Executive Summary / Key Takeaways

• First-in-Class Mechanism Validated Across Two Indications: Haduvio's kappa agonist/mu antagonist (KAMA) mechanism has produced statistically significant cough reductions in both IPF chronic cough (Phase 2b CORAL) and refractory chronic cough (Phase 2a RIVER), making it the only therapy in clinical development to demonstrate efficacy across these neurogenic conditions. This dual validation de-risks the central mechanism hypothesis and eliminates the need for patient enrichment strategies that have limited competitors.

• Fortress Balance Sheet Extends Runway Through 2028: Following a $115 million June 2025 offering triggered by positive CORAL data, Trevi holds approximately $195 million in cash and investments as of September 30, 2025. This capital, combined with a quarterly burn rate of $11-12 million, funds two Phase 3 IPF trials, a non-IPF ILD study, the next RCC trial, and pre-commercial activities without requiring near-term dilution.

• Massive Underserved Markets With Zero Approved Competition: Chronic cough in IPF and non-IPF ILD currently has no FDA-approved therapies, while RCC has limited options after gefapixant's FDA withdrawal. The non-IPF ILD population alone comprises approximately 228,000 patients, with 50-60% experiencing uncontrolled cough—more than doubling the IPF opportunity and creating clinical and commercial synergies through shared pulmonology prescribers.

• Differentiated Safety and Abuse Profile Versus P2X3 Antagonists: Haduvio's mu antagonism mitigates abuse risk, as demonstrated in a Human Abuse Potential study showing significantly lower Drug Liking than intravenous butorphanol. This positions it favorably against scheduled opioids and contrasts with P2X3 antagonists like camlipixant, which have demonstrated efficacy only in severe coughers representing less than one-third of the RCC market.

• Critical Execution Risks in Phase 3 and Regulatory Pathway: While Phase 2 data is compelling, Phase 3 trials must replicate results in larger, more diverse populations. The FDA has requested a respiratory safety study (TIDAL) to characterize effects in IPF patients, and any safety signals or restrictive REMS requirements could limit commercial potential. Success hinges on maintaining single-digit discontinuation rates and demonstrating quality-of-life improvements that support specialty pricing.

Setting the Scene: The Chronic Cough Conundrum

Trevi Therapeutics, founded in 2011 and based in the United States, operates as a clinical-stage biopharmaceutical company singularly focused on solving one of the most debilitating yet overlooked symptoms in pulmonary medicine: chronic cough. The company’s sole asset, Haduvio (oral nalbuphine extended-release), targets three distinct but related indications: chronic cough in idiopathic pulmonary fibrosis (IPF), chronic cough in non-IPF interstitial lung disease (ILD), and refractory chronic cough (RCC). This narrow focus concentrates resources on a mechanism with broad applicability across neurogenic cough conditions, rather than diluting capital across multiple platforms.

The chronic cough market represents a classic case of high unmet need colliding with regulatory neglect. IPF patients face a median survival of 3-5 years, yet spend their final years tormented by relentless coughing that no approved therapy addresses. Such desperation fosters a motivated patient population and prescriber base eager to adopt novel mechanisms. Similarly, RCC patients have exhausted off-label options—benzonatate, low-dose morphine, neuromodulators—with minimal efficacy and significant safety concerns. The FDA’s limited engagement with cough as a primary endpoint has left the field wide open, and Trevi’s decision to pursue a 505(b)(2) pathway leveraging nalbuphine’s 30-year safety record as an injectable analgesic de-risks regulatory approval compared to de novo NCEs.

Trevi’s position in the value chain is straightforward: develop, validate, and eventually commercialize Haduvio through specialty pulmonary channels. The company has no manufacturing infrastructure, relying on third-party contractors for drug substance and product. This approach preserves capital for clinical development but introduces dependency risk—any supply disruption could delay Phase 3 initiation. The recent capital raises, totaling $165 million in the past year, signal that management understands the window of opportunity is now, as competitors like Boehringer Ingelheim have already terminated IPF cough programs, winnowing the competitive field.

