Good day and welcome to the Travere Therapeutics Second Quarter Financial Results and Corporate Update. Today's conference is being recorded. At this time, I would like to turn the conference over to the CFO, Chris Cline. Please go ahead, sir. Thank you.

Thank you, Caroline. Good morning, and welcome to Travere Therapeutics Second Quarter 2022 Financial Results and Corporate Update Call. Thank you all for joining us. Today's call will be led by our Chief Executive Officer, Dr. Eric Dube. Eric will be joined for the prepared remarks by Dr. Jula Inrig, our Chief Medical Officer; Peter Heerma, our Chief Commercial Officer; and our Chief Financial Officer, Laura Clague. Dr. Bill Rote, Senior Vice President of Research and Development, will join us for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the Risk Factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, August 4, 2022, and Travere specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. With that, I'll now turn the call over to Eric. Eric?

Thank you, Chris, and good morning, everyone. Yesterday afternoon, we provided a comprehensive regulatory update on our sparsentan and pegtibatinase programs, which is where I will begin. First, the FDA recently communicated to us in our mid-cycle review meeting for the sparsentan NDA in IgA nephropathy that the review process remains on track for our PDUFA target action date of November 17. This strengthens our confidence that we are on the path to a potential approval of sparsentan for IgA nephropathy later this year. As such, we are continuing our efforts to ready the organization for the first launch of sparsentan, and I am very pleased with the progress we have made to date. The second update is that we completed our planned Type A interactions with the FDA to discuss the potential for accelerated approval of sparsentan for FSGS and we received the final meeting minutes. Following a collaborative interaction, rather than submitting for accelerated approval this year, the FDA has recommended that we pursue traditional approval based on 2-year eGFR slope data following the completion of the DUPLEX study next year. While it is disappointing that we will not be filing for accelerated approval this year, it does not change our belief that sparsentan has the potential to become a new treatment standard for FSGS as well as IgA nephropathy, if approved. Of note, while the FDA reiterated again that we should not disclose detailed data from the ongoing study in order to assure trial integrity, they did align with us on sharing a few important elements with stakeholders. The first is that the FDA recognizes the significant unmet need as well as the challenges in studying FSGS, given its heterogeneity. There have been a few clinical trials completed to date to provide insight into this disease. In…

Thank you, Eric, and good morning, everyone. I'd like to begin by recognizing the significant need for new non-immunosuppressive treatments for people living with IgA nephropathy and FSGS. We continue to hear from the nephrology community and from patients that the available treatment options are limited in their effectiveness, have a challenging side effect profile or have long-term safety concerns. As a result, many patients are left rapidly progressing to end-stage kidney disease. We also continue to hear that nephrologists are looking to the future and see promise for the evolution of the treatment paradigm in IgA nephropathy and FSGS. We believe that physicians will be looking to use a foundational treatment alongside other modalities to provide their patients with the greatest chance of sustained proteinuria reduction over time. We believe sparsentan as the potential first non-immunosuppressive therapy to be indicated for IgA nephropathy and FSGS will become this foundational treatment, if approved. I am proud of our team's execution in the second quarter. In our IgA nephropathy program, we were pleased that the NDA for sparsentan was accepted by the FDA and granted priority review. Furthermore, we were pleased with the outcome of our recently completed mid-cycle review meeting. In this interaction, the FDA indicated that the review process remains on track for our assigned PDUFA target action date of November 17, 2022, and they reiterated that they are not planning for an advisory committee to discuss the application. We have also successfully completed our on-site sponsored good clinical practice or GCP inspection. I'm very pleased with the high-quality standard that our clinical and operational teams have met throughout the PROTECT study. As such, we believe we are in a strong position as we continue moving towards the target action date in November. We know that medical education is…

