Reata Pharmaceuticals, Inc. (Nasdaq: RETA), a clinical-stage
biopharmaceutical company, today announced financial results for
the first quarter ended March 31, 2019, and provided an update on
the Company’s business and product development programs.
Product Development Updates
Phase 2/3 CARDINAL Trial of Bardoxolone in
Alport Syndrome
Enrollment in the pivotal Phase 3 portion of the
CARDINAL trial of bardoxolone methyl (bardoxolone) in patients with
chronic kidney disease (CKD) caused by Alport syndrome is complete
at 157 patients. Alport syndrome is a rare and serious
hereditary disease that affects approximately 30,000 to 60,000
patients in the United States. There are no approved
therapies for Alport syndrome anywhere in the world. We
expect to have one-year top-line results available in the second
half of 2019.
Phase 2 PHOENIX Trial of Bardoxolone in Rare
Forms of Chronic Kidney Disease
In the first quarter of 2019, we announced final
data from the cohort of patients with focal segmental
glomerulosclerosis (FSGS) from the Phase 2 PHOENIX study of
bardoxolone in rare forms of CKD, as well as aggregate data across
all four cohorts of PHOENIX. PHOENIX was an open-label,
multi-center Phase 2 trial evaluating the safety and efficacy of
bardoxolone in 103 patients, including 31 patients with autosomal
dominant polycystic kidney disease (ADPKD), 26 with IgA
nephropathy, 28 with CKD caused by type 1 diabetes, and 18 with
FSGS. Patients were treated with bardoxolone for 12 weeks,
and each cohort showed statistically significant increases in mean
estimated glomerular filtration rate (eGFR) at Week 12. The
mean change in eGFR from baseline across all four cohorts was 7.8
mL/min/1.73 m2 (n=103; p<0.00001). Of the patients that
reached Week 12, 88% experienced increases in eGFR.
Bardoxolone significantly reduced mean systolic blood pressure by
3.8 mmHg (n=103; p=0.002) and mean diastolic blood pressure by 2.8
mmHg (n=103; p=0.0009). Urinary albumin excretion was low
upon study entry and remained unchanged by bardoxolone treatment
(n=103; p=0.6). No severe adverse events were reported
related to bardoxolone treatment.
Phase 3 FALCON Trial of Bardoxolone in Autosomal
Dominant Polycystic Kidney Disease
Based on the results from the ADPKD cohort of
PHOENIX, we announced in January of 2019 that we will initiate a
registrational Phase 3 trial called FALCON in patients with
ADPKD. ADPKD is the most common single-gene disorder of the
kidneys, and there are an estimated 400,000 patients in the United
States, with approximately 140,000 diagnosed. The only
therapy currently approved for the treatment of ADPKD is tolvaptan,
which was approved in the United States in 2018.
FALCON is an international, multi-center,
randomized, double-blind, placebo-controlled trial studying the
safety and efficacy of bardoxolone in approximately 300 patients
with ADPKD randomized one-to-one to active drug or placebo.
The primary efficacy endpoint is the retained eGFR benefit, defined
as the change from baseline in eGFR compared to placebo after 48
weeks of treatment and a four-week drug withdrawal period.
Based upon guidance from the FDA, the 52-week retained eGFR
benefit data may support accelerated approval under subpart
H. After Week 52, patients will be restarted on study drug
with their original treatment assignments and will continue on
study for a second year. The second-year retained eGFR
benefit will be measured at Week 104 after withdrawal of drug for
four weeks. Based upon guidance from the FDA, the year-two
retained eGFR benefit data may support full approval. We plan
to enroll the first ADPKD patient in FALCON in May 2019.
Pivotal MOXIe Trial of Omaveloxolone in
Friedreich’s Ataxia
We are conducting the pivotal part 2 of the
MOXIe Phase 2 trial of omaveloxolone in Friedreich’s ataxia, an
inherited, debilitating, and degenerative neuromuscular
disorder. Enrollment in part 2 of the MOXIe trial is complete
at 103 patients, and top-line data are expected in the second half
of 2019.
Phase 3 CATALYST Trial of Bardoxolone in
Connective Tissue Disease-Associated Pulmonary Arterial
Hypertension
We are conducting the pivotal Phase 3 CATALYST
trial of bardoxolone in patients with pulmonary arterial
hypertension associated with connective tissue disease (CTD-PAH),
an often fatal manifestation of many types of autoimmune disease,
including systemic sclerosis (scleroderma) and systemic lupus
erythematosus. The trial will enroll approximately 200
patients, with top-line data expected in the first half of
2020.
