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Edited Transcript of ENTA earnings conference call or presentation 6-Feb-20 9:30pm GMT

Q1 2020 Enanta Pharmaceuticals Inc Earnings Call

WATERTOWN Feb 12, 2020 (Thomson StreetEvents) -- Edited Transcript of Enanta Pharmaceuticals Inc earnings conference call or presentation Thursday, February 6, 2020 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Carol Miceli

Enanta Pharmaceuticals, Inc. - Director of IR

* Jay R. Luly

Enanta Pharmaceuticals, Inc. - President, CEO & Director

* Nathalie Adda

Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer

* Paul J. Mellett

Enanta Pharmaceuticals, Inc. - Senior VP of Finance & Administration and CFO

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Conference Call Participants

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* Akash Tewari

Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst

* Brian Corey Abrahams

RBC Capital Markets, Research Division - Senior Biotechnology Analyst

* Brian Peter Skorney

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Eric William Joseph

JP Morgan Chase & Co, Research Division - VP & Senior Analyst

* Liisa Ann Bayko

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Zhilin Long

Joh. Berenberg, Gossler & Co. KG, Research Division - Associate

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Enanta Pharmaceuticals first quarter financial results conference call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to Ms. Carol Miceli, Director of Investor Relations. Please go ahead, ma'am.

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Carol Miceli, Enanta Pharmaceuticals, Inc. - Director of IR [2]

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Thank you, Erica, and thanks for joining us this afternoon. The news release with our fiscal first quarter financial results was issued today and is available on our website. On the call today is Dr. Jay Luly, President and CEO; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team.

Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call.

I'd now like to turn the call over to Dr. Jay Luly, President and CEO.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [3]

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Thank you, Carol. Good afternoon, everyone. On today's call, I will discuss our recent clinical development progress on our lead RSV, NASH and HBV compounds and upcoming milestones to look for in 2020. I'll begin with EDP-938, the only N-inhibitor for RSV in clinical development today. RSV is a severe respiratory infection associated with significant morbidity and mortality in infants, the elderly and immune-compromised adults and a condition for which there's currently no safe and effective therapy.

At the end of 2019, we initiated our Phase IIb study named RSVP, which is a randomized, double-blind, placebo-controlled study of EDP-938 designed to enroll approximately 70 subjects up to the age of 75 years randomized to receive either 800 milligrams of EDP-938 or placebo for 5 days. The primary objective of this study is to evaluate the effect of EDP-938 on the progression of RSV infection by assessment of clinical symptoms measured over the course of a 14-day study observation period. Antiviral efficacy will be evaluated as a key secondary endpoint.

We're pleased to report that we've been able to identify many adult outpatients who have had cold-like symptoms that started within 48 hours of their visit to an RSVP study site. Identification of RSVP -- of RSV patients in this group has been aided by the prompt on-site confirmation of RSV infection, which we have been providing by PCR testing. Unfortunately, it appears that the North American RSV season this winter peaked in December, which is approximately 1 to 2 months earlier than in most years. As a result, we have seen fewer RSV cases than expected. And therefore, we are planning to continue the study into the Southern Hemisphere and have enrollment continue in all sites, with the goal now to have data in the first half of 2021.

In addition to this study, we have also announced plans to initiate additional Phase II studies in pediatric patients and transplant patients by the end of this year, concurrent with the RSVP study.

We continue to believe that our N-protein inhibitor approach represents the best chance for success against RSV, because it attacks the virus' replication machinery. Building in on our success with viral infections such as HCV and our ongoing program with RSV, last month, we introduced our newest drug discovery program, which is seeking therapeutics for human metapneumovirus, also known as hMPV.

hMPV is a pathogen identified in 2001 that causes upper and lower respiratory tract infections in young children and the elderly as well as in COPD, asthma and immunocompromised patients. During 2020, we will continue to perform optimization of our current nanomolar inhibitor leads against this virus.