Thank you, Jula. I am pleased with the commercial organization's execution during the second quarter. We have continued to make strong progress, both with the approved products and with our preparation for a potential launch of sparsentan for IgA nephropathy later this year. During the second quarter, we saw strong demand for Thiola, but as we have talked about earlier this year, we are seeing the impact of generic dynamics affecting net sales. We expect there will be a continued downward pressure through the balance of the year, as the market competition evolves, but I'm very pleased with how our team continues to identify, treat and support patients in homocystinuria community. The bile acid portfolio led by demand for Cholbam performed well during the quarter and we continue to expect growth of the bile acid portfolio in the second half of the year. Supporting Cholbam is another great example of our team's ability to identify patients with rare diseases that are not always easily identified or understood. Our commercial organization, is well that historically delivered year-over-year organic growth for 7 consecutive years, was able to achieve more than 85% utilization of the new formulation within the first 9 months of loss, it has consistently been able to provide necessary services to support patients with rare diseases. We are building upon these strengths, and we are making great strides to be ready for a potential approval of sparsentan this year. As an organization, that is uniform alignment and belief in the ability to achieve our vision of making sparsentan foundational therapy for patients with IgA nephropathy and FSGS as if approved. I am very pleased to report that we have completed the recruitment of our field force that will support sparsentan for IgA nephropathy at launch, if approved. I believe we…

Thank you, Peter. For the second quarter of 2022, we reported total revenue of $54.2 million, consisting of approximately $51 million in net product sales and $3.2 million in collaboration revenue from our European collaboration with Vifor Pharma. This compares to $54.6 million in net product sales reported for the same period in 2021. As we typically see in the second quarter, gross to net discounts narrowed following the insurance coverage changes that typically impact first quarter sales. We reported a GAAP net loss of $67 million for the second quarter of 2022. After adjusting for noncash expenses and income tax, we reported a non-GAAP net loss of $41.3 million for the second quarter of 2022. On a GAAP basis, R&D expenses were $59.7 million for the second quarter of 2022. The increase compared to 2021 is largely attributable to increased headcount as well as medical affairs activities to support the continued advancement of the sparsentan and pegtibatinase programs. On an adjusted basis, R&D expenses were $54.4 million for the second quarter of 2022. Relevant noncash expenses for the fourth quarter included $5.3 million of stock-based compensation and amortization. On a GAAP basis, selling, general and administrative expenses for the second quarter of 2022 were $53 million. The increase compared to 2021 is largely attributable to increased headcount and commercial launch preparation. On an adjusted basis, SG&A expenses for the second quarter of 2022 were $37.5 million. Significant noncash adjustments for the quarter consisted of $15.4 million in stock-based compensation and depreciation and amortization. From an operating expense perspective, we anticipate that our R&D expenses will increase from current levels, and it may be uneven quarter-to-quarter, as we continue to invest in ongoing clinical work and long-term supply for both sparsentan and pegtibatinase. Consistent with our planning from the beginning…

Thank you, Laura. Overall, we continue to execute towards our vision of being a leader in the global rare disease community. We are doing this through the continued development of our pipeline with the objective of positioning it for sustainable diversified growth for years to come. And by strengthening our organization to support broad access to our medications and meet the needs of patients as our products become available. We are entering the second half of the year, having made significant progress towards our goal of sparsentan becoming a new treatment standard for rare kidney disorders. The review process for our NDA for IgA nephropathy remains on track, and we are in great shape preparing the organization, and we will be fully ready to launch come November, if approved. We now know that we will have to wait a bit longer for FSGS, but the fundamental value and our confidence in sparsentan has not changed. We believe it is a matter of difference in time, and we will put that to good use. While we are awaiting the results of the full 2-year eGFR data from DUPLEX, we will take the opportunity to focus even more sharply on the launch of IgA nephropathy, if approved, and applying those learnings to commercialization of FSGS in the future, if approved. Additionally, now with breakthrough therapy designation granted for pegtibatinase, we believe we will be able to efficiently align with regulators on a pivotal program that will give us the best chance of success in delivering the potential first disease-modifying therapy to a community in need of new treatments. I would like to extend 1 final thank you to Laura for her incredible service and leadership and also reiterate what she said earlier. The future is incredibly bright at Travere, and I look forward to continued execution through the balance of the year. Now let me turn the call over to Chris for Q&A.

Thanks, Eric. Caroline. Can we please go ahead and open up the lines for Q&A?

