Good afternoon and welcome to the Trevi Therapeutics Second Quarter Earnings Conference Call. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call may be recorded.

Various remarks the management makes during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including both discussed in the risk factors section of the company's most recent quarterly reports on Form 10-Q which is on file with the SEC.

In addition, any forward-looking statements represents a company's views only as of today and should not be relied upon as representing views as of any subsequent. While the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so even if this changes.

These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. Participating on today's call from Trevi are Jennifer Good, President and CEO; and Chris Seiter, Chief Financial Officer. I'd now like to turn the call over to Jennifer. Please go ahead..

Thank you, Grace. Good afternoon, everyone, and welcome to our inaugural earnings conference call. Given the execution against our business plan, we feel it is a good time to start giving more regular updates. It was a busy second quarter and has continued through the summer months.

During the quarter we were adapting to the impacts of COVID with our workforce and our clinical trials, by first pausing everything, assessing the situation and then restarting again. We were able to reopen sites for screening and enrollment in our lead study of prurigo nodularis or PN, beginning in May.

We also announced a positive outcome of a pre-specified sample size re-estimation analysis for the PN trial in July, which I will talk more about later. And today, we announced a $14 million term loan, which bolsters our balance sheet and extends our cash runway into the first half of 2022, which Chris will talk more about in his comments.

Finally, we brought the Trevi team back to the office in July in a hybrid model. I've been very pleased about how well the work from home transition happened, and I commend the team for working hard to make that successful. However, it has been nice to get back to some normalcy as well as the synergies in a small company of seeing people in person.

So, just to step back a moment and remind everyone of the strategy for growth. Trevi's developing Nalbuphine ER for Haduvio to explore its potential treatment effect in various serious neurologically mediated conditions. The drug is pharmacologically active on two receptors including as a MU antagonist and also as a KAPPA agonist.

These receptors are located in many organs, including the skin, lung, the spinal cord and parts of the brain including the brainstem.

We have focused on the clinical conditions of pruritus, cough and movement disorders as therapeutic areas of interest, because of the scientific evidence that activity at both the MU and KAPPA receptors play an important role in these medical conditions.

Our lead indication in clinical development is severe pruritus in prurigo nodularis, which is a serious and debilitating skin disease characterized by papules and nodules on the skin, as well as incessant and severe itching. There are currently no approved therapies for this indication.

Prurigo nodularis is a chronic disease and because of repeated scratching, the papules and nodules spread and continue to worsen. We estimate there are approximately 250,000 PN patients in the U.S.

and another 430,000 in the rest of the world, there are biologics being developed as well for pruritus in PN, but we are the only oral drug and development for this condition. We believe that both biologics and oral therapeutics will have important and complimentary roles to play in managing this chronic disease.

Over the long-term and oral option is likely to pay an important role for patients. We are currently conducting a Phase 2b/3 trial in these subjects with prurigo nodularis, which we call our PRISM trial. The trial is recruiting in both the U.S. and Europe and today we have more than 60 sites activated.

The primary endpoint is a responder analysis based on the reduction in itch intensity as measured by the worst itch numerical rating scale after 12 weeks a blinded six dosing.

In July, the company achieved an important milestone in this program, when we announced the completion and positive outcome of a pre-specified sample size re-estimation analysis or SSRE in this trial.

The analysis was based on a pre-specified interim conditional power and was conducted by an external unblinded statistician after approximately 45% of the initial targeted number of patients were available for the primary study endpoint.

Based on the SSRE analysis, the Independent Data Monitoring Committee recommended that the PRISM trial should continue, and the trial size should increase to 360 subjects to maintain the statistical power for the primary endpoint. We were blinded to the underlying results, so we do not have insights into what drove the sample size increase.

But as a reminder, the increase to 360 subjects was in the range that was pre specified by the company based on various powering assumptions and the Phase 2 results. We were pleased that at this interim point, the drug appears to be showing efficacy that falls within a range which we considered clinically relevant, when designing the study.

Our clinical operations team has been prepared for a potential ramp up in the number of subjects by opening new sites, should they be needed. We believe we have enough sites either open or in the process of being open to complete this study in accordance with our planned timelines. We currently have approximately 155 subjects randomized in the trial.