Now let's shift to HBV. Our HBV program with EDP-514 is moving ahead nicely. And today, we announced positive results from the SAD and the MAD portion of our Phase I study in healthy volunteers. EDP-514 is our novel class II HBV core inhibitor, sometimes referred to by others as a capsid assembly modulator or CAM. The aim of part 1 of this randomized, double-blind, placebo-controlled, first-in-human study of EDP-514 was to evaluate the safety, tolerability and pharmacokinetics of single ascending doses and multiple ascending doses in healthy subjects, while part 2 will assess the safety and antiviral activity of EDP-514 in nuc-suppressed patients with chronic HBV infection.

Overall, EDP-514 in healthy subjects dosed for up to 14 days was well tolerated with a favorable safety profile. Treatment-emergent adverse events were infrequent and mild in intensity. No one discontinued EDP-514 due to adverse events. And there were no significant individual lab data findings or pattern of lab abnormalities. Additionally, the pharmacokinetic or blood level profile was fully supportive of once-daily dosing.

Following these promising results, which support further clinical evaluation of EDP-514 in HBV patients, Enanta has initiated a study in nuc-suppressed patients. These are patients with chronic HBV infection that is being suppressed with nucleoside reverse transcriptase treatment.

We plan to enroll a total of 24 subjects among 3 escalating dose cohorts with study drug dosed for 28 days. Our goal is to have data from this study in the first quarter of calendar 2021.

Next quarter, we plan to initiate a separate study in HBV patients who are not on therapy and who have high levels of virus in their blood, who are also referred to as viremic. EDP-514 was selected from our lead series of HBV compounds that are characterized by potent antiviral activity. And promising preclinical data also support our excitement for EDP-514 and for this mechanism. An abstract of the healthy volunteer portion of the study has recently been accepted for presentation at the International Liver Congress known as EASL. So stay tuned for additional data in April.

Switching to our NASH program. We are pleased to announce that the ARGON-1 Phase IIa proof-of-concept study of EDP-305, our lead FXR agonist candidate, has been accepted as an oral presentation at EASL. We plan to further evaluate EDP-305 and ARGON-2, a Phase IIb study in which we expect to initiate dosing by early next quarter. ARGON-2 will be a randomized, double-blind, placebo-controlled, 72-week study in approximately 340 subjects with biopsy-proven NASH.

The primary endpoint of the study will be an improvement in fibrosis without worsening of NASH and/or NASH resolution without worsening of fibrosis. We plan to use doses of 1.5 milligram and 2 milligram with the aim of demonstrating stronger biomarker signals of efficacy than seen at 1 milligram in the ARGON-1 study and less pruritus than seen at the 2.5 milligram in that study. The study will include a 12-week interim analysis to generate dose information more quickly for potential combinations with other mechanisms in NASH.

Also in our NASH program, Enanta has identified EDP-297 as its follow-on FXR candidate. Preclinical data on EDP-297 revealed a differentiated profile that delivers high target tissue distribution along with potency greater than that published on any FXR agonist in clinical development today.

Last month at the JPMorgan conference, we presented compelling data that demonstrate the high potency and tissue-targeting characteristics of EDP-297 compared to other FXR agonists in development. This tissue-targeting data showed that in preclinical models, EDP-297 delivered the drug preferentially to tissues involved in FXR activity, namely liver and in intestine, while minimizing drug levels in plasma and skin. 2 abstracts on EDP-297 have been accepted and will be presented at the EASL conference in April.

We believe that having a highly potent and highly targeted FXR agonist like EDP-297 may allow for lower doses and reduced drug levels at nontargeted tissues, thereby potentially reducing pruritus, and less pruritus is FXR mediated by FXR receptors in the liver or intestine. We plan to initiate a Phase I study of EDP-297 in mid-calendar 2020 and to have data in the first half of 2021.

Lastly, the INTREPID study of EDP-305 in PBC has completed dosing, and we expect to announce top line data by early next quarter. So keep your eye out for a presentation of Phase I results of EDP-514 at EASL, the initiation of our Phase Ib study of EDP-514 in viremic HBV patients, Phase II results of EDP-305 in PBC and initiation of our Phase I study of EDP-297, all by mid-year.

