On March 1, 2021 Reata Pharmaceuticals, Inc. (Nasdaq: RETA) ("Reata," the "Company," or "we"), a clinical-stage biopharmaceutical company, reported financial results for the quarter and full year ended December 31, 2020, and provided an update on the Company’s business operations and clinical development programs (Press release, Reata Pharmaceuticals, MAR 1, 2021, View Source [SID1234575863]).
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Recent Company Highlights
Chronic Kidney Disease
Bardoxolone Methyl ("Bardoxolone") in Alport Syndrome
Reata has submitted a New Drug Application ("NDA") for bardoxolone in Alport syndrome to the U.S. Food and Drug Administration ("FDA"). This NDA submission is based on the efficacy and safety data from the CARDINAL Phase 3 clinical trial, which was an international, double-blind, placebo-controlled, randomized trial that enrolled 157 patients with chronic kidney disease ("CKD") caused by Alport syndrome. This NDA submission includes a request for Priority Review, which, if granted, would shorten the FDA’s review of the NDA to eight months from the time of submission, versus a standard review timeline of 12 months. If approved, bardoxolone would become the first therapy specifically indicated for the treatment of CKD caused by Alport syndrome.
"We are extremely pleased to announce this submission of our NDA for bardoxolone in Alport syndrome," said Warren Huff, Reata’s President and Chief Executive Officer. "This submission of Reata’s first NDA marks a significant step toward our commitment to develop novel therapies for life threatening diseases that have limited treatment options. I want to thank all of the people who made this moment possible, including the patients and their families, investigators, and physicians who participated in our Alport syndrome clinical trials."
Bardoxolone in Autosomal Dominant Polycystic Kidney Disease ("ADPKD")
FALCON is an international, multi-center, randomized, double-blind, placebo-controlled, registrational Phase 3 trial studying the safety and efficacy of bardoxolone in patients with ADPKD randomized one-to-one to bardoxolone or placebo. In March 2020, we announced a temporary pause on enrollment in FALCON due to the COVID-19 pandemic; we resumed enrollment during the third quarter of 2020. Despite the pandemic, most sites are currently able to screen and randomize patients. More than 220 patients are currently enrolled in the study.
We are planning to amend the FALCON protocol to increase the target enrollment from 300 patients to a total of 550 patients. With the planned increase in anticipated enrollment, we expect to complete enrollment in FALCON by the end of 2021.
Bardoxolone in CKD Patients at Risk of Rapid Progression
MERLIN is a proof of concept, multi-center, double-blind, placebo-controlled, Phase 2 trial to evaluate the safety and efficacy of bardoxolone in patients at risk of rapidly progressing CKD due to multiple etiologies. The primary endpoint of the trial is the change in estimated glomerular filtration rate ("eGFR") from baseline to Week 12. Enrollment began in February 2021, and data are expected in the second half of 2021. If the results of this study are positive, our plan would be potentially to proceed to a larger Phase 3 with similar eligibility criteria. Rapid progression to end-stage kidney disease affects patient subsets across multiple etiologies of CKD. MERLIN is designed to evaluate the efficacy and safety of bardoxolone in this area of high unmet need.
Neurology
Omaveloxolone in Patients with Friedreich’s Ataxia ("FA")
MOXIe Part 2 was an international, multi-center, double-blind, placebo-controlled, randomized registrational study of omaveloxolone in 103 patients with FA. Patients who completed the study and met eligibility requirements could participate in the open-label extension ("MOXIe Extension"). In November 2020, the FDA suggested additional exploratory analyses that could inform the future development program of omaveloxolone in patients with FA. The analyses would include the change from baseline in the modified Friedreich’s Ataxia Rating Scale ("mFARS") during the MOXIe Extension, comparing patients randomized to placebo (the placebo-to-omaveloxolone group) with those randomized to omaveloxolone (the omaveloxolone-to-omaveloxolone group) in the double-blind period from MOXIe Part 2. Such analyses would include a graphical representation of the time course for the change from baseline mFARS in both omaveloxolone and placebo groups from the placebo-controlled MOXIe Part 2 and the change from baseline in the two treatments groups (the omaveloxolone-to-omaveloxolone group and the placebo-to-omaveloxolone group) through 48 weeks in the MOXIe Extension.
We conducted these additional exploratory analyses, called the Delayed-Start Analyses, of data from MOXIe Part 2 and the MOXIe Extension. Parallel trajectories between the placebo-to-omaveloxolone group and the omaveloxolone-to-omaveloxolone group in the MOXIe Extension could provide evidence of disease-modifying activity.
