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Edited Transcript of SYBX earnings conference call or presentation 12-Nov-19 10:00pm GMT

Q3 2019 Synlogic Inc Earnings Call

Austin Dec 5, 2019 (Thomson StreetEvents) -- Edited Transcript of Synlogic Inc earnings conference call or presentation Tuesday, November 12, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Aoife M. Brennan

Synlogic, Inc. - President, CEO & Director

* Elizabeth Wolffe

Synlogic, Inc. - Head of IR & Corporate Communications

* Gregg D. Beloff

Synlogic, Inc. - Interim CFO, Pincipal Acounting Oficer & Principal Financial Officer

* Richard J. Riese

Synlogic, Inc. - Chief Medical Officer

* Scott Eric Plevy

Synlogic, Inc. - Chief Scientific Officer

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Conference Call Participants

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* Boobalan Pachaiyappan;H.C. Wainwright & Co, LLC, Research Division;Equity Research Associate

* Edward Andrew Tenthoff

Piper Jaffray Companies, Research Division - MD & Senior Research Analyst

* Joori Park

SVB Leerink LLC, Research Division - Associate

* Julian Reed Harrison

BTIG, LLC, Research Division - Analyst

* Mark Alan Breidenbach

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Samantha Lynn Semenkow

Citigroup Inc, Research Division - Senior Associate

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Presentation

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Operator [1]

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Good afternoon. Welcome to Synlogic's Third Quarter 2019 Conference Call and Webcast. (Operator Instructions) Please be advised that today's call is being recorded.

I would now like to turn the conference over to Dr. Elizabeth Wolffe, Head of Investor Relations and Corporate Communications. Please proceed.

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Elizabeth Wolffe, Synlogic, Inc. - Head of IR & Corporate Communications [2]

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Thank you, Charlie. Good afternoon and thanks for joining us on today's conference call.

Earlier this afternoon, we issued a press release, which outlines our third quarter 2019 financial results and several other topics that we plan to discuss today. The release is available on the Investors section of our website at www.synlogictx.com.

Joining me on the call are several members of Synlogic senior management, including Aoife Brennan, President and Chief Executive Officer; Richard Riese, our new Chief Medical Officer; Scott Plevy, Chief Scientific Officer; and Gregg Beloff, who's recently joined us as interim Chief Financial Officer. Aoife provide an update on recent events. Gregg will briefly summarize our financial results for the quarter, and Richard will provide more detail about our SYNB1891 program, for which we just opened a clinical trial. Following the prepared remarks, we'll open up the call for questions.

As we begin, I'd like to remind everyone that comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements other than statements of historical facts regarding the potential of Synlogic's platform to develop therapeutics to address a wide range of diseases, including cancer, inborn errors of metabolism and inflammatory and immune disorders; the future development of Synthetic Biotic medicines; the approach Synlogic is taking to discover and develop novel therapeutics using synthetic biology; and the expected timing of Synlogic's clinical trials and availability of clinical data. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including those described under the heading Forward-Looking Statements in Synlogic's press release from earlier today or under the heading Risk Factors in Synlogic's most recent Form 10-Q or in later filings with the SEC. Synlogic cautions you not to place undue reliance on any forward-looking statement.

Now I'd like to turn the call over to Aoife.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [3]

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Thanks, Liz. Good afternoon, everyone, and thank you for joining us on our quarterly update to discuss our financial results for the third quarter of 2019 and to provide an update on our programs and upcoming milestones.

It's been a busy summer, with data readouts from 2 clinical trials and the initiation of our first oncology program. We've learned a great deal, including where we can best apply our platform and resources, and we continue to be excited about the potential of our Synthetic Biotic medicines.

Our mission is to develop a new class of medicines that can address dynamic and complex diseases. Using synthetic biology tools and techniques, we engineered nonpathogenic E. coli Nissle to provide one or more therapeutic functions missing or damaged in patients with disease. A living cell senses and responds to its environment and we engineer therapeutic functions into our Synthetic Biotic medicines with potency and control, which enable them to provide these therapeutic functions when and where they are needed.