Selected Clinical Milestones in
2019
- Initiation of pivotal FALCON trial in ADPKD in May 2019
- Pivotal CARDINAL data in the second half of 2019
- Pivotal MOXIe data in the second half of 2019
First Quarter Results
The Company incurred total expenses of $36.3
million for the quarter ended March 31, 2019, with research and
development accounting for $26.1 million. This compares to
total expenses of $28.1 million for the same period of the year
prior, when research and development accounted for $21.4
million. We reported a net loss of $29.2 million or $0.98 per
share for the quarter ended March 31, 2019. This compares to
net income of $4.1 million or $0.16 per share in the same period of
the year prior.
The net loss for the three-month period compared
to the prior year is primarily driven by both an increase in
expenses and a decrease in revenue. Higher expenses were
driven by an increase in research and development expenses due to
clinical and manufacturing activities and an increase in personnel
expenses to support expanded development activities. Revenue
to date has primarily been related to license and collaboration
agreements entered into during 2009, 2010, and 2011. The
decrease in revenue was primarily due to an increase in revenue in
the first quarter of 2018 from the portion of a $30 million
milestone from KHK that related to the period of time from
execution of the KHK agreement until the three months ended March
31, 2018. There was no such catch-up revenue recognition in
the first quarter of 2019.
Our cash-based operating expenses, a non-GAAP
measure, were $31.9 million for the three months ended March 31,
2019. This compares to $25.6 million for the same period in
2018. We expect our cash-based operating expenses to continue
to increase in the future as we advance bardoxolone and
omaveloxolone through ongoing and future clinical trials, scale
manufacturing for registrational and validation purposes, advance
other product candidates into mid- and later-stage clinical trials,
expand our product candidate portfolio, increase both our research
and development and administrative personnel, and plan for
commercialization of our product candidates.
At March 31, 2019, we had $313.1 million in cash
and cash equivalents. We expect our current cash to fund our
operations through data readouts for CARDINAL, MOXIe, and
CATALYST.
Non-GAAP Financial Measures
In addition to the U.S. generally accepted
accounting principles (GAAP) financial highlights, this earnings
release includes cash-based operating expenses, a non-GAAP
financial measure, which the Company defines as total expenses
excluding stock-based compensation expense and depreciation
expense. A reconciliation of this non-GAAP financial measure
to its most directly comparable GAAP financial measure is presented
in the table below in this earnings release.
We believe that this non-GAAP financial measure,
in addition to GAAP financial measures, provides a meaningful
measure of our ongoing business and operating performance by
allowing investors to analyze our financial results similarly to
how management analyzes our financial results by viewing period
expense totals more indicative of effort directly expended to
advance the business and our product candidates. Non-GAAP
financial measures should be considered in addition to, not in
isolation or as a substitute for, GAAP financial measures. In
addition, our non-GAAP financial measure may differ from similarly
named measures used by other companies.
CONFERENCE CALL INFORMATION |
Date: |
Thursday, May 9, 2019 |
Time: |
8:00 a.m. ET |
Audience Dial-in (toll-free): |
844-348-3946 |
Audience Dial-in (international): |
213-358-0892 |
Conference ID: |
5177169 |
Webcast Link: |
https://edge.media-server.com/m6/p/cwm9hw5f |
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Consolidated Statements of Operations |
|
(Unaudited) |
|
|
(in thousands, except share and per share
data) |
Collaboration revenue |
|
|
|
|
|
|
|
|
License and milestone |
|
$ |
7,726 |
|
|
$ |
32,168 |
|
Other revenue |
|
|
44 |
|
|
|
224 |
|
Total collaboration revenue |
|
|
7,770 |
|
|
|
32,392 |
|
Expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
26,114 |
|
|
|
21,407 |
|
General and administrative |
|
|
10,038 |
|
|
|
6,628 |
|
Depreciation |
|
|
170 |
|
|
|
101 |
|
Total expenses |
|
|
36,322 |
|
|
|
28,136 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
Investment income |
|
|
1,797 |
|
|
|
335 |
|
Interest expense |
|
|
(2,397 |
) |
|
|
(509 |
) |
Total other income (expense) |
|
|
(600 |
) |
|
|
(174 |
) |
(Loss) income before taxes on income |
|
|
(29,152 |
) |
|
|
4,082 |
|
Provision for taxes on income |
|
|
2 |
|
|
|
- |
|
Net (loss) income |
|
$ |
(29,154 |
) |
|
$ |
4,082 |
|