Technology, Products, and Strategic Differentiation: The KAMA Advantage

Haduvio’s core technology rests on a dual mechanism that is both central and peripheral: kappa opioid receptor agonism activates the cough reflex arc’s inhibitory pathways, while mu receptor antagonism blocks the euphoric effects that drive opioid abuse. This addresses the fundamental neurobiology of chronic cough—dysregulated neuronal hypersensitivity—while avoiding the scheduling restrictions and respiratory depression warnings that plague mu-agonists like morphine. The clinical data validates this thesis: in the Phase 2b CORAL trial, all three doses (27 mg, 54 mg, and 108 mg BID) achieved statistically significant reductions in 24-hour cough frequency at Week 6, with the 54 mg dose hitting a "sweet spot" across primary and secondary endpoints.

The magnitude of effect is clinically meaningful and commercially compelling. In CORAL, 63% of patients on 54 mg BID achieved a ≥50% cough reduction versus 19% on placebo. This 44-percentage-point difference far exceeds the threshold payers require for specialty drug status and provides pulmonologists with a clear value proposition versus off-label morphine, which showed zero placebo response in the PACIFY study. The Leicester Cough Questionnaire data—showing 3.7-point improvements at 54 mg BID versus 1.3-point minimum clinically important difference—creates a reimbursement narrative linking cough control to reduced hospitalizations and mortality, a correlation Trevi is mining from the Pulmonary Fibrosis Foundation Registry.

Strategically, Trevi is pursuing a "treatment-failure" positioning in RCC rather than competing head-to-head with P2X3 antagonists in treatment-naïve patients. This targets the highest-unmet-need segment—patients who have failed peripherally acting agents—and preserves specialty pricing power. Management explicitly states this approach allows them to "maintain our specialty IPF pricing" while addressing a market segment competitors have abandoned. The non-IPF ILD expansion leverages the same pulmonology call point, creating commercial synergies and more than doubling the addressable market without incremental sales force investment.

R&D execution reflects disciplined capital allocation. The company completed enrollment in the CORAL trial in February 2025, reported positive topline data in June, and immediately triggered a $115 million raise while data was fresh. Such timing demonstrates management’s ability to align capital markets with clinical catalysts, minimizing dilution. The decision to eliminate the 108 mg dose for Phase 3 and use 54 mg BID as the top dose with 27 mg BID for titration shows learning from CORAL’s dose-response curve, optimizing the risk-benefit profile before pivotal trials.

Financial Performance & Segment Dynamics: Pre-Revenue Efficiency

As a clinical-stage company, Trevi’s financials tell a story of controlled burn and strategic cash deployment rather than revenue growth. The company reported a net loss of $11.8 million for Q3 2025, down from $13.2 million in the prior year period, with R&D expenses declining to $10.1 million from $11.2 million.

This decline reflects the winding down of Phase 2 enrollment costs, partially offset by increased Phase 1 study expenses and SOX compliance preparation. The 9-month operating cash burn of $34.5 million aligns with management’s guided quarterly burn of $12-14 million, providing visibility into runway duration.

General and administrative expenses rose to $3.8 million in Q3 2025 from $2.9 million year-over-year, driven by $500,000 in SOX 404(b) compliance costs. These increases signal Trevi’s evolution from a development-stage startup to a public company preparing for commercial operations. While they pressure near-term burn, they are necessary investments to support eventual NDA submissions and post-approval reporting requirements. The absence of debt and a current ratio of 21.93 indicate pristine balance sheet health, giving the company flexibility to pursue non-dilutive partnerships if needed.

The cash position of $195 million as of September 30, 2025, represents a strategic inflection point. This capital is sufficient to fund two Phase 3 IPF trials, a non-IPF ILD study, a Phase 2b RCC trial, and pre-commercial activities—exactly the critical path to value creation.

It eliminates the primary risk that derails clinical-stage biotechs: a financing overhang that forces premature partnerships or distressed asset sales. Management’s explicit guidance of runway "into 2028" provides a timeline for investors to monitor trial execution without worrying about interim dilution.