E. coli Nissle, which currently forms the basis of our Synthetic Biotic platform, confers specific advantages over other bacterial strains. It has been used as a probiotic for decades and has a good safety record. We understand how to engineer both therapeutic and additional safety functions into its genome and to add combinations of functions as needed. Finally, it's relatively easy to grow in large quantities, and we can demonstrate that it can be successfully formulated as a solid powder while retaining viability and activity, an important commercial consideration for certain of our cell-based medicines.

In July, we reported positive data from our randomized placebo-controlled Phase I/IIa clinical study of a liquid formulation of SYNB1618. SYNB1618 is a Synthetic Biotic medicine that we have engineered to consume phenylalanines, commonly known as Phe, from the GI tract for the treatment of phenylketonuria, or PKU.

In PKU, patients whose ability to metabolize Phe is compromised. Elevated blood levels of this metabolite can lead to serious cognitive impairments. The only available oral medicine for this disease, Kuvan, results in a 30% reduction in blood Phe in the 20% to 30% of patients with PKU who respond. Our goal is to develop a safe oral treatment for patients with PKU that can be used by all patients, regardless of age or disease type.

The data we disclosed in the press release and subsequently presented at an academic meeting in September demonstrated that the bacteria were functioning as desired in the human GI tract, and we could measure metabolites in blood and urine. These data demonstrated that both engineered pathways were active on consuming Phe in humans. Based on modeling derived from the relationship of dietary Phe restriction on blood Phe lowering, our data suggested that with a higher active dose of SYNB1618, we can achieve clinically relevant blood Phe reductions in PKU patients.

Prior to proceeding with an efficacy study to confirm blood Phe reduction, we needed to switch from a liquid formulation which requires storage at minus [80] to a solid oral preparation that is stable at room temperature. We are currently evaluating the tolerability and activity of a new solid formulation of SYNB1618 in a bridging study in healthy volunteers which we expect to complete at the end of 2019. We will select the dose levels for a Phase II efficacy study of the solid formulation in PKU patients, which we expect to initiate in the first half of 2020.

In August, we announced the top line data from our Phase Ib/IIa clinical study of SYNB1020 in patients with cirrhosis and elevated ammonia. The data demonstrated that SYNB1020 was well tolerated at a dose of 5 x 10 to the 11, 3x daily. However, in contrast to data obtained in standard preclinical models of hyperammonemia in both mice and rats, SYNB1020 treatment did not lead to lowering of blood ammonia in patients. We believe that these data reflect on this program and the difficult indication and not the platform as a whole.

They tell us a strain designed to work in the colon was active, as evidenced by the production of the nitrate biomarker, but the mechanism of arginine production did not result in lowering of ammonia in humans. Based on the data, we have discontinued our SYNB1020 program. Our near-term plans for GI-based programs will focus resources on development of SYNB1618 and other applications with validated biology.

As part of the process of learning about the potential of our platform through clinical trials of our first strains, we've been building capabilities required to develop our Synthetic Biotic platform. In addition to establishing the clinical and regulatory functions to carry out our clinical studies, we have developed in-house process development and manufacturing of both solid and liquid presentation of our Synthetic Biotic medicines, which has enabled us to generate clinical trial material for ongoing trials at SYNB1618 and our first oncology program, SYNB1891.

This summer, we established a collaboration with Ginkgo Bioworks that has exponentially grown our capabilities in synthetic biology and provided access to their extensive libraries of potential therapeutic genes, bioinformatics and an industrial scale operation to enable generation, screening and assay of candidate strains. All of this will enable us to move more rapidly to optimize and advance the most active versions of each candidate Synthetic Biotic medicine into clinical trials.