I'd like to close by summarizing a couple of key takeaways from today. First, that despite the vagaries of the RSV season in North America, we are advancing the RSVP study and have plans for 2 additional studies of EDP-938 to start in other RSV patient populations later this year. And second, we had good safety and PK results with our lead HBV core inhibitor in healthy volunteers, leading us to initiate the second part of the study in nuc-suppressed HBV patients. This is all good progress.

I'll now turn the call over to Paul to discuss our financials for the quarter. Paul?

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Paul J. Mellett, Enanta Pharmaceuticals, Inc. - Senior VP of Finance & Administration and CFO [4]

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Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our first quarter ended December 31, 2019.

For the quarter, total revenue was $52.6 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales. This compares to total revenue of $69.9 million for the same period in 2018. Royalty revenues calculated on 50% of MAVIRET sales at a royalty rate for the quarter of 17% and on approximately 30% of VIEKIRA sales at a royalty rate of 10% after adjustment for certain contractual discounts and rebates, which historically have been approximately 1.5% of AbbVie's total reported HCV product sales.

AbbVie will be recording their global HCV sales number on February 7. As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties for our fiscal first quarter ending December 31 will be calculated at the highest royalty rate, and royalties for our fiscal quarter ended March 31 will be calculated at 10%, our lowest royalty rate tier in our fiscal year. You can review our royalty tier schedule in our 2019 Form 10-K.

Moving on to expenses. For the 3 months ended December 31, 2019, research and development expenses totaled $32.8 million compared to $34.9 million for the same period in 2018. The decrease was primarily due to the timing of clinical trial costs associated with the progression of our wholly owned clinical programs in RSV, NASH, PBC and HBV.

Generally and administrative expense for the quarter was $6.9 million, a slight decrease to the comparable quarter in 2018. Enanta recorded an income tax expense of $1.5 million for the 3 months ended December 31, 2019, compared to income tax expense of $3.7 million for the same period in 2018, reflecting the reduction in income tax -- in income before income taxes.

For the 3 months ended December 31, 2019, Enanta's effective tax rate was approximately 10% compared to approximately 12.5% for the corresponding period in 2018. The reduction in rate was driven by both research and development credits as well as a federal benefit from foreign-derived royalty income.

Net income for the 3 months ended December 31, 2019, was $13.4 million or $0.65 per diluted common share compared to a net income of $26 million or $1.25 per diluted common share for the corresponding period in 2018. Enanta ended the quarter with approximately $415 million in cash and marketable securities, an increase of approximately $15 million from our 2019 fiscal year-end balance of $400 million. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q when filed.

I'd now like to turn the call back to the operator and open up the lines for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question is from Brian Abrahams with RBC.

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Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [2]

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First off, on 938, on the RSV program, I know you mentioned that you'll be getting the transplant and pediatric studies underway later this year. I was wondering if you could talk a little bit more about how you guys are thinking about the potential design there. And in particular, how -- what's going to be shaping elements like the dose selection, potential duration as you look to get those studies going later? And then I had a follow-up.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [3]

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Yes. So thanks for the question, Brian. The team is working right now on the fine details of both of those studies. So I'd say it's a little bit premature on this call to get into that. I'd say, as the year progresses, we'll report more on RSVP. And as the exact design of these 2 new studies gels, we'll have a lot more to say about it then.

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Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [4]

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Okay. Fair enough. And then it sounds like the hep B program is moving along well with 514. Was wondering if you could maybe just elaborate a little bit more on what you guys observed in the healthy volunteer Phase I study with respect to PK and safety, your thoughts on the therapeutic window for that agent and anything, at least that you're able to glean from the Phase I study, that might support your view of this being differentiated from others in the same class of development.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [5]

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Well, certainly, I'll just start with a little bit of the preclinical background on 514 too, first. So 514, we worked a long time to identify this candidate and picked it. We believe it has a great preclinical profile, not only in terms of virology, both in vitro and in vivo, where it certainly looks better than first-generation capsid or core capsid inhibitors. Everything about that preclinical profile, including the pharmacokinetic profile across multiple different species, suggested that it had a pretty good chance of having a strong profile clinically too. So we'll have a lot of details around this data set presented formally at EASL. But suffice it to say, it was generally safe and well tolerated. Again, nothing remarkable in terms of any findings. And importantly and as you know, the PK is really all important when you're looking at virals. And so we think we've got good exposure and good troughs and so forth that would give us a good amount of pressure on the virus. So this is a 14-day study, and it's in healthy. But we'll lay it out very clearly with all the details at EASL, but the results are definitely strong.

