Analyst Conference Summary

Reata Pharmaceuticals

conference date: August 8, 2019 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2019 (Q2, second quarter 2019)

Forward-looking statements

Overview: Phase 3 enrollment of bardoxolone for CKD is complete, top line results should be available in 2019.

Basic data (GAAP):

Revenue was $7.8 million, flat sequentially from $7.8 million and up from $7.6 million in the year-earlier quarter.

Net income was negative $34.4 million, down sequentially from negative $29.2 million, and down from negative $28.2 million year-earlier.

Diluted EPS was negative $1.14, down sequentially from negative $0.98, and down from negative $1.08 year-earlier.


Cash should be sufficient to get pivotal data readouts from 3 trials.

Conference Highlights:

Warren Huff, CEO of Reata, said "Over the past few years we have reported proof of concept data in 8 programs and advanced 4 into registrational studies. We are poised to report data, before the end of this year, from two of these pivotal studies. "

Expects cash-based expenses to increase as development is accelerated and preparations for commercial launch are made. Also investing in commercial manufacturing capabilities.

The Phase 3 CARDINAL trial of bardoxolone methyl for CKD (chronic kidney disease) caused by Alport Syndrome is fully enrolled with topline data expected in the second half of 2019. Data might support accelerated approval.

MOXIe is a two-part, international, multi-center, randomized, double-blind, placebo-controlled registrational trial studying the safety and efficacy of omaveloxolone in patients with Friedreich’s ataxia (FA). Enrollment in the pivotal part 2 of MOXIe was completed in 2018 with 103 patients, and top-line data is expected in the second half of 2019. The FDA has provided guidance that an analysis of modified Friedreich’s Ataxia Rating Scale (mFARS) scores demonstrating an improvement versus placebo after 48 weeks of omaveloxolone treatment may support submission of a NDA for omaveloxolone for the treatment of FA. No safety concerns have been reported by the data monitoring committee.

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

Reata announced the clinical trial design for FALCON, a Phase 3 study of bardoxolone for the treatment of patients with ADPKD and expects to dose the first patient in May 2019. A Phase 2 study (PHOENIX) of bardoxolone methyl for CKD from four rare causes produced clinically and statistically significant results in Q1 2019. Bardoxolone demonstrated a statistically significant improvement from baseline in mean eGFR of 7.8 mL/min/1.73m2 (p≤0.00001; n=103) after 12 weeks of treatment. Each individual cohort demonstrated statistically significant increases in mean eGFR representing recovery of multiple years of kidney function loss based on historical average eGFR decline. Reata also plans to pursue IgAN, T1D CKD, and FSGS as commercial indications for bardoxolone

Omaveloxolone for Friedreich's ataxia is in a Phase 2 registrational trial (MOXIe) with enrollment completed. Topline data should be available in the second half of 2019. Earlier data was positive. Granted EU Orphan Drug status in July 2018.

CATALYST Phase 3 topline 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.

Reata has been hiring professionals in preparation for the product launches.

Cash ended at $280 million, down sequentially from $313 million.

Operating expense of $42 million consisted of $30 million for R&D, $12 million for general and administrative, and depreciation of $0 million. Other expense $1 million.

Q&A summary:

Frederick's Ataxia revised plan? It is finalized.

ADPKC site sign up? We are rolling out sites in the U.S. first, then will be from Australia, then EU and Japan.

Cardinal powering? Yes is now 2.5, was 2.2. We saw a meaningful effect in Phase 2. We have a large margin to detect a significant p-value. It depends somewhat on variability.

Before year-end 2019, is that Q4? No additional comment, second half.

Bard in Falcon v. competition? We are encouraged by the response to the tolvaptan launch. Patients have a high unmet medical need. We don't think t. will have an impact on bardoxolone; patients are still declining on it, so an additional therapy will be needed.

Commerical preparations? There is a lot of activity. Two novel products in two disease areas, rare diseases with no approved therapy. Ramping up manufacturing. Launched both disease awareness campaigns. The sales force is a reasonable size for a targetted therapy. For Friedreich's ataxia there are a dozen key centers.

Falcon powering was 1.6, changes? Not decided yet, could be slightly higher.

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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 2019 William P. Meyers