Segment dynamics are straightforward: Trevi operates as a single reportable segment, with all value tied to Haduvio’s success. This creates a pure-play investment thesis without corporate complexity or diversification discounts. The company’s accumulated deficit of $321.5 million is typical for a 14-year-old biotech and is offset by the intangible value of positive Phase 2 data in two indications. The key financial metric to watch is the cash burn rate as trials scale—if quarterly burn exceeds $15 million, runway could compress to 2027, pressuring the stock ahead of Phase 3 readouts.

Outlook, Management Guidance, and Execution Risk

Management’s guidance points to a clear catalyst path through 2026. The company expects to request an End-of-Phase 2 meeting with FDA in Q4 2025, with Phase 3 IPF trials initiating in the first half of 2026. This provides a concrete timeline for regulatory alignment and trial startup, allowing investors to model data readouts in late 2027 or early 2028. The inclusion of TIDAL respiratory safety data and drug-drug interaction results with pirfenidone/nintedanib in the meeting package addresses FDA concerns proactively, reducing the risk of trial design disputes that could delay initiation.

The RCC development plan reflects strategic sequencing. Rather than rushing into Phase 3, Trevi will run a Phase 2b parallel-arm dose-ranging study in the first half of 2026, likely eliminating the 108 mg dose and exploring once-daily dosing. This allows optimization of the dosing regimen before committing to a pivotal program, reducing the risk of Phase 3 failure due to suboptimal dosing. Management’s decision to target treatment-failure patients creates a more homogeneous population likely to show robust efficacy, but it also limits the initial market size, requiring premium pricing to achieve commercial viability.

Execution risk centers on three variables: trial enrollment speed, safety signal detection, and competitive dynamics. The CORAL trial enrolled its biggest cohorts in December 2024 and January 2025, suggesting strong investigator enthusiasm, but Phase 3 will require 5-10x more patients across 100+ sites. Any enrollment delays could push readouts beyond 2028, compressing cash runway and forcing a financing decision before data maturity. The TIDAL study’s sentinel cohort review found no respiratory safety signals, but full enrollment could reveal rare adverse events that trigger restrictive labeling or REMS requirements.

Competitive developments add urgency. Boehringer Ingelheim’s termination of its IPF cough program in September 2025 removes a direct rival, but GSK (GSK)’s gefapixant remains in late-stage development for RCC. Management’s comment that GSK’s delays "have no impact on our program" masks a deeper risk: if gefapixant gains FDA approval first, it could establish P2X3 antagonists as the standard of care, making pulmonologists hesitant to switch to Haduvio without head-to-head data. First-mover advantage in RCC could determine which therapy captures the treatment-failure segment that Trevi is targeting.

Risks and Asymmetries: What Could Break the Thesis

The most material risk is a safety signal in the TIDAL respiratory study or Phase 3 trials that leads to restrictive labeling. Haduvio carries an opioid class warning for respiratory depression, and while the mu antagonism mitigates abuse, it does not eliminate respiratory risk in a fibrotic lung population. If discontinuation rates exceed single digits or serious adverse events cluster in the 54 mg dose, the FDA could require a Risk Evaluation and Mitigation Strategy (REMS) program that limits prescribing to certified pulmonologists. This would increase commercialization costs and reduce market penetration, turning a potential blockbuster into a niche hospital product.

A second critical risk is competitive displacement. GSK’s gefapixant, despite its FDA setback, has demonstrated efficacy in severe RCC patients and could gain approval with a broader label. If gefapixant launches first with a treatment-naïve indication, payers may require step therapy before approving Haduvio, forcing Trevi to compete on price rather than mechanism. This could pressure Haduvio’s specialty pricing, which management is counting on to justify development costs. The company’s strategy of targeting treatment-failure patients mitigates this risk but does not eliminate it if gefapixant proves effective across all cough severities.