Net (loss) income per share—basic |
|
$ |
(0.98 |
) |
|
$ |
0.16 |
|
Net (loss) income per share—diluted |
|
$ |
(0.98 |
) |
|
$ |
0.15 |
|
Weighted-average number of common shares used in net (loss)
income per share basic |
|
|
29,830,114 |
|
|
|
26,155,141 |
|
Weighted-average number of common shares used in net (loss)
income per share diluted |
|
|
29,830,114 |
|
|
|
26,633,521 |
|
|
|
As ofMarch 31,
2019(unaudited) |
|
|
As of December 31,
2018 |
|
|
|
(in thousands) |
|
Condensed Consolidated Balance Sheet Data |
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
313,056 |
|
|
$ |
337,790 |
|
Working capital |
|
|
256,267 |
|
|
|
286,353 |
|
Total
assets |
|
|
331,285 |
|
|
|
345,208 |
|
Term
loan |
|
|
79,558 |
|
|
|
79,219 |
|
Deferred revenue (including current portion) |
|
|
217,995 |
|
|
|
225,721 |
|
Accumulated deficit |
|
|
(449,477 |
) |
|
|
(420,323 |
) |
Total stockholders’
equity (deficit) |
|
$ |
(4,610 |
) |
|
$ |
15,159 |
|
Reconciliation of GAAP to
Non-GAAP Financial Measures
The following table presents results for the
three months ending (in thousands) (unaudited):
|
2019 |
|
|
2018 |
|
|
March 31 |
|
|
December 31 |
|
|
September 30 |
|
|
June 30 |
|
|
March 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses - GAAP |
$ |
36,322 |
|
|
$ |
33,373 |
|
|
$ |
34,735 |
|
|
$ |
34,223 |
|
|
$ |
28,136 |
|
Stock-based compensation expense |
|
(4,227 |
) |
|
|
(2,768 |
) |
|
|
(2,745 |
) |
|
|
(2,552 |
) |
|
|
(2,485 |
) |
Depreciation |
|
(170 |
) |
|
|
(120 |
) |
|
|
(105 |
) |
|
|
(105 |
) |
|
|
(101 |
) |
Cash-based operating expenses
- Non-GAAP |
$ |
31,925 |
|
|
$ |
30,485 |
|
|
$ |
31,885 |
|
|
$ |
31,566 |
|
|
$ |
25,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change from previous quarter |
$ |
1,440 |
|
|
$ |
(1,400 |
) |
|
$ |
319 |
|
|
$ |
6,016 |
|
|
$ |
961 |
|
Percentage change from
previous Quarter |
|
5 |
% |
|
|
-4 |
% |
|
|
1 |
% |
|
|
24 |
% |
|
|
4 |
% |
About Reata Pharmaceuticals,
Inc.
Reata is a clinical-stage biopharmaceutical
company that develops novel therapeutics for patients with serious
or life-threatening diseases by targeting molecular pathways
involved in the regulation of cellular metabolism and inflammation.
Reata’s two most advanced clinical candidates, bardoxolone
and omaveloxolone, target the important transcription factor Nrf2
that promotes the resolution of inflammation by restoring
mitochondrial function, reducing oxidative stress, and inhibiting
pro-inflammatory signaling. Bardoxolone and omaveloxolone are
investigational drugs, and their safety and efficacy have not been
established by any agency.
Forward-Looking Statements
This press release includes certain disclosures
that contain “forward-looking statements,” including, without
limitation, statements regarding the success, cost and timing of
our product development activities and clinical trials, our plans
to research, develop and commercialize our product candidates, and
our ability to obtain and retain regulatory approval of our product
candidates. You can identify forward-looking statements
because they contain words such as “believes,” “will,” “may,”
“aims,” “plans,” and “expects.” Forward-looking statements
are based on Reata’s current expectations and assumptions.
Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks, and changes in
circumstances that may differ materially from those contemplated by
the forward-looking statements, which are neither statements of
historical fact nor guarantees or assurances of future
performance. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, but are not limited to, (i) the timing, costs,
conduct, and outcome of our clinical trials and future preclinical
studies and clinical trials, including the timing of the initiation
and availability of data from such trials; (ii) the timing and
likelihood of regulatory filings and approvals for our product
candidates; (iii) the potential market size and the size of the
patient populations for our product candidates, if approved for
commercial use, and the market opportunities for our product
candidates; and (iv) other factors set forth in Reata’s filings
with the U.S. Securities and Exchange Commission, including its
Annual Report on Form 10-K, under the caption “Risk Factors.”
The forward-looking statements speak only as of the date made and,
other than as required by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Contact:Reata Pharmaceuticals, Inc.(972)
865-2219https://reatapharma.com
Investors:Vinny JindalVice President,
Strategy(469)
374-8721ir@reatapharma.comhttps://reatapharma.com/contact-us/
Media:Matt Middleman, M.D.LifeSci Public
Relations(646)
627-8384matt.middleman@lifescipublicrelations.com
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