Analyst Conference Summary

Reata Pharmaceuticals

conference date: March 1, 2021 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2021 (Q4, fourth quarter 2020)

Forward-looking statements

Overview: Today submitted NDA for Bardoxolone in Alport Syndrome.

Basic data (GAAP):

Revenue was $3.1 million, up sequentially from $1.4 million and up from $2.7 million in the year-earlier quarter.

Net income was negative $66 million, down sequentially from negative $65 million, and up from negative $187 million year-earlier.

Diluted EPS was negative $1.90, up sequentially from negative $1.94, and up from negative $5.91 year-earlier.


Believes cash is sufficient to fund operations through mid 2024.

Conference Highlights:

Warren Huff, CEO said "We are extremely pleased to announce this submission of our NDA for bardoxolone in Alport syndrome. This submission of Reata's first NDA marks a significant step toward our commitment to develop novel therapies for life threatening diseases that have limited treatment options. I want to thank all of the people who made this moment possible, including the patients and their families, investigators, and physicians who participated in our Alport syndrome clinical trials."

On March 1, 2021 submitted the New Drug Application to the FDA for Bardoxolone in Alport Syndrome. The Phase 3 CARDINAL trial of bardoxolone methyl for CKD (chronic kidney disease) caused by Alport Syndrome reported positive topline 2-year data in the fourth quarter of 2020. Applied to FDA for approval in 1Q 2021. 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. There is a genetic testing program for Alport syndrome. The study showed that improved kidney function continued in the third year of treatment, and the largest treatment effect was observed in pediatric patients. Reata is actively preparing commercial teams for bardoxolone.

Reata is planning to amend the FALCON protocol to increase the target enrollment from 300 patients to a total of 550 patients and expects to complete enrollment by the end of 2021. This is for Bardoxolone in Autosomal Dominant Polycystic Kidney Disease (ADPKD). As of Feb. 2021 over 220 patients had been enrolled. Each patient is followed for 2 years.

An investigator initiated trial of Bardoxolone for kidney-related effects of Covid-19 began in Q1 2021.

The Phase 2 BARCONA IST study of bardoxolone in patients with COVID-19 is enrolling. It is a randomized, double-blind trial that will enroll approximately 40 patients with a primary endpoint of safety and treatment duration of up to 29 days in hospitalized patients.

The MERLIN Phase 2 study of bardoxolone in CKD with risk for rapid progression began in February 2021 with data expected before the end of 2021.

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) was expected in the first half of 2020. However, for safety the trial was stopped during the pandemic (as of May 11, 2020). Primary endpoint is 6-minute walk distance. Enrollment was completed in 2019.

In November 2020, the FDA suggested additional exploratory analyses that could inform the future development program of omaveloxolone in patients with FA. In Q4 2020 the Baseline-Controlled Study of Omaveloxolone for Friedreich's Ataxia met its primary endpoint of paired difference in annualized mFARS slope with a statistically significant 3.76 point improvement (p=0.0022) between the treatment and pre-treatment periods in the primary analysis population. Further, all sensitivity analyses of the primary analysis showed a significant treatment effect. Thus, we believe that the results of the Baseline-Controlled Study support the positive mFARS results of Part 2 and provide additional evidence of the effectiveness of omaveloxolone in FA. The Baseline-Controlled Study completed in October 2020 and the results were provided to the FDA. The FDA confirmed that it will review the study results and may request a meeting with us to discuss the conclusions of its review. If the FDA views these results as sufficient to increase the persuasiveness of data from Part 2, our plan would be to submit an NDA in mid-2021. However, there can be no assurance that the FDA will accept the design of the BaselineControlled Study. Previously, the FDA was not convinced that the MOXIe Part 2 results would support a single study approval without additional evidence that lends persuasiveness to the results. The FDA stated that we will need to conduct a second pivotal trial that confirms the mFARS results of the MOXIe Part 2 study with a similar magnitude of effect. Our counterproposal was for the crossover study.

Completed a Phase 1 study of RTA 901 for Diabetic Peripheral Neuropathic Pain (DPNP) with positive results in Q1 2021. Plans both an additional Phase 1 study in Q2 2021 and a Phase 2 study in Q4 2021.

Cash ended at $818 million, up sequentially from $578 million. No debt.

Non-GAAP numbers: net income negative $43 million, up sequentially from negative $44 million and up from negative $50 million year-earlier. Diluted EPS negative $1.25 up sequentially from negative $1.31 and up from negative $1,59 year-earlier.

Operating expense of $57 million consisted of $37 million for R&D, $19 million for general and administrative, and depreciation of $0.3 million. Other expense net $12 million. Income tax benefit $0.2 million. Sharecount increased to 34.6 million from 31.6 million year-earlier.

Q&A summary:

We will provide more guidance on trial design after our type C meeting with the FDA for Friedreich's ataxia.

Type C meeting outcome scenarios? Position is to increase persuasiveness of the results, possibly requiring another pivotal trial. But they might allow us to submit an NDA.

Falcon physician questions? We have 6 patients who met guidance with suffient elevation that were required to stop drug. We believe they a pharmacological changes not indicative of liver damage. So we restart them at a lower dose.

Omav Type C meeting timing, announcement of results? We cannot comment on the timing of the meeting, we have requested it. Normally we wait for the FDA minutes before commenting, but if something is very material we may announce earlier.

Alzheimer's argument? A purely symptomatic treatment would be approvable. The real question is the ethicalness of conducting a second study once you have already demonstrated effectiveness in a deadly disease (FA) with no approved therapy.

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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 2021 William P. Meyers