Tvardi Therapeutics, Inc. Q3 FY2022 earnings call

• Strong execution on strategy with traction for Cara, including accelerating demand for KORSUVA injection, international expansion of KORSUVA and Kapruvia, and progress with oral difelikefalin pipeline.
• KORSUVA injection net sales $16.2M, profit-sharing revenue $7.4M, with over 180,000 vials shipped from wholesalers to clinics in the US. Demand acceleration from large dialysis organizations like Fresenius.
• International launch of KORSUVA and Kapruvia, with Germany updating guidelines to include Kapruvia as first-line for CKD pruritus. Approval in Canada, Singapore, Switzerland, and Japan progress with Maruishi Pharmaceuticals.
• Progress with oral difelikefalin: enrolling in Phase III trials for CKD pruritus and atopic dermatitis, meeting with FDA for notalgia paresthetica, discontinuing Phase III trial in PBC pruritus due to slow enrollment but efficacy trending positive.

Total revenue for the third quarter of 2022 was $10.8 million. Revenue consisted of $7.4 million of collaboration revenue from profit-sharing related to CSL Vifor's sale of KORSUVA injection and $3.4 million of commercial supply revenue. Net sales for KORSUVA injection were $16.2 million. In Q3 2021, revenue was $20.3 million related to milestone payments for KORSUVA injection approval. Cost of goods sold was $3.1 million for Q3 2022, R&D expenses were $24.7 million (up from $15.5 million in Q3 2021 due to increased clinical trial spend and a $5M milestone to Enteris), and G&A expenses were $6.9 million (up from $5.9 million in Q3 2021 due to increased headcount). Cash, cash equivalents, and marketable securities at September 30, 2022, were $179.5 million, down from $236.8 million at Dec 31, 2021.

• Current unrestricted cash and marketable securities sufficient to fund operating plan into first half of 2024, assuming KORSUVA revenue profit share consistent with Q3 levels.
• Focus on demand generation in Q4, expecting acceleration in KORSUVA injection demand to continue, with eyes on demand at Fresenius and DaVita.

• Uncertainty in product demand normalization and quarterly variability in results.
• Risks related to clinical trial outcomes, including potential challenges in enrolling patients and achieving expected efficacy in trials.
• Regulatory uncertainties, such as CMS rule-making for post-TDAPA reimbursement and potential delays in approvals.

Q: Clarification on 184,000 vials shipped (U.S. only) and what to communicate on AD internal readout in 2023 A: Chris Posner stated 184,000 vials are U.S. only; Joana Goncalves said for AD, will share sample size and dose selected for Part B Q: Margins and impact of Fresenius sales force A: Ryan Maynard said margins consistent with prior quarter and expected to continue; Chris Posner said Fresenius sales force came online in early Q3 Q: Revenue from 184,000 vials, full year guidance for 2023 A: Ryan Maynard clarified $7.4M revenue is shipments from Vifor to wholesalers, not 184,000 vials; no full year KORSUVA revenue guidance yet but runway guidance provided Q: Gross to net on IV KORSUVA and DaVita penetration A: Ryan Maynard said can't provide gross to net based on reported info; Chris Posner said DaVita adoption gradual but ramping up with KORSUVA on formulary and strong reorder rates Q: DaVita vs Fresenius sales, commercial supply revenue inventory, and advocacy efforts A: Chris Posner noted difference in sales with Fresenius leading in Q3; Ryan Maynard said commercial supply revenue has lumpiness; Chris Posner said CSL Vifor is handling advocacy Q: RN revenue timing, CMS rule-making timeline for post-TDAPA A: Chris Posner said revenue timing may normalize in 2023; CMS acknowledged comments and expects more clarity in 2024 rule-making cycle Q: 4Q revenue inventory and DaVita uptake slowness A: Chris Posner said 4Q may have lumpiness; DaVita uptake slow due to gradual adoption, no specific issue with KORSUVA Q: Q3 vials trending and TDAPA utilization A: Chris Posner said utilization will ramp up, expecting good data near TDAPA end, with CMS typically looking at 2 years of utilization data