SKYCLARYS® Approved by FDA in the U.S.
Approximately 500 Patient Start Forms Received for
SKYCLARYS
Marketing Authorization Application for Omaveloxolone in
Europe Under Review
Announced $275 Million Debt Facility and Extended Cash
Guidance Through the End of 2026
Focus on Neurology Pipeline; Announced Discontinuation of
Bardoxolone CKD Programs
Conference Call with Management on May 10, 2023, at 8:30 a.m.
ET
Reata Pharmaceuticals, Inc. (Nasdaq: RETA) (“Reata,” the
“Company,” “our,” “us,” or “we”), a global biopharmaceutical
company focused on developing and commercializing novel therapies
for patients with severe diseases, today announced financial
results for the first quarter of 2023 and provided an update on the
Company’s business operations and clinical development
programs.
“In the first quarter of 2023, we announced that the U.S. Food
and Drug Administration (FDA) approved SKYCLARYS® (omaveloxolone)
as the first and only FDA-approved drug indicated for the treatment
of Friedreich’s ataxia (FA), a rare, genetic, debilitating, and
degenerative neuromuscular disorder,” said Warren Huff, Chief
Executive Officer of Reata. “This was a historic milestone for FA
patients, their families, the FA support community, and Reata. Our
commercial sales team has been in the field since early March, and
we have completed the final stages of manufacturing and packaging
commercial supplies of SKYCLARYS. We are encouraged by the
significant interest from patients and health care providers to
begin SKYCLARYS treatment and have already engaged a large segment
of the neurology community in the brief time since the Company
received approval.”
Recent Company Highlights
SKYCLARYS Approval in the U.S.
In the first quarter of 2023, we announced FDA approval of
SKYCLARYS (omaveloxolone) for the treatment of FA in adults and
adolescents aged 16 years and older. In early March 2023, we
deployed our fully trained and experienced field sales team as well
as the infrastructure that enables physicians to initiate start
forms for FA patients. We have received approximately 500 patient
start forms to date.
We have completed the final stages of SKYCLARYS drug product
manufacturing and packaging. An NDA supplement was submitted to the
FDA to increase the drug substance specification for a process
impurity that was observed above the current specification during
process validation. The approval of this supplement is required to
release SKYCLARYS drug product to our specialty pharmacy. The FDA
is reviewing the supplement as a Prior Approval Supplement under
Priority Review with an approval target action date in mid-August
2023. The FDA stated that the review of the supplement was
prioritized and that the approval potentially should come earlier
than the action date. We believe that the information provided in
the NDA supplement, which was developed based upon FDA and
international harmonized guidance, is sufficient to support the
proposed change. Provided that there are no major review issues
with the supplement, we believe that SKYCLARYS will be available
through the specialty pharmacy no later than mid-August 2023.
Marketing Authorization Application for Omaveloxolone in
Patients with FA in Europe
In the fourth quarter of 2022, we submitted a Marketing
Authorization Application (MAA) for omaveloxolone in patients with
FA in Europe that is currently under review. We recently received
the Day 120 list of questions and requests from the European
Medicines Agency (EMA). We believe that we have the data and
analyses necessary to address the requests of the EMA, and we plan
to provide responses to the EMA in the third quarter of 2023.
Bardoxolone in Patients with Chronic Kidney Disease
In May 2023, our strategic collaborator, Kyowa Kirin Co., Ltd.
(Kyowa Kirin) announced results from AYAME, a Phase 3,
multi-center, randomized, double-blind, placebo-controlled trial to
evaluate the efficacy and safety of bardoxolone methyl
(bardoxolone) for patients with diabetic kidney disease. The study
enrolled 1,013 patients who were treated with 5 to 15 mg of
bardoxolone or placebo for three to four years. The primary
endpoint of the study was time to onset of a ≥ 30% decrease in
estimated Glomerular Filtration Rate (eGFR) from baseline or
end-stage renal disease (ESRD).
The AYAME study met the primary and key secondary endpoints, and
no significant safety issues were observed in patients receiving
bardoxolone. However, there was no separation in the occurrence of
ESRD events between the bardoxolone and placebo groups after three
years of treatment. Based on the results of AYAME and its potential
regulatory impact, we and Kyowa Kirin have decided to discontinue
our bardoxolone chronic kidney disease programs.