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Operator [6]

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Your next question is from Eric Joseph with JPMorgan.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [7]

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A couple from me, first on 514. I guess, I'm thinking about the Phase Ib study portion in nuc-suppressed patients. If I heard correctly, this would be a MAD study assessing 514 over a 28-day treatment period. Can you talk a little bit about sort of the study objectives in that trial portion? Are you -- how are you looking at antiviral activity? Can you just walk us through sort of the surrogates for efficacy? Are you looking at 0 conversion or pgRNA?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [8]

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Yes. Again, I'll remind you that this is a Phase Ib 28-day study. So it's a short-term study where we'll be looking principally at safety as a primary endpoint. But I'll let Nathalie comment on some of the other aspects related to other things to be studied.

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [9]

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Thank you for your question. So I think just to echo what Jay said, this is the second part of first-in-man study. So the 1b, we'd be looking, obviously, in nuc-suppressed subjects. Safety, PK are the key primary and secondary objectives. We will be also looking at exploratory endpoint that all the other company, I would say, in that field are looking. Just to remind you that so far, all those endpoint in viremic patients or nuc-suppressed are still considered exploratory in essence. So we would be looking at something such as HBV DNA, HBV RNA and other, and we will report that as we are obviously finalizing the study.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [10]

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Great. And maybe just a separate question on the RSVP study. I just wanted to revisit the trial design and powering assumptions there. Can you kind of just talk about what the trial is powered to detect in terms of total symptom reduction versus no treatment? And I'm also curious to know whether looking at some of the flu antiviral programs are useful comps in terms of thinking about longer-term study design and whether, if that's appropriate, looking at time to symptom -- whether or not you're looking at time to symptom resolution?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [11]

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So I think I heard very clearly, your first question about the power of the RSVP study. I'm not sure I completely understood the second part, but maybe you can repeat once I address the first part. So I think we had that question a few times regarding the power of RSVP study. We have, as you know, run a challenge study, and that was what we used as far as understanding our drug in context of the patient who received the placebo in the challenge study to really identify and analyze. Clearly, our -- the dynamic of symptoms was evolving over time. I'm not yet ready to disclose completely how we power the study, as I think it's more relevant when you present the data. But obviously, we will be looking at seeing a difference of the progression of the symptoms from time to onset over 14 days course of study conduct. I know it's an indirect way of responding, but that's what can I offer today. Would you remind me the second part of your question, please?

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [12]

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Sure. I was -- I'm curious to know whether you're looking at time to symptom resolution specifically in the RSVP study. And the reason for asking the question is that, that is an endpoint used in the influenza antiviral studies. And I'm wondering whether that is a useful comparator set of studies to look at when thinking about longer-term development of the pivotal development potentially of EDP-938?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [13]

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Yes. Thank you. I appreciate your question. So obviously, we have looked at many of other flu studies to understand endpoint and symptoms in relationship to that patient population. There's a series of key secondary endpoints that we'll be looking at more details, time to resolution, time to progression. There would be, obviously, more detailed analysis of all the symptoms.

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Operator [14]

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Our next question is from Yasmeen Rahimi with Roth Capital.

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Unidentified Analyst, [15]

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[Paul] on for Yasmeen. So first, I just wanted to ask about -- again, about RSVP. Can you talk more about the confirmation of RSV diagnosis and the optimal window for the study? And can PCR be used to determine quantitatively if patients' viral loads fall in the optimal range for intervention?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [16]

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So we are using rapid test, and it's a PCR when the patient show up at the clinic within the 48 hours of the window. So it's confirmed at the site. And there will be centralized, also, PCR that we do afterwards.

