On May 6, 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 March 31, 2021, and provided an update on the Company’s business operations and clinical development programs (Press release, Reata Pharmaceuticals, MAY 6, 2021, View Source [SID1234579394]).
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Recent Company Highlights
Bardoxolone Methyl ("Bardoxolone") in Patients with Alport Syndrome
In April 2021, we announced that the U.S. Food and Drug Administration ("FDA") accepted for filing Reata’s New Drug Application ("NDA") for bardoxolone for the treatment of patients with chronic kidney disease ("CKD") caused by Alport syndrome. The FDA will review the application under a Standard Review timeline. The Prescription Drug User Fee Act ("PDUFA") date, the FDA action date for the application, is scheduled for February 25, 2022. The FDA also advised us that it is currently planning to hold an Advisory Committee meeting to discuss the application. If approved, bardoxolone may become the first therapy specifically indicated for the treatment of CKD caused by Alport syndrome.
"We made significant progress during the first quarter of 2021 with the submission of our NDA for bardoxolone for the treatment of CKD caused by Alport syndrome coming less than four months after reporting positive results from Year 2 of our Phase 3 CARDINAL trial," said Warren Huff, Reata’s President and Chief Executive Officer. "Alport syndrome is a devastating disease that affects 30,000 to 60,000 patients in the United States. We are pleased with the FDA’s recent decision to accept our application for filing and look forward to continuing to work with the FDA during its review of our application."
Bardoxolone in Patients with 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. More than 290 patients are currently enrolled in the study and we expect to complete enrollment in FALCON by the end of 2021.
Bardoxolone in Patients with CKD 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 with CKD due to multiple etiologies at meaningful risk of progression to end-stage kidney disease. Enrollment began in February 2021, and we expect to complete enrollment by the end of the second quarter of 2021 with results expected in the second half of 2021. If the results of this study are positive, we would potentially proceed to a larger Phase 3 with similar eligibility criteria.
Omaveloxolone in Patients with Friedreich’s Ataxia ("FA")
Data from the registrational Part 2 portion of the MOXIe Phase 2 trial of omaveloxolone in patients with FA ("MOXIe Part 2") and the open-label extension study (the "MOXIe Extension") were analyzed in additional exploratory analyses (the "Delayed-Start Analyses"), whereby parallel trajectories between the patients randomized to placebo (placebo-to-omaveloxolone group) and those randomized to omaveloxolone (omaveloxolone-to-omaveloxolone group) in the double-blind period from MOXIe Part 2 through 48 weeks 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. A longitudinal analysis used to calculate annualized slopes incorporating all available data from the MOXIe Extension showed similar slopes in Modified Friedreich’s Ataxia Rating Scale for the placebo-to-omaveloxolone group when compared to the omaveloxolone-to-omaveloxolone group with no significant difference between slopes (p=0.75). The resulting parallel trajectories between both treatment groups is consistent with disease-modifying activity.
We believe that the results of the Delayed-Start Analyses suggest disease-modifying activity with omaveloxolone, provide evidence supporting the positive primary endpoint findings in MOXIe Part 2, and provide additional evidence of the effectiveness of omaveloxolone in patients with FA. The FDA has granted us a Type C meeting, which is scheduled to occur in the second quarter of 2021, to discuss the Delayed-Start Analyses and the FA development program. We plan to initiate a second pivotal study in the fourth quarter of 2021, incorporating input from both the FDA and the European Medicines Agency into the protocol before we initiate enrollment.
Recent Presentations
Abstracts highlighting results from our various programs in CKD and FA have been selected for presentation at recent international medical conferences. Posters that have been presented can be found on our website at View Source." target="_blank" title="View Source." rel="nofollow">View Source
Chronic Kidney Disease
Two abstracts were selected for poster presentations at the National Kidney Foundation Spring Clinical Meetings 2021 which was held virtually from April 6 – 10, 2021. The first poster highlighted the trial design for FALCON, a Phase 3 trial of bardoxolone in patients with ADPKD. The second poster presented results from KIDNEYCODE, a genetic testing program for patients with CKD.
An abstract was selected for poster presentation at the World Congress of Nephrology 2021 which was held virtually from April 15 – 19, 2021 presenting results from an interim analysis of the EAGLE trial, an open-label study to assess the long-term safety and tolerability of bardoxolone in patients with CKD caused by Alport syndrome.
Two abstracts were selected for poster presentations at the Pediatric Academic Societies 2021 Virtual Meeting which was held virtually from April 28 – May 5, 2021. The first poster highlighted results from pediatric patients in the Phase 3 CARDINAL trial. The second poster presented results from pediatric patients in KIDNEYCODE, a genetic testing program for patients with chronic kidney disease.
Upcoming Presentation in Chronic Kidney Disease
An abstract describing pediatric data from the Phase 3 CARDINAL trial of bardoxolone in patients with CKD caused by Alport syndrome was selected for oral presentation at the 58th ERA-EDTA Congress being held virtually from June 5 – 8, 2021, to be presented by Dr. Bradley A. Warady, MD, Director, Division of Pediatric Nephrology, Children’s Mercy Kansas City, Kansas City, MO.
Upcoming Presentation in Friedreich’s Ataxia
An abstract describing results from the baseline-controlled study of omaveloxolone in patients with FA was selected for an oral presentation at the National Ataxia Foundation’s Ataxia Investigators Meeting 2021 being held virtually from May 24 – 27, 2021, to be presented by Dr. David Lynch, MD, PhD, Director, Friedreich’s Ataxia Program, Division of Neurology, Children’s Hospital of Philadelphia, Philadelphia, PA.
First Quarter Financial Highlights
"We have maintained our strong balance sheet and anticipate our current cash runway to last through mid-2024," said Manmeet S. Soni, Reata’s Chief Operating Officer and Chief Financial Officer. "With the FDA’s acceptance for filing of our NDA, we plan to continue advancing disease state awareness and education through our medical affairs organization and our online platforms."
Cash and Cash Equivalents
At March 31, 2021, we had cash and cash equivalents of $777.6 million, as compared to $818.2 million at December 31, 2020.
Collaboration Revenue
Collaboration revenue was $0.9 million in the first 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 $34.9 million for the for the first quarter of 2021, as compared to $47.7 million, for the same period of the year prior.
Non-GAAP R&D expenses were $28.1 million for the first quarter of 2021, as compared to $36.1 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 $20.7 million for the first quarter of 2021, as compared to $20.8 million, for the same period of the year prior.
Non-GAAP G&A expenses were $12.8 million for the first quarter of 2021, as compared to $13.0 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 2021, was $67.5 million, or $1.86 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $48.9 million, or $1.47 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 2021, was $41.9 million, or $1.16 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $29.6 million, or $0.89 per share, on both a basic and diluted basis, for the same period of the year prior.1
The increases in GAAP and non-GAAP net loss are driven primarily by an income tax benefit recognized in the first quarter of 2020, offset by a decrease in research and development spend.
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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; non-GAAP net loss as GAAP net loss, which excludes 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, which excludes stock-based compensation expense, 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 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 May 6, 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: 10153548. The webcast link is View Source
First 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." target="_blank" title="View Source." rel="nofollow">View Source