This quarter, we also made several appointments to support our clinical programs and our platform development. In September, I was absolutely delighted to welcome Dr. Richard Riese as our new Chief Medical Officer. Richard has over 15 years of experience in the pharmaceutical industry, most recently as VP of Clinical Development at Alnylam, where he led clinical development projects in several areas across Alnylam's rare disease portfolio. Prior to that, he was Head of Translational Clinical Sciences in the research unit at Alexion, where he was responsible for the clinical development strategy of all compounds from discovery to proof of concept. Stepping in to take over the running of 2 clinical trials, Richard has already made significant impact, particularly on my life. I've asked him to introduce himself and provide more information on our clinical plans for SYNB1891 later in this call.

We've also been fortunate to convince Michael Slater to join Synlogic full time as Head of Regulatory Affairs after a short stint as a consultant with us. Michael is a veteran of the industry with more than 25 years of experience, including hands-on preclinical and clinical regulatory strategy developments from pre-IND application through drug approval. Most recently, he was Head of Regulatory Affairs at Merrimack Pharmaceuticals, where he led the regulatory strategy resulting in the approval of Onivyde for the treatment of metastatic pancreatic cancer.

Our recent addition to Scott's research team is Dr. Dayal Saran, who joins us as Head of Synthetic Biology, most recently from [Lotte Foods], but prior to that from Ginkgo Bioworks. His years with synthetic biology experience and intimate knowledge of Ginkgo capabilities and operations will be instrumental in helping us to strengthen our relationship with our Ginkgo partners.

Last but not least, we're lucky to be joined by Gregg Beloff, who recently stepped in as interim Chief Financial Officer while we conduct a search for a permanent replacement. Gregg is a co-founder of Danforth Advisors and is another veteran of the life sciences industry. He has served as CFO of several public and privately held companies where he managed finance, accounting, corporate communications, human resources, IT, facilities, legal, IP and business development functions.

I hand the call over to him now to summarize our financial results for the quarter. Gregg?

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Gregg D. Beloff, Synlogic, Inc. - Interim CFO, Pincipal Acounting Oficer & Principal Financial Officer [4]

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Thanks, Aoife. It's a pleasure to be here, and good afternoon, everyone.

Earlier today, we released our financial results for the third quarter ended September 30, 2019, and I'm pleased to review those highlights of the results with you now.

Revenues in the third quarter of 2019 were $0.3 million as compared to $1.8 million for the corresponding period in 2018. The revenue for both periods is associated with our collaboration with AbbVie to develop a Synthetic Biotic medicine for the treatment of inflammatory bowel disease. The decrease in revenue was primarily the result of the achievement of a $2 million milestone under a September 2018 amendment to our AbbVie agreement, of which $1.8 million was recognized in revenue in the quarter ended September 30, 2018.

Total operating expenses for the third quarter of 2019 were $14.4 million compared to $13.3 million for the same period in 2018. For the 3 months ended September 30, 2019, we reported a consolidated net loss of $13.3 million or $0.39 a share as compared to a consolidated net loss of $10.7 million or $0.43 per share for the corresponding period in 2018.

Research and development expenses were $10.6 million for the 3 months ended September 30, 2019, when compared to $9.9 million for the corresponding period in 2018. The increase in expense was primarily due to increased clinical development costs for our SYNB1618 program.

Turning to the balance sheet. Synlogic ended the third quarter of 2019 with cash and cash equivalents as well as short- and long-term investments of $138.7 million. So based on our current operating plan, we anticipate that our existing cash and cash equivalents will fund our operations through 2021. So in summary, we have the balance sheet strength to advance our ongoing clinical programs throughout important data readouts in 2020 and to accomplish our near and midterm goals as we continue to develop our platform and pipeline.

Thanks. I will now turn the call back to Aoife.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [5]

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Thanks, Gregg.

Using a microbe as the basis for our living medicines provides certain additional advantages over other cell types. As we've shown in our SYNB1618 studies, we can exploit the special relationships that human have with bacteria in our GI tract where, while protected from the immune system, microbes have the potential to affect systemic biology.

Our second route of administration that we are evaluating, stimulated by the historic observation of tumor immune responses in patients with cancer and concurrent bacterial infections, is the administration of bacteria intratumorally. We are exploiting this route of administration with our first immuno-oncology program.