Screening and enrollment restrictions were lifted in May across our sites, and currently about 80% of our sites have been screening patients since being paused during the COVID restrictions. The sites are off to a strong start, with June and July being our strongest two consecutive months of enrollment to-date.

We are also not seeing the usual August slowdown in enrollment that typically occurs in clinical development. Another encouraging sign for the study is that over 95% of subjects that reached week 14 chose to roll into the open label extension portion of the study.

Based upon the rates of enrollment coming out of the pandemic restrictions as well as the increase in the sample size of the trial, we believe we can complete enrollment in the third quarter of 2021 with top line data in the fourth quarter of 2021.

We are encouraged by the progress of this trial and will continue to drive hard to complete these important milestones. Turning now to our second clinical phase program for cough in idiopathic pulmonary fibrosis or IPF, IPF is also a severe condition in which there is scarring of the lung tissues.

One of the leading debilitating symptoms of this disease is chronic coughing, which affects approximately 70% to 85% of these patients. There are no approved therapies for this condition. We are conducting a Phase 2 double blind crossover study with a 14-day washout period after each three-week treatment arm.

The primary endpoint assessment is the mean percent change in daytime cough frequency from baseline. The daytime cough frequency is measured by a digital cough monitor between the treatment and placebo arms.

This trial is being conducted in the UK and given that this patient group is high risk for COVID due to their lung impairment, we voluntarily paused all screening and enrollment activities.

We have used this time to focus on amending study procedures that will enhance our ability to successfully enroll in this patient population, given COVID limitations, and plan to implement a protocol amendment to allow for fewer visits to the hospital. We believe we are in a good position as this study prepares to resume.

And we already have four of our 11 sites that have indicated they are ready to restart the study. We expect we can start screening patients again later this year. We have several other programs that are in earlier stages of development.

However, we have prioritized our priorities and cost programs to optimize our development execution and company resources. That is a good segue to hand this over to Chris Seiter, Trevi's Chief Financial Officer, to provide you with a financial update.

Chris?.

Thank you, Jennifer. As a reminder, the full financial results for the second quarter of 2020 can be found in our 10-Q, which was filed with the SEC today after the market closed. For the second quarter of 2020, we reported a net loss of $7.4 million compared to a net loss of $7.3 million for the same quarter of 2019.

R&D expenses were $4.9 million during the second quarter of 2020 compared to $5.5 million in the same period of 2019. The decrease was primarily due to decreased activity in our Phase 2 trial and chronic cough in patients with IPF due to the halting of enrollment and treatment of patients as a result of the COVID-19 pandemic.

G&A expenses were $2.5 million during the second quarter of 2020, compared to $1.9 million in the same period of 2019. The increase was primarily due to an increase in stock-based compensation expenses and an increase in expenses related to being a public company.

As of June 30, 2020, our cash and cash equivalents totaled $44.2 million, compared to $57.3 million as of December 31, 2019. This implemented funding strategies using both debt and equity to extend our cash runway. During the second quarter, we filed in aftermarket or ATM prospectus.

Subsequent to the end of the second quarter, we sold approximately $2.2 million of our common stock through the ATM facility. In addition, earlier today we entered into a $14 million term loan facility with Silicon Valley Bank.

The term loan requires monthly interest only payments through February 28, 2022, followed by monthly payments of principal and interest until February 1, 2024. Interest on the term loan initially accrues at a per annum rate 4.25%.

The proceeds from the ATM and the non-dilutive term loan bolsters our cash position and will extend our cash runway into the first half of 2022 pass the anticipated top line results from the PRISM trial, which are expected in the fourth quarter of 2021. That is all for our prepared remarks. Now we'll turn the call back over to the operator for Q&A..

[Operator Instructions] Your first question comes from the line of Gary Nachman from BMO Capital. Your line is open..

Hi. Good afternoon, guys.

With the re-estimation and upsizing of PRISM to 360 which is the maximum that was predetermined, are you allowed to go even higher for additional comfort if you want to? And at 360, is statistical power maintained at 90%, is that something you quantify Chris, Jen?.

Yeah, no, thank you, Gary. So you're right, we powered the original study at 90% power. So we don't see the actual calculations. But that's what the premise of the study was. As far as going above, the sample size is sort of like any trial. If you have people in the pipeline, you can sort of let them finish.

