Trevi Therapeutics, Inc. — Q1 2020 Form 10-Q
Reporting period: Three months ended March 31, 2020; unaudited. Trevi is a clinical-stage biopharmaceutical company developing oral extended-release nalbuphine (nalbuphine ER). It had no product revenue and no approved products.
Financial results and liquidity
| Metric | Q1 2020 | Q1 2019 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $6.019 million | $3.338 million |
| General and administrative expense | $2.620 million | $1.474 million |
| Total operating expenses / operating loss | $8.639 million | $4.812 million |
| Net loss | $8.473 million | $4.802 million |
| Net loss per common share | $0.48 | $13.85 |
| Net cash used in operating activities | $4.673 million | $4.096 million |
Amounts in the table are in U.S. dollars. Operating expenses rose about 80% year over year, principally from increased clinical development activity and public-company and stock-based compensation costs. Net loss per share is not directly comparable: weighted-average shares rose from 444,132 to 17,834,570 following the May 2019 IPO and preferred-stock conversion. With no product revenue, gross margin and operating margin are not meaningful.
At March 31, cash and cash equivalents were $52.640 million, down from $57.313 million at December 31, 2019. Total assets were $54.238 million; current liabilities were $7.206 million, including $4.911 million in accrued expenses. Accumulated deficit was $122.692 million. The company reported no outstanding term-loan borrowings. Operating lease liabilities totaled $332,000.
Material changes and business developments
- R&D expense increased $2.681 million, mainly from higher activity in the PRISM prurigo nodularis trial, the IPF chronic-cough trial, and clinical-trial supplies.
- G&A expense increased $1.146 million, mainly from stock-based compensation, public-company costs, and professional fees.
- Operating cash use increased by $577,000 year over year. Q1 2020 had no investing or financing cash flows; Q1 2019 included $9.963 million of net preferred-stock financing proceeds.
- Common shares outstanding were 17,834,570 at March 31, 2020. The company reported 2,205,535 outstanding stock options.
Outlook, risks, and contingencies
- COVID-19: The pandemic temporarily halted new screening and most enrollment in PRISM, and paused enrollment and treatment in the IPF trial. Trevi expected U.S. PRISM sites to resume screening and enrollment, with European sites restarting in stages during May and June 2020. It expected IPF enrollment might resume in the second half of 2020. Further delays, supply disruption, and regulatory disruption remained risks.
- PRISM: The company had enrolled patients for a sample-size re-estimation (SSRE), moved from approximately 50% to approximately 45% of patients evaluable because of pandemic delays, and expected the analysis in mid-2020. It planned to update top-line timing after the analysis; the filing gives no revised top-line date.
- Other programs: Trevi completed the single-dose portion of its hepatic-impairment study in mild and moderate impairment, with no serious adverse events reported, and intended to plan a Phase 2 study for pruritus associated with primary biliary cholangitis. It had drafted an LID Phase 2 protocol and planned to submit an IND in the coming months, while prioritizing PRISM and IPF.
- Cash runway: The filing gives two different estimates. The financial-statement note says March 31 cash was expected to fund operations and capital needs for at least 12 months from the May 7, 2020 issuance date; MD&A says cash was expected to last into Q4 2021. Both estimates depend on assumptions and trial costs and delays could shorten runway. Additional funding will be needed to complete development; no committed external funding source was disclosed.
- Trevi expects substantial future clinical, regulatory, manufacturing, and possible commercialization costs. It expects continuing operating losses and has never generated product revenue. Key development risks include the prior Phase 2 prurigo nodularis trial missing its primary endpoint, enrollment and discontinuation uncertainty, possible need for additional Phase 3 work, and opioid-related safety, labeling, or controlled-substance restrictions.
- Potential Endo, Rutgers, and MentiNova license-related milestone, royalty, and sublicense-payment obligations may arise if specified development, approval, sales, or licensing events occur. The filing also describes possible termination-cost obligations under third-party development contracts. Trevi reported no material legal proceedings.
Investor facts to verify
- Reconcile the two disclosed cash-runway estimates and assess the assumptions supporting each.
- Check the SSRE outcome, revised PRISM enrollment and top-line timeline, and subsequent site-restart progress.
- Monitor the IPF trial restart, trial costs, and whether COVID-19 creates further enrollment or supply interruptions.
- Assess financing needs and potential dilution against the stated development plans and cash burn.
- Review future safety, efficacy, regulatory-pathway, and manufacturing updates for nalbuphine ER, including the additional Phase 3 requirement and opioid-related risks.