On May 10, 2022 Reata Pharmaceuticals, Inc. (Nasdaq: RETA) ("Reata," the "Company," "our," "us," or "we"), a clinical-stage biopharmaceutical company, reported financial results for the first quarter of 2022 and provided an update on the Company’s business operations and clinical development programs (Press release, Reata Pharmaceuticals, MAY 10, 2022, View Sourcenews/news-details/2022/Reata-Pharmaceuticals-Inc.-Announces-First-Quarter-2022-Financial-Results-and-Provides-an-Update-on-Clinical-Development-Programs/default.aspx" target="_blank" title="View Sourcenews/news-details/2022/Reata-Pharmaceuticals-Inc.-Announces-First-Quarter-2022-Financial-Results-and-Provides-an-Update-on-Clinical-Development-Programs/default.aspx" rel="nofollow">View Source [SID1234614117]).
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"We are pleased to have recently completed rolling submission of a New Drug Application ("NDA") for omaveloxolone for the treatment of patients with Friedreich’s ataxia in the United States," said Warren Huff, Reata’s Chief Executive Officer. "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 U.S. Food and Drug Administration ("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."
Recent Company Highlights
Neurology
Omaveloxolone in Patients with Friedreich’s Ataxia
The FDA has granted Fast Track Designation, Orphan Drug Designation, and Rare Pediatric Disease Designation to omaveloxolone for the treatment of Friedreich’s ataxia. In March 2022, we completed the rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with Friedreich’s ataxia. This NDA is supported by the efficacy and safety data from the MOXIe Part 2 trial and additional supporting data from the MOXIe Part 1 and MOXIe Extension trials.
We have secured an agreement on our Pediatric Investigation Plan with the European Medicines Agency ("EMA") Pediatric Committee, and we are continuing to complete the regulatory procedures and submissions required prior to filing a Marketing Authorization Application ("MAA") in Europe for approval of omaveloxolone for the treatment of patients with Friedreich’s ataxia. We plan to submit an MAA to the EMA in the fourth quarter of 2022.
Chronic Kidney Disease
Bardoxolone Methyl in Autosomal Dominant Polycystic Kidney Disease
We are currently enrolling patients in FALCON, a Phase 3, international, multi-center, randomized, double-blind, placebo-controlled trial studying the safety and efficacy of bardoxolone methyl ("bardoxolone") in patients with autosomal dominant polycystic kidney disease ("ADPKD") randomized one-to-one to active drug or placebo. FALCON is enrolling patients in a broad range of ages with an estimated glomerular filtration rate ("eGFR") between 30 and 90 mL/min/1.73 m2. More than 550 patients are currently enrolled in the trial.
In the first quarter of 2022, we submitted a protocol amendment to the FALCON Phase 3 trial of bardoxolone in patients with ADPKD with the FDA and other relevant health authorities. We recently met with the FDA in a Type A meeting to discuss our protocol amendment. Based on the discussion during the meeting and the meeting minutes, the Division stated that the proposed primary endpoint of eGFR change from baseline at Week 108 (8 weeks after planned drug discontinuation at Week 100) was reasonable since the available data suggest that bardoxolone’s acute pharmacodynamic effect on eGFR should be largely resolved. The FDA also confirmed that, if the FALCON trial is positive, it could support registration of bardoxolone in ADPKD.
First Quarter Financial Highlights
Cash and Cash Equivalents
On March 31, 2022, we had cash and cash equivalents of $532.0 million, as compared to $590.3 million 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 $39.8 million for the first quarter of 2022, as compared to $34.9 million for the same period of the year prior. The increase is primarily due to personnel and personnel-related costs to support the product development activities.
Non-GAAP R&D expenses were $32.2 million for the first quarter of 2022, as compared to $28.1 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 $24.8 million for the first quarter of 2022, as compared to $20.7 million for the same period of the year prior. The increase is primarily due to rent expense related to the new headquarters building lease that commenced in December 2021.
Non-GAAP G&A expenses were $17.0 million for the first quarter of 2022, as compared to $12.8 million for the same period of the year prior.1
GAAP and Non-GAAP Net Loss
The GAAP net loss for the first quarter of 2022 was $73.8 million, or $2.03 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $67.5 million, or $1.86 per share, on both a basic and diluted basis, for the same period of the year prior.
The non-GAAP net loss for first quarter of 2022 was $48.5 million, or $1.33 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $41.9 million, or $1.16 per share, on both a basic and diluted basis, for the same period of the year prior.1
Updated Cash Guidance
The Company reaffirms its existing cash and cash equivalents will be sufficient to enable it to fund operations through the end of 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 exclude stock-based compensation expense; non-GAAP G&A expenses as GAAP G&A expenses, which exclude stock-based compensation expense; non-GAAP operating expenses as GAAP operating expenses, which exclude stock-based compensation expense; non-GAAP net loss as GAAP net loss, which excludes 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, which excludes 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 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 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 May 10, 2022, 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 488160. The webcast link is View Source
First quarter 2022 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 of the conference call will be accessible for at least 90 days after the event at View Source.