[Operator Instructions] We will take the first question from the line go Tim Lugo from William Blair.

Congratulations Laura on all your work over the past years. I wanted to just -- I just wanted to verify and be clear, what 2-year data from DUPLEX was the FDA able to look at? I know you obviously had a little bit over half of the patients at 2 years. But I believe you mentioned to preserve alpha, you do not run stats on these patients for proteinuria. And Also, I guess, now that you're expecting to launch in IgAN with the steroid therapy already on the market. Can you talk a bit about -- are you expecting the initial patient bolus to start sparsentan, hopefully, post approval, will be those who have already progressed on the predefined therapy?

Tim, thanks for the questions. I'll ask Bill to take the first question on what data was available for FDA. And then I'll ask Peter to talk about how we're thinking about the early uptake of -- in IgAN once approved.

Tim, thanks for the question. With -- our agreement with the agency, there was very little done with the EGFR data, and that was a deliberate strategy to preserve the alpha for the study. So what we provided was a descriptive look at the composite of all available eGFR data for the sparsentan arm and the irbesartan treatment arm. So it wasn't broken out specifically based on with those that were at 2 years versus those that were at 1 year. It was combined together, and they looked at the aggregate of that eGFR data plan, if that helps you, but it wasn't divided into specific groups based on duration in the study.

Okay. That's helpful.

Your -- for your question -- shall I answer the question on your bolus so we can have an additional question to build?

No, I was hoping to hear for you, Peter, on the long term versus the initial bolus of patients. What do you expect that they will be kind of failing budesonide or other steroid?

Excellent. Thanks for that, Tim. Thinking about like initial uptake, there are several elements that we are taking into consideration. And one of them is the relative conservative nature of nephrologists as a prescriber base in the adaptation for new treatment that we have seen it with recent introductions in nephrology. We know, for example, that they don't want to burden their office or their patients to obtain challenges. So that's something that we are planning for, and we have the experience to navigate that. So as we anticipate in launching during the holiday season, that require certain challenges as well. In the first full quarter that we will see for sparsentan and is expected in the first quarter of 2023. And that's usual also when the payers are resetting the insurance plan. So those are elements we take into consideration. We do anticipate a strong uptake once physicians gain patient experience and make it a foundational therapy for their patients. So I think the attractive profile of sparsentan that we believe resonates well with patient needs together with our talented and experienced commercial team gives me confidence that our mission to achieve sparsentan as a foundational therapy, is feasible and reachable. But I think given what we have seen with other updates in nephrology, in particular, and given the timing of our launch, that may be not as a usual bonus that you're talking about, but I think a faster update later on once the physicians have experienced with sparsentan.

We will take the next question from the line of Maury Raycroft from Jefferies.

Hi, good morning. Thanks for taking my question and my congrats to you, Laura as well a great working with you. And the question I had is you mentioned the bar for FSGS is high. Has FDA quantified what the threshold is for FSGS approval? And lastly, you mentioned you continue to see sparsentan consistently. Can you elaborate on what that means?

Sure. Maury, I'd say, first, I'll turn to Bill, to articulate what we understand that bar is for accelerated approval with FSGS. I think it's important for us to really highlight what we've been saying historically around the differences between these 2 programs with regard to the disease, the trial design as well as the literature that supports that link and modeling the link between proteinuria and eGFR. I'll ask Bill to take your first question, and then I'll ask Jula to provide her perspective on that profile of sparsentan that we see consistently throughout the programs. Bill?

Yes, certainly. The FDA really hasn't set a specific threshold, but we do believe that, that bar is high. They also, in our discussions with them, have recognized the difficulty in studying FSGS in particular. There have been very few studies done in this disease. There isn't an existing precedent and DUPLEX is going to be the largest data set in a controlled study in FSGS once we complete it early next year, but we don't have a specific numerical threshold that they've enumerated to us. I will hand over to Jula for some of the additional color.

