Atea Pharmaceuticals, Inc. (AVIR) Earnings Call Transcript

Great. Hi, everyone. Thanks so much for joining us here today. My name is Hannah Adeoye, and I'm an associate biotech analyst here at JPMorgan. Our next presenting company is Atea Pharmaceuticals, and presenting on the behalf of the company is CEO, J.P. Sommadossi, and some other members of the management team. Just want to say we're going to be doing Q&A in the room after the presentation. So there should be some mic runners around the room. And for those who want to ask questions, simply raise your hand, and we'll get you a microphone. And if you are listening online or you want to ask a question online, you can also ask via the conference -- digital conference book. And with that, I'm going to hand it off. Thank you. J.P.?

Thank you so much. And before I begin, I would like to thank JPMorgan for the opportunity to present today and give you the latest development at Atea Pharmaceuticals. Before I go further in the presentation, this slide shows us standard forward-looking statement, and further information can be found in our most recent regulatory filings. Since the founding of Atea, our vision has not changed and has been centered on the discovery, development and commercialization of antiviral drugs for severe viral infections where there is a significant unmet medical need where we can make a huge difference. Following a year of solid execution across all 3 clinical programs, we enter the new year in a position of strength, as you can see, with a pivotal year, which is really milestone rich for 2023. For our COVID-19 program, we expect to complete the enrollment at the end of the year. Before that, actually, we will have an interim analysis in the second half after the enrollment of about 60% of the monotherapy arm, I'm going to go over the details of our study design for this SUNRISE-3. And also, we expect to file an IND/CTA around the end of the year with our second-generation protease inhibitor discovered in-house, for which we foresee to develop for combination therapy with bemnifosbuvir in 2024 and beyond. For our dengue program, we anticipate proof-of-concept clinical result this quarter actually, which is evaluating the impact of AT-752 on dengue virus infections. And these results will tell us how we are going to advance the clinical program. Finally, for our HCV program, we are very excited, after a hold due to the pandemic, to reinitiate this very promising combination therapy of 2 very potent drug, bemnifosbuvir and ruzasvir in Phase II, robust Phase II. We have started regulatory submissions, and we anticipate first patient will be dosed next quarter with the initial result of the lead-in cohort -- and I'm going to go over a little bit later on the study design, also about this robust Phase II, with initial results around the end of the year as well. Atea has a very experienced management team, scientific team with a proven track record of success in the field of antiviral drug discovery, clinical development and commercialization. And along this deep pipeline, as you can see in this slide, our goal is to become a leading antiviral company. Importantly, and especially in these days, we are very well capitalized to fund our robust mid- to late-stage clinical programs through key inflection points and beyond and with the cash runway, we believe, through at least 2025. So let's go now about the detail or the update on the COVID-19 program, including our global SUNRISE-3 trial. Our COVID-19 strategy is really focused on the current highest unmet medical needs. We are targeting the most vulnerable patient population who have the greatest risk for disease progression to severe COVID or mortality and where there is only very few options. Currently, as you may know, vaccine and therapies have some key limitations, including waning immunity. We see failure in certain patient population to mount immune response to vaccine. The monoclonal antibodies are no longer effective, especially with the new subvariants, the XBB.1.5. And we know the limitations of our oral authorized antiviral as well. So as a monotherapy, we believe that bemnifosbuvir profile fulfill an unmet need for safe, well-tolerated and easily prescribed oral antiviral for COVID-19. This profile should enable us to -- bemnifosbuvir as a cornerstone therapy for both monotherapy and combination therapy. And you're going to see this is why we have a very unique study design for the Phase III SUNRISE-3 that I'm going to in a few minutes. Indeed, there's already -- we are going to study this combination therapy approach. We are the first one to do so in SUNRISE-3. And data from that trial will inform us how we are going to develop for some specific patient population, which enable to mount an immune response. Obviously, we are thinking about immunosuppressed patients where you can have viral application actually for weeks and even months. And that's where our variants and subvariants actually are being produced as well around the world. So our combination strategy includes the development of a second-generation protease inhibitors at Atea. We have already shown additive benefit with bemnifosbuvir and other protease inhibitors. And really, the rationale for developing the PI is really to have a major impact in immunosuppressed patient or where there is basically a very weak immune response. As I'm sure you read in the news or see on TV, it's clear that what we have today is a pandemic of the elderly with very high rate of hospitalization and deaths in that patient population. And this is the patient population that actually is targeted in our Phase III SUNRISE-3. Let's not forget that COVID-19 still today is the third leading cause of death in the United States after heart disease and cancer with the majority, obviously, in 65 years old and older. This is the first time -- just to put in perspective, this is the first time in 100 years that the life expectancy has decreased in this country. We have deaths of 300 -- we have 300 to 400 deaths every day due to COVID-19. So far in the United States, almost 280,000 individuals have died in 2022 because of COVID-19. It essentially is like if you have a jumbo jet crashing every day in the United States. Doesn't make headline anymore today. It will do if it was a jumbo jet crashing every day. So this is what we have to think about and what we are confronted there. And now we're going to basically let COVID-19 continue because it's going to continue. It doesn't go anywhere for the next 10 years and beyond until there's going to be a vaccine that will prevent transmission. And the technology is not even available