Amended And Restated Development and Commercialization Funding
Agreement with Blackstone Life Sciences
As a result of discontinuation of bardoxolone development, we
have amended the development and commercialization funding
agreement with Blackstone Life Sciences. Under the terms of the
amended agreement, all obligations for development and
commercialization of bardoxolone, restrictions on debt financing,
restrictions on licensing assets, and all prior security interests
have been removed. Reata will pay to Blackstone a low, single-digit
royalty on world-wide net sales of omaveloxolone for FA.
Debt Financing Agreement
On May 5, 2023, we entered into a debt facility with funds
managed by Pharmakon Advisors, LP for an aggregate principal amount
of up to $275 million to be advanced in four tranches. The first
tranche of $75 million will be funded on May 12, 2023. The second
tranche of $50 million will be funded after meeting certain
regulatory or production requirements. The final two tranches of
$75 million each will be available based on achieving certain
commercial sales milestones. The funding of the last tranche will
be at the option of Reata.
“Today’s announcement of a non-dilutive debt facility of $275
million bolsters Reata’s strong balance sheet, which will enable us
to extend our cash runway through the end of 2026 and focus on the
commercial launch of SKYCLARYS,” said Manmeet Soni, President,
Chief Operating Officer and Chief Financial Officer of Reata. “This
new debt facility, along with savings from funds planned for
bardoxolone development and anticipated product revenues from the
commercial launch of SKYCLARYS, puts Reata on a path to
self-sustainability.”
First Quarter Financial Highlights
Cash and Cash Equivalents
On March 31, 2023, we had cash, cash equivalents and marketable
securities of $321.0 million, as compared to $387.5 million of
cash, cash equivalents and marketable securities on December 31,
2022.
GAAP and Non-GAAP Research and Development (“R&D”)
Expenses
R&D expenses according to generally accepted accounting
principles in the U.S. (“GAAP”) were $55.5 million for the first
quarter of 2023, as compared to $39.8 million for the same period
of the year prior. The increase is due to increases in certain
ongoing clinical study costs and increases in stock-based
compensation resulting from the vesting of certain
performance-based equity awards upon FDA approval of SKYCLARYS.
Non-GAAP R&D expenses were $41.2 million for the first
quarter of 2023, as compared to $32.2 million for the same period
of the year prior.1
GAAP and Non-GAAP Selling, General and Administrative
(“SG&A”) Expenses
GAAP SG&A expenses were $54.9 million for the first quarter
of 2023, as compared to $24.8 million for the same period of the
year prior. The increase was primarily due to increased commercial
activities and to an increase in stock-based compensation resulting
from the vesting of certain performance-based equity awards upon
FDA approval of SKYCLARYS.
Non-GAAP SG&A expenses were $31.1 million for the first
quarter of 2023, as compared to $17.0 million for the same period
of the year prior.1
GAAP and Non-GAAP Net Loss
The GAAP net loss was $116.1 million, or $3.14 per share, for
the first quarter of 2023, on both a basic and diluted basis, as
compared to a GAAP net loss of $73.8 million, or $2.03 per share,
for the same period of the year prior, on both a basic and diluted
basis.
The non-GAAP net loss was $67.0 million, or $1.81 per share, for
the first quarter of 2023, on both a basic and diluted basis, as
compared to a non-GAAP net loss of $48.5 million, or $1.33 per
share, for the same period of the year prior, on both a basic and
diluted basis.1
Updated Cash Guidance
The Company updated its cash guidance. Based on the Company’s
current operating plans, its existing cash, cash equivalents, and
marketable securities plus funds available from its new debt
facility will be sufficient to fund operations through the end of
2026.
[1] See “Non-GAAP Financial Measures” below for a description of
non-GAAP financial measures and a reconciliation between GAAP and
non-GAAP R&D expenses, GAAP and non-GAAP SG&A expenses, and
GAAP and non-GAAP net loss, respectively, appearing later in the
press release.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures,
including non-GAAP R&D expenses, non-GAAP SG&A expenses,
non-GAAP operating expenses, non-GAAP net loss and non-GAAP net
loss per common share – basic and diluted. These measures are not
in accordance with, or an alternative to, GAAP, and may be
different from non-GAAP financial measures used by other
companies.
The Company defines non-GAAP R&D expenses as GAAP R&D
expenses, excluding stock-based compensation expense; non-GAAP
SG&A expenses as GAAP SG&A expenses, excluding stock-based
compensation expense; non-GAAP operating expenses as GAAP operating
expenses, excluding stock-based compensation expense; non-GAAP net
loss as GAAP net loss, excluding stock-based compensation expense
and non-cash interest expense from liability related to sale of
future royalties; and non-GAAP net loss per common share – basic
and diluted as GAAP net loss per common share – basic and diluted,
excluding stock-based compensation expense and non-cash interest
expense from liability related to sale of future royalties. The
Company has excluded the impact of stock-based compensation
expense, which may fluctuate from period to period based on factors
including the variability associated with performance-based grants
of stock options and restricted stock units and changes in the
Company’s stock price, which impact the fair value of these awards.
