date view of it. And that was the more up-to-date view, we are very confident that there’s a good probability of stopping our end.

All right. Thank you.

Thank you. And the next question in the queue comes from Jessica Fye with JP Morgan. Your line is open. Please proceed.

Hey, guys. Thanks for taking my questions. I guess, first, I just talk -- want to follow up on Graig’s question. Do you have any plans to provide the FDA with 52 weeks bicarb data from VALOR i.e. is that still kind of on the table, if these interims don’t hit and you kind of get to that time point?

Yeah. I mean, definitely, I think, that’s something that is one of the potential options or paths that we’re pursuing. It’s more, I think, what we want to highlight is sort of the misnomer of accelerated in the context of timing of a potential readout. So it doesn’t mean that we don’t believe in it or we wouldn’t pursue it, it just means that we think that the interim analysis might happen earlier.

Okay. Got it. And maybe related to that, is there any reason to expect a stronger treatment effect on serum bicarb in VALOR than what you saw in 301/301E?

Yes. We’ve improved screening criteria to ensure that we have truly acidotic patients in the study and there are other reasons that we can’t comment on because it’s an ongoing trial, but we’re confident that we would see significant the increase in bicarb effects similar or larger bicarb effects in the median of 3.15.

And Jess, it’s Geoff. I would comment that for our powering assumptions, though, we don’t need to assume anything greater than 3.15. So what was actually observed in the median difference in the 301E study of 3.15. That goes into our analysis. We’re not assuming anything greater than that, when we think about either the interims or the stopping.

Right.

The differences is the percent reduction in renal events per one mil equivalent, that really is the factor that maybe you need to take into account and based on the time dependent model, of course, that’s 8.4%.

Okay. Got it. And maybe just the last one, given what seems like a large proportion of ex-U.S. patients enrolled in VALOR already, how do you think about the FDA’s willingness to accept those results if successful. For example, if you do hit on one of these interims?

Yeah. I think, having done this before a couple times and the team -- may have the team members here in clinical development, I’ve worked on the alpha program that relied to greater than 90% on Eastern European data and really having looked at patient by patient, patient level data in 301/301E, we believe that those are patients that have the same underlying disease and the same comorbidities and treatments as U.S. like patients. But let’s be clear, the feedback from OND is quite definitive on that concern and we can’t assume that this is only going to be in the context of accelerated approval. And that’s -- I think that’s why we are focusing on recruiting additional U.S. like patients here in the remaining 150, 200 subjects.

Got it. Thank you.

Thank you, Jess.

Thank you. And the last question in the queue comes from Eva Prisitera with Cowen. Your line is open. Please proceed.

Hi. Thank you so much for taking my call. I just had a question about the renal event rate with VALOR. Has it been consistent with expectations and what kind of factors could cause it to vary?

Yeah. I think we -- with the current number 69 for 511 events, I think that’s in line with our expectations and that the keeps us on track for the timing in the second half of this year for the 150 and second half of next year for the 250. Now, the expectation for our standing committee and the world experts who run most of these trials is that this wait is going to increase as patients are in the study for a longer period of time. It’s well known that in the first year or two, there are fewer renal events, because of better care or just being part of a study or being seen more often by a physician and then it really goes up significantly. And so our expectation is that, that we continue to see an increase in that rate and we will monitor it carefully and update on that periodically. Things that can impact it. Of course, our study specific, we obviously have to make sure that we keep our patients in the study and we also monitor COVID related events. So those are all things that we work very carefully to ensure that our patients remain in the study, and, again, we accrued the right number of events to get interpretable data.

Great. Thank you. And then just to follow up from what you mentioned about COVID, has it affected your ability to monitor patients and also has it affected that maybe the timing of the interims.

So on the timing of interims. We don’t believe it has affected it so far. And yes, we’ve put specific code measures in place early in the pandemic to allow sort of home delivery of study, drug and other things and we are managing that that very actively and I think that that’s obviously given that such a major worldwide pandemic, that high on the list of things to consider for all ongoing clinical trials.

Okay. Thank you very much.

Thanks, Eva.

And we have no further questions at this time, so I’ll turn the call back over to Jackie Cossmon for any closing remarks.

Thank you, Michelle, and thank you all for joining us on the call today. As always, if you have additional questions, please don’t hesitate to email us at IR at tricida.com. Thank you very much and good-bye.

Ladies and gentlemen, this concludes today’s teleconference. Thank you for participating. You may now disconnect.