Yes. I'll comment that what's reassuring to us is sparsentan is acting consistently. And you, Maury, have heard the proteinuria reduction that we've seen consistently across all the trials to date, the consistent proteinuria reduction we saw in DUET in patients with FSGS, the consistent proteinuria reduction we saw in protecting patients with IgA nephropathy and in the DUPLEX trial that we saw in patients with FSGS. The consistency that we're referring to with regards to the eGFR profile, we can't release any data, unfortunately, in the PROTECT and in the DUPLEX trial. Obviously, the integrity of those trials, as they're ongoing but what we can refer back to is the historical data of DUET. And so we're only able to say that sparsentan is acting consistent with what we've seen historically. And what we saw historically with DUET, as we saw an acute decline in EGFR and then a stabilization of GFR. And that's what we see, and that's the natural history that we see with sparsentan and that's the mechanism of action that you would expect to see with the dual combination of endothelin and RAS blockade. And that's what gives us the consistency that we see in the profile of sparsentan and what you would anticipate to see.

Got it. That's really helpful. And maybe 1 quick follow-up. Just digging into the FDA's threshold. Are they more focused on the magnitude of delta between control and treatment? Or are they more focused on what you see for the duration of treatment. And so that's why they want to see the 2-year data for FSGS?

Bill, I'll turn it to you.

Yes. I think it's all of those things. I think that it's effect size, it's variability, it's the duration of effect, it's a consistency of a data picture presented by all the elements of the study, proteinuria being a strong anchor on 1 end, but then looking across all of the data that's available. And recall that with accelerated approval, it's only a partial data set so they have less to go on, but it's not 1 specific element.

And I think -- yes, Maury, thank you for your question. I think it's important to reiterate that we believe that ultimately, with that time completing the 2 years, that's going to allow us to meet that bar for full approval in sNDA next year.

We will take our next question from the line Joseph from SVB Securities.

Thanks very much and I'd like to also pass along my best wishes to Laura, it was great to work with you. I was wondering if you guys could talk a little bit about the heterogeneity of the FSGS some more in the contracts of the patients that have been enrolled in DUPLEX? How representative of the overall population are these patients? And are there any particular market segments that naturally present themselves? And would some of these be expected to be early versus later adopters of sparsentan, if approved?

Joe, thanks for the questions. Jula, I will turn that 1 to you and then maybe Peter can share a little bit of the thinking as we look to ultimately the launch and what the patient population looks like. Jula?

Yes. So I mean, FSGS is a heterogeneous patient population, and we enrolled a wide spectrum of patients with FSGS and I think that's important to note. And this is the largest trial of FSGS patients to date. And we enrolled primary FSGS in genetic patients with FSGS and patients at risk for progression. And the spectrum included patients with a wide range of eGFR from 30, way above 90 with 20% of patients with the eGFR above 90. So earlier in their disease state with regards to eGFR, but still at high risk for progression. And additionally, we enrolled a significant proportion of pediatric patients. And I think that's really important to note as well with regards to the patient population that we're represented. And so just a wide range of patients and then significantly at risk for progression, I think that's an important thing to note as well. And I'll turn it over to Peter with regards to who we think we're going to be studying here.

Yes. Thanks, Joe. Thanks for that question. I mean we have finished our segmentation for physicians. And we are looking both at prescriber potential and amount of patients that are treating as well as behavioral aspects. In IgA nephropathy, what we see other than maybe in other rare diseases where you have more central excellence, there is more a broader care concentration of care in nephrology. I think it's something we have talked about historically as well. But still, we see -- when we look at the different deciles, there is differences in amount of patients that are seen by the nephrologist. I think we have a good handle on that, that our focus is going to be as well and that allows us to be very focused initially with launch as well, how we focus our efforts on certain centers and physicians for orders.

It's very helpful.

