Analyst Conference Summary

Reata Pharmaceuticals

conference date: august 8, 2022 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2022 (Q2, second quarter)

Forward-looking statements

Overview: Dealing with FDA setback for bardoxolone and questions about omaveloxolone efficacy.

Basic data (GAAP):

Revenue was $0.8 million, down sequentially from $0.9 million and down from $2/2 million in the year-earlier quarter.

Net income was negative $74 million, flat sequentially from negative $74 million, and down from negative $73 million year-earlier.

Diluted EPS was negative $2.02, down sequentially from negative $2.03, but up from negative $2.00 year-earlier.


Cash good through end of 2024.

Conference Highlights:

Warren Huff, CEO said "The FDA was not pursuaded that asingle Phase 3 trial would be pursuasive for omaveloxolone... We submitted a delayed start analysis ... It is planning to hold an Advisory Committee meeting to discuss the application." In a rare disease like FA it is challenging to conduct two large studies. A single well-contolled trial plus confirmatory evidence can be adquate for approval, but it is up to the FDA to determine when that option can be used for approval. The FDA has concerns about the strength of the evidence. Also questioned biomarker relation to outcomes.

In May, 2022, the FDA accepted an NDA for omaveloxolone for the treatment of patients with FA (Friedreich's ataxia) with priority review designation. This NDA is supported by the efficacy and safety data from MOXIe Part 1, Part 2, and MOXIe Extension studies. But in a meeting the FDA stated that while it had not identified any new significant issues, it continued to have concerns regarding the strength of the efficacy evidence. Updated data will be presented to the FDA. There will be an Advisory Committee meeting. PDUFA date set at November 30, 2022. 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. At the Q2 conference Warren Huff and others went over interactions with the FDA and data submissions in great detail.

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.

In Q2 2022 Reata began commercial preparations for omaveloxolone launch, including a patient access program and

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 $481 million, down sequentially from $532 million. No debt.

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

Operating expense of $65 million consisted of $39 million for R&D, $25 million for general and administrative, and depreciation of $0.2 million. Other expense net $10 million. Income tax $0 million.

Q&A summary:

Date for Ad Com? We have a tentative date but cannot disclose it, the FDA will do that.

FDA concerns on various P values? We believe their comment was based on the primary results, the 82 patients contributing to the between group with a P value of 0.014. For a single study approval, it is true, the p value is typically lower. No specific concerns about Moxie part 2. The FDA asked for specific supportive data and we have provided that. One problem was dropouts, patients missing values during the Covid pandemic, but as time passed more patients were able to come in, and we submitted that data.

There has been no mention of a PDUFA date extension.

The data show that progression is slowed over long periods of time. Mechanism of action data is a clear base for providing confirmatory evidence.

Cardiac safety concerns of FDA? There were no specific concerns provided, we provided all of our data to them.

We provided three sets of possible confirmatory evidecne to the FDA, only one would be needed to support the approval.

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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