The Company has excluded the impact of accreted non-cash interest
expense from liability related to sale of future royalties as it
may be calculated differently from, and therefore may not be
comparable to, peer companies who also provide non-GAAP
disclosures. The Company has excluded the impact of stock-based
compensation expense and non-cash interest expense from liability
related to sale of future royalties because the Company believes
its impact makes it difficult to compare its results to prior
periods and anticipated future periods.
Because management believes certain items, such as stock-based
compensation expense and non-cash interest expense from liability
related to sales of future royalties, can distort the trends
associated with the Company’s ongoing performance, the following
measures are often provided, excluding special items, and utilized
by the Company’s management, analysts, and investors to enhance
consistency and comparability of year-over-year results, as well as
to industry trends, and to provide a basis for evaluating operating
results in future periods: non-GAAP net loss; non-GAAP net loss per
common share – basic and diluted; non-GAAP R&D expenses;
non-GAAP SG&A expenses; and non-GAAP operating expenses.
The Company believes the presentation of these non-GAAP
financial measures provides useful information to management and
investors regarding the Company’s financial condition and results
of operations. When GAAP financial measures are viewed in
conjunction with these non-GAAP financial measures, investors are
provided with a more meaningful understanding of the Company’s
ongoing operating performance and are better able to compare the
Company’s performance between periods. In addition, these non-GAAP
financial measures are among those indicators the Company uses as a
basis for evaluating performance, allocating resources, and
planning and forecasting future periods. These non-GAAP financial
measures are not intended to be considered in isolation or as a
substitute for GAAP financial measures. A reconciliation between
these non-GAAP measures and the most directly comparable GAAP
measures is provided later in this press release.
Conference Call Information
Reata’s management will host a conference call on May 10, 2023,
at 8:30 am ET. The conference call will be accessible by dialing
(833) 470-1428 (toll-free domestic) or (929) 526-1599
(international) using access code 283635. The webcast link is
https://events.q4inc.com/attendee/647566363.
First quarter 2023 financial results to be discussed during the
call will be available on the Company’s website shortly before the
call at https://www.reatapharma.com/investors/ and will be
available for at least 12 months after the call. The audio
recording and webcast of the conference call will be accessible for
at least 90 days after the event at
https://www.reatapharma.com/investors/.
About SKYCLARYS® (omaveloxolone)
SKYCLARYS (omaveloxolone) is an oral, once-daily medication
indicated for the treatment of Friedreich’s ataxia in adults and
adolescents aged 16 years and older in the U.S. Additionally, the
Company’s Marketing Authorization Application for omaveloxolone is
under review in Europe by the EMA. The European Commission has
granted Orphan Drug designation in Europe to omaveloxolone for the
treatment of Friedreich’s ataxia.
IMPORTANT SAFETY INFORMATION
WARNINGS AND PRECAUTIONS
Elevation of Aminotransferases: Treatment with SKYCLARYS
can cause an elevation in hepatic transaminases (alanine
aminotransferase [ALT] and aspartate aminotransferase [AST]). The
incidence of elevations of ALT or AST above 5 times and 3 times the
upper limit of normal (ULN) was 16% and 31%, respectively, in
patients treated with SKYCLARYS. There were no cases of concomitant
elevation of transaminases and total bilirubin observed. Maximum
increases in ALT and AST occurred within 12 weeks after starting
SKYCLARYS. Increases in serum aminotransferases were generally
asymptomatic and reversible following discontinuation of SKYCLARYS.
Patients with clinically significant liver disease were excluded
from the pivotal study.
Monitor ALT, AST, and total bilirubin prior to initiation of
SKYCLARYS, every month for the first 3 months of treatment, and
periodically thereafter. If transaminases increase to levels
greater than 5 times the ULN, or greater than 3 times the ULN with
evidence of liver dysfunction (e.g., elevated bilirubin),
immediately discontinue SKYCLARYS and repeat liver function tests
as soon as possible. If transaminase levels stabilize or resolve,
SKYCLARYS may be reinitiated with an appropriate increased
frequency of monitoring of liver function.
