Reata Pharmaceuticals, Inc. Announces First Quarter 2022 Financial Results and Provides an Update on Clinical Development Programs
Reata Pharmaceuticals has announced the completion of a rolling submission of a New Drug Application (NDA) for omaveloxolone, targeting Friedreich’s ataxia, a rare genetic disorder. The FDA has granted multiple designations to the drug, and if approved, a commercial launch is anticipated by early 2023. The company is also enrolling patients in a Phase 3 trial for bardoxolone methyl in autosomal dominant polycystic kidney disease (ADPKD). Financially, Reata reported a GAAP net loss of $73.8 million for Q1 2022. Despite the loss, cash reserves are projected to last through the end of 2024.
- Completion of NDA submission for omaveloxolone, potentially launching by early 2023.
- FDA granted Fast Track, Orphan Drug, and Rare Pediatric Disease designations for omaveloxolone.
- Patient enrollment ongoing in FALCON trial for bardoxolone methyl, supporting future drug registration.
- Q1 2022 GAAP net loss increased to $73.8 million from $67.5 million year-over-year.
- R&D expenses rose to $39.8 million, higher than $34.9 million in the previous year.
- G&A expenses increased to $24.8 million, up from $20.7 million in the prior year.
Completed Rolling Submission of NDA for Omaveloxolone for Treatment of Patients with Friedreich’s Ataxia; Actively Preparing for Commercial Launch
Updates Outcome of Type A Meeting with the FDA on the Protocol Amendment for FALCON
Reaffirms Cash Runway Through end of 2024
Conference Call with Management on
“We are pleased to have recently completed rolling submission of a New Drug Application (“NDA”) for omaveloxolone for the treatment of patients with Friedreich’s ataxia in the United States,” said
Recent Company Highlights
Neurology
Omaveloxolone in Patients with Friedreich’s Ataxia
The FDA has granted Fast Track Designation, Orphan Drug Designation, and Rare Pediatric Disease Designation to omaveloxolone for the treatment of Friedreich’s ataxia. In
We have secured an agreement on our Pediatric Investigation Plan with the
Chronic Kidney Disease
Bardoxolone Methyl in Autosomal Dominant Polycystic Kidney Disease
We are currently enrolling patients in FALCON, a Phase 3, international, multi-center, randomized, double-blind, placebo-controlled trial studying the safety and efficacy of bardoxolone methyl (“bardoxolone”) in patients with autosomal dominant polycystic kidney disease (“ADPKD”) randomized one-to-one to active drug or placebo. FALCON is enrolling patients in a broad range of ages with an estimated glomerular filtration rate (“eGFR”) between 30 and 90 mL/min/1.73 m2. More than 550 patients are currently enrolled in the trial.
In the first quarter of 2022, we submitted a protocol amendment to the FALCON Phase 3 trial of bardoxolone in patients with ADPKD with the FDA and other relevant health authorities. We recently met with the FDA in a Type A meeting to discuss our protocol amendment. Based on the discussion during the meeting and the meeting minutes, the Division stated that the proposed primary endpoint of eGFR change from baseline at Week 108 (8 weeks after planned drug discontinuation at Week 100) was reasonable since the available data suggest that bardoxolone’s acute pharmacodynamic effect on eGFR should be largely resolved. The FDA also confirmed that, if the FALCON trial is positive, it could support registration of bardoxolone in ADPKD.
First Quarter Financial Highlights
Cash and Cash Equivalents
On
R&D expenses according to generally accepted accounting principles in the
Non-GAAP R&D expenses were
GAAP and Non-GAAP General and Administrative (“G&A”) Expenses
GAAP G&A expenses were
Non-GAAP G&A expenses were
GAAP and Non-GAAP Net Loss
The GAAP net loss for the first quarter of 2022 was
The non-GAAP net loss for first quarter of 2022 was
Updated Cash Guidance
The Company reaffirms its existing cash and cash equivalents will be sufficient to enable it to fund operations through the end of 2024.
___________________________
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 exclude stock-based compensation expense; non-GAAP G&A expenses as GAAP G&A expenses, which exclude stock-based compensation expense; non-GAAP operating expenses as GAAP operating expenses, which exclude stock-based compensation expense; non-GAAP net loss as GAAP net loss, which excludes stock-based compensation expense and non-cash interest expense from liability related to sale of future royalties; 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 and 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 stock-based compensation expense and non-cash interest expense from liability related to sale of future royalties 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 and non-cash interest expense from liability related to sales of future royalties, 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
First quarter 2022 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 of the conference call will be accessible for at least 90 days after the event at https://www.reatapharma.com/investors/.