On that note, let me hand over to Richard to provide more detail on our plans for development of SYNB1891 and to give you a sense of what drew him to Synlogic. Richard?

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [6]

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Great. Thanks, Aoife.

I've spent a great deal of my career developing treatments for rare diseases, and I'm fortunate enough to have worked on a number of successful products which are now helping patients in meaningful ways. At Synlogic, I am particularly excited by the potential to develop a whole new class of drugs that apply synthetic biology to the purposeful engineering of microbes to ultimately impact the lives of patients and their families. I also like the company's approach of rational design and the application of drug development principles to its programs. Finally, it is clear that Synlogic is really the leader in this new field and is building the necessary capabilities to rapidly translate this platform into therapies that have the potential to provide meaningful clinical benefit for patients. It's been fun to roll up my sleeves and get up to speed on details. And to say that Synlogic has lived up to my expectations and excitement is a bit of an understatement. I'm also not quite sure how Aoife carried out both jobs over these last few months. I look forward to updating you on the PKU programs in future calls.

Today, I would like to provide more detail on our plans for SYNB1891, which has the potential to help the significant proportion of patients who do not respond to currently available immunotherapies.

As Aoife mentioned, we have initiated the first clinical trial to evaluate our Synthetic Biotic approach in immuno-oncology with SYNB1891, which is designed to activate the immune system in advanced solid tumors and lymphomas that are not responsive to checkpoint inhibitors. SYNB1891 is an engineered strain of E. coli Nissle that produces cyclic di-adenosine monophosphate, or CDA, a potent agonist of the STING pathway, which plays a critical role in the production of type 1 interferon, an initiation of antitumor responses via activation of antigen presenting cells, or APCs. There are several key differences between our approach and others in this area, particularly small molecule STING agonists.

SYNB1891 can be delivered directly into the tumor where it remains active for several days to stimulate a local immune response, in contrast to naked agonists that tend to have short half lives. CDA is delivered directly into tumor resident APCs when they engulf SYNB1891, as these innate immune cells naturally sense and engulf bacteria. This process results in a highly efficient activation of the STING pathway and a type 1 interferon response in APCs while sparing other cell types, such as T cells, where STING activation may be detrimental for efficacy. We believe this longer availability and directed delivery is unique to our Synthetic Biotic platform among the other approaches.

In addition, the bacterial chassis used in Synlogic's Synthetic Biotic approach is also able to stimulate the in -- innate immune system via several other mechanisms, potentially adding to the magnitude of the overall immune response. These 2 key features, STING activation primarily only in APCs and activation of additional immune pathways, makes SYNB1891, in our opinion, a truly differentiated first-in-class immuno-oncology agent.

Let me provide an overview of our clinical plans. The Phase I clinical trial is an open-label two-arm dose escalation studies in patients with cutaneously accessible advanced metastatic solid tumors or lymphomas. The study's primary objectives are to evaluate the safety of intratumoral administration of SYNB1891 in establishing a maximum tolerated dose as monotherapy in arm 1 and to establish a suitable dose for administration in combination with the checkpoint inhibitor atezolizumab, which will be evaluated in arm 2. Exploratory endpoints will include a preliminary assessment of disease response, if appropriate for the given tumor type as well as valuation of cellular and soluble pharmacodynamic response biomarkers in the tumor in serum and kinetics of SYNB1891 in the tumor.

In arm 1, patient cohorts will be treated with SYNB1891 as monotherapy at escalating dose levels. Patients enrolled in arm 1 may receive up to 4, 21 -- 21-day cycles of SYNB1891 monotherapy. In cycle 1, patients will receive an i.t. injection of SYNB1891 into an eligible lesion on days 1, 8 and 15. On cycles 2 through 4, patients will receive an injection at that site on day 1. The maximum tolerated dose, or MTD, will be determined based on defined dose [forming] toxicity thresholds observed in cycle 1.

