Trevi Therapeutics, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Trevi is a clinical-stage biopharmaceutical company developing Haduvio (oral extended-release nalbuphine); it has no approved products and has generated no product revenue.
Financial performance and position
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $5.0 million | $4.6 million |
| General and administrative expense | $2.6 million | $2.4 million |
| Total operating expenses / operating loss | $7.6 million | $7.0 million |
| Net loss | $6.4 million | $7.3 million |
| Net loss per share, basic and diluted | $0.06 | $0.24 |
| Net cash used in operating activities | $8.2 million | $7.1 million |
| Cash and cash equivalents at quarter-end | $11.7 million | — |
At March 31, 2023, Trevi held $99.6 million of marketable securities, for combined cash, cash equivalents and marketable securities of approximately $111.3 million. Total current assets were $114.2 million and current liabilities were $13.2 million. Stockholders’ equity was $101.7 million. There is no meaningful product gross margin because the company has no product sales.
Term-loan carrying value was $7.5 million at quarter-end, including accrued final-payment fees and net of discounts. After the quarter, on May 9, 2023, Trevi paid $6.5 million to fully extinguish the loan: $5.2 million principal, $1.2 million final-payment fee, and $0.1 million accrued interest and prepayment premium.
Changes versus the prior comparable period
- Net loss narrowed by $0.9 million, despite operating expenses increasing by $0.5 million.
- R&D expense rose $0.4 million. Higher consulting and professional fees for startup activities across three planned chronic-cough trials, and higher personnel costs, more than offset lower clinical-development costs following completion of the blinded PRISM portion and the CANAL trial.
- G&A expense increased $0.2 million, primarily from personnel costs and tax-professional fees.
- Other income improved by $1.5 million, mainly because net interest income increased to $1.2 million from near zero as cash balances and yields rose. Q1 2023 also included $0.2 million of CARES Act employee-retention tax-credit income.
- Operating cash use increased by $1.1 million. Investing cash inflow of $9.0 million reflected net maturities of marketable securities, rather than operating earnings.
Development outlook, management commentary and risks
- Chronic cough in IPF: Management reported positive Phase 2 CANAL results, including a statistically significant reduction in daytime cough frequency (p<0.0001) and positive key secondary outcomes. Trevi was discussing trial design with regulators and planned a Phase 2b dose-ranging study of approximately 150–200 subjects and a Phase 1b respiratory-physiology study. Subject to regulatory agreement, it intended to start both in the second half of 2023; an FDA IND is required for U.S. sites.
- Refractory chronic cough: Trevi planned to initiate a Phase 2a study of approximately 60 subjects at U.K. sites in Q3 2023.
- Prurigo nodularis: The company reported positive Phase 2b/3 PRISM results and completed the open-label extension in Q1 2023. It expected to present full results at a future medical meeting, planned to request an FDA end-of-Phase-2 meeting in 2023, and said another Phase 3 trial would be needed to support filings. Next steps were subject to regulatory discussions; Trevi was exploring a strategic collaboration. Its cash-runway estimate excludes costs of additional prurigo nodularis trials.
- Abuse-potential study: Part one was complete; the FDA requested the data supporting the butorphanol dose selection before part two begins. Top-line data were expected by year-end 2023, subject to regulatory input and butorphanol supply. The filing notes a butorphanol shortage may delay the study.
- Liquidity and funding: Management stated that existing cash, cash equivalents and marketable securities were expected to fund operating and capital requirements into 2026, based on current plans. Elsewhere, the filing says the funds cover at least 12 months from issuance of the financial statements. Trevi expects substantial development spending and says additional funding will be needed to pursue its strategy; it has no committed external funding source. Financing may dilute shareholders or require less favorable terms, and funds may be used faster than estimated.
- Key development risks: Haduvio is the company’s sole product candidate. Trials may fail or be delayed, enrollment has been difficult in prior studies, and early-stage results may not predict later success. The nalbuphine label carries an opioid-class warning for serious respiratory depression; Haduvio may also raise psychiatric, withdrawal, endocrine or other safety concerns. FDA requirements for a REMS or DEA controlled-substance scheduling could constrain use or commercialization.
- Other risks and items: Trevi relies on third parties for trials and manufacturing, including a single supplier of active ingredient. The SVB closure caused no expected material disruption, and the company reported access to its cash and securities. The New Haven office lease was expanded and extended through February 2028; related operating and finance lease liabilities totaled $1.5 million at quarter-end. Management assessed disclosure controls as effective; no material legal proceedings were reported.
Important facts for investors to verify
- Whether the planned chronic-cough studies began on the stated timelines, and whether regulators agreed with their designs and endpoints.
- Full PRISM results, FDA feedback on the prurigo nodularis program, and the cost and funding implications of any additional Phase 3 trial or collaboration.
- Whether the HAP study proceeds after FDA review and whether butorphanol supply affects its timing; assess respiratory-safety findings as they emerge.
- The assumptions behind management’s runway estimate into 2026, particularly planned trial costs, the exclusion of additional prurigo nodularis trials and the need for future financing.
- The dilution and potential share-supply effects of 48.3 million outstanding warrant shares at March 31, 2023, including 38.6 million pre-funded warrant shares, relative to 60.1 million issued and outstanding common shares.
- Confirm the May 9, 2023 loan payoff and extinguishment, and track the continuing costs and commitments associated with leases, licensing and outsourced development.