Trevi Therapeutics(TRVI) - 2024 Q4 - Annual Report

Part I Business Trevi Therapeutics is a clinical-stage biopharmaceutical company developing Haduvio for chronic cough in IPF, non-IPF ILD, and RCC - The company is a clinical-stage biopharmaceutical firm whose primary focus is the development and commercialization of its sole investigational therapy, Haduvio (oral nalbuphine ER)[21] - Haduvio's target indications are chronic cough in patients with idiopathic pulmonary fibrosis (IPF), chronic cough in patients with non-IPF interstitial lung disease (non-IPF ILD), and refractory chronic cough (RCC)[21] - Haduvio is an oral extended-release formulation of nalbuphine, functioning as a kappa-opioid receptor agonist and a mu-opioid receptor antagonist (KAMA), and is not a controlled substance in the U.S. and most of Europe[22] - The company has paused further development of Haduvio for prurigo nodularis to focus its strategy on chronic cough indications[73] - Trevi has retained worldwide commercial rights for Haduvio and plans to build its own specialty sales force in the U.S., while seeking partners for commercialization outside the U.S.[36][99] Haduvio Development Programs Haduvio development programs focus on chronic cough, with IPF Phase 2b CORAL results expected Q2 2025 and positive RCC Phase 2a RIVER data - Chronic Cough in IPF Program: Enrollment for the Phase 2b CORAL trial was completed in February 2025, with topline results expected in Q2 2025. A Phase 3 program is anticipated to start in the first half of 2026[26][28] - Refractory Chronic Cough (RCC) Program: The Phase 2a RIVER trial met its primary endpoint, demonstrating a statistically significant 67% reduction in 24-hour cough frequency from baseline and a 57% placebo-adjusted reduction (p<0.0001)[33] - Chronic Cough in non-IPF ILD Program: The company plans to conduct a Phase 2 clinical trial, contingent on positive data from the Phase 2b CORAL trial and discussions with health authorities[31][59] - Human Abuse Potential (HAP) Study: Positive topline results announced in December 2024 showed a statistically significant lower "Drug Liking" for clinical doses of oral nalbuphine compared to 6mg IV butorphanol[35][74] Competition Trevi Therapeutics faces competition in chronic cough from companies developing treatments for IPF and RCC, alongside off-label therapeutics - For chronic cough in IPF, Haduvio may compete with product candidates from Nerre Therapeutics (orvepitant), Melius Pharma (ME-015), Boehringer Ingelheim (BI 1839100), and Seyltx, Inc. (ifenprodil)[82] - For RCC, Haduvio faces competition from GSK's camlipixant (a P2X3 antagonist), with other candidates in development by Nocion Therapeutics, Axalbion Therapeutics, Addex Therapeutics, and Seyltx, Inc.[83][84] - The company also anticipates competition from therapeutics not specifically approved for chronic cough, such as benzonatate, opioids, corticosteroids, and neuromodulators[85] Intellectual Property and Licensing The company's IP strategy relies on owned and licensed patents, holding an exclusive worldwide license from Endo Pharmaceuticals for Haduvio formulations, but lacks composition of matter patents - The company has an exclusive, worldwide license from Endo Pharmaceuticals to develop and commercialize products incorporating nalbuphine hydrochloride, including Haduvio, with potential milestone payments of up to $1.1 million and royalties on net sales[89][90] - As of December 31, 2024, the company owned five U.S. patents and 19 foreign patents, with expiration dates between 2032 and 2039, and a new U.S. patent for Haduvio's use in IPF patients with hepatic impairment is expected to expire in 2042[101] - The intellectual property in-licensed from Endo includes six U.S. patents and four foreign patents related to Haduvio's formulation, expiring between 2026 and 2029[102] - The company does not own or exclusively license any composition of matter patents for Haduvio[103] Government Regulation The company's operations are subject to extensive U.S. and international regulations, requiring multi-phase clinical trials, NDA submission, and post-approval compliance with manufacturing, marketing, and safety reporting - The drug approval process in the U.S. requires completing preclinical studies, filing an IND, and conducting Phase 1, 2, and 3 clinical trials to establish safety and efficacy before submitting an NDA to the FDA[109][122][123][124] - In the E.U., the new Clinical Trials Regulation (CTR) streamlines the application process for multi-state trials through a single submission via the Clinical Trials Information System[212] - The