But technically, you're running an experiment based off a certain sample size. So, I think that's what we'll target for. But again, oftentimes they tend to run over a bit on patients just because people are in the queue..

Okay.

And then how have you been managing the patient discontinuation, that's something that you talked about in the past? And has it been more challenging through the pandemic, providing the appropriate education? And do you think that was a factor maybe behind the upsizing up to the maximum amount, or is it too hard to tell?.

So I'll start with the last point, just so I don't forget it. We have no visibility on what drove it. That's certainly one factor, because if we have discontinuations, say essentially count as treatment failures and it's hard to dial in exactly what those might be. So that could have been part of it. It can also be site variability.

There's a lot of things that play into that calculation. So, I don't have actually a good sense of what that can be. As far as how we're managing it. We've put a lot of effort into this study, not only training the sites, we have good patient facing materials.

But we do follow up often with our 60 sites to make sure that they're just paying attention to this and handling it appropriately with patients. So we're not seeing anything alarming there or disturbing. That's sort of business as usual.

I would say that during the pandemic, sort of contrary though, what you raised and also what I was worried about, discontinuations did not go higher. As a matter of fact, I actually think they dipped a bit because people were home. I think they're not trying to work and run around, there was good focused people.

I think we only had one visit missed during the time. We didn't lose anybody in the blinded portion of the study to COVID. So, in the early days, we sort of paused things and put in place all the things everybody did around, getting drug to people and worrying about sites and waving visits, and didn't end up needing that IPF.

IPF was a little different situation, as I mentioned, because of the nature of those patients. But in PN, that actually held together really well..

Okay. Then, just one last quick one, just on the IPF study. It sounds like you're amending the protocol to minimize the hospital visits. And yet, I think you said you have four of the 11 sites that are ready to go.

But do you think it makes sense maybe to expand beyond the U.K., given the pandemic, if that's going to be a difficult geography just in terms of how cases are playing out there? Thanks..

Yeah. Good question, Gary, you should go run a little drug development company. So, we are exploring that because we're already doing trials in Germany, for instance, which is a great place to do this. Austria, France, so we are actually looking at possibly adding on another country for exactly the reasons you say, it's more about risk mitigation.

And just making sure we're not sort of tied to whatever's going on in one country during this time of the pandemic. So, those are all options we're exploring..

Okay, great. Thanks..

Thank you. And your next question comes from Ami Fabia with SVB Leerink. Your line is open..

Hi, thank you for taking my questions. Firstly, just on PN study, you had a pretty strong enrolment in June, July.

Can you talk to whether there might have been any bolus of patients because of the pandemic? And how do we think about kind of the run rate of patients that you can enroll in the coming months? Are you opening up new sites that can sort of continue to channel new patients into the trial?.

Yeah, sure. Hi, Amy. How are you? So, the bolus question is a good question.

I do think sites were productive during the - what ended up not being a very long pause, but I think they were productive about reaching out to patients, which I think they would have eventually got into anyway, but they took advantage of that time to get some people queued up.

The nice thing I think that's encouraging to me is that continued on through June, July, and now we're seeing through August. And I think it's really more of a function of two things. One, we had a competitor in this place, enrolling in the same trial that essentially reported out negative during the whole COVID transaction - transition memo.

And so I think that's helpful because you've got them out of recruiting for the same patients. And the other thing is exactly what you said, which is we were actually quite successful during this window of bringing on new sites, and people have been very creative about how to do virtual SIV's and get people up and running.

So, we will continue to add some new sites into the mix because I think bringing in some of these fresh patients is a good thing. But I think we're just about there as far as the number of sites we need to enroll there. So, I do think there was a little bit of a bolus in June. June was a nice month but continued strong through July and August.

So, I think it's the run rate we're at, we're in a good position with the number of sites we have..

Got it.

Just to look after the open extension part of the trial, can you give me some color on how many patients sort of chose to be on it? And how long have they been followed?.

Yep..

And any sort of anecdotal feedback?.

Sure. So, I mentioned in my comments, over 95% of patients have opted to roll into the open label extension. That's an additional 38 weeks of time. So, if you've been on the first 14-weeks, you can be up to a year on therapy. People discontinued or stopped the study along the way at different points for different reasons.

