SEC Filing | Trevi Therapeutics, Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

trvi-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38886

TREVI THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	45-0834299
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
195 Church Street, 14^th Floor New Haven, Connecticut	06510
(Address of principal executive offices)	(Zip Code)

(203) 304-2499

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

TRVI

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 11, 2020, the registrant had 18,380,790 shares of common stock, $0.001 par value per share, outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues and profitability, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” “could,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

•

the impact of the COVID-19 pandemic on our clinical trials, business and operations and our response to the pandemic;

•

our ongoing clinical trials, including our Phase 2b/3 PRISM trial of Haduvio (nalbuphine ER) for the treatment of pruritus associated with prurigo nodularis;

•

our plans to develop and, if approved, subsequently commercialize Haduvio for the treatment of pruritus associated with prurigo nodularis or for other serious neurologically mediated conditions;

•

our expectations regarding the timing for the initiation of clinical trials and the reporting of data from such trials;

•

the timing of and our ability to submit applications for, and to obtain and maintain regulatory approvals for Haduvio;

•

our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;

•

our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing;

•

the impact of government laws and regulations;

•

our competitive position; and

•

our ability to establish and maintain collaborations or obtain additional funding.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the section titled “Risk Factors,” that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may differ materially from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements except as required by applicable law.

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. We own the trademarks Trevi® and Haduvio™. Other trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, some of the trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q are listed without the ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our trademarks, service marks and trade names. We intend to propose Haduvio as the trade name for our nalbuphine ER investigational product and therefore plan to use that name when we refer to nalbuphine ER going forward.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 6.	Exhibits	75
Signatures		76

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Trevi Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(Amounts in thousands, except share and per share amounts)

	September 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	53,293		$	57,313
Tax credit and other receivables		59			558
Prepaid expenses		1,857			1,681
Total current assets		55,209			59,552
Deferred offering costs		291			—
Operating lease right-of-use asset		250			312
Security deposit		19			19
Property, equipment and leasehold improvements, net		110			118
Total assets	$	55,879		$	60,001
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,258		$	1,599
Accrued expenses		4,735			3,501
Operating lease liability - current portion		110			99
Total current liabilities		6,103			5,199
Term loan		13,798			—
Term loan derivative liability		187			—
Operating lease liability - long term portion		173			257
Commitments and contingencies (Note 11)
Stockholders’ equity (deficit):
Common stock: $0.001 par value; 200,000,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; and 18,321,068 and 17,834,570 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively.		18			18
Preferred stock: $0.001 par value; 5,000,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; no shares issued or outstanding at September 30, 2020 or December 31, 2019.		—			—
Additional paid-in capital		173,054			168,746
Accumulated deficit		(137,454	)		(114,219	)
Total stockholders’ equity		35,618			54,545
Total liabilities and stockholders’ equity	$	55,879		$	60,001

See accompanying notes.

Trevi Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(Amounts in thousands, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Operating expenses:
Research and development	$	4,828		$	5,650		$	15,768		$	14,516
General and administrative		2,416			2,000			7,528			5,363
Total operating expenses		7,244			7,650			23,296			19,879
Loss from operations		(7,244	)		(7,650	)		(23,296	)		(19,879	)
Other income (expense):
Change in fair value of obligation for loan success fee		—			—			—			(215	)
Interest income		3			280			174			567
Interest expense		(148	)		—			(148	)		—
Total other income (expense), net		(145	)		280			26			352
Loss before income tax benefit		(7,389	)		(7,370	)		(23,270	)		(19,527	)
Income tax benefit		11			5			35			14
Net loss	$	(7,378	)	$	(7,365	)	$	(23,235	)	$	(19,513	)
Accretion of redeemable convertible preferred stock		—			—			—			1,535
Dividends accrued on redeemable convertible preferred stock		—			—			—			(2,239	)
Adjusted net loss attributable to common stockholders	$	(7,378	)	$	(7,365	)	$	(23,235	)	$	(20,217	)
Basic and diluted net loss per common share outstanding	$	(0.41	)	$	(0.41	)	$	(1.30	)	$	(2.09	)
Weighted average common shares used in net loss per share attributable to common stockholders, basic and diluted		18,134,886			17,834,570			17,935,865			9,680,512

See accompanying notes.

