Reata Pharmaceuticals, Inc. (Nasdaq: RETA) (“Reata,” the “Company,”
“our,” “us,” or “we”), a clinical-stage biopharmaceutical company,
today announced financial results for the quarter ended March 31,
2021, and provided an update on the Company’s business operations
and clinical development programs.
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
https://www.reatapharma.com/investors/.
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.____________________________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
https://event.on24.com/wcc/r/3080993/647A7195D390CEF8F5FA6FFA73CD7C87.
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 https://www.reatapharma.com/investors/ 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
https://www.reatapharma.com/investors/.
About Reata Pharmaceuticals,
Inc.
Reata is a clinical-stage biopharmaceutical
company that develops novel therapeutics for patients with serious
or life-threatening diseases by targeting molecular pathways that
regulate cellular metabolism, inflammation, and the cellular
response to injury. Reata’s two most advanced clinical candidates,
bardoxolone and omaveloxolone, target the important transcription
factor Nrf2 that promotes the resolution of inflammation by
restoring mitochondrial function, reducing oxidative stress, and
inhibiting pro-inflammatory signaling. We possess exclusive,
worldwide rights to develop, manufacture, and commercialize
bardoxolone, omaveloxolone, and our next-generation Nrf2
activators, excluding certain Asian markets for bardoxolone in
certain indications, which are licensed to Kyowa Kirin Co., Ltd.
Bardoxolone and omaveloxolone are investigational drugs,
and their safety and efficacy have not been established by any
agency.
Forward-Looking Statements
This press release includes certain disclosures
that contain “forward-looking statements,” including, without
limitation, statements regarding the success, cost and timing of
our product development activities and clinical trials, our plans
to research, develop and commercialize our product candidates, our
plans to submit regulatory filings, and our ability to obtain and
retain regulatory approval of our product candidates. You can
identify forward-looking statements because they contain words such
as “believes,” “will,” “may,” “aims,” “plans,” “model,” and
“expects.” Forward-looking statements are based on Reata’s current
expectations and assumptions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks, and changes in circumstances that may differ materially from
those contemplated by the forward-looking statements, which are
neither statements of historical fact nor guarantees or assurances
of future performance. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, but are not limited to, (i) the timing, costs,
conduct, and outcome of our clinical trials and future preclinical
studies and clinical trials, including the timing of the initiation
and availability of data from such trials; (ii) the timing and
likelihood of regulatory filings and approvals for our product
candidates; (iii) whether regulatory authorities determine that
additional trials or data are necessary in order to obtain
approval; (iv) the potential market size and the size of the
patient populations for our product candidates, if approved for
commercial use, and the market opportunities for our product
candidates; and (v) other factors set forth in Reata’s filings with
the U.S. Securities and Exchange Commission, including the detailed
factors discussed under the caption “Risk Factors” in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2020.
The forward-looking statements speak only as of the date made and,
other than as required by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Contact:Reata Pharmaceuticals,
Inc.(972) 865-2219https://www.reatapharma.com/
Investor Relations &
Media:Manmeet SoniAndres
Lorenteir@reatapharma.commedia@reatapharma.comhttps://www.reatapharma.com/contact-us/
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Consolidated Statements of Operations |
|
(unaudited) |
|
|
|
(in thousands, except share and per share
data) |
|
Collaboration revenue |
|
|
|
|
|
|
|
|
License and milestone |
|
$ |
795 |
|
|
$ |
1,169 |
|
Other revenue |
|
|
149 |
|
|
|
184 |
|
Total collaboration revenue |
|
|
944 |
|
|
|
1,353 |
|
Expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
34,880 |
|
|
|
47,653 |
|
General and administrative |
|
|
20,704 |
|
|
|
20,787 |
|
Depreciation |
|
|
274 |
|
|
|
278 |
|
Total expenses |
|
|
55,858 |
|
|
|
68,718 |
|
Other income (expense), net |
|
|
(12,556 |
) |
|
|
(3,814 |
) |
Loss before taxes on income |
|
|
(67,470 |
) |
|
|
(71,179 |
) |
Benefit from (provision for) taxes on income |
|
|
15 |
|
|
|
22,240 |
|
Net loss |
|
$ |
(67,455 |
) |
|
$ |
(48,939 |
) |
Net loss per share—basic and diluted |
|
$ |
(1.86 |
) |
|
$ |
(1.47 |
) |
Weighted-average number of common shares used in net loss per share
basic and diluted |
|
|
36,203,631 |
|
|
|
33,222,085 |
|
|
|
As of |
|
|
As of |
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in thousands) |
|
Condensed Consolidated Balance Sheet Data |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
777,624 |
|
|
$ |
818,150 |
|
Income tax receivable |
|
|
22,250 |
|
|
|
22,228 |
|
Working capital |
|
|
691,161 |
|
|
|
728,136 |
|
Total assets |
|
|
815,084 |
|
|
|
857,598 |
|
Liability related to sale of future royalties, net |
|
|
326,379 |
|
|
|
315,454 |
|
Payable to collaborators |
|
|
75,150 |
|
|
|
73,437 |
|
Deferred revenue |
|
|
3,893 |
|
|
|
4,688 |
|
Accumulated deficit |
|
|
(1,025,700 |
) |
|
|
(958,245 |
) |
Total stockholders’ equity |
|
$ |
369,333 |
|
|
$ |
417,431 |
|
Reconciliation of GAAP to Non-GAAP
Financial Measures
The following table presents reconciliations of
non-GAAP financial measures to the most directly comparable GAAP
financial measures (in thousands, except for per share data):
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Research and
development: |
|
(unaudited) |
|
GAAP Research and development |
|
$ |
34,880 |
|
|
$ |
47,653 |
|
Less: Stock-based compensation expense |
|
|
(6,808 |
) |
|
|
(11,516 |
) |
Non-GAAP Research and development |
|
$ |
28,072 |
|
|
$ |
36,137 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP General and
administrative: |
|
|
|
|
|
|
|
|
GAAP General and administrative |
|
$ |
20,704 |
|
|
$ |
20,787 |
|
Less: Stock-based compensation expense |
|
|
(7,871 |
) |
|
|
(7,791 |
) |
Non-GAAP General and administrative |
|
$ |
12,833 |
|
|
$ |
12,996 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Operating
expenses: |
|
|
|
|
|
|
|
|
GAAP Operating expense |
|
$ |
55,858 |
|
|
$ |
68,718 |
|
Less: Stock-based compensation expense |
|
|
(14,679 |
) |
|
|
(19,307 |
) |
Non-GAAP Operating expense |
|
$ |
41,179 |
|
|
$ |
49,411 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net loss: |
|
|
|
|
|
|
|
|
GAAP Net loss |
|
$ |
(67,455 |
) |
|
$ |
(48,939 |
) |
Add: Stock-based compensation expense |
|
|
14,679 |
|
|
|
19,307 |
|
Add: Non-cash interest expense from liability related to sale of
future royalties |
|
|
10,925 |
|
|
|
- |
|
Non-GAAP Net loss |
|
$ |
(41,851 |
) |
|
$ |
(29,632 |
) |
Reconciliation of GAAP to Non-GAAP Net loss per common
share- basic and diluted: |
|
|
|
|
|
|
|
|
GAAP Net loss per common share-basic and diluted |
|
$ |
(1.86 |
) |
|
$ |
(1.47 |
) |
Add: Stock-based compensation expense |
|
|
0.41 |
|
|
|
0.58 |
|
Add: Non-cash interest expense from liability related to sale of
future royalties |
|
|
0.29 |
|
|
|
- |
|
Non-GAAP Net loss per common share-basic and diluted |
|
$ |
(1.16 |
) |
|
$ |
(0.89 |
) |
|
|
Three Months Ended |
|
Reconciliation of GAAP to Non-GAAP
Operating expenses |
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
GAAP Operating expenses |
|
$ |
55,858 |
|
|
$ |
57,173 |
|
|
$ |
55,786 |
|
|
$ |
53,667 |
|
Less: Stock-based compensation expense |
|
|
(14,679 |
) |
|
|
(11,950 |
) |
|
|
(11,580 |
) |
|
|
(14,796 |
) |
Non - GAAP Operating expenses |
|
$ |
41,179 |
|
|
$ |
45,223 |
|
|
$ |
44,206 |
|
|
$ |
38,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net loss |
|
$ |
(67,455 |
) |
|
$ |
(65,776 |
) |
|
$ |
(65,456 |
) |
|
$ |
(67,581 |
) |
Add: Stock-based compensation expense |
|
|
14,679 |
|
|
|
11,950 |
|
|
|
11,580 |
|
|
|
14,796 |
|
Add: Non-cash interest expense from liability related to sale of
future royalties |
|
|
10,925 |
|
|
|
10,807 |
|
|
|
10,413 |
|
|
|
664 |
|
Add: Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,183 |
|
Less: Gain on lease termination |
|
|
- |
|
|
|
(470 |
) |
|
|
(816 |
) |
|
|
- |
|
Non-GAAP Net loss |
|
$ |
(41,851 |
) |
|
$ |
(43,489 |
) |
|
$ |
(44,279 |
) |
|
$ |
(40,938 |
) |
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