Elevation of B-Type Natriuretic Peptide: Treatment with
SKYCLARYS can cause an increase in B-type natriuretic peptide
(BNP), a marker of cardiac function. A total of 14% of patients
treated with SKYCLARYS had an increase from baseline in BNP value
above the ULN (100 pg/mL), compared to 4% of patients who received
placebo. The incidence of elevation of BNP above 200 pg/mL was 4%
in patients treated with SKYCLARYS. Cardiomyopathy and cardiac
failure are common in patients with Friedreich’s ataxia. Patients
were excluded from the pivotal study if they had BNP levels >
200 pg/mL prior to study entry, or a history of clinically
significant left-sided heart disease and/or clinically significant
cardiac disease, with the exception of mild to moderate
cardiomyopathy associated with Friedreich’s ataxia. Whether the
elevations in BNP are related to SKYCLARYS or cardiac disease
associated with Friedreich’s ataxia is unclear.
Elevations in BNP may indicate cardiac failure and should prompt
an evaluation of cardiac function. Check BNP prior to initiation of
SKYCLARYS. Monitor patients for the signs and symptoms of fluid
overload, such as sudden weight gain (3 pounds or more of weight
gain in one day, or 5 pounds or more of weight gain in a week),
peripheral edema, palpitations, and shortness of breath. If signs
and symptoms of fluid overload develop, worsen, or require
hospitalization, evaluate BNP and cardiac function, and manage
appropriately. Management of fluid overload and heart failure may
require discontinuation of SKYCLARYS.
Lipid Abnormalities: Treatment with SKYCLARYS can cause
changes in cholesterol. In the pivotal study, 29% of patients
treated with SKYCLARYS reported elevated cholesterol above ULN at
one or more time points. Mean increases were observed within 2
weeks of initiation of SKYCLARYS and returned to baseline within 4
weeks of discontinuing treatment. A total of 16% of patients
treated with SKYCLARYS had an increase in low-density lipoprotein
cholesterol (LDL-C) from baseline, compared to 8% of patients who
received placebo. The mean increase in LDL-C for all
SKYCLARYS-treated patients was 23.5 mg/dL at 48 weeks. A total of
6% of patients treated with SKYCLARYS had decreases in high-density
lipoprotein cholesterol (HDL-C) from baseline compared to 4% of
patients who received placebo. The mean decrease in HDL-C for all
SKYCLARYS-treated patients was 5.3 mg/dL at 48 weeks.
Assess lipid parameters prior to initiation of SKYCLARYS and
monitor periodically during treatment. Manage lipid abnormalities
according to clinical guidelines.
CONTRAINDICATIONS
None.
ADVERSE REACTIONS
Adverse reactions reported in 10% or more of patients and
greater than placebo were elevated liver enzymes (AST/ALT) (37%),
headache (37%), nausea (33%), abdominal pain (29%), fatigue (24%),
diarrhea (20%), musculoskeletal pain (20%), oropharyngeal pain
(18%), influenza (16%), vomiting (16%), muscle spasms (14%), back
pain (13%), decreased appetite (12%), rash (10%).
DRUG INTERACTIONS
- Moderate or Strong CYP3A4 Inhibitors: Avoid concomitant use.
Consider SKYCLARYS dosage reduction with monitoring if use is
unavoidable.
- Moderate or Strong CYP3A4 Inducers: Avoid concomitant use.
- Hormonal Contraceptives: Counsel females to use an alternative
contraceptive method (e.g., non-hormonal intrauterine system) or
additional non-hormonal contraceptive (e.g., condoms) during
concomitant use and for 28 days after discontinuation of
SKYCLARYS.
This is not a complete list of potential drug interactions.
Specific Population: Due to the uncertainty of any
potential adverse effects on the breastfed infant, women are
advised not to breastfeed during treatment with SKYCLARYS.
To report SUSPECTED ADVERSE REACTIONS, contact Reata
Pharmaceuticals, Inc. at 1-800-314-3934 or FDA at 1-800-FDA-1088 or
www.fda.gov/medwatch.
For more information about SKYCLARYS, please see the full
Prescribing Information
About Reata
Reata is a global biopharmaceutical company committed to
developing and commercializing 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 first product, SKYCLARYS (omaveloxolone), has
been approved by the FDA for the treatment of FA and is under
review in Europe by the EMA. In addition, Reata is developing
cemdomespib for the treatment of patients with diabetic neuropathic
pain and Nrf2 activators for neurological diseases. For more
information visit http://www.reatapharma.com and follow us on
LinkedIn and Twitter.