Trevi Therapeutics, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)

(Amounts in thousands, except share amounts)

	Series A				Series B				Series C
	Redeemable				Redeemable				Redeemable													Total
	Convertible				Convertible				Convertible								Additional					Stockholders’
	Preferred Stock				Preferred Stock				Preferred Stock				Common Stock				Paid-		Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		in Capital		Deficit			(Deficit)
Balance at June 30, 2020	—		$	—	—		$	—	—		$	—		17,851,152	$	18	$	170,095	$	(130,076	)	$	40,037
Stock-based compensation	—		—		—		—		—		—			—		—		588	—				588
Issuance of common stock from exercise of stock options	—		—		—		—		—		—			3,158		—		7	—				7
Issuance of common stock under the at-the-market sales agreement, net of commissions and fees	—		—		—		—		—		—			466,758		—		2,364	—				2,364
Net loss	—		—		—		—		—		—		—		—		—			(7,378	)		(7,378	)
Balance at September 30, 2020	—		$	—	—		$	—	—		$	—		18,321,068	$	18	$	173,054	$	(137,454	)	$	35,618

Balance at June 30, 2019		—	$	—		—	$	—		—	$	—		17,834,570	$	18	$	168,002	$	(100,317	)	$	67,703
Stock-based compensation	—		—		—		—		—		—		—		—			371	—				371
Net loss	—		—		—		—		—		—		—		—		—			(7,365	)		(7,365	)
Balance at September 30, 2019		—	$	—		—	$	—		—	$	—		17,834,570	$	18	$	168,373	$	(107,682	)	$	60,709

See accompanying notes.

Trevi Therapeutics, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)

(Amounts in thousands, except share amounts)

	Series A						Series B						Series C
	Redeemable						Redeemable						Redeemable															Total
	Convertible						Convertible						Convertible										Additional					Stockholders’
	Preferred Stock						Preferred Stock						Preferred Stock						Common Stock				Paid-		Accumulated			Equity
	Shares			Amount			Shares			Amount			Shares			Amount			Shares		Amount		in Capital		Deficit			(Deficit)
Balance at December 31, 2019		—		$	—			—		$	—			—		$	—			17,834,570	$	18	$	168,746	$	(114,219	)	$	54,545
Stock-based compensation		—			—			—			—			—			—			—		—		1,907		—			1,907
Issuance of common stock from exercise of stock options		—			—			—			—			—			—			18,343		—		34		—			34
Issuance of common stock from employee stock purchase plan		—			—			—			—			—			—			1,397		—		3		—			3
Issuance of common stock under the at-the-market sales agreement, net of commissions and fees		—			—			—			—			—			—			466,758		—		2,364		—			2,364
Net loss		—			—			—			—			—			—			—		—		—		(23,235	)		(23,235	)
Balance at September 30, 2020		—		$	—			—		$	—			—		$	—			18,321,068	$	18	$	173,054	$	(137,454	)	$	35,618

Balance at December 31, 2018		15,387,923		$	21,033			22,608,695		$	33,686			38,097,672		$	61,023			438,600	$	4	$	—	$	(109,498	)	$	(109,494	)
Stock-based compensation		—			—			—			—			—			—			—		—		754		—			754
Issuance of common stock from exercise of stock options		—			—			—			—			—			—			14,736		—		38		—			38
Issuance of Series C redeemable convertible preferred stock, net of issuance costs		—			—			—			—			6,849,315			11,059			—		—		—		—			—
Dividends accrued on redeemable convertible preferred stock		5,406,844			326			6,478,999			551			3,792,386			1,362			—		—		—		(2,239	)		(2,239	)
Accretion (amortization) of premium (discount) on issuance of redeemable convertible preferred stock		—			(7	)		—			31			—			—			—		—		—		(24	)		(24	)
Accretion of discount on investor rights/obligation		—			84			—			117			—			—			—		—		—		(201	)		(201	)
Adjustment for excess (shortfall) of fair value over liquidation value of redeemable convertible preferred stock		—			(651	)		—			(940	)		—			(403	)		—		—		—		1,994			1,994
Accretion of issuance costs on redeemable convertible preferred stock		—			7			—			4			—			223			—		—		—		(234	)		(234	)
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering		(20,794,767	)		(20,792	)		(29,087,694	)		(33,449	)		(48,739,373	)		(73,264	)		10,381,234		7		105,464		22,033			127,504
Issuance of common stock upon completion of initial public offering, net of underwriting discounts and commissions and issuance costs		—			—			—			—			—			—			5,500,000		5		48,169		—			48,174
Issuance of common stock upon completion of private placement, net of private placement agent fees		—			—			—			—			—			—			1,500,000		2		13,948		—			13,950
Net loss		—			—			—			—			—			—			—		—		—		(19,513	)		(19,513	)
Balance at September 30, 2019		—		$	—			—		$	—			—		$	—			17,834,570	$	18	$	168,373	$	(107,682	)	$	60,709

See accompanying notes.

Trevi Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(Amounts in thousands)

	Nine Months Ended September 30,
	2020			2019
Operating activities
Net loss	$	(23,235	)	$	(19,513	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		34			30
Changes in fair value of obligation for loan success fee		—			215
Accretion/accrual of term loan discounts and debt issuance		68			—
Stock-based compensation		1,907			754
Changes in operating assets and liabilities:
Receivables		499			(19	)
Prepaid expenses		(176	)