today. So in SUNRISE-3, we are going to enroll elderly regardless of vaccination status. So 80 years old, regardless of morbidity -- of comorbidities; 65 years old with at least 1 major risk factor such as diabetes, obesity; anyone above 18 years old that are immunocompromised. And just to put in perspective, as much -- as many as 20% of immunocompromised patients hospitalized today because of COVID-19 and at risk of death with very limited options for treatment, where, as I'm showing -- I'm going to show you in a few minutes, Paxlovid is mostly contraindicated in those individuals. So let's review now our SUNRISE-3, which is a Phase III registrational trial in mild-to-moderate COVID-19 but it's an [ enriched, ] high-risk patient population. This is a randomized, double-blind, placebo-controlled, assessing bemnifosbuvir or placebo administered along with the local standard of care. So that means that you have add-on with bemnifosbuvir or placebo to the local standard of care. So we expect to enroll about 1,500 patients, high risk, as I have indicated; regardless of vaccination status; symptom onset less than 5 days before randomization. So we anticipate, as you can see, a very large footprint, global footprint with 25 countries, about 300 clinical sites. We have already -- we are already enrolling in the United States and submitting applications where we get very good, actually, feedback, with some already being approved by regulatory authorities around the world. And we will initiate very soon enrollment in Europe, Japan, Latin America, Africa, North Africa, Australia. You can see a very large footprint. And this patient will be randomized 1:1 either to 550 milligram BID of bemnifosbuvir or placebo, so twice daily for 5 days. And that's where it's very unique for a Phase III for COVID. And we believe that we are already the first one that the FDA has basically endorsed this study due to the significant unmet medical need in this very high-risk COVID-19 outpatients. So we have 2 studies -- 2 cohort, I'm sorry, derived from the type of standard of care that is going to be used locally: so a supportive care patient population, which is a monotherapy or -- and that monotherapy will be the primary analysis of the Phase III; and then the second cohort, which will be combination antiviral population, which would be comprised of patients that are going to receive compatible antivirals as the local standard of care, which is Paxlovid or molnupiravir, as part of their, basically, local treatment. So we have 2 cohorts. We -- the primary endpoint will be all cause of hospitalization or death through day 29, and we anticipate at least 1,300 patients will be in the supportive care population. Thus, we are targeting a 4% to 6% hospitalization rate to have sufficient statistical power to differentiate, obviously, the treatment against placebo. As I have mentioned at the beginning of my presentation, we will have an interim analysis second half when 60% of the supportive care population would have been enrolled with an independent DSMB. Ongoing development work for bemnifosbuvir include also the development of second-generation tablet. And we are very proud of this accomplishment in 2022 because as you can see, the second generation achieved much higher plasma drug concentration, also a higher trough, which obviously are essential for the efficacy of the drug, without any food effect, regardless of fat content. We tried both with low and high fat content. And this is in contrast to the first generation of formulation, which was used for Phase III MORNINGSKY study. And I'd like to remind you that in that study, we had an endpoint with hospitalization, and that endpoint showed actually a 71% decrease of hospitalization, even with the first generation. And actually, when we analyzed patients above 40 years old, that rate increased even up to 82%. So obviously, with this improved formulation, we feel even more confident in the potential of bemnifosbuvir for the treatment of COVID-19. As I'm sure you see every day in the news, we have new variants globally that continue to spread. We are confident that bemnifosbuvir will remain fully active against future variants and subvariants as we have shown here with all the strains that have been reported as a concern, including all the Omicron subvariants, where you see that basically, the EC90, so this is the concentration in vitro which inhibit 90% of viral replication, remain essentially the same. And so this consistent potent antiviral activity really bodes well with what we believe is going to be a drug that basically is going to be efficacious regardless of the future variants that we are going to have. So let's now review the commercial opportunity. The projected annual COVID-19 oral antiviral, you can see a demand, will be between $8 billion and $16 billion. And this is basically based on IQVIA retail prescription mostly in the United States. Beyond that, we believe that there is definitely an opportunity to expand that market by prescribing for patients when Paxlovid drug-drug interaction with mostly with -- DDI are a concern. And you can see the millions of individuals here in the United States, where basically the drug-drug interaction issue is a major concern and where mostly there's -- the Paxlovid is -- use is contraindicated. We are talking, as I mentioned before, the immunosuppressive drugs, but also elderly who is not on anticoagulant, who is not statin. You can stop for 5 days for sure. But you can see that the calcium blockers for hypertension and other, definitely an issue with Paxlovid. Putting in perspective, over the next 10 years, we believe that this is going to remain the largest antiviral -- oral antiviral market that we are going to have. So a huge opportunity with very few products that, as I have mentioned, have definitely key limitations. We anticipate that definitely in 2023, there's going to be a transition in the U.S. to a payer market. And so you're going to have a transition to Medicare, Medicaid and then private insurance. And what are they going to look? They are going to look for the economic burden of COVID-19. That means the hospitalization cost. And the hospitalization costs, which CMS has reported as an average cost for hospitalization, is around $22,000. So you can see that with $13 billion total expenses for Medicare, with 70% of those hospitalization actually are Medicare patients, we are going to need real drug, real oral antiviral that are going to be safe, convenient and obviously efficacious. And this will clearly -- oral antiviral provide a clinically and cost-effective solution. And it is a position that has been