About Reata
Reata is a clinical-stage biopharmaceutical company that develops novel therapeutics for patients with serious or life-threatening diseases by targeting molecular pathways involved in the regulation of cellular metabolism and inflammation. Reata’s two most advanced clinical candidates, omaveloxolone and bardoxolone, target the important transcription factor Nrf2 that promotes the resolution of inflammation by restoring mitochondrial function, reducing oxidative stress, and inhibiting pro-inflammatory signaling. Omaveloxolone and bardoxolone 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
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Three Months Ended |
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2022 |
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2021 |
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Consolidated Statements of Operations |
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(unaudited) |
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(in thousands, except share and per share data) |
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|||||
Collaboration revenue |
|
|
|
|
|
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||
License and milestone |
|
$ |
893 |
|
|
$ |
795 |
|
Other revenue |
|
|
21 |
|
|
|
149 |
|
Total collaboration revenue |
|
|
914 |
|
|
|
944 |
|
Expenses |
|
|
|
|
|
|
||
Research and development |
|
|
39,804 |
|
|
|
34,880 |
|
General and administrative |
|
|
24,841 |
|
|
|
20,704 |
|
Depreciation |
|
|
308 |
|
|
|
274 |
|
Total expenses |
|
|
64,953 |
|
|
|
55,858 |
|
Other income (expense), net |
|
|
(9,772 |
) |
|
|
(12,556 |
) |
Loss before taxes on income |
|
|
(73,811 |
) |
|
|
(67,470 |
) |
Benefit from (provision for) taxes on income |
|
|
(31 |
) |
|
|
15 |
|
Net loss |
|
$ |
(73,842 |
) |
|
$ |
(67,455 |
) |
Net loss per share—basic and diluted |
|
$ |
(2.03 |
) |
|
$ |
(1.86 |
) |
Weighted-average number of common shares used in net loss per share basic and diluted |
|
|
36,412,621 |
|
|
|
36,203,631 |
|
|
|
As of |
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As of |
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|
|
|
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(in thousands) |
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|||||
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||
Condensed Consolidated Balance Sheet Data |
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|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
531,979 |
|
|
$ |
590,258 |
|
Working capital |
|
|
493,716 |
|
|
|
542,481 |
|
Operating lease right-of-use assets |
|
|
131,178 |
|
|
|
126,777 |
|
Total assets |
|
|
679,868 |
|
|
|
735,016 |
|
Liability related to sale of future royalties, net |
|
|
372,013 |
|
|
|
362,142 |
|
Operating lease liabilities |
|
|
141,587 |
|
|
|
136,033 |
|
Deferred revenue |
|
|
755 |
|
|
|
1,648 |
|
Accumulated deficit |
|
|
(1,329,473 |
) |
|
|
(1,255,631 |
) |
Total stockholders’ equity |
|
$ |
127,785 |
|
|
$ |
185,989 |
|
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):
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Three Months Ended |
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2022 |
|
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2021 |
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Reconciliation of GAAP to |
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(unaudited) |
|
|||||
|
|
$ |
39,804 |
|
|
$ |
34,880 |
|
Less: Stock-based compensation expense |
|
|
(7,606 |
) |
|
|
(6,808 |
) |
|
|
$ |
32,198 |
|
|
$ |
28,072 |
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP General and administrative: |
|
|
|
|
|
|
||
GAAP General and administrative |
|
$ |
24,841 |
|
|
$ |
20,704 |
|
Less: Stock-based compensation expense |
|
|
(7,838 |
) |
|
|
(7,871 |
) |
Non-GAAP General and administrative |
|
$ |
17,003 |
|
|
$ |
12,833 |
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Operating expenses: |
|
|
|
|
|
|
||
GAAP Operating expense |
|
$ |
64,953 |
|
|
$ |
55,858 |
|
Less: Stock-based compensation expense |
|
|
(15,444 |
) |
|
|
(14,679 |
) |
Non-GAAP Operating expense |
|
$ |
49,509 |
|
|
$ |
41,179 |
|
|
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Net loss: |
|
|
|
|
|
|
||
GAAP Net loss |
|
$ |
(73,842 |
) |
|
$ |
(67,455 |
) |
Add: Stock-based compensation expense |
|
|
15,444 |
|
|
|
14,679 |
|
Add: Non-cash interest expense from liability related to sale of future royalties |
|
|
9,871 |
|
|
|
10,925 |
|
Non-GAAP Net loss |
|
$ |
(48,527 |
) |
|
$ |
(41,851 |
) |
Reconciliation of GAAP to Non-GAAP Net loss per common share-basic and diluted: |
|
|
|
|
|
|
||
GAAP Net loss per common share-basic and diluted |
|
$ |
(2.03 |
) |
|
$ |
(1.86 |
) |
Add: Stock-based compensation expense |
|
|
0.42 |
|
|
|
0.41 |
|
Add: Non-cash interest expense from liability related to sale of future royalties |
|
|
0.28 |
|
|
|
0.29 |
|
Non-GAAP Net loss per common share-basic and diluted |
|
$ |
(1.33 |
) |
|
$ |
(1.16 |
) |
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of GAAP to Non-GAAP Operating expenses |
|
(unaudited) |
|
|||||||||||||
GAAP Operating expenses |
|
$ |
64,953 |
|
|
$ |
72,503 |
|
|
$ |
65,486 |
|
|
$ |
62,351 |
|
Less: Stock-based compensation expense |
|
|
(15,444 |
) |
|
|
(15,226 |
) |
|
|
(13,657 |
) |
|
|
(13,244 |
) |
Non - GAAP Operating expenses |
|
$ |
49,509 |
|
|
$ |
57,277 |
|
|
$ |
51,829 |
|
|
$ |
49,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of GAAP to Non-GAAP Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP Net loss |
|
$ |
(73,842 |
) |
|
$ |
(85,385 |
) |
|
$ |
(71,846 |
) |
|
$ |
(72,700 |
) |
Add: Stock-based compensation expense |
|
|
15,444 |
|
|
|
15,226 |
|
|
|
13,657 |
|
|
|
13,244 |
|
Add: Non-cash interest expense from liability related to sale of future royalties |
|
|
9,871 |
|
|
|
12,376 |
|
|
|
11,958 |
|
|
|
11,429 |
|
Non-GAAP Net loss |
|
$ |
(66,866 |
) |
|
$ |
(57,783 |
) |
|
$ |
(46,231 |
) |
|
$ |
(48,027 |
) |
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FAQ
What is the status of the NDA submission for omaveloxolone by Reata Pharmaceuticals (RETA)?
When is the expected commercial launch of omaveloxolone?
What were the financial results for Reata Pharmaceuticals for Q1 2022?
How much cash does Reata Pharmaceuticals have and what is the guidance for cash runway?
What designations were granted to omaveloxolone by the FDA?
