Good afternoon, and welcome to the Trevi Therapeutics First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

Various remarks that 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 those discussed in the Risk Factors section of the company’s most recent quarterly report on Form 10-Q, which the company filed with the SEC this afternoon.

In addition, any forward-looking statements represent the company’s views only as of today and should not be relied upon as representing the company’s views as of any subsequent date.

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 its views change. I would now like to turn the conference over to Jennifer Good, Trevi’s President and CEO. Please go ahead..

Good afternoon, and welcome to our first quarter 2022 earnings call and business update. Joining me today on this call are Lisa Delfini, Trevi’s Chief Financial Officer; and Dr. Bill Forbes, Trevi’s Chief Development Officer. Lisa and I have some prepared remarks then the three of us will be available for questions at the end.

2022 has already been an exciting year on the clinical front for Trevi, and there is more data to come. On this call, we will provide an update on the continued progress we are making on advancing the development of both of our programs. However, before I do that, I want to quickly touch on the pipeline strategy at Trevi.

We are focused on targeting the most debilitating aspects of disease where we also believe that there may be an opportunity to become disease-modifying over time.

For instance, it is believed that for pruritus and PN, if you are able to break the itch scratch cycle for the patient by reducing or suppressing the itch and therefore the urge to scratch, then the skin and nodules will have time to heal. We have seen evidence supporting that in our clinical work to date.

For cough in IPF, patients may cough upwards of 1,500 times per day, and by significantly reducing cough, there is potential to decrease the mechanical trauma that coughing puts on the lungs, which may result in broader benefits to IPF patients.

So in both of our programs, we are exploring how providing relief on the most impactful parts of disease management may improve the underlying disease itself. Trevi was built with this strategy in mind, and it is very exciting to be reading out critical data in both of our indications in the coming months.

Let me now provide you with an update on both programs. Our most advanced program in clinical development is in severe chronic pruritus in prurigo nodularis or PN, which is a serious and debilitating disease characterized by papules and nodules on the skin as well as incessant and severe itching.

Haduvio is being studied in PN in our PRISM trial, which is a 14-week Phase 2b/3 trial. We believe PN, due to the refractory nature of the disease, is neurologically mediated and potentially aligns well within the neural mechanism of our mixed agonist-antagonist drug.

Most of these patients have already tried and failed topical treatments, and we believe future patients will be eligible for an oral therapy like Haduvio before turning to biologics. This trial has reached several important milestones this year.

At the end of January, we enrolled our last patient, and we just received word that our last patient has completed their final visit in the double-blind portion of the study. This keeps us on track to report data by the end of June. Our clinical team is cleaning data and preparing for database lock. We look forward to seeing the results.

Turning now to our other clinical program, which is in chronic cough in idiopathic pulmonary fibrosis, or IPF. During the first quarter, we were very happy to report a positive result from a pre-specified efficacy interim analysis, allowing us to end enrollment early, save money and accelerate into the next phase of development.

In this interim analysis, Haduvio showed a 77% reduction from baseline at day 22 in daytime cough frequency as measured by an objective cough monitor, demonstrating a 52% difference from placebo. Imagine how impactful a 77% reduction in cough may be to a patient who coughs up to 1,500 times per day.

The p-value on this interim analysis of 26 subjects was P less than 0.0001 and conditional power was 100%. These results were consistent regardless of baseline cough frequency or antifibrotic use. Patient reported outcomes or PROs corroborate the impressive results found with the objective cough monitor.

The PRO question assessing cough frequency demonstrates separation against placebo-treated subjects starting at day one and performed better in subjects on Haduvio than placebo across all time points.

Haduvio is the lead therapy in development for cough in IPF and is the only one to have shown positive results on the reduction of cough in this patient population.

Haduvio was well tolerated in this study with only one SAE that was not deemed to be treatment related, and the adverse events were consistent with what we have seen in Haduvio trials in other indications. 26 subjects were included in the interim analysis, and we expect approximately 40 subjects in total to be evaluated in the final data.

