Analyst Conference Summary

Reata Pharmaceuticals

conference date: May 10, 2022 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2022 (Q1, first quarter)

Forward-looking statements

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

Basic data (GAAP):

Revenue was $0.9 million, down sequentially from $1 million and flat from $0.9 million in the year-earlier quarter.

Net income was negative $74 million, up sequentially from negative $85 million, and down from negative $67 million year-earlier.

Diluted EPS was negative $2.03, up sequentially from negative $2.35, and down from negative $1.86 year-earlier.


Cash good through end of 2024.

Conference Highlights:

Warren Huff, CEO said "We are pleased to have recently completed rolling submission of a New Drug Application for omaveloxolone for the treatment of patients with Friedreich's ataxia in the United States. Friedreich's ataxia is a rare, genetic, debilitating, and degenerative neuromuscular disorder with no approved therapies, and we are looking forward to working with the FDA on its review of our NDA throughout this year. If approved, we are preparing to be in a position to launch this important drug by early 2023."

In March, 2022, Reata completed a rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with FA (Friedreich's ataxia). This NDA is supported by the efficacy and safety data from MOXIe Part 1, Part 2, and MOXIe Extension studies. Fast Tracked. Rare Pediatric Disease designation. There is currently no approved therapy for Friedreich's Ataxia. Could do commercial launch in early 2023 if approved by the FDA. Plans to submit an MAA to the EU in Q4 2022.

An FDA Complete Response Letter was issued for Bardoxolone for Alport Syndrome CKD (chronic kidney disease) 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. Reata is actively preparing commercial teams for bardoxolone.

The Phase 3 Falcon study in autosomal dominant polycycstic kidney disease is enrolling. The FDA has confirmed that postive Falcon study results would support registration. The protocol was amended to a primary endpoint of eGFR change from baseline at week 108.

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) in healthy volunteers with positive PK results in Q1 2021. Currently in Phase 1 pharmacology study. Plans a Phase 2 study in Q4 2022 which will be randomized and placebo controlled.

Cash ended at $532 million, down sequentially from $590 million. No debt.

Non-GAAP numbers: net income negative $49 million, down sequentially from negative $58 million and up from negative $42 million year-earlier. Diluted EPS negative $1.33 up sequentially from negative $1.59 and down from negative $1.16 year-earlier.

Operating expense of $65 million consisted of $40 million for R&D, $25 million for general and administrative, and depreciation of $0 million. Other expense net $10 million. Income tax $0 million.

Q&A summary:

Delayed start analysis of omav? Argument that the two cohorts should keep a delta? Differentiating between a symptomatic treatment and one affecting an underlying disease. If underlying, the new patients should not be able to easily catch up. Omav patients had minimal progression over 3 years. Initally placebo worsened, then they did better on Omav, curves stayed separated. You do not want to see convergence, which would suggest Omav is not disease-modifying.

Might you still get Breakthrough Designation in addition to the ones you have? It is too late to allow applying Breakthrough, and it would not be that helpful.

Do you expect the FDA to want to see updates from the OLE? They will let us know if they want to see additional data.

Slide 13 and others shows we met the endpoints for Omav, despite some missing data due to Covid.

Omav, investors skittish around the FDA changing course? Every program is unique. Omav for FA is distinguished from the programs you are speaking of. FA has serious life shortening effects, given patients mostly die in their 30s. There is no approved therapy. The patient group and opinion leaders and the FDA agreed on the endpoint, MFARs. The data set is very straightforward. We cleanly hit the endpoint. We have disclosed much more data to the FDA than we have to the public.

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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