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Unidentified Analyst, [17]

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Okay. Okay. And just one more question. Could you give us some more color on what the profile for a viremic patient would look like in the next portion of the EDP-514 study?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [18]

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Repeat one more time, please?

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Unidentified Analyst, [19]

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I was wondering what the profile for a viremic patient in the next portion of the EDP-514 study would look like?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [20]

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The profile of the...

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [21]

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The profile of the -- for 514 for the HBV, okay. Sorry, I didn't -- you switched to the HBV. So there will be patient who are viremic, obviously, who have a higher level of HBV DNA than the nuc-suppressed, they could be either naive of treatment or they could have received treatment, but having a worsening window where they don't receive any treatment. But they have to show an elevated level of HBV DNA at entry.

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Operator [22]

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Your next question is from Akash Tewari with Wolfe Research.

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Akash Tewari, Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst [23]

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So maybe on the RSV trial, maybe a little bit of color on why you chose AUC symptom benefit as your Phase IIb primary endpoint versus maybe like baseline viral load or something they use in Phase I or some of the flu trials. Would love to get some detail on that. Additionally, in your protocol, you say that patients will have to present within 48 hours of symptom onset. Are there any tricks that you're using for the trial to kind of ensure that patients are actually presenting within that treatment window -- I mean that treatment time line? And finally, it seems like you're -- I think you had previously mentioned that the powering was going to be similar to Phase I. So I think that was around 80% powered. Is there a chance that you could increase your enrollment now that the trial is getting pushed to first half '21?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [24]

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So there -- I don't think there are any special tricks. I think we were taking people as they present. And we have to rely on the reliability of what they say in terms of symptoms. Obviously, they're the only people who can know. But the good news is we're seeing lots of people coming in within that time window with symptoms. The -- could you repeat your first question, the first part of your first question again?

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Akash Tewari, Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst [25]

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Yes, absolutely. So I think we were looking at like J&J's outpatient RSV Phase II, their pilot trial, and they're looking at a lot of primary and secondary endpoints, viral kinetics [with respiratory] symptoms. So why specifically -- it's an interesting endpoint. AUC symptom benefit as your primary endpoint. Does it somehow give you a bit more wiggle room than some of these other exploratory endpoints that other companies are looking at?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [26]

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I think the choice of the AUC as far as the primary endpoint to look into the total symptom score was mainly driven also to the understanding and the very thorough analysis of our challenge study. As we work with our statistician, we thought that AUC for symptom score will be a better endpoint for what we are looking for in the context of that study.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [27]

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It's also easier on an outpatient basis to get more data points, because people will be reporting symptoms in diaries et cetera. So it's just as a -- from a practical basis on an outpatient study, you can get more data sampling that way.

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [28]

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Just want to complement to what Jay said about the trick. I mean there's obviously a lot of work that went into educating the site and the site educating patients that come to see them. We are using family practice, emergency care, center with patient with allergy, asthma, COPD. So we have a large campaign that try to attract patients with clear understanding of the eligibility criteria for our study. So we were able to be successful in that sense to attract patients with symptom within our window.

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Akash Tewari, Wolfe Research, LLC - Director of Equity Research & Senior Research Analyst [29]

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Got it. And just a quick question. Given the trial delay on the RSV side, is there any chance that you'd be looking at increasing the enrollment? So you might have more of a flu-like total number of patients in your trial versus something more in line with other RSV Phase IIb studies?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [30]

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There's no plan to increase the enrollment number.

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Operator [31]

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Your next question is from Liisa Bayko with JMP Securities.

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Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [32]

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Just wondering if you're going to be doing any interim cuts of the RSVP study. I thought that you needed some data in adult patients before moving into pediatrics. So just wondering how that's all going to work and if you're still then on time to start it at the end of this year.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [33]

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No, they're not really interrelated, and there won't be an interim cut. So we'll take the wealth of all the information we have and all the adults who have received study drug and parlay that into our thinking about how we dose peds ultimately. But our expectation is, is that these studies would be run concurrently.