Their itch gets down, low life happens, although we've had a fair number of patients that make their way all the way to the end of that window. And so we have a lot of patients still on that study. So, I always find that's an encouraging sign when people are choosing to continue forward into the open label extension.

Anecdotal, of course, it's all the same stuff you probably always hear in trials. We're hearing lots of good feedback about skin healing, and itch or some things like that. Like I said, we've had almost 20 patients make it all the way to a year, so, lots of good encouraging things. We actually are taking pictures with several of the sites.

We have not yet started looking at those because that's the real sort of golden ring here is when you are able to heal up the skin but hearing lots of encouraging information out of the open label study..

And could you just confirm you were - were you blinded to the discontinuation rate of the overall trial?.

No. We know the overall discontinuation rate, but we don't really get into it just because I'm blinded to, whether they're on drug or placebo. And so, the overall discontinuation rate is not anything that's outside of what we were assuming.

Just it's very hard to parse it out, because you have people discontinuing all along the way, sort of 12-weeks out, because they're itchy. I have no idea if they're on drug or placebo. So, it's just really hard to parse and what that means from a drug perspective. It is something I think the team's doing a nice job of managing..

Got it. Just last question on IPF.

What is the rough timeline for when the study might be able to readout? I know it's early in the process, but what would be kind of the rough timeline you would give?.

Yeah. So, Ami as you know, we have guidance out there by year end, but with COVID, we pulled that back. And I think until we - we need 44 completers. I think until we get this up and rolling with our sites in the UK and I think to Gary's question about are we going to open any other territories, we've hesitated to put a date out there.

So, I think hopefully by the next quarter, we'll have more visibility on that as sites actually get up and rolling. So, I don't want to lay out any dates yet, just because when we do that, I want to make sure it's something we're confident we can hit..

Got it. Okay, thank you so much..

Yeah. Thank you..

Thank you. Your next question comes from the line of Annabel Sami from Stifel. Your line is open..

Hi, thanks for taking my question. I wonder if I'll even have any left. But of course I do. So, I want to go back to the upsizing for a moment. I want to clarify something that you said. So, you're at the maximum allowable level for upsizing.

So, I guess number one, how should we read into that given that that was the max allowed? And then the second point I want to drill down on is, when you say you maintained your power, but it seems that you're suggesting you still have some wiggle room in terms of enrolling more patients within to - in case you lose some, I just want to understand exactly what you meant by that?.

No. So yeah, okay..

No go ahead..

As a matter, just to clear that up, it does maintain our power. And we don't really have wiggle room other than the normal trial that if you have, say, 10 patients in the queue, when you hit your 360 say, you typically let them finish. So, that's why trials never sort of end up spot on to the number they were at.

But no, we're not anticipating needing any wiggle room to try to create a little better efficacy read. So, that 360s are and that's what we're targeting. And we'll end up in around there. Your first question was around, what to read into the upper limit? It's hard for me to....

Yes. I mean sometimes the upsize - yeah, it's like sometimes you have size 20% or 30%.

This is like all the way up to this max, so I was just curious about that?.

Yeah. Annabel as I understand it is a bit of the sort of magic behind the curtain, because you don't get to see any of the calculations going on. There's not a specific number, there's sort of these ranges of numbers. And I think when you drop into these ranges, you end up in the upper end of that.

The only thing I can read into it is at the 360, that would have looked similar to what our Phase 2 results look like. That's why we picked that number.

And so, we had sort of this range where we had made the decision that we were going to try to enroll on the lower end of that, recheck it in the middle, and if we had to go up to sort of our phase two results, then we could do that in stepwise fashion and that's essentially what happened..

Okay. And then on the monitoring of these patients, and I want to talk more about the burden of monitoring of these patients, so it's great that enrolment has started.

Can you just talk about how they're being monitored during this COVID period as COVID kind of spreads around the country and wreaks havoc, more so than just in the Northeast region? So, how are you - how have you been managing these patients and how much do they have to come in for visits? Are you conducting everything virtually at this point?.

No, I mean, somewhat a lot to my surprise, all these visits have gone on actually coming into the office for studies that were ongoing on patients, the PN patients in particular typically don't have other underlying medical conditions. And so they were able to continue through their visits. And so that didn't end up being a problem.