shared by drug research organization like ICER and ASP. So now let's move on our dengue program. So the AT-752 that we have in the clinic, both as a treatment and prophylaxis actually. We received a Fast Track designation by the U.S. FDA for treatment of dengue. As you may know, it is the most prevalent mosquito-borne viral disease that affect about 400 million individuals every year. It is endemic in 100 countries, about half of the world population. So I talk about 4 billion individuals have risk for dengue. There is no approved treatment options, and we are real pioneers here in terms of both treatment and prophylaxis. AT-752 is a purine nucleotide prodrug from our platform. It has shown potent in vitro activity against all serotypes, there's 5 serotypes of dengue. And actually, we have also shown its potency and efficacy in a small animal model, which is basically well recognized. As an update to DEFEND-2, we have completed enrollment of the first cohort with 21 patients. Just to remind you, it's a randomized, double-blind, placebo-controlled conducted in dengue endemic countries, and we are assessing the antiviral activity with viral load, safety and PK. And this is after oral administration of AT-752, about 750 milligram TID, or placebo obviously for 5 days. We have also completed the human challenge infection model at a single site in the United States in an academic setting. The study basically evaluate the effect of AT-752 or placebo. And the way this conducted, the healthy volunteer receive the first day, AT-752, 750 milligrams TID, and then received the next day an attenuated live virus of dengue type 1. And then the administration of AT-752 is continued at 750 milligram TID for the next 14 days. As part of the development, we wanted to know are we going to achieve, with the 750 milligram TID, sufficient levels of the active metabolite. I remind you that this drug needs to be activated inside the cell to an active metabolite, which is a triphosphate, and the triphosphate is going to basically shut down the RNA viral replication by being like a monkey wrench and causing what we call chain termination. So do we achieve in patients what we hope a really good level of this active metabolite interfering with the replication? And obviously, you want to see that it's going to achieve at the target site where you have viral replication, and that's occurring in peripheral blood mononuclear cells. So actually, we do. As you can see, 750 milligram TID, which are the dosing regimens that were used in both studies achieved rapidly the highest levels. And of interest, even with BID, we could achieve actually comparable levels at steady state. So that introduced some flexibility to us, especially for the prophylactic program where we can move from a TID to a BID. So we look forward to report the proof-of-concept results in this quarter. And obviously, we are encouraged with the potential of AT-752 with this data. Moving now to the commercial opportunity. As I have mentioned, there is no approved treatment for dengue. There is a significant unmet medical need. As you see, the annual global economic burden is $8 billion to $9 billion. And we foresee that there is essentially 2 major market -- treatment in the endemic countries. And most importantly, for the U.S., a very robust U.S. travel market. Just to put it in perspective, you know that there is no malaria in the United States, but actually 600,000 prescription of Malarone were prescribed in the U.S. as prevention -- as a prophylactic before the pandemic. And those numbers actually are getting back quite nicely recently. So a very significant opportunity for dengue. Now let's review our third program in the clinic, hepatitis C, which we believe has the potential to become a best-in-class combination. We look very promising with belief that it has the potential to improve the current standard of care, as you can see with a convenient and short duration protease inhibitor-free treatment. We have also the potential for the first ribavirin-free therapy for decompensated liver disease. This is a very advanced stage of liver disease. We have submitted already the regulatory form for the Phase II study, and we anticipate patient enrollment, as I have indicated, next quarter. So let's review now the study design for this robust Phase II. Total of 280 infected individuals with HCV, including compensated cirrhosis. These are enrolling naive patients, so I want to call direct-acting antiviral naive, all genotypes, as I was saying. And we have a lead-in cohort of 60 patients, and we anticipate to report the result of that cohort before the end of the year. Also -- so this is administration of 550 milligram QD of bemnifosbuvir in combination with 180 milligram QD of ruzasvir, and this is for 8 weeks of treatment. The primary endpoint is standard, as I'm sure you know very well, and accepted by all regulatory authorities around the world with safety and obviously, importantly, sustained virologic response at week 12. We also are going to evaluate other endpoints such as virologic failure, resistance and also SVR at week 24. And then the market is very large, growing with net sales globally of around $4 billion, 50% in the United States. And you see that despite the availability of 2 combination treatment, the incidents in the U.S. with new infection actually exceed the cure with antivirals. So -- and this is really with the opioid crisis, with the IV drug abusers. That's why you need short duration, you need convenient, no food effect, no interaction with methadone substitute, for example, and that's one of the issue with protease inhibitors included in the combination. So we believe that with our combination of ruzasvir and bemnifosbuvir, we have really the potential to capitalize on this significant and growing market. So in closing we have a really exciting pivotal year ahead of us with a number of inflection point. You can see clinical, well-defined endpoints across each of our 3 clinical programs with obviously the late stage of Phase III, it's always exciting to be in Phase III with COVID-19, and really with a drug that we believe really fulfill the need and cover really the major unmet medical needs. We are well capitalized to achieve these milestones throughout the year and beyond. And I would like to take this opportunity to thank our talented and dedicated team. They are really working tirelessly in order to really lay the foundation for a successful 2023. And again, thank you very much to JPMorgan for hosting us today and continued interest and support our mission to transform really the treatment of severe viral diseases. Thank you.