With the strength of the p-value reported, we would expect to see similar results in the final data set and anticipate announcing data on the full set of subjects in the third quarter of this year. Bill and his team have been busy preparing for the next IPF cough study.

To date, the team has written a protocol synopsis, which we intend to design as an adequate and well-controlled trial, as well as requested a meeting with the FDA to discuss the design. We expect to have that FDA meeting during the third quarter of this year.

This interim data is exciting and is initial validation of our hypothesis of the mechanism of Haduvio in treating cough. And as a team, we are determining our path forward, not only in this indication, but also other chronic cough indications. The global chronic cough market is estimated to be approximately $10 billion.

It has been a busy start to the year at Trevi, but we still have much to do with the data-rich few months ahead of us, and then a transition into the next phase of development. We look forward to getting PRISM data in June and full CANAL data on all subjects in the third quarter.

We are well positioned to grow Trevi based on what we know of Haduvio’s mechanism and the strong cough data at hand. I will now ask Lisa to review our financial results, and then we will open it up for questions.

Lisa?.

Thank you, Jennifer, and good afternoon, everyone. As a reminder, the full financial results for the three months ended March 31, 2022, can be found in our press release issued ahead of this call and in our 10-Q, which was filed with the SEC today after the market closed. I’d like to begin with an update on events after the end of the quarter.

On April 11, we raised $55 million through the sale of common stock and prefunded warrants to both new investors and any long-time investor who also chose to participate. The offering was priced at market with no warrant coverage.

The new investors were Frazier, Venrock, and Fairmount, and these funds are well-known biotech investors, and we’re thrilled to have them in our corner as we advance the development of our programs. We also received proceeds of $4.5 million in April related to the exercise of warrants that were originally issued in our October 2021 private placement.

Together with our cash balance of $29 million at the end of March, I’m happy to report that we now have over $80 million of cash and investments on hand.

These funds will be used for our ongoing operations, including completing our current PRISM trial and its open-label extension and planning for and conducting our next trial for chronic cough in IPF. This gives us cash runway into Q1 of 2024.

In addition, we have approximately 15 million warrants still outstanding, which can provide up to $20 million, if exercised. Now on to first quarter results. For the first quarter of 2022, we reported a net loss of $7.3 million compared to a net loss of $8.4 million for the same quarter of 2021.

R&D expenses were $4.6 million during the first quarter of 2022, compared to $5.6 million in the same period of 2021, primarily due to decreased clinical trial subject recruitment cost due to our PN trial wrapping up enrollment this year.

Our consulting expenses and professional fees declined as well due to a reduction in our use of consulting services and the nonrecurrence of professional recruiting fees related to hiring in the prior year period.

G&A expenses were $2.4 million during the first quarter of 2022 compared to $2.5 million in the same period of 2021, primarily due to lower legal fees as a result of the timing of certain intellectual property filings.

In closing, we are excited about the strategy of the company, the recently reported data in IPF cough, and the strength of our balance sheet to continue executing on our plan. This concludes our prepared remarks. I will now turn the call back over to the operator for Q&A..

[Operator Instructions] The first question comes from Serge Belanger with Needham & Company. Please go ahead..

Hi good afternoon, and thanks for taking my questions. I’ll start off with a couple on the PN program and more specifically the PRISM trial.

When we get a readout at the end of June, should we expect just a top line? Or will we also see the secondary endpoints as well as the full safety results? And then secondly, maybe just give us an update on where the open-label extension portion of that trial stands? Thanks..

Bill, do you want to take it? Yes, go ahead..

Yes. Thanks, Serge, for your questions. I’ll jump in here. So as far as what to expect with the top line, I think, as far as guiding you, we’ll provide the information that we have. And so I expect it to be top line with some secondary endpoints as well as some safety overview as well.