Maybe I can add just a little bit more context for your questions, Joe, because I think for folks that may not be as close to this space, it will be important to reiterate. The first is, I think, with regard to market uptake. What we are hearing from nephrologists is that based on the mechanism of action of sparsentan and the unit mechanism of action and that common injury pathway, there's a strong belief amongst nephrologists that there would be broad use across the heterogeneous FSGS population. And so we don't see that there's any particular kind of pull 1 way or another with regard to that segment. So we do believe that's a fundamental assumption behind our view that sparsentan will be the foundational therapy for both FSGS and IgA nephropathy. And I just want to spend a moment on what Jula mentioned in the pediatric patients and why perhaps they -- it's important to think about that in the context of the heterogeneity and in the DUPLEX trial. Maybe, Jula, you can speak a little bit about the eGFR profile that typically we see in pediatric FSGS patients and why that may contribute to sort of where we are today with that trial.

Yes, certainly. When we think about the broad spectrum of patients that we represented in this trial, we did have patients, who are very early in their disease and pediatric patients have really normal kidney function, really in the high range of functioning well above 120. And within the pathophysiology of FSGS, you really want to correct that down to normal, and that's what you do when you give whether it's an endothelin antagonist or RAS blockade. And so you want to correct that hyperfiltration. And that's one of the common pathway injuries with FSGS that you want to correct. And that's distinct from, say, IgA nephropathy.

We will take the next question from Greg Harrison from Bank of America.

Good morning. This is [Hao] calling in for Greg Harrison. So I just had a question about the IgA nephropathy, have you thought about pricing to balance maybe patient benefit with value? Just too kind of get a sense about your starting process and maybe some of the factors that you would consider when sort of determining the pricing.

Yes. Thank you, Hao, for the question. We have not disclosed how we will be pricing specifically yet, but I will ask Peter to share a bit of his team's thinking as we prepare for the pricing and launch in IgA nephropathy.

Indeed and thank you Hao for that question. So yes, Eric mentioned, we have not disclosed any pricing yet. We won't do that price to launch as well, but we have studied quite a bit on the burden of disease of IgA nephropathy to make it insight for payers like what the cost associated with this disease is today. And we know that's substantial, given the progressive nature of the disease, ultimately leading to end-stage renal disease for many of those patients, often needing dialysis. We've also been studying the value proposition for sparsentan, and we have disclosed some of that data earlier on what the potential value could be of reducing proteinuria with the level that we have seen with sparsentan. And we have started engaging with payers as well, in advisory boards as well as in field conversations. And I'm very pleased to see that there is a good understanding of protenuria amongst the payer community. And there's a sole understanding as well what the value proposition of sparsentan and could be. So I think that gives me confidence. It's not answering your question on the price. That's something to count. But rather than price, it always starts with like what is the potential value that this product provides to payers and society, and I'm pleased with the conversations we're having on that.

Yes. Thank you, Peter. What -- I think additionally, I can say, how that is -- we do -- our strategy will be to price sparsentan for broad access given our plan to make sparsentan the new foundational therapy. And so in order for us to achieve that vision, we need to make sure that we have broad access. And we are taking a lot of the great work that Peter's team is doing on modeling the health economic benefit as well as insight from payers and the early uptake and access for others within this space. And I think we'll be in a very strong position to achieve our vision with sparsentan.

We will take our next question from the line Carter Gould from Barclays.

Great, good morning. Thanks for taking the questions. Maybe just to switch it up for a second. Congrats on the pegtibatinase breakthrough therapy designation. I guess based on that, what should we read through to kind of sort of growing alignment between you and FDA around the nature of that Phase III program and when that might be able to get started? And then you called it out during the prepared remarks around that you didn't perform stats on the eGFR data going back to sparsentan. I guess, I'm sure you guys consider that at some point and having gone through the discussion with FDA, do you think that would have helped the switch some of FDA's concerns here? Any thoughts on that would be helpful.

Thank you, Carter. Bill, I'll ask you to take both of those.

So for the breakthrough designation, that allows us to have additional conversation with the agency. So once that's been granted, the agency then provides a multidisciplinary meeting where we meet with the different groups of the different review divisions and then that spurs additional specific work on different elements of the development path. It's essentially design such that they slide around to your side of the table and help you with the development moving forward. For us, what that means is that we're working currently on definition of surrogate endpoint, and that will continue and then working them with them on Phase III trial design, what the specific data elements need to be and should be, how the pediatric patients should be included in that development as well as aspects of manufacturing and progression of that side of it. It's an iterative process moving forward. So we really need to get through a few of those steps before I can give you better vision to where we're starting on the Phase III study. And when we've completed some of those, we'll be back with greater specificity on that. And I was -- I'm sorry, I was writing notes for that question as you asked your second one. Could that be rephrased for me, please?