Okay. Great. Okay, just checking. So yes, thank you so much, J.P., for the presentation. As mics get positioned, I can start with the first few questions. So starting off with just your bemnifosbuvir program and COVID-19. Just wondering if you could talk a little bit about your expectations for enrollment cadence with the SUNRISE trial. Just are there any regions with slower or faster pace of COVID transmission that you would expect faster enrollment? And how quickly do you think you could monitor COVID transmission and adapt trial sites to more quickly enroll the trial?

So I have with us today our colleague, Janet Hammond, who is our Chief Development Officer, and she will address that question and maybe some other questions as well. So go ahead, Janet.

Thank you, Hannah. So we're very pleased with the progress that we're making with our trial. We have an extensive footprint, I think as J.P. mentioned, with sites in 25 countries, 300 sites all in all that we anticipate having up and running. We're in the process of getting countries on board. It takes a little time at the beginning of a trial to go through all of the regulatory processes that are necessary for countries to approve protocols and get sites activated. And so we're still ramping up in some areas. But I think as you know, we see wave upon wave of COVID. And so once the sites are up and running, they should be there and ready to receive as patients come through. I think we've all been quite caught a little by surprise by what's happened in China. And I don't think we'll be ready to enroll patients in China anytime soon, particularly with hospitalization being our primary endpoint because obviously, we want the endpoint to be a robust one and for there to be fairly normal conditions when patients are hospitalized rather than what is a rather extreme situation, unfortunately. But as things evolve there too, we hope that it may be possible even to have sites there and really to capture patients around the world as they fall sick.

Okay. Great. And so early in the pandemic, we were seeing some pretty large variances in placebo performance in COVID trials due to differences in standard of care and differences in treatment experience with the virus across regions. So I think you mentioned the study is powered assuming a 4% to 6% placebo, I think, rate, right?

Yes.

So wondering if from your research, that's a normal assumption across regions or if you think there might be some variance across study.