So that’s my hope is that we’ll be able to provide all of that when we come out in June with that information. The open-label continues. We have some patients that are still finishing up in that. So we’re still collecting information on that one as well. So that will take us probably through the next six months or so..

Okay. And then assuming this is positive, you’ll have to conduct a second Phase 3 trial in PN. Can you maybe just ballpark what the cost of the Phase 3 trial would be? And maybe time lines? I know it’s difficult to provide those.

But given that we should be in – the second trial is to be conducted in a better COVID environment than the previous one, maybe just give us an idea of how the time lines could be improved. Thanks..

Sure. So I’ll probably pass the budget response on to Lisa, but yes, we’ve been guiding towards the probable need for a second study in this indication. And so my hope is that we can do the entire rollout of that over the next couple of years. Obviously, it will depend a lot on how large that study is.

But we feel confident that we have over 60 centers that participated in PRISM. We will add more patients – or more centers, excuse me. And of course, hopefully, we don’t have to have as many patients in the second study as well.

So depending on a lot of hypotheticals, hopefully, that will take about two years in the in-clinic phase for it to be completed. Lisa, I don’t know if you want to handle the cost of the study..

Yes. On the cost of the study side, I mean, we still have to do formal RFP and all that. So we don’t have an exact number, but we are estimating that it will be in the $20 million to $30 million range..

Okay, thank you..

The next question comes from Annabel Samimy with Stifel. Please go ahead..

Hi, thanks for taking my question. So just thinking about the size of another chronic cough trial in IPF.

What do you think that might look like and how large? And I guess I’m asking because you could potentially have two large late-stage programs simultaneously? Do you feel like you’re in a position that you would need to prioritize them based on the value of each of the different programs.

So how do you think about running two programs simultaneously? And do you have any sense of how large that next chronic cough trial will look like?.

Sure. So I’ll start, and maybe, Jennifer, you might want to step in on a couple of these. But what we’re looking at, and we’ve been pretty vocal about this. Right now, we estimate that we’ll have about 300 patients in the next study, 100 patients per treatment group.

We anticipate that the enrollment period for that will be 18 to 24 months, and we’re going to try to do everything we can to keep it to 12 months, if possible. But if we go to 18 months on enrollment, then it would be six months follow-up. So it would be a couple of years again. But obviously, the efficacy on that would just be cough count.

So I’ll add a little more color here to this, Annabel. But we’ll look at cough counts. But one of the things that I’ve been very vocal about is that we don’t need a lot of patients to show efficacy, and we know based upon our Phase 2 experience that very few patients are required to drive a statistical difference.

We’re interested in following these patients for six months. So that we can start to see whether or not we have an impact on their disease itself.

We anticipate that when we unburden them from this kind of cough, the amount of cough that these patients have, that they will do very well from a respiratory perspective, and I think that will play into hospitalizations and respiratory distress that they have and an improvement in the respiratory exacerbations.

So I think, for the most part, we’ll follow them right now. We predict we’ll follow them for six months. And we have to get to the FDA. And as Jennifer mentioned in her talk, we’ll have a discussion with them in Q3. So I don’t know, Jennifer, if I missed anything..

No. I would just add on the resourcing, Annabel, you’re asking. I think I feel comfortable, we’ve got a good development team in place. We’ve got a strong clin-ops under Bill, and we are capable of running both of these trials. There may be a couple of adds or hires.

But what I’m less comfortable with, and it probably plays into some of our decisions and other indications as sort of wearing off into completely new spaces. As you know, this drug, we think, has broad utility. I think as long as we stay home in sort of pruritus and cough, I feel comfortable about our ability to run two trials in parallel..

Okay. And if I could just follow up on both the topics actually. So when you’re talking about assessing for potential disease modification. So I think PN, it’s pretty easy to sort of measure healing.

So for chronic cough, when you think about disease modification, are you going to be measuring things like FVC? Or how are you going to measure disease modification for chronic cough exactly?.

