On November 8, 2022 Reata Pharmaceuticals, Inc. (Nasdaq: RETA) ("Reata," the "Company," "our," "us," or "we"), a clinical-stage biopharmaceutical company, reported financial results for the third quarter of 2022 and provided an update on the Company’s business operations and clinical development programs (Press release, Reata Pharmaceuticals, NOV 8, 2022, View Source [SID1234623451]).
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Recent Company Highlights
Omaveloxolone in Patients with Friedreich’s Ataxia
In May 2022, the U.S. Food and Drug Administration ("FDA") accepted our New Drug Application ("NDA") for filing and granted Priority Review for omaveloxolone for patients with Friedreich’s ataxia. We completed a Mid-Cycle Communication Meeting with the FDA and submitted additional data and analyses to the FDA after the meeting. The FDA determined that these submissions were a major amendment to our NDA and extended the Prescription Drug User Fee Act ("PDUFA") date by three months to provide time for a full review of the new data and analyses. The PDUFA date is now February 28, 2023.
We recently completed a Late-Cycle Meeting with the FDA. The purpose of the Late-Cycle Meeting is for the FDA to discuss any substantive issues identified, and the Division’s objectives for the remainder of the review. The meeting does not address the final regulatory decision for the NDA. While we have not received formal minutes from the FDA, in the preliminary agenda for, and during, the Late-Cycle Meeting, the FDA stated that they continue to review the analyses and data included in the recent NDA submissions. The FDA made no request for additional data or analyses but stated that additional data may be requested as reviews are ongoing. The FDA confirmed that no information requests were outstanding. The FDA reiterated that they do not currently plan to hold an advisory committee meeting.
The FDA stated that no issues related to risk management have been identified to date. During the meeting, the FDA indicated that post-marketing requirements and label review are ongoing. With respect to post-marketing requirements and commitments, FDA stated that if omaveloxolone is approved, they anticipate requiring a drug-drug interaction trial with CYP3A4 modulators, a thorough QT trial, and an evaluation of pregnancy outcomes. FDA stated that other post-marketing requirements and commitments may be considered depending on the findings of the review. With respect to label review, during the meeting we noted that the original proposed label language did not reflect the data and analyses included in the amendments to the NDA and that we have updated it in connection with the planned filing of our Marketing Authorization Application ("MAA") in Europe later this year. We committed to submit the updated proposed label language to the NDA. The FDA indicated that post-marketing requirements and label comments will be communicated in early in 2023.
We have advanced our commercial launch preparations in the United States and are building the infrastructure necessary to support the commercialization of omaveloxolone for the treatment of Friedreich’s ataxia, if and when we receive regulatory approval. We have designed our patient access programs and our product distribution network. The payer field team has been hired and deployed. Hiring of the sales leadership team is underway and we intend to onboard our sales organization and reimbursement specialists in the first quarter of 2023, pending regulatory advancement.
We plan to submit an MAA to the European Medicines Agency ("EMA") for omaveloxolone this year.
Third Quarter Financial Highlights
Cash and Cash Equivalents
On September 30, 2022, we had cash and cash equivalents and marketable securities of $435.9 million, as compared to $590.3 million of cash and cash equivalents on December 31, 2021.
GAAP and Non-GAAP Research and Development ("R&D") Expenses
R&D expenses according to generally accepted accounting principles in the U.S. ("GAAP") were $43.5 million for the third quarter of 2022, as compared to $39.4 million for the same period of the year prior.
Non-GAAP R&D expenses were $36.8 million for the third quarter of 2022, as compared to $34.0 million, for the same period of the year prior.1
GAAP and Non-GAAP General and Administrative ("G&A") Expenses
GAAP G&A expenses were $27.3 million for the third quarter of 2022, as compared to $25.7 million, for the same period of the year prior.
Non-GAAP G&A expenses were $19.5 million for the third quarter of 2022, as compared to $17.5 million for the same period of the year prior.1
GAAP and Non-GAAP Net Loss
The GAAP net loss for the third quarter of 2022, was $79.0 million, or $2.16 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $71.8 million, or $1.97 per share, on both a basic and diluted basis, for the same period of the year prior.
The non-GAAP net loss for the third quarter of 2022, was $53.9 million, or $1.47 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $46.2 million, or $1.27 per share, on both a basic and diluted basis, for the same period of the year prior.1
[1]See "Non-GAAP Financial Measures" below for a description of non-GAAP financial measures and a reconciliation between GAAP and non-GAAP R&D expenses, GAAP and non-GAAP G&A expenses, and GAAP and non-GAAP net loss, respectively, appearing later in the press release.
Cash Guidance
The Company reaffirms that its existing cash and cash equivalents and marketable debt securities will be sufficient to enable it to fund operations through the end of 2024.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including non-GAAP R&D expenses, non-GAAP G&A expenses, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per common share – basic and diluted. These measures are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP financial measures used by other companies.
The Company defines non-GAAP R&D expenses as GAAP R&D expenses, excluding stock-based compensation expense; non-GAAP G&A expenses as GAAP G&A expenses, excluding stock-based compensation expense; non-GAAP operating expenses as GAAP operating expenses, excluding stock-based compensation expense; non-GAAP net loss as GAAP net loss, excluding stock-based compensation expense and non-cash interest expense from liability related to sale of future royalties; and non-GAAP net loss per common share – basic and diluted as GAAP net loss per common share – basic and diluted, excluding stock-based compensation expense and non-cash interest expense from liability related to sale of future royalties. The Company has excluded the impact of stock-based compensation expense, which may fluctuate from period to period based on factors including the variability associated with performance-based grants of stock options and restricted stock units and changes in the Company’s stock price, which impact the fair value of these awards. The Company has excluded the impact of accreted non-cash interest expense from liability related to sale of future royalties as it may be calculated differently from, and therefore may not be comparable to, peer companies who also provide non-GAAP disclosures. The Company has excluded the impact of stock-based compensation expense and non-cash interest expense from liability related to sale of future royalties because the Company believes its impact makes it difficult to compare its results to prior periods and anticipated future periods.
Because management believes certain items, such as stock-based compensation expense and non-cash interest expense from liability related to sales of future royalties, can distort the trends associated with the Company’s ongoing performance, the following measures are often provided, excluding special items, and utilized by the Company’s management, analysts, and investors to enhance consistency and comparability of year-over-year results, as well as to industry trends, and to provide a basis for evaluating operating results in future periods: non-GAAP net loss; non-GAAP net loss per common share – basic and diluted; non-GAAP R&D expenses; non-GAAP G&A expenses; and non-GAAP operating expenses.
The Company believes the presentation of these non-GAAP financial measures provides useful information to management and investors regarding the Company’s financial condition and results of operations. When GAAP financial measures are viewed in conjunction with these non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance and are better able to compare the Company’s performance between periods. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating performance, allocating resources, and planning and forecasting future periods. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. A reconciliation between these non-GAAP measures and the most directly comparable GAAP measures is provided later in this press release.
Conference Call Information
Reata’s management will host a conference call on November 8, 2022, at 8:30 am ET. The conference call will be accessible by dialing (844) 200-6205 (toll-free domestic) or (929) 526-1599 (international) using access code 756839. The webcast link is View Source
Third quarter 2022 financial results to be discussed during the call will be available on the Company’s website shortly before the call at View Source and will be available for 12 months after the call. The audio recording and webcast of the conference call will be accessible for at least 90 days after the event at View Source.