On Wednesday June 12th, 2019 the MS Money Moves executive team spoke over the phone with Trevena Inc. (Nasdaq: TRVN). On the call was Trevena’s President and Chief Executive Officer Carrie Bourdow and Senior Vice President and Chief Business Officer Robert Yoder. Trevena is a biopharmaceutical company dedicated to addressing the need for innovative medicine in the central nervous system (CNS) therapeutics space. Their pipeline consists of four clinical assets under development for a variety of CNS conditions, including moderate-to-severe acute pain, migraine, opioid use disorder, and chronic pain. For 45-minutes we talked about Trevena’s history, their product candidates, finances, upcoming milestones, and managements priorities heading into the 2nd half of 2019. For those of you who are new to the Trevena story I’ll provide some background.
In the Fall of 2018 Trevena catapulted nearly +150% to a high around $3.50. The increase in valuation was fueled by anticipation for an FDA advisory committee (ADCOM) meeting regarding a new drug application (NDA) for Oliceridine, Trevena’s novel intravenous opioid drug for treating acute moderate to severe pain. Unfortunately, the ADCOM panel voted 8:7 against approval. Soon after on November 2nd, 2018 FDA issued TRVN a complete response letter (CRL) requesting that the company conduct a new clinical study to collect additional QT interval data at more frequent time points. The letter also indicated that Oliceridine’s safety database was inadequate for the proposed maximum daily dose of 40 mg. Per usual with CRLs the share price tanked as this signified additional work was required in the clinic, which consequently would consume more time and capital. However, as many of you already know after a Type-A meeting FDA deemed the current safety database was deemed adequate to support the maximum daily dose of 27 mg. To satisfy the CRL FDA agreed Trevena could conduct a QT-interval study in healthy volunteers and produce nonclinical metabolite data to confirm certain aspects of Oliceridine’s safety profile.
When the news hit on January 28th Trevena’s floundering share price was resurrected +120% to $1.19. By mid-March, Trevena had gained an additional +58% climaxing at $1.88. Trevena’s management and operational teams likewise reacted with vigor. They submitted the protocol and statistical analysis plan for FDA review during the first quarter of 2019. Following receipt of FDA feedback supporting the protocol, Trevena initiated the QT-interval study on June 20th and anticipates having topline data in the fourth quarter of 2019 (October-December). An NDA submission could happen as early as the first quarter of 2020. Meanwhile, the share price has receded back down to ~$1.00. Collectively, fundamentals and technicals suggest now is a good time to build a position in an innovative company on the cusp of commercializing its first product. In the rest of the article, I will elaborate on this point and share what I learned from my discussion with the Trevena team.
About Trevena And Its Leaders
Founded in 2007 Trevena Inc. is a biopharmaceutical company focused on developing novel compounds to treat diseases affecting the central nervous system (CNS). Trevena is led by an experienced and passionate management team. Both Carrie Bourdow and Robert Yoder are pharma industry veterans. Ms. Bourdow got her start as a sales representative at Merck and Co. She spent 20-years there and eventually ran Merck’s hospital franchise. Prior to joining Trevena in 2015 she served as Vice President of Marketing for Cubist Pharmaceuticals Inc. Mr. Yoder also spent a significant portion of his career at Merck. Over 28-years he held an assortment of roles through which he increased responsibility in global business and commercial operations. After Merck he went on to serve as Senior Vice President and Head of Global Commercial Operations, Alliance Management and IT at Orexigen Therapeutics. He joined Trevena in June 2018 initially as Vice President of Commercial Operations and Sales. Another important Trevena executive that was not able to join the call is Senior Vice President and Chief Medical Officer Dr. Mark Demitrack.
An interesting fact you may not know about Trevena is their technology was founded on a Nobel Prize winning discovery. Researchers at Stanford and Duke were the first to elucidate the structure of G Protein Coupled Receptors (GPCRs), one of the most important protein classes for all living organisms. GPCRs communicate a host of molecular signals between the inside and outside of cells throughout the body. It should come as no surprise then that over 30% of all drugs interact with GPCRs, including opioid medication. You see, GPCRs were historically viewed as functioning similar to on and off switches’. The existing assumption was that the binding of a molecule to a GPCR stimulated both therapeutic effects and adverse side-effects in an ‘all or nothing’ fashion. The new discovery however revealed that they operated more like lights with dimmers. Equipped with a deeper understanding of the molecular structure of GCPRs Trevena has pioneered three selective G-protein agonists. A significant portion of my discussion with Ms. Bourdow was about what sets these novel small molecules apart from existing medications.
A New Class of Opioid Medication
A common thread among Trevena’s pipeline assets is they all have completely new mechanisms of action. As such they are designed to confer a similar level of efficacy as their contemporary counterparts minus side-effects. Oliceridine is the most advanced of these candidates. In several clinical trials, including two phase 3 studies, Oliceridine demonstrated a similar level of pain relief post-surgery while posing less risk to respiratory functions compared to Morphine. The ADCOM vote may have been split but the fact remains that the CRL issued by the FDA made no mention of efficacy concerns. Ms. Bourdow reaffirmed the company’s confidence in Oliceridine’s performance. The most exciting topic of our conversation for me though was TRV734.