As far as the monitoring visits, that was also something that was paused that has started to open up in countries. I know in Germany, they're in monitoring and person. They are doing remote monitoring I know.

So each site is a little different, some sites are letting monitors, on site to go ahead and monitor, other sites are doing what they can remotely and then they'll have to go in and verify some of the patient-based data when they are in in-house..

Okay. Okay. The last question I had is, I guess I'm a little surprised that you expect enrolment completion by third quarter of '21 given that I guess the competitor is out of the way, and you had some very rapid enrolment the last few months.

Do you think that that's the most conservative timing on it or do you think this could speed up and you can get through that faster?.

Well, we always try to do better if we can. I think that we think that's realistic guidance. It's not aggressive guidance. I'd love to be able to try to beat that. But these are challenging patients. It's the most severe of the PN patients. There are some other competitive studies out there we're mindful of with biologics.

So I think it's a realistic timeline as we move through the next few months and see how much COVID continues to challenge studies. Hopefully we'll have a little better lens on that..

Okay, and are those - sorry one more follow-up on that point.

Are the other biologics treating underlying disease that ends up happening - ends up manifesting as prurigo nodularis? Or is it actually targeting PN specifically?.

Yeah, no, they're targeting pruritis in prurigo nodularis, just like we are. Dupixent's running two trials. And Galderma has announced they're going to start up trials. And then Kenexa is not quite going but they've done some work here. So it's a similar space, but my view more of the biologics sort of doing what biologics do.

I think there is a big need for an oral here, but we have not run across much of these at the clinical sites, but it's something I stay aware of..

Okay, great. Thank you..

Yeah, thank you..

[Operator Instructions] And your next question comes from the line of Serge Belanger from Needham & Co. Your line is open..

Hey, good afternoon. Thanks for taking the questions. Just a couple for me, I guess the first one is, are there any differences between how U.S.

and European PN patients are treated? And whether you expect a difference in how they'll react to nalbuphine in the trial?.

No, so I think, Serge, U.S. and Western European patients are similarly defined that KOL community is sort of United across those territories. And I think we've had some good evidence of that not only from our Phase 2 results where we didn't see a difference, but Memo just reported out a U.S. trial and a European trial.

Placebo effects were very similar and also the drug effect was very similar in both. So we didn't see differences between the two patient populations in their studies which were both about 300 - each about 300 patients.

So we're not seeing any differences and I think that was further evidence that that we should be able to run across the two territories..

Okay. And then on the IPF trial, I think initially you were set out to recruit 56 patients and have 40-ish responders.

Is that still the target or you'd be willing to have smaller numbers to be able to report these results a little quicker?.

Yeah, it's a good question. You guys are all sort of thinking as we do. Our goal still is to do the 56 with 44 completers. We are exploring various avenues. One, we wanted to see how many of our UK sites we could get up and rolling and when? There's some kind of a nice dynamic that's going on here, I didn't mention.

In that, a lot of people that were doing IPF trials, that had them substantially enrolled. A lot of those patients had to drop out and it hurt their studies. And so they're out of the space. So it was a very competitive space in both IPF and we had one company in IPF cough has now cleared out.

So the sites are actually quite hungry to get some new ticket studies going again. So I want to get a read on that, see sort of how the COVID thing plays out. We're going to pursue another country, which would prioritize over doing a little smaller study. Having said all that, this is really a Phase 2 proof-of-concept study.

So that looks like it's going to drag on and take too much time. We made sort of draw a line at some point and see if the drug appears is working. So those are all sort of options on the table. But at this point, the team favors being able to do this the original sample size because we think we can get more interpretable data out of it..

Okay. Great. That's all for me..

Thank you, Serge..

Thank you, and I'm showing no further questions at this time. I would like to turn the conference back to Ms. Jennifer Good for any closing remarks..

Chris and I would like to thank everybody for participating in today's call. I'd also like to thank the Trevi team, our study investigators and all of the patients who continue to participate in our clinical trials during this very challenging time. We look forward to continued progress and updating you soon.

Enjoy the rest of your summer and stay healthy. Thank you..

Ladies and gentlemen, this concludes today's conference. Thank you all for joining. You may now all disconnect..