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Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [34]

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Okay. So FDA doesn't need to see the data in the adult population before starting with pediatric study?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [35]

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No.

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Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [36]

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Okay. Okay. Got it. And then could you maybe talk a little bit more about the differentiated profile of 297? As you mentioned, it was differentiated. And I'd just be curious on learning a little bit more about that.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [37]

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Sure. So shifting gears to FXR now. So 297 are follow-on FXR agonists. We spend a lot of time trying to optimize whatever characteristics of the molecule we could, obviously, looking at the potency and selectivity and other kinds of things. What surprised us, as you know, with 305 in the ARGON study was at the doses that we used, we saw more pruritus than we would have expected from all the information we saw in Phase I. And so for us, thinking about how to use 305 in a way that gives better tolerability going forward is the path that we're thinking about for 305. But 297 then, it became clear that pruritus, perhaps more so than lipids, is the thing we needed to really try to figure out how to improve upon. The confounding part of that is that nobody really understands what's causing pruritus with these various FXRs that have seen it, is it on target, is it off target, is it on target in certain tissues, but not others. And so absent having the sort of confirmed mechanistic understanding of how to reduce pruritus, what we did was took other approaches that we could do sort of independent of knowing the mechanism.

So number one is drill down the potency to, as good a potency is, you could possibly do. So we worked and worked and worked on that. You've -- we put the data out at JPMorgan initially, and we'll have more at EASL. But it's a very, very potent FXR. It's the most potent one based on the data that we've generated side-by-side versus any other FXR agonist that's in development today. So number one, that's good, because you will reduce the amount of drug that it takes to deliver the punch. So we know that FXR receptors are in the intestine and also in the liver in terms of the sites of efficacy for a compound that we would be looking for in NASH. And so in addition to making these exquisitely potent for FXR and hopefully less potent for something else that we might not know, we aimed it directly at liver and intestine and not at plasma and skin. Because obviously, if you have high plasma levels, you're going to be circulating the drug around all kinds of other tissues in the body. And we specifically thought it would be interesting to minimize the skin exposure of the drug as well. So it's really the twofold combination of having very, very good potency so that we'll be dosing just very small amounts of drug and then having that drug go directly to the sites where we need the drug and hopefully not at the sites where we don't need the drug where only other things could happen.

So that's our thesis. And there's a scenario where it might not play out as we hoped. But that sort of narrow scenario of bad luck, I guess, would be if it's FXR-mediated, the pruritus. And if it's FXR mediated by FXR receptors inside the liver or intestine, then we may only have achieved a super, super potent version of 305 or some of the other FXRs that are out there today. But if it's any other scenario, we have the chance to come up with benefit. And that's what we'll be exploring. We think we can learn actually a fair amount in Phase I. And we're on track to start that Phase I study in the middle of this year, with the data coming in, in the first half of next year. So it's a pretty straightforward plan. It looks like an excellent molecule. Again, we'll profile it more at EASL. But it's a polished entrant into the field.

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Operator [38]

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Your next question is from Brian Skorney with Baird.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [39]

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I guess first just on EDP-514, can you just walk us through how to think about the dosing here and where you want to target to maximize antiviral activity? If I look at the results you have in the chimeric liver mouse model, it seems like dose escalation isn't really topping out despite going to pretty high mg per kg doses? Any thought on how to think about translating that data into a target dose in patients?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [40]

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Yes, I wouldn't translate the rodent model numbers into the humans. What I wouldn't look at it in that experiment is a very strong dose response and a very robust antiviral effect. In fact, it's the most robust antiviral effect that anybody has reported in that model. So -- but in terms of comparing the doses in milligrams per kilogram to a rodent to the actual doses we'll use in humans, I wouldn't get -- spend too much time thinking about that translation. And again, we'll get into the whole dose escalation work that we did at EASL when we lay the whole data set out, and you'll be able to take a good look at it then.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [41]

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Great. And then just if I could ask a question on the patient flow in the RSVP study. Could you just remind us how screening works here? Are you just first primarily screening for patients with respiratory symptoms and then screening them in for RSV in the study? And do you have any data on how many patients coming in with respiratory symptoms screen in for RSV versus screening out with influenza?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [42]