Like Oliceridine, TRV734 is a G-protein selective mu-opioid receptor agonist. Unlike Oliceridine, its orally delivered. What really grabbed my attention is its potential application for the management of opioid use disorder. The opioid epidemic has been escalating for years now in America and abroad. A sobering statistic from the National Institute on Drug Abuse (NIDA) states that 130 people die every day from opioid overdoes. From what we’ve learned about TRV734 it has the potential to rival the industry standards for opioid dependence therapy (i.e. Methadone, Buprenorphine, and Naltrexone). Because of the selective nature of TRV734, and Oliceridine for that matter, the negative side effects associated with medications of their class should be mitigated. Both drugs have high affinities for their target receptor with minimal recruitment of mischievous beta-arrestin proteins. NIDA seems to think Trevena is onto to something too. In 2018, Trevena announced they were collaborating with NIDA who had reached out to them after observing rats given TRV734 were less prone to relapse into opioid seeking behavior. This opened the door to a significant potential revenue stream. If TRV734 proves to be as effective as standard treatment options, with a greater tolerability profile, it could become the drug of choice for managing opioid addiction. NIDA is gearing up to launch a proof of concept clinical study in the second half of this year. A third GPCR asset TRV250 is set to advance in the clinic as well.
TRV250 is a potent G-protein agonist that targets the delta-opioid receptor and is under development as an acute treatment of migraines. Approximately 12 million people in 2017 were treated with drugs for migraines representing $1.5 billion in sales. Previous attempts to target this receptor have been limited because of a heightened risk of seizures linked to beta-arrestin recruitment. Similar to Oliceridine and TRV734, TRV250 has demonstrated a high specificity for G-protein coupling with minimal interactions with beta-arrestins. Based on findings in a phase 1 dose escalation study management believes TRV250 stands to become a first-in-class treatment for migraines. A phase 2 proof of mechanism study is slated to begin in the fourth quarter. Given the conserved role of the delta-receptor in CNS disorders, migraines are just one of many indications Trevena could pursue.
The fourth and final pipeline asset is TRV045, a novel S1P modulator being investigated as a non-opioid treatment for chronic pain. Ms. Bourdow confirmed that Investigational New Drug (IND) enabling work (a requirement to begin human studies) is planned for this year.
Partnership is a Potential Path Forward
Before talking about what could be let’s talk about what is. Trevena has two commercial partnerships for Oliceridine outside the U.S, one with Pharmbio Korea Inc. in South Korea and another with Jiangsu Nhwa Pharmaceutical in China. The agreements came with upfront payments of $3.0 and $2.5 million, respectively. If Oliceridine is approved in the U.S and China, Trevena is eligible for up to an additional $6.0 million in milestones from Nwha ($3.0 million for each approval). And of course, each deal comes with royalties on sales of Oliceridine ranging from the high single digits to 20%.
Trevena’s attitude towards partnerships in the U.S and elsewhere is one of receptiveness. They acknowledged the benefits of developing and commercializing a drug with the right partner. If a suitable match can be made, whether it’s a one partner fits all approach, or asset-specific, Trevena is prepared to make a deal. The priority Ms. Bourdow emphasized was for any agreement to be in the best interest of shareholders. If that is not the case, Trevena is prepared to continue alone.
Financials Are Strong
As of March 31st, 2019 Trevena, has $60.1 million in cash and marketable securities and half that in total liabilities ($25.5 million). For Q1 2019 they had a net loss of $5.2 million. The company has stated several times now, and Ms. Bourdow reiterated in our conversation, they have ample cash to fund operations into the third quarter of 2020. What that means is the $60.1 million cash position is enough to see the company through the QT-interval study, initiating IND enabling activities for TRV045, completing proof of mechanism work for TRV250, and filing an NDA re-submission for Oliceridine. On June 27th, 20169 Trevena announced the appointment of Barry Shin as Chief Financial Officer. Mr. Shin has over 17-years of experience in investment banking as well as corporate advisory experience in the biopharmaceuticals space.
My takeaway from the interview was that getting Oliceridine to market in a fashion that delivers shareholders the most value in the top priority. Since receipt of the FDA type-A meeting minutes Trevena has executed efficiently on planning and implementing a cost-effective QT-Interval study that is now underway. The key differentiator for the company’s drug candidates vs. other GPCR ligands is their ability to assert a therapeutic effect without recruiting beta-arrestin proteins. Designing molecules capable of “functional-selectivity” was made possible by the contributions of Nobel Prize winners Dr.’s Robert Lefkowitz (Duke) and Brian Kobilka (Stanford).
As with all biotech companies, things take time to unfold. Now though, the path to regulatory approval for Oliceridine is clearly defined. Beyond that there is much to be excited about. It’s unfortunate, but the opioid problem in America is not going anywhere. In the second half of this year, NIDA researchers are expected to start investigating the efficacy of TRV734 for managing opioid use disorder. TRV250 is expected to begin its proof of mechanism study in migraines in the fourth quarter. Trevena will continue to explore opportunities to secure worldwide developmental and commercial partners for all three assets. However, this is not always possible to achieve on favorable terms. Management acknowledged this and is prepared to go at it alone if need be. From an investor’s perspective, the recent share-price deflation paired with these upcoming catalyst makes for an attractive investment.
I am/we are long TRVN. I was not compensated to write this article.