Forward-Looking Statements
This press release includes certain disclosures that contain
“forward-looking statements,” including, without limitation, our
plans and objectives for the commercialization of SKYCLARYS and the
timing thereof, our expectations regarding the size of the patient
population for SKYCLARYS, and our plans to research, develop, and
commercialize our other product candidates. You can identify
forward-looking statements because they contain words such as
“believes,” “will,” “may,” “aims,” “plans,” “model,” 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 potential
market size and the size of the patient population for SKYCLARYS
and the market opportunities for SKYCLARYS; (ii) our ability to
successfully build our commercial infrastructure to manufacture,
market and sell SKYCLARYS, including the successful development and
implementation of our sales and marketing campaigns for SKYCLARYS;
(iii) the ability of our third-party suppliers and contract
manufacturers to manufacture SKYCLARYS at the required quality and
quantities and in compliance with applicable laws and regulations;
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 for the fiscal year ended December 31, 2022, 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.
Three Months Ended
March 31
2023
2022
Consolidated Statements of
Operations
(unaudited)
(in thousands, except share
and per share data)
Collaboration revenue
License and milestone
$
-
$
893
Other revenue
195
21
Total collaboration revenue
195
914
Expenses
Research and development
55,477
39,804
Selling, general and administrative
54,885
24,841
Depreciation
288
308
Total expenses
110,650
64,953
Other income (expense), net
(5,662
)
(9,772
)
Loss from operations
(116,117
)
(73,811
)
Benefit from (provision for) taxes on
income
-
(31
)
Net loss
$
(116,117
)
$
(73,842
)
Net loss per share—basic and diluted
$
(3.14
)
$
(2.03
)
Weighted-average number of common shares
used in net loss per share basic and diluted
36,948,063
36,412,621
As of
As of
March 31, 2023
December 31, 2022
(unaudited)
(in thousands)
Condensed Consolidated Balance Sheet
Data
Cash and cash equivalents and marketable
debt securities
$
320,959
$
387,514
Operating lease right-of-use assets
103,807
105,258
Working capital
277,944
338,810
Total assets
453,582
514,491
Liability related to sale of future
royalties, net
414,930
403,913
Operating lease liabilities
117,933
119,464
Accumulated deficit
(1,683,649
)
(1,567,532
)
Total stockholders’ equity
$
(130,673
)
$
(65,695
)
Reconciliation of GAAP to Non-GAAP
Financial Measures
The following table presents
reconciliations of non-GAAP financial measures to the most directly
comparable GAAP financial measures (in thousands, except for per
share data):
Three Months Ended
March 31
2023
2022
Reconciliation of GAAP to Non-GAAP
Research and development:
(unaudited)
GAAP Research and development
$
55,477
$
39,804
Less: Stock-based compensation expense
(14,270
)
(7,606
)
Non-GAAP Research and development
$
41,207
$
32,198
Reconciliation of GAAP to Non-GAAP
Selling, general and administrative:
GAAP Selling, general and
administrative
$
54,885
$
24,841
Less: Stock-based compensation expense
(23,787
)
(7,838
)
Non-GAAP Selling, general and
administrative
$
31,098
$
17,003
Reconciliation of GAAP to Non-GAAP
Operating expenses:
GAAP Operating expense
$
110,650
$
64,953
Less: Stock-based compensation expense
(38,057
)
(15,444
)
Non-GAAP Operating expense
$
72,593
$
49,509
Reconciliation of GAAP to Non-GAAP Net
loss:
GAAP Net loss
$
(116,117
)
$
(73,842
)
Add: Stock-based compensation expense
38,057
15,444
Add: Non-cash interest expense from
liability related to sale of future royalties
11,017
9,871
Non-GAAP Net loss
$
(67,043
)
$
(48,527
)
Reconciliation of GAAP to Non-GAAP Net
loss per common share-basic and diluted:
GAAP Net loss per common share-basic and
diluted
$
(3.14
)
$
(2.03
)
Add: Stock-based compensation expense
1.03
0.42
Add: Non-cash interest expense from
liability related to sale of future royalties
0.30
0.28
Non-GAAP Net loss per common share-basic
and diluted
$
(1.81
)
$
(1.33
)
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Reata Pharmaceuticals, Inc. (972) 865-2219
https://www.reatapharma.com/
Investor Relations & Media Relations: John Hunter
IR@reatapharma.com Wendy Segal media@reatapharma.com
https://www.reatapharma.com/contact-us/
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