U.S. Food and Drug Omnibus Reform Act (FDORA) now requires sponsors to submit a Diversity Action Plan (DAP) for all Phase 3 or pivotal studies to encourage enrollment of diverse patient populations[126] - Post-approval, the company will be subject to ongoing regulatory requirements, including cGMP for manufacturing, pharmacovigilance, and strict rules on advertising and promotion, with prohibitions on off-label marketing[159][163] Risk Factors The company faces substantial risks, including significant financial losses, need for additional capital, dependence on a single product, potential clinical trial failures, competition, reliance on third-party manufacturers, and IP challenges - The company has a history of significant losses, with a net loss of $47.9 million in 2024 and an accumulated deficit of $287.0 million as of December 31, 2024, expecting to continue incurring losses[246] - The company will need substantial additional funding, as existing cash, cash equivalents, and marketable securities of $107.6 million are expected to fund operations only into the second half of 2026[252][255] - The business is entirely dependent on the successful development and commercialization of its sole product candidate, Haduvio; failure or significant delays would substantially harm the company[261] - The company relies on third parties for manufacturing, including a single supplier (Mallinckrodt) for the active ingredient in Haduvio, posing a significant supply chain risk[329][332] - Haduvio, if approved, will likely carry an opioid class label warning for respiratory depression and faces the risk of being classified as a controlled substance by the DEA, which could restrict its commercial potential[290][292] - The significant number of outstanding warrants could negatively affect the stock price, make future equity financing more difficult, and could entitle warrant holders to a disproportionate share of consideration in a sale of the company[494][497] Cybersecurity The company manages cybersecurity risks through a comprehensive program overseen by the audit committee and a dedicated Cybersecurity Committee, with no material threats currently identified - The audit committee of the board of directors provides direct oversight over cybersecurity risk[521] - A Cybersecurity Committee, led by a part-time CIO and including the CEO and CFO, meets quarterly to manage cybersecurity risks[522] - The board of directors has concluded that there are currently no known cybersecurity threats reasonably likely to materially affect the company's business, operations, or financial condition[520] Properties The company's headquarters is located in New Haven, Connecticut, where it leases approximately 12,500 square feet of office space under a lease expiring in February 2028 - The company leases approximately 12,500 square feet of office space in New Haven, Connecticut for its headquarters[524] - The current lease expires in February 2028, with an option to extend for an additional five years[524] Legal Proceedings As of the filing date, Trevi Therapeutics, Inc. is not subject to any material legal proceedings - The company is not currently a party to any material legal proceedings[526] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Trevi Therapeutics' common stock trades on Nasdaq under "TRVI"; the company has never paid cash dividends and plans to retain earnings for growth - The company's common stock is listed on the Nasdaq Stock Market under the ticker symbol "TRVI"[529] - The company has never declared or paid cash dividends and does not plan to in the foreseeable future, intending to retain all future earnings for business operations and development[530] Management's Discussion and Analysis of Financial Condition and Results of Operations For 2024, Trevi Therapeutics reported a net loss of $47.9 million, up from $29.1 million in 2023, driven by increased R&D and G&A expenses, with $107.6 million in cash expected to fund operations into H2 2026 Financial Performance Summary (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2024 | 2023 | Change | | Research and development | $39,377 | $23,683 | $15,694 | | General and administrative | $12,147 | $10,240 | $1,907 | | Total operating expenses | $51,524 | $33,923 | $17,601 | | Loss from operations | ($51,524) | ($33,923) | ($17,601) | | Total other income, net | $3,583 | $4,826 | ($1,243) | | Net loss | ($47,911) | ($29,065) | ($18,846) | - Research and development expenses increased by $15.7 million (66.3%) in 2024, primarily due to increased clinical development costs for the Phase 2b CORAL trial, Phase 2a RIVER