The third risk is execution failure in Phase 3. While CORAL achieved statistical significance with 160 patients, Phase 3 will require 500-1,000 patients across multiple countries. If the effect size diminishes in a larger, less-enriched population or if placebo response rates increase, Haduvio could miss its primary endpoint. This would force another costly trial or terminate the program, leaving Trevi with no pipeline and a cash balance that would be liquidated. The SSRE analysis confirmed 80% conditional power, but this assumes effect size and variability remain constant—assumptions that often break in larger trials.

On the upside, asymmetries exist in market expansion and partnership potential. If Haduvio demonstrates quality-of-life improvements that correlate with reduced hospitalizations, payers could grant premium pricing above $30,000 annually. A partnership with a major pulmonary specialty pharma could provide commercial infrastructure without diluting equity, accelerating time to market. The non-IPF ILD indication, if successful, more than doubles the addressable market with minimal incremental R&D, creating a free option that is not reflected in the current valuation.

Valuation Context: Pricing a Pre-Revenue Pipeline

Trading at $12.98 per share with a market capitalization of $1.66 billion and enterprise value of $1.47 billion, Trevi is valued entirely on the probability of Haduvio’s approval and peak sales potential. With zero revenue and negative operating margins, traditional multiples are meaningless; instead, investors must frame valuation against clinical-stage biotech comps and risk-adjusted net present value. Peer companies with positive Phase 2 data in orphan indications typically trade at $1-3 billion market cap pre-Phase 3, suggesting Trevi is reasonably valued if Phase 3 success probability is 50-60%.

The cash position of $195 million provides a floor, representing $1.53 per share in net cash against a $12.98 stock price. This implies the market is assigning $1.47 billion in enterprise value to Haduvio’s pipeline. With peak sales estimates for IPF chronic cough alone reaching $500-800 million annually in the U.S., and RCC adding another $300-500 million, a 3x revenue multiple on 50% probability-adjusted peak sales yields a valuation range of $1.2-1.9 billion—aligning with current trading levels. The stock is not pricing in success in non-IPF ILD or premium pricing power, creating upside if either materializes.

Comparing Trevi to competitors highlights its relative positioning. GSK trades at 13.7x earnings with a $98 billion market cap, reflecting diversified revenue and gefapixant’s option value. Sanofi (SNY)’s Dupixent generates over €10 billion annually, valuing its pruritus franchise at multiples that dwarf Trevi’s entire enterprise value. This demonstrates the upside if Haduvio becomes the standard of care in chronic cough—a specialty pulmonary franchise could command 5-7x sales multiples, implying a $4-6 billion valuation at peak. The key difference is that Trevi’s pipeline is concentrated, making it a binary bet, while peers have portfolio diversification that reduces risk but limits upside.

Conclusion: A Well-Positioned Bet on Neurogenic Cough

Trevi Therapeutics has transformed from a speculative clinical-stage biotech into a de-risked Phase 3-ready company with a validated mechanism, robust balance sheet, and clear path to market in two large underserved indications. The positive CORAL and RIVER data demonstrate that Haduvio’s kappa agonist/mu antagonist profile addresses the central mechanisms of chronic cough that peripherally acting P2X3 antagonists cannot, positioning it as potentially first-in-class in IPF and best-in-class across chronic cough. With $195 million in cash funding operations into 2028, management can execute Phase 3 trials without the financing overhang that typically pressures biotech stocks.

The investment thesis hinges on three variables: maintaining safety margins in larger trials, preserving specialty pricing in a competitive landscape, and executing commercial launch in a specialty pulmonary market. The risks are real—respiratory safety signals, GSK’s first-mover potential, and Phase 3 execution could all derail the program—but the asymmetry is compelling. Success in IPF chronic cough alone justifies the current valuation, while non-IPF ILD and RCC provide free options that could triple the addressable market.

For investors, Trevi offers a rare combination of clinical de-risking, financial strength, and market opportunity in a therapeutic area with zero approved competition. The stock price reflects moderate optimism but not the full potential of a multi-indication pulmonary franchise. If Phase 3 data replicate Phase 2 effect sizes and the FDA grants a clean label, Trevi could command a multi-billion-dollar valuation as it becomes the standard of care for chronic cough. The next 18 months will determine whether this promise becomes reality.