Yes. Well, I think the antifibrotics have done a pretty good job of trying to stick out some of this. I think we’ll take a look at changes in FVC, although six months is a little bit short to be able to see anything like that.

But I think we’ll probably hone in around things like hospitalization, specifically respiratory hospitalizations as a result of respiratory illness. And I think there’s a few other things that we’d like to try to take a closer look at.

And so we’re talking about those, and I want to get over my skis on some of this, so we want to have a discussion with the FDA on it.

But I think as far as exacerbation of IPF, if you just take a look and look at the things that the antifibrotics have done to try to measure improvement in some of these things, we’ll count some of those same types of things. And we’ll have an open-label study that will be able to follow these patients longer, too.

So the six months on placebo will give us an event rate inside of our population. The open-label study that we run will allow these patients to flow into that, and we can follow them even longer.

So I think we’ll see over time whether or not reducing cough, in about half of these patients by up to 75% reduction in their daytime cough, we’ll see if that translates into better respiratory function over time..

Okay. Got it. And just one last question on the sourcing side of it. Are there, I mean, you mentioned you had warrants, but are there any other potential ways to monetize some of the ex-U.S.

opportunity to really give yourself additional lift to maximize what you can do with these programs that you have right now?.

Yes. So we’ve been busy at that over the last year, sort of preparing for these data readouts. We are not going to obviously try to market this in Europe or any of the Asian countries. So we’ve been in active discussions with lots of partners. They’re waiting on the data. I think we’ve got to make some decisions about the strategy there.

But there is a way to monetize it. And also, to your point, I think, bring on some development expertise in these territories. I feel comfortable in the U.S. and Europe.

We’ve got a lot of experience and Bill has been through all those jurisdictions getting approvals, but I do think bringing in sort of their knowledge around pricing and some of the stuff is helpful. So we will look to try to do that once we get through all the data readouts here..

Okay, great. Thank you..

Thank you, Annabel..

The next question comes from Nathan Weinstein with Aegis Capital. Please go ahead..

Hi good afternoon Jennifer, Bill and Lisa, thank you for taking my questions. I had two questions. One was regarding the disease-modifying characteristics of Haduvio.

And maybe you could share some high-level thoughts about what that profile could mean for the drug’s market potential versus if it were just viewed as a palliative option?.

Yes. I’ll start with that. I mean obviously, if you end up disease-modifying, I think Annabel hit on some of the FVCs that’s longer. But the antifibrotics are priced annually at about $140,000 a year.

If you end up just treating sort of the severe aspect of the disease of cough, which I still think is quite meaningful, it’s not going to be in that disease modification category. So we’ve always thought about the pruritus pricing somewhere around biologics with some type of discount. Biologics are priced at roughly 40,000.

So I would sort of probably give a range somewhere between that level of pricing up to sort of disease-modifying aspects. I think it will just depend on the data. So huge range there and a lot of difference, but it just is going to come down to what Bill is able to sort of read out in this trial..

Got it. Understood. And then just one follow-up regarding the adjacent indications. You guys have been pretty vocal that there are potential large markets outside of the lead indications. Maybe you could just speak to how you think about that embedded optionality.

And then strategically, what are some of the paths you might take to tap into it?.

Yes. So we’re going to make sure we read both of these trials out and get both of these programs on their way, assuming the data supports that. Clearly, cough does, we’ll wait for PN. So our first priority is going to be moving forward the indications we’ve already committed to.

Beyond that, we are doing a lot of work internally preparing for other markets, pricing sort of strategy, I think to the question about resourcing, what can we handle. So we’ll fight off maybe one or potentially two other indications along the way that could make some sense, I think, to help really grow out the company.

So we are doing that work, and I would expect, once we get all the data in hand and are able to course around the path forward, we’ll be able to give some guidance on that..

Okay, that sounds great and thanks again for taking the questions..

Thank you, Nathan..

I am not showing any further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Jennifer Good for closing remarks..

We 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 the subjects who have participated in our clinical trials. Thank you..

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect..