On November 8, 2021 Reata Pharmaceuticals, Inc. (Nasdaq: RETA) ("Reata," the "Company," "our," "us," or "we"), a clinical-stage biopharmaceutical company, reported financial results for the quarter ended September 30, 2021, and provided an update on the Company’s business operations and clinical development programs (Press release, Reata Pharmaceuticals, NOV 8, 2021, View Sourcenews/news-details/2021/Reata-Pharmaceuticals-Inc.-Announces-Third-Quarter-2021-Financial-Results-and-Provides-an-Update-on-Clinical-Development-Programs/default.aspx" target="_blank" title="View Sourcenews/news-details/2021/Reata-Pharmaceuticals-Inc.-Announces-Third-Quarter-2021-Financial-Results-and-Provides-an-Update-on-Clinical-Development-Programs/default.aspx" rel="nofollow">View Source [SID1234594737]).
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Recent Company Highlights
Bardoxolone in Patients with CKD Caused by Alport Syndrome
The New Drug Application ("NDA") for bardoxolone methyl ("bardoxolone") for the treatment of patients with chronic kidney disease ("CKD") caused by Alport syndrome is currently under review by the U.S. Food and Drug Administration ("FDA"). An Advisory Committee meeting is scheduled for December 8, 2021, and the Prescription Drug User Fee Act ("PDUFA") date, the FDA action date for the application, is scheduled for February 25, 2022.
We are pursuing marketing approvals outside of the United States. On October 28, 2021, we announced the submission of a Marketing Authorization Application ("MAA") with the European Medicines Agency ("EMA") for marketing approval of bardoxolone for the treatment of CKD caused by Alport syndrome in the European Union.
Bardoxolone in Patients with Autosomal Dominant Polycystic Kidney Disease
FALCON is an international, multi-center, randomized, double-blind, placebo-controlled Phase 3 trial studying the safety and efficacy of bardoxolone in patients with autosomal dominant polycystic kidney disease ("ADPKD") randomized one-to-one to active drug or placebo. We are preparing a protocol amendment following the Type B meeting with the FDA as outlined in our Quarterly Report on Form 10-Q for the second quarter of 2021. We will increase the sample size from 550 to 700 patients. The trial will remain blinded until study completion. The primary endpoint will be the off-treatment estimated glomerular filtration rate ("eGFR") change from baseline versus placebo at Week 104. The key secondary endpoint will be the eGFR change from baseline versus placebo at Week 100. More than 450 patients are currently enrolled in the study, and we expect to complete enrollment by the middle of 2022.
Omaveloxolone in Patients with Friedreich’s Ataxia
On September 30, 2021, we announced that we completed our pre-NDA meeting with the FDA for omaveloxolone for the treatment of patients with Friedreich’s ataxia ("FA"). The purpose of the pre-NDA meeting was to discuss the content of Reata’s planned NDA submission. We are not planning to conduct a second pre-approval clinical study prior to the submission. We are planning to finalize the NDA package for submission during the first quarter of 2022.
Recent Presentations
The following abstracts highlighting results from our various programs in CKD and FA were presented at recent international medical conferences:
David Lynch, MD, PhD, Director, Friedreich’s Ataxia Program, Division of Neurology, Children’s Hospital of Philadelphia, Philadelphia, PA, presented the talk Efficacy of Omaveloxolone in Patients with Friedreich’s Ataxia: Delayed-Start Study at the MDS Virtual Congress of the International Parkinson and Movement Disorder Society, which was held virtually from September 17 – 22, 2021.
An oral presentation was made and six posters highlighting clinical data for bardoxolone and disease education data on Alport syndrome were presented at the American Society of Nephrology Kidney Week 2021 from November 4 – 7, 2021.
Third Quarter Financial Highlights
Cash and Cash Equivalents
At September 30, 2021, we had cash and cash equivalents of $713.2 million. We reaffirm our current cash runway to last through mid-2024.
Collaboration Revenue
Collaboration revenue was $7.4 million in the third quarter of 2021, as compared to $1.4 million for the same period of the year prior.
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 $39.4 million for the third quarter of 2021, as compared to $37.2 million, for the same period of the year prior.
Non-GAAP R&D expenses were $34.0 million for the third quarter of 2021, as compared to $32.9 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 $25.7 million for the third quarter of 2021, as compared to $18.3 million, for the same period of the year prior.
Non-GAAP G&A expenses were $17.5 million for the third quarter of 2021, as compared to $11.0 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 2021 was $71.8 million, or $1.97 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $65.5 million, or $1.94 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 2021 was $46.2 million, or $1.27 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $44.3 million, or $1.31 per share, on both a basic and diluted basis, for the same period of the year prior.1
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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.
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, non-cash interest expense from liability related to sale of future royalties, loss on extinguishment of debt, and gain on lease termination; 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, non-cash interest expense from liability related to sale of future royalties, loss on extinguishment of debt and gain on lease termination. 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 for stock options and restricted stock units and changes in the Company’s stock price, which impacts 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 loss on extinguishment of debt and gain on lease termination as they are non-recurring transactions that make it difficult to compare its results to peer companies who also provide non-GAAP disclosures. The Company has excluded the impact of stock-based compensation expense, non-cash interest expense from liability related to sale of future royalties, loss on extinguishment of debt, and gain on lease termination 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, non-cash interest expense from liability related to sales of future royalties, loss on extinguishment of debt, and gain on lease termination, 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, 2021, at 8:30 a.m. ET. The conference call will be accessible by dialing (844)200-6205 (toll-free domestic) or (929)526-1599 (international) using the access code: 052919. The webcast link is View Source
Third quarter financial results to be discussed during the call will be included in an earnings press release that 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 will be accessible for at least 90 days after the event at View Source.