Analyst Conference Summary

conference date: November 7, 2018 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

Forward-looking statements

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

Basic data (GAAP):

Revenue was $5.2 million, down sequentially from $7.6 million and down from $12.6 million in the year-earlier quarter.

Net income was negative $30.8 million, down sequentially from $28.2 million, and down from negative $12.3 million year-earlier.

Diluted EPS was negative $1.07, up slightly sequentially from $1.08, and down from negative $0.50 year-earlier.

Guidance:

Now has cash to get through the three registrational trials and into 2021.

Conference Highlights:

Revenue is from partners and is down due to completing recognition of prior milestones.

Data from bardoxolone trials releases in July and September 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 CKD (chronic kidney disease) caused by Alport Syndrome was statistically significant, as reported in July. The Phase 3 part is fully enrolled with topline data expected in the second half of 2019. 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 pivotal Phase 3 ADPKD trial to start in 2019. Full primary endpoint data from the focal segmental glomerulosclerosis cohort is expected to be available in H1 2019. In September IgA nephropathy and type 1 diabetic CKD cohorts reported positive data, including increased GFR. But FSGS cohort data not expected until first half of 2019. Collectively improved kidney function across several types of CKD.

Omaveloxolone for Friedreich's ataxia is in a Phase 2 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. Primary endpoint is 6-minute walk distance. Enrollment proceeding as planned.

Future events:
Final 12-week PHOENIX data from the FSGS cohort in the first half of 2019
Phase 1 data for RTA 1701 in the first half of 2019
Pivotal data from the CARDINAL trial in the second half of 2019
Pivotal data from the MOXIe trial in the second half of 2019
Initiation of a pivotal trial for bardoxolone in ADPKD in 2019
Pivotal data from the CATALYST trial in the first half of 2020

Cash ended at $375 million, up sequentially from $138.7 million. In July, raised $248 million with a stock offering.

Operating expense of $34.7 million consisted of $27.1 million for R&D, $7.5 million for general and administrative, and depreciation of $0.1 million. Other expense $1.2 million.

Q&A:

Plan for ADPKD study? The protocols of the studies are different. No retained benefit analysis, and just 12 weeks. The specific plan for the pivotal trial is likely to be for a longer duration.

Baseline characteristics of follow up to Cardinal? Within our expectations.

We are planning to pursue the other CKD indications in pivotal trials, but no timing yet.

Elevated liver enzymes? ALT and AST elevations are occasionally seen. Usually quickly after initiation of treatment, but none leading to liver toxicity so far. Total bilurubin is reduced, which is the prime marker of liver function. We have a lot of data ruling out harm to the liver [very long review of that].

So for protein urea you are not limited to patient types? Right, it is one of the distinctions of our program. We don't see an increase in protein urea in 3 cohorts. Our drug's primary effect is on EGFR.

Friedreich's ataxia part 2 v. part 1? Will disclose baseline details at a future medical meeting. We try to ensure the patients are similar.

EGFR change at 12 weeks is predictive of 52 weeks, but full approval requires 2 years of treatment, which is our base case plan. We would stick to 52 weeks, not try to shorted to 36 weeks.

We are triaging our pivotal trials based on our capabilities before adding more. The key is bringing the first trials in successfully, then we can do more.

We are making plans for if we receive commercial approval. We hired a Chief Commercial Officer last year. It is part of the y/y expense increase, as is manufacturing scale out preparation. In Bardoxolone in CKD we retained 100% of U.S. commercial rights, with Abbvie have a ROW (except Japan) option.

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