A total of 73 out of 75 (97%) patients without pes cavus who completed MOXIe Part 2 enrolled in the MOXIe Extension, including 39 patients previously randomized to placebo and 34 patients previously randomized to omaveloxolone. Annualized slopes using all available data from the MOXIe Extension showed similar slopes in mFARS for the placebo-to-omaveloxolone group (0.59 points per year) when compared to the omaveloxolone-to-omaveloxolone group (0.41 points per year) with no significant difference between slopes (p=0.75). The resulting parallel trajectories between both treatment groups is consistent with disease-modifying activity.
We have requested a Type C meeting with the FDA to discuss the Delayed-Start Analyses and the FA development program. We plan to initiate a second pivotal study in the second half of 2021, following discussions with the FDA and the European Medicines Agency ("EMA").
RTA 901 in Diabetic Peripheral Neuropathic Pain ("DPNP")
We have observed favorable activity of RTA 901 in a range of preclinical models of neurological disease, including models of diabetic neuropathy, neuroinflammation, and neuropathic pain. We have completed a Phase 1 trial to evaluate the safety, tolerability, and pharmacokinetic profile of RTA 901 administered orally, once-daily in healthy adult volunteers. RTA 901 was well tolerated in both single and multiple ascending dose studies across all dose groups with no safety signals, drug discontinuations, or serious adverse events. Additionally, we observed an acceptable pharmacokinetic profile with exposures approximately 10-fold larger than required for efficacy in preclinical animal models. We plan to initiate additional Phase 1 clinical pharmacology studies in the second quarter of 2021. We also expect to launch a randomized, placebo-controlled Phase 2 study in DPNP in the fourth quarter of 2021.
Fourth Quarter and Full Year Financial Highlights
On its fourth quarter 2020 and full-year financial results, Reata’s Chief Operating Officer and Chief Financial Officer, Manmeet S. Soni, commented: "Reata’s balance sheet is strong. Our current cash runway will allow us to invest appropriately in the promising assets within Reata’s pipeline. Our investments to date have enabled our readiness for bardoxolone’s commercial launch later this year, should we receive FDA approval of bardoxolone for the treatment of patients with Alport syndrome."
Cash and Cash Equivalents
At December 31, 2020, we had cash and cash equivalents of $818.2 million, as compared to $664.3 million at December 31, 2019.
Collaboration Revenue
Collaboration revenue was $4.7 million for the twelve-month period ended December 31, 2020, as compared to $25.3 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 $159.1 million for the twelve months ended December 31, 2020, as compared to $128.1 million, for the same period of the year prior.
Non-GAAP R&D expenses were $131.0 million for the twelve months ended December 31, 2020, as compared to $119.4 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 $75.1 million for the twelve months ended December 31, 2020, as compared to $58.3 million, for the same period of the year prior.
Non-GAAP G&A expenses were $45.6 million for the twelve months ended December 31, 2020, as compared to $40.6 million for the same period of the year prior.1
GAAP and Non-GAAP Net Loss
The GAAP net loss for the twelve months ended December 31, 2020, was $247.8 million, or $7.35 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $290.2 million, or $9.54 per share, on both a basic and diluted basis, for the same period of the year prior.
The non-GAAP net loss for twelve months ended December 31, 2020, was $158.3 million, or $4.70 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $139.4 million, or $4.58 per share, on both a basic and diluted basis, for the same period of the year prior.1
Cash Guidance
The Company expects existing cash and cash equivalents will be sufficient to enable it to fund operations through mid-2024.
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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, which excludes stock-based compensation expense; non-GAAP G&A expenses as GAAP G&A expenses, which excludes stock-based compensation expense; non-GAAP operating expenses as GAAP operating expenses, which excludes stock-based compensation expense and reacquired license rights; non-GAAP net loss as GAAP net loss, which excludes stock-based compensation expense, reacquired license rights, 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, which excludes stock-based compensation expense, reacquired license rights, 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 reacquired licenses rights expense, 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, reacquired license rights 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, reacquired license rights 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 March 1, 2021, at 8:30 am ET. The conference call will be accessible by dialing (866) 270-1533 (toll-free domestic) or (412) 317-0797 (international) using the access code: 10152707. The webcast link is View Source
Fourth quarter and full year 2020 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.