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

OR

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, 14th 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.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

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

 

 

 

i


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.

1


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.

 

2


 

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.

3


 

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.

 

 

4


 

 

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

)