Sure. It was -- I'm sure there was -- you mentioned there were no stats performed in the EGFR data consistent with prior messaging. I'm sure there's consideration of doing some additional statistical work on that data over various points in the past year. And having gone through the discussions with FDA, do you think that -- do you think having done that or being able to deliver some additional data on that front would have helped us swage some of their concerns?

Yes. I think that's a tough 1 to answer. I'm not sure if it would or it wouldn't have. For us, the key was preserving alpha for the endpoint of the study. We wanted to maintain our highest probability of success at the confirmatory endpoint, seeing that as the primary goal. So we really made the decision to do it that way in order to ensure our best chance of delivering this for FSGS patients.

We will take our next question from Laura Chico from Wedbush.

Good mornings. Thanks very much for taking the question. Just for clarification, I'm wondering if you could just comment on study retention in both DUPLEX and PROTECT. I guess, have discontinuation progressed as anticipated in both of these studies now that we've had interim updates? And then a follow-up. I just wanted to clarify -- so the mid-cycle review meeting has completed with respect to IgAN and obviously, the agency has seen the interim FSGS data from DUPLEX. But wondering if the FSGS data could somehow trigger an amendment or how that might impact the IgAN review? Just wanted to clarify there.

Laura, thank you for your questions. Jula, can you please take the question on study retention in DUPLEX and PROTECT.

Yes -- I apologize for that. So the studies have continued to progress with very high quality. And we're seeing dropout rates within the range of what you would expect for nephrology studies of this length. And we, as you can imagine, have put a significant amount of efforts to make sure that we maintain the patients in this -- in both studies. And so we're very proud of the efforts that we've put into this and with the retention rates that we're seeing to date.

And Bill, would you like to take the question on the mid-cycle review and the data availability and how that might impact FDA's review?

Certainly, the FDA throughout our development program has consistently pointed to evaluating these 2 programs independently. And this remains the case. There are different diseases. They are studied on their own, and they have trial designs that are different and there are key differences between them that we've highlighted. They did have the data sets and vision to both programs, the whole way through. So at the point of their mid-cycle review meeting, they were aware of the DUPLEX data, and there was no expression of concern on their part. As a result of those, the DUPLEX data, it was in that frame that they gave us very clear feedback and that we were on track that there was no plan for an ADCOM was reiterated and that we are looking forward to our action date in November.

We will take our last question from the line of Edward Nash from Canaccord.

Hi, thanks guy for taking my question. And really appreciate the clarity on the FSGS here in the States and in Europe. I guess my question just specific to Europe, it would just be -- clearly, it's the risk averse to position to kind of wait for European filing also on FSGS, but I just wanted to know, do you guys feel confident that it would probably turn out the same way with Europe, if you went ahead and did the combine filing that the Europeans would also kind of view the same issue and see that increased heterogeneity would require to see data out to 2 years? Or is it also that just by filing together that would risk the IgAN approval there if you have both going at the same time?

Ed, thanks for the question. I'll turn that one over to Bill.

Sure. I mean ultimately, our commitment here is to get sparsentan patients as fast as possible. And that remains unchanged. While we believe there is a case to be made to putting the 2 together in combination, we felt that, that would be adding a potential incremental risk to the probability of an IgAN approval, and therefore, risking our ability to deliver sparsentan to those patients as quickly as possible, If the EMA were to end up with the same view as the FDA. We're now strategically aligning with our partners, Vifor on the regulatory process so that we have the best probability of success for both applications in Europe, and we look forward to getting the first potential approval in IgAN next year.

There's no further questions at this time.

Great. Well, thank you, everybody, for joining us this morning for all of our updates. We have an exciting second half of the year ahead, and we look forward to sharing more updates along the way. Have a great rest of the day.

This concludes today's call. Thank you for your participation. You may now disconnect.