Analyst Conference Summary

Reata Pharmaceuticals

conference date: August 8, 2018 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2018 (Q2, second quarter 2018)

Forward-looking statements

Overview: Clinical-stage company continues to develop its pipeline.

Basic data (GAAP):

Revenue was $7.6 million, down sequentially from $32.4 million and down from $12.8 million in the year-earlier quarter.

Net income was negative $28.2 million, down sequentially from $4.1 million, and down from negative $11.6 million year-earlier.

Diluted EPS was negative $1.08, down sequentially from $0.15, and down from negative $0.52 year-earlier.



Conference Highlights:

2018 and 2019 will be data-rich years.

Data from baroxolone trials releases in July was positive. The data suggests the Phase 3 portion of the CARDINAL trial is conservatively powered.

The Phase 2 part of the CARDINAL trial of bardoxolone methyl for CDK (chronic kidney disease) caused by Alport Syndrome was statistically significant, as reported in July. The Phase 3 part is enrolling, completion expected in 2018. One year data could support accelerated approval by the FDA.

Partner Kyowa Hakko Kiri plans to initiate a pivotal Phase 3 trial in diabetic CKD in Japan during 2018. The EU granted Orphan Drug status in May 2018.

A Phase 2 study (PHOENIX) of bardoxolone methyl for CKD from four rare causes produced clinically and statistically significant results for the ADPKD cohort. Planning a Phase 3 ADPKD trial. Full primary endpoint data from the focal segmental glomerulosclerosis cohort is expected to be available in H1 2019. Enrollment in the IgA nephropathy and type 1 diabetic CKD cohorts completed in Q2; data should be available in Q3. But FSGS cohort data not expected until first half of 2019.

Omaveloxolone for Friedreich's ataxia is in a registrational trial (MOXIe). The mFARS score has been accepted by the FDA as an endpoint that would support accelerated or full approval. Topline data should be available in the second half of 2019. Granted EU Orphan Drug status in July 2018.

CATALYST Phase 3 data for bardoxolone for CTD-PAH (connective tissue disease associated pulmonary arterial hypertension) is expected in the first half of 2020, a delay due to sample size recalculation to 200. Primary endpoint is 6-minute walk distance. Enrollment proceeding as planned.

Cash ended at $138.7 million, up sequentially from $105.9 million. After the quarter ended, in July, raised $248 million with a stock offering. Cash plus an expected milestone payment from Kirin should last into 2021.

Operating expense of $34.2 million consisted of $23.4 million for R&D, $10.70 million for general and administrative, and depreciation of $0.1 million. Other expense $1.6 million.


Alport Syndrome collagen mutations, effects? There is a spectrum of mutations that define the rate of progression. It is now known that females are just as affected as males in terms of numbers. Key opinion leaders believe there are many undiagnosed patients. Patients with a mutation are allowed in our trials.

Collagen patient reclassification to Alport, formal guidelines? It is more than just talk, there are some guidelines in the academic community.

Phase 3 ADPKD trial timing? Should have an announcement in the next few months.

ADPKD new FDA target guidelines, accelerated approval? FDA has said they will take egfr for full approval. Total kidney volume has not been accepted in the past for approval. We prefer egfr data, total kidney volume is just a surrogate.

Type 2 diabetes CKD? It is a target indication. Our Japanese partner is conducting a Phase 3 study of it. Our plan is to work through the rare diseases, which is a very significant market opportunity. Then we can decide whether to develop for broader markets like type 2 diabetes and hypertension induced CKD.

Cost of trials? These are rare disease trials, they are cost efficient, but we don't give guidance.

Pricing? Will be appropriate to the size of the patient populations. Starting high with Alport Syndrome, lower for the indications with more patients.

Abbvie opt in? We retained all commercial rights in the U.S. We have a commercial partner in Japan and SE Asia. Abbvie has an option in rest of world, can elect as late as Phase 3 data. If Abbvie does not take the option we would place the rights.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2018 William P. Meyers