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 June 30, 2021, and provided an update on the Companys business operations and clinical development programs.
Recent Company Highlights
Omaveloxolone in Patients with Friedreichs Ataxia (FA)
Based on a communication received from the U.S. Food and Drug Administration (FDA) regarding omaveloxolone for the treatment of FA, we withdrew our request for a Type C meeting and requested a pre-NDA meeting with the FDA. The pre-NDA meeting request has been granted, a pre-NDA meeting has been scheduled during the third quarter of this year, and we have submitted briefing materials for the meeting. We recently received a communication from the FDA requesting the estimated date of our New Drug Application (NDA) for its planning purposes. We plan to submit the NDA during the first quarter of 2022.
Bardoxolone Methyl (Bardoxolone) in Patients with Alport Syndrome
The NDA for bardoxolone for the treatment of patients with chronic kidney disease (CKD) caused by Alport syndrome is currently under review by the FDA. The FDA completed a bio-research monitoring inspection of Reata. We did not receive any observations. We also recently completed a mid-cycle communication meeting with the FDA. While we have not yet received formal minutes from the FDA, in the preliminary agenda for, and during, the meeting, the FDA identified four significant clinical and statistical review issues for us to address. The FDA invited us to respond to its identified issues in follow-up submissions to the NDA, and we believe each of the identified issues is addressable with additional data and analyses. The FDA did not designate any safety issues as significant issues, and it stated that, based on its current review, it does not believe a Risk Evaluation and Mitigation Strategies (REMS) program is needed. The FDA also advised us that an Advisory Committee meeting is tentatively scheduled for December 8, 2021. The Prescription Drug User Fee Act (PDUFA) date, the FDA action date for the application, is scheduled for February 25, 2022.
We reaffirm our plan to submit a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) in the fourth quarter of 2021 for marketing approval of bardoxolone for the treatment of CKD caused by Alport syndrome in the European Union.
On July 27, 2021, Kyowa Kirin Co., Ltd. (KKC), our strategic collaborator in CKD in Japan, submitted an NDA in Japan to the Ministry of Health, Labour and Welfare (MHLW) for bardoxolone for the treatment of patients with CKD caused by Alport syndrome. Based on this submission, we have earned a milestone payment under the KKC license agreement.
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. We recently had a Type B meeting with the FDA regarding the ADPKD development program, and we have not yet received minutes from the meeting. Based on the discussion during the meeting, we plan to modify the protocol so that the primary endpoint will be the Year 2 off-treatment analysis. Additionally, we will not unblind the trial until after its completion, we will add an eight-week off-treatment visit to the study, and we will incorporate the FDAs feedback on data related to patients who discontinued treatment early in the study. We may need to increase the patient enrollment sample size from the current target of 550 patients. More than 370 patients are currently enrolled in the study. We continue to expect to enroll 550 patients in the FALCON study by the end of 2021. However, if we decide to increase the target enrollment, we will provide updated guidance on our enrollment timeline.
Bardoxolone in Patients with CKD at Risk of Rapid Progression
MERLIN is a 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. We have completed enrollment in the MERLIN trial and expect to have top-line data in the fourth quarter of 2021. If the results of this study are positive, we may proceed to a larger Phase 3 with similar eligibility criteria.
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/.
Dr. David Lynch, MD, PhD, Director, Friedreich's Ataxia Program, Division of Neurology, Children's Hospital of Philadelphia, Philadelphia, PA, presented the talk Efficacy of Omaveloxolone in Patients with Friedreichs Ataxia: Baseline-Controlled Study at the National Ataxia Foundations Ataxia Investigators Meeting 2021, which was held virtually from May 24 27, 2021.
Dr. Bradley A. Warady, MD, Director, Division of Pediatric Nephrology, Children's Mercy Kansas City, Kansas City, MO presented the talk Safety of Bardoxolone Methyl in Pediatric Patients with Alport Syndrome in CARDINAL Phase 3 Trial at the 58th ERA-EDTA Congress, which was held virtually from June 5 8, 2021.
Dr. Arlene Chapman, MD, Professor of Medicine, University of Chicago, Chicago, IL, presented the poster Trial Design for Phase 3 FALCON: Evaluation of the Safety, Tolerability, and Efficacy of Bardoxolone Methyl in Patients with Autosomal Dominant Polycystic Kidney Disease at the PKD CON:NECT Conference, which was held virtually from June 25 26, 2021.
Second Quarter Financial Highlights
Cash and Cash Equivalents
At June 30, 2021, we had cash and cash equivalents of $755.7 million. The decrease in cash and cash equivalents during the second quarter of 2021 was $21.9 million, as compared to $40.5 million in the first quarter of 2021. This decrease in cash used is primarily due to a $22.9 million tax refund related to the Coronavirus Aid, Relief and Economic Security Act that was received during the second quarter of 2021. We reaffirm our current cash runway to last through mid-2024.
Collaboration revenue was $2.2 million in the second quarter of 2021, as compared to $3.1 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 $40.1 million for the second quarter of 2021, as compared to $36.8 million, for the same period of the year prior.
Non-GAAP R&D expenses were $34.8 million for the second quarter of 2021, as compared to $29.3 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 $22.0 million for the second quarter of 2021, as compared to $16.6 million, for the same period of the year prior.
Non-GAAP G&A expenses were $14.0 million for the second quarter of 2021, as compared to $9.3 million for the same period of the year prior.1
GAAP and Non-GAAP Net Loss
The GAAP net loss for the second quarter of 2021 was $72.7 million, or $2.00 per share, on both a basic and diluted basis, as compared to a GAAP net loss of $67.6 million, or $2.03 per share, on both a basic and diluted basis, for the same period of the year prior.
The non-GAAP net loss for second quarter of 2021 was $48.0 million, or $1.32 per share on both a basic and diluted basis, as compared to a non-GAAP net loss of $40.9 million, or $1.23 per share, on both a basic and diluted basis, for the same period of the year prior.1
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 increases in GAAP and non-GAAP net loss are driven primarily by increased clinical study and manufacturing activities, commercial launch readiness activities, and increased personnel and personnel-related costs to support the growth of our development activities compared to the same period of the year prior.
The Company defines non-GAAP R&D expenses as GAAP R&D expenses, excluding stock-based compensation expense; non-GAAP G&A expenses as GAAP G&A expenses, excluding stock-based compensation expense; non-GAAP operating expenses as GAAP operating expenses, excluding stock-based compensation expense; non-GAAP net loss as GAAP net loss, excluding 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, excluding stock-based compensation expense, non-cash interest expense from liability related to sale of future royalties, and loss on extinguishment of debt. 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 o 2021 Global Data Point.