Analyst Conference Summary

conference date: February 19, 2019 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2019 (Q4, fourth quarter 2020)

Forward-looking statements

Overview: Trials were successful, so preparing for applications to FDA and commercial launches.

Basic data (GAAP):

Revenue was $2.7 million, down sequentially from $8.2 million and down from $8.5 million in the year-earlier quarter.

Net income was negative $187 million, down sequentially from negative $40 million, and down from negative $26 million year-earlier.

Diluted EPS was negative $5.91, down sequentially from negative $1.32, and down from negative $0.86 year-earlier.

Guidance:

Believes cash is sufficient to fund operations through 2021.

Conference Highlights:

Warren Huff, CEO of Reata, said "We announced positive, pivotal data from our lead franchises, chronic kidney disease (CKD) and neurology, and are actively preparing for commercial launch in the United States and abroad for bardoxolone methyl (bardoxolone) in CKD caused by Alport syndrome, and omaveloxolone in Friedreich's ataxia, two severe and life-threatening diseases without approved therapies. We also successfully capitalized the Company to fund the development of our pipeline assets and advance our lead drug candidates and early-stage drug candidates into new indications with high unmet need."

The Phase 3 CARDINAL trial of bardoxolone methyl for CKD (chronic kidney disease) caused by Alport Syndrome reported positive topline 1-year data in the fourth quarter of 2019. Data may support accelerated approval; plans to meet with FDA. Bardoxolone treatment slows the decline leading to kidney failure. Alport Syndrome is estimated to affect 30,000 to 60,000 people in the U.S. and 32,000 to 64,000 in the EU5.

MOXIe, a double-blind, placebo-controlled registrational trial studying the safety and efficacy of omaveloxolone in patients with Friedreich’s ataxia (FA), reported positive topline data in Q4 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. Plans to make a regulatory filing in 2020.

Reata is actively preparing commercial teams for bardoxolone.

The pivotal, global Phase 3 FALCON study of bardoxolone in patients with CKD caused by autosomal dominant polycystic kidney disease (ADPKD) was launched in Q4 2019.

Reata reacquired the development, manufacturing, and commercialization rights concerning our proprietary Nrf2 activator product platform, including bardoxolone and omaveloxolone, originally licensed to AbbVie, Inc. (AbbVie) for territories outside of the United States and excluding, for bardoxolone, certain Asian countries previously licensed to Kyowa Kirin Co., Ltd. (KKC).

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.

A Phase 2 study (PHOENIX) of bardoxolone methyl for CKD from four rare causes produced clinically and statistically significant results in Q1 2019. Reata also plans to pursue IgAN, T1D CKD, and FSGS as commercial indications for bardoxolone

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 was completed in 2019.

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

Cash ended at $664 million, up sequentially from $240 million, having raised $505 million with a stock offering in the quarter. There was a $155 million term loan outstanding.

Non-GAAP numbers: net income negative $50.3 million, down from negative $22.8 million year-earlier. Diluted EPS negative $1.59 down from negative $0.77 year-earlier.

Operating expense of $187 million consisted of $40 million for R&D, $22 million for general and administrative, and depreciation of $0.3 million. Other expense net $124 million for reacquired license rights.

Q&A summary:

Enrollment for Falcon trial? We do not have guidance on completion of enrollment.

Filing for NDA? Omav in FA and Bardoxolone for Alport Syndrome this year. Will not comment further on interactions with the FDA.

New programs, constraints? We will provide guidance on which pivotal programs will come next when it is appropriate. We also could begin studies in a number of rare forms of CKD, plus all the possible neurological indications. The pipeline is deep, we are constrained by human and financial resources.

Sufficiency of data to file with FDA? We had FDA guidance on the Moxie study design.

There would be different sales teams for Omav and Bard, but both disease targets are rare, so each sales force would be small.

Japanese Bard study? It is a Phase 3 trial in diabetic CKD, with a broad range of CKD patients. Looking for 30% reduction in EGFR. They have state enrollment is complete and data should be available in the first half of 2022.

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