Analyst Conference Summary

Reata Pharmaceuticals

conference date: February 28, 2022 @ 5:30 AM Pacific Time
for quarter ending: Dectember 31, 2021 (Q4, fourth quarter)

Forward-looking statements

Overview: Dealing with FDA setback for bardoxolone while advancing omaveloxolone.

Basic data (GAAP):

Revenue was $1 million, down sequentially from $7.4 million and down from $3 million in the year-earlier quarter.

Net income was negative $85 million, down sequentially from negative $72 million, and down from negative $66 million year-earlier.

Diluted EPS was negative $2.35, down sequentially from negative $1.97, and down from negative $1.90 year-earlier.


Cash good through end of 2024.

Conference Highlights:

Warren Huff, CEO said "We are making important progress in our efforts to advance omaveloxolone for the treatment of patients with Friedreich’s ataxia (FA) including receiving Fast Track Designation from the FDA and initiating rolling submission of our New Drug Application (NDA). As we continue to complete the submission of our NDA for omaveloxolone, we are also actively preparing for the commercial launch of the drug early next year Our strong balance sheet has permitted us to continue the development of drugs for deadly diseases with few or no available therapies. We look forward to providing additional updates as we advance towards key milestones."

On January 31, 2022, Reata announced that a rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with FA (Friedreich's ataxia). Expects to complete the submission of the NDA by the end of the first quarter of 2022. This NDA is supported by the efficacy and safety data from MOXIe Part 1, Part 2, and MOXIe Extension studies. Fast Tracked. There is currently no approved therapy for Friedreich's Ataxia. Could do commercial launch in early 2023 if approved by the FDA.

An FDA Complete Response Letter was issued for Bardoxolone for Alport Syndrome CKD on February 25, 2022. Problem is disease is slow and EGFR is not considered a clinical endpoint by all physians, or the Advisory Committee. Could be fixed by a large Phase 3 trial in Japan in biabetic CKD with new primary endpoints of dialysis delay. The Japanese Ayame trial follows patients for 3 years and should complete enrollment in 2022. Reata is working with the FDA on next steps. In October 2021 made submission to EU. In April 2021 the FDA accepted the NDA for bardoxolone for 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 Q4 2020, including all four endpoints. 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.A milestone pament was earned from Kyowa Kirin from the NDA submission in Japan for CKD caused by Alport syndrome.

For Bardoxolone in Autosomal Dominant Polycystic Kidney Disease (ADPKD), Reata recently (Q1 2021) filed a protocol amendment with the FDA and requested a Type A meeting to discuss the overall ADPKD development program including the recently submitted major protocol amendment. The protocol amendment increases the sample size from 550 to 850 patients, adds adolescent (12 to 17 years) patients with ADPKD, removes the off-treatment period (Week 48 – Week 52) during Year 1, changes the primary endpoint to estimated glomerular filtration rate (eGFR) change from baseline at Week 108 (8 weeks after planned drug discontinuation at Week 100), adds an exploratory endpoint of eGFR change from baseline at Week 112 (12 weeks after planned drug discontinuation at Week 100), and adds a sub study with ambulatory blood pressure monitoring. The secondary endpoint is the eGFR change from baseline at Week 100. The statistical analysis plan, detailing the proposed analyses, has also been submitted. More than 500 patients are currently enrolled in the study.

Preclinical work indicates omaveloxolone may be applicable to progressive suprnuclear palsy, ALS, Parkinson's, frontotemporal dementia, Huntington's, Alzheimer's, and epilepsy.

Adjusted commercial spend for Alport Syndrome to preserve cash.

The MERLIN Phase 2 study of bardoxolone in CKD with risk for rapid progression began in February 2021.

Completed a Phase 1 study of RTA 901 for Diabetic Peripheral Neuropathic Pain (DPNP) with positive results in Q1 2021. Plans a Phase 2 study in 2H 2022.

Cash ended at $590 million, down sequentially from $na million. No debt.

Non-GAAP numbers: net income negative $58 million, down sequentially from negative $46 million and down from negative $43 million year-earlier. Diluted EPS negative $1.59 down sequentially from negative $1.27 and down from negative $1.25 year-earlier.

Operating expense of $73 million consisted of $42 million for R&D, $31 million for general and administrative, and depreciation of $0.3 million. Other expense net $14 million. Income tax $0.2 million.

Q&A summary:

Ayame Japanese study, criteria for success with AS? Has not discussed the Ayame trial with the FDA yet. What is required is subjective. There will be a large number of dialysis events in the trial; a meaningful reduction should be persuasive. It would indicate EGFR trajectory does indicate a reduction in dialysis events. No guidance to timing of data release yet.

FA Ad Com likely questions? Believes the issues are straightforward. Clinical meaningfulness of changes over time, which the data are clear about.

Reviewed timeline of FDA discussions for FA. Invited submission for Fast Track and Rolling, which they granted. Seemed cooperative.

Well prepared for omav launch. Transaminases seem clinically manageable, does not think a rems program will be required, just label info.

Manufacturing is the last module to go in, will be completed in March.

In ADPKD, reason to remove interim eGFR? Could have supported accelerated approval, followed by a second year of data allowing full approval, in Cardinal study. But it was clear delays put the year 1 data not much before the year 2 data. Same issue for PKD, so no point to year 1 data.

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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 2022 William P. Meyers