trial, HAP study, and Phase 1b TIDAL study[560] - General and administrative expenses increased by $1.9 million (18.6%) in 2024, mainly due to higher personnel-related costs, stock-based compensation, IT services, and market research[561] - As of December 31, 2024, the company had $107.6 million in cash, cash equivalents, and marketable securities, which management believes are sufficient to support operations into the second half of 2026[546][578] Cash Flow Summary (in thousands) | | Twelve Months Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2024 | 2023 | Change | | Net cash used in operating activities | ($38,256) | ($31,710) | ($6,546) | | Net cash (used in) provided by investing activities | ($21,528) | $59,428 | ($80,956) | | Net cash provided by (used in) financing activities | $61,484 | ($7,910) | $69,394 | Controls and Procedures As of December 31, 2024, management concluded that the company's disclosure controls and internal control over financial reporting were effective at a reasonable assurance level - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[592] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024, based on the 2013 COSO framework[594] - No changes in internal control over financial reporting occurred during the fourth quarter of 2024 that materially affected, or are reasonably likely to materially affect, these controls[596] Part III Information for Part III, including details on directors, executive officers, corporate governance, executive compensation, security ownership, and certain relationships and transactions, is incorporated by reference from the company's 2025 Annual Meeting of Stockholders Proxy Statement Directors, Executive Officers, Corporate Governance, Compensation, and Related Matters - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the registrant's 2025 Annual Meeting of Stockholders Proxy Statement[600][601][602][603][604] Part IV Exhibits, Financial Statement Schedules This section contains the company's Consolidated Financial Statements for 2024 and 2023, and a list of all exhibits filed with the Form 10-K, with all financial statement schedules omitted as not applicable or included elsewhere - This section includes the Consolidated Financial Statements and a list of exhibits filed as part of the Annual Report[606][608] - All financial statement schedules have been omitted because they are not applicable or the required information is already present in the financial statements or accompanying notes[607] Financial Statements Consolidated Balance Sheets As of December 31, 2024, Trevi Therapeutics had total assets of $110.9 million, up from $89.4 million in 2023, driven by increased cash and marketable securities, with total liabilities rising to $11.3 million and equity to $99.6 million Consolidated Balance Sheets (in thousands) | (in thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $109,428 | $87,547 | | Cash and cash equivalents | $34,097 | $32,397 | | Marketable securities | $73,525 | $50,574 | | Total Assets | $110,900 | $89,403 | | Total Current Liabilities | $10,509 | $5,824 | | Accounts payable | $3,414 | $1,809 | | Accrued expenses | $6,810 | $3,709 | | Total Liabilities | $11,256 | $6,856 | | Total Stockholders' Equity | $99,644 | $82,547 | Consolidated Statements of Comprehensive Loss For 2024, the company reported a net loss of $47.9 million, or ($0.47) per share, compared to a net loss of $29.1 million, or ($0.29) per share, in 2023, primarily due to increased R&D expenses Consolidated Statements of Comprehensive Loss (in thousands, except per share data) | (in thousands, except per share data) | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Research and development | $39,377 | $23,683 | | General and administrative | $12,147 | $10,240 | | Loss from operations | ($51,524) | ($33,923) | | Net loss | ($47,911) | ($29,065) | | Basic and diluted net loss per common share | ($0.47) | ($0.29) | | Weighted average common shares outstanding | 101,971,873 | 99,033,373 | Consolidated Statements of Cash Flows For 2024, net cash used in operating activities was $38.3 million, used in investing activities was $21.5 million, and provided by financing activities was $61.5 million, resulting in a net increase in cash of $1.7 million Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($38,256) | ($31,710) | | Net cash (used in) provided by investing activities | ($21,528) | $59,428 | | Net cash provided by (used in) financing activities | $61,484 | ($7,910) | | Net increase in cash and cash equivalents | $1,700 | $19,808 | | Cash and cash equivalents at end of period | $34,097 | $32,397 |