Trevi Therapeutics, Inc. — Q1 2022 Form 10-Q
Business context and reporting period. This unaudited filing covers the three months ended March 31, 2022. Trevi is a clinical-stage biopharmaceutical company with no approved products or product revenue. Its sole candidate, Haduvio (extended-release nalbuphine), is being developed for pruritus associated with prurigo nodularis and chronic cough in adults with idiopathic pulmonary fibrosis (IPF).
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $4.6 million | $5.6 million |
| General and administrative expense | $2.4 million | $2.5 million |
| Total operating expenses | $7.0 million | $8.1 million |
| Net loss | $7.3 million | $8.4 million |
| Net loss per share | $0.24 | $0.43 |
| Cash used in operating activities | $7.1 million | $7.6 million |
Operating expenses fell $1.1 million year over year, principally because of lower clinical-trial recruitment costs and lower consulting and professional fees. Net loss narrowed by $1.0 million. Operating cash use decreased $0.5 million. Margins are not meaningful because the company had no revenue.
Cash and cash equivalents were $29.1 million at March 31, down from $36.8 million at December 31, 2021. Current assets were $29.8 million and current liabilities were $12.9 million. Term-loan principal outstanding was $13.4 million; the balance-sheet carrying amount was $14.1 million, including accrued fees and discounts. The loan is secured by substantially all company assets other than intellectual property, which is subject to a negative pledge. Principal and interest repayments began in March 2022; the loan matures February 1, 2024, and includes a $1.2 million final payment fee.
Clinical progress, outlook and risks
- PRISM: The Phase 2b/3 prurigo nodularis trial completed enrollment on January 31, 2022, after its target was increased from 240 to 360 participants following a sample-size re-estimation. Management expected top-line data in Q2 2022.
- CANAL: A February 2022 interim analysis of 26 participants showed a 52% placebo-adjusted reduction in geometric mean daytime cough events (p<0.0001; reported conditional power 100%). Trevi ended enrollment early in March, with approximately 40 participants enrolled, and expected full efficacy and safety data in Q3 2022. The company cautions interim results may not predict final or future-trial results.
- Development plans: If results support further development, Trevi anticipates another Phase 3 trial for prurigo nodularis and plans a subsequent chronic-cough trial expected to be Phase 2b/3, subject to FDA discussions. The filing provides no product-revenue or profitability guidance and says substantial future spending is expected.
- Funding and debt amendment: After quarter-end, Trevi closed an April private placement for approximately $55.0 million gross proceeds and received $4.5 million from warrant exercises. Management said these proceeds and existing cash were expected to fund operations into Q1 2024. This estimate is subject to assumptions and excludes the potential impact of the SVB collateral requirement. The April amendment removed earlier loan milestones after the equity raise, but requires cash collateral equal to all amounts owed if Trevi does not receive positive final data by December 31, 2022 from either PRISM or CANAL. Following the equity raise, the loan rate changes to the greater of prime plus 3% or 6.25%.
- Key risks: Trevi has recurring losses and no product revenue, will need additional capital, and depends on clinical and regulatory success for a single candidate. Enrollment delays, COVID-19 impacts, safety or abuse-potential concerns, competition, and reliance on third-party trial and manufacturing providers are material risks. Mallinckrodt is the sole supplier of nalbuphine active ingredient; Trevi had not qualified an alternate source. Haduvio may require restrictive opioid-related labeling, a REMS, or controlled-substance scheduling.
Most important facts for investors to verify
- Actual PRISM and full CANAL results, including whether they meet their prespecified endpoints and support subsequent trials.
- Whether management’s stated runway into Q1 2024 remains achievable after development spending, debt service and other cash needs.
- Compliance with the SVB agreement and the consequences of the December 31, 2022 positive-data condition, including potential cash collateralization.
- Potential dilution: 18.3 million warrants were outstanding at March 31, and the April financing issued pre-funded warrants for up to 24.4 million shares; confirm subsequent exercises and share-count effects.
- Clinical supply continuity and qualification of an alternative nalbuphine supplier.