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Yes. So we take people, again, within 48 hours of symptoms. There's an in-office PCR that's done. We look for RSV versus flu A or flu B. And if you're positive for RSV and negative for flu A and negative for flu B, then you're a potential candidate. Obviously -- I mean there's more flu out there than there is RSV. So you're going to see more of that in these screens. But generally speaking, it's a straightforward test with a straightforward presentation of people coming in within 48 hours, which again, we've seen many people coming in, in that window.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [43]

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I guess what I'm trying to get at is, if eventually this moves into sort of a seasonal RSV treatment, I'm trying to see it in the real-world setting what sort of is a reasonable number to assume as a percent of flu and we could obviously kind of comp it to what like Tamiflu does, get a feel for the commercial opportunity?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [44]

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Yes. It's - it changes every -- it doesn't correlate perfectly every year. The seasonality is a little bit different. And what might be a more robust RSV season could be a lower flu season. So there's just this overarching seasonality to it. The patient numbers are probably not as high as flu. But again, I don't think people really fully know yet, in part because this testing is not routinely done on a broad scale basis in clinical practice so -- and in part because it's not that the tests don't exist, it's that the drugs don't exist. So people don't often order up the test. It's also different too to be thinking about the patient demographic that's in the RSVP study, which is the adult outpatient study. We know adults, in general, are a fraction of what they are -- that all RSV cases in general are a fraction of what they are in peds. So ultimately, the question will drive down to what are those ped numbers, but they're very significant in peds. Again, every ped gets typically an RSV infection by the time they're aged 2 or 3. It's just a question of severity, and it's a question of what happens once they get that infection.

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Operator [45]

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(Operator Instructions) Your next question is from Patrick Trucchio with Berenberg Capital Management.

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Zhilin Long, Joh. Berenberg, Gossler & Co. KG, Research Division - Associate [46]

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This is Iris on for Patrick. So regarding EDP-938, can you tell us if you expect to evaluate the drug in elderly patients? And if so, would you move directly into a pivotal trial? Or would you anticipate running maybe another 2 Phase II trials in this patient population? And then finally, would you anticipate having to run 2 pivotal trials for each patient population? Or is 1 pivotal trial sufficient?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [47]

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Thank you for your question. I can address that. And they are good questions. So I think for now, we have informed that our next studies will be in the transplant and peds. We know that those population are really unmet medical need. We are not excluding for the next future to be looking into the elderly, obviously, as they are also population of good targets for RSV. But the plan for now will be to focus on the transplant and the peds.

To your next question regarding pivotal study, I think that's a very good question. Today, if you look at the guidance issued by FDA or EMA, I don't think there's a clear understanding of if we will need 1 or 2 pivotal study, like we usually do when we register a drug. I think it's going to be interesting to engage regulatory authorities as we are moving and progress our programs. So we will know more as we are obviously progress further.

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Zhilin Long, Joh. Berenberg, Gossler & Co. KG, Research Division - Associate [48]

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Okay. Got it. And then regarding RSVP, can you tell us what you would consider to be a highly successful top line data results?

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Nathalie Adda, Enanta Pharmaceuticals, Inc. - Senior VP & Chief Medical Officer [49]

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Well, I guess, simply to make the primary endpoint with a nice p-value, I'll be happy to see that. And I think RSVP is also an interesting study for us and maybe for the field, trying to understand the feasibility of how soon can you attract the patient with nasal symptoms that you can treat to prevent severity and progress to lower respiratory tract infection. And I think this is what we need to understand. And if we understand it and we can put that in practice, I think there will be probably half of winning cure for RSV if you have a good product.

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Operator [50]

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And there are no further questions at this time. I'll turn the call back over to Ms. Carol Miceli.

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Carol Miceli, Enanta Pharmaceuticals, Inc. - Director of IR [51]

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Thank you, everyone, for joining us today. If you have any further questions, feel free to give us a call in the office. Thank you.

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Operator [52]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.