In arm 2, patient cohorts will begin at a tenfold lower dose than in arm 1 and will be treated with escalating doses of SYNB1891 in combination with a fixed dose of atezolizumab until the recommended Phase II dose for the combination regimen is determined. Atezolizumab will be administered on day 1 of each of 4 planned cycles. Once the Phase II dose of arm 2 is determined, up to 20 additional patients may be enrolled in that cohort to fully characterize the safety profile of SYNB1891 in combination with atezolizumab. We will post further details on clinicaltrials.gov.

Earlier this summer, we announced that the FDA has cleared our IND. And earlier this month, we initiated our first site and are working hard to get several more sites online this year. While it's a bit early to provide more specific timing, we expect to have monotherapy data in 2020, and we'll update as we gain a better understanding as our rate of enrollment into the study.

Thank you. Now let me turn the call back to Aoife.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [7]

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Thanks, Richard. We're at an exciting stage in the company's development with 2 programs in clinical trials that represent very different clinical applications of our Synthetic Biotic platform: SYNB1618 for treatment of PKU which is administered as a solid oral product; and SYNB1891, our first immuno-oncology program, which is administered by intratumoral injection. These 2 Synthetic Biotic medicines will continue to teach us about the strength of our platform and provide very different opportunities from a clinical development and business perspective.

As we stated before, we will look to partner programs where appropriate, particularly as partnerships provide necessary capabilities for development, allowing us to focus on developing our platform and pipeline of wholly owned programs.

With approximately $139 million in cash and investments at the end of the third quarter, we have a solid financial position to execute on our planned activities through 2021. In the year ahead, we believe that we will gain additional insights into the potential of our program to treat human disease and the promise of our platform across additional metabolic and oncology indications. I look forward to updating you on our progress and future plans as we complete the SYNB1618 bridging study at the end of 2019.

In the new year, we also expect to provide more detail on how we've been engaging Ginkgo's capabilities and the future development of the pipeline as we advance several new programs.

I'd like to thank you all for joining us this afternoon. We will now open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Joseph Schwartz with SVB Leerink.

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Joori Park, SVB Leerink LLC, Research Division - Associate [2]

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I'm Joori Park dialing in for Joseph Schwartz. My first question has to do with SYNB1618. For your bridging study in healthy volunteers, I know the goal is to establish the maximum tolerated dose. And I was just wondering if you could please remind us what like the number of volunteers you have and what you'll be measuring, the biomarkers you will be looking for and how you will be analyzing the data, and maybe if you could put it into context by letting us know what you're hoping to see that would indicate that you could reach your target profile, a Phe lowering of 30%, that would be very helpful.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [3]

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Great. Yes. Thanks so much, Joori, for the question. So as I mentioned on prior calls, the objectives of the bridging study are really to a -- threefold. Firstly, to identify the maximum tolerated dose of the solid oral formulation because that's the kind of formulation that we think is commercially viable for later stages of development. And so for that, we'll enroll cohorts of -- at escalating doses. The cohorts will be 8 patients per cohort, 6 active and 2 placebo, and we will measure the same biomarkers that we measured in our prior Phase I study. We think that those biomarkers are the appropriate ones to measure in vivo activity, and we are able to develop nice, precise assays that really taught us a lot in -- when we did the study of the liquid formulation. So we'll continue to kind of measure TCA and HA using the tracer that we used in Phase I because we think we have a nice, informative biomarker strategy. So that's kind of the first objective.

The second objective is to really understand how we could establish a first dose effect that was going to be favorable for patients. And as you know, with the -- when we announced the data from the prior study, what we observed was that there was some nausea and vomiting that appeared to occur right around the time of the first dose that was usually worse on the first day, and as patients continued with dosing, it got better throughout the dosing period. So that leads to the obvious question, well, what happens if you do a dose ramp where you give lower doses and then gradually ramp up to the dose that you think you need. So the second objective of the study is going to be evaluating a dose ramp and the impact of kind of starting low and escalating the dose on the tolerability profile.

And then the third objective, which really informed how we think about the formulation of a product for later phases of development and what options might be available to us, is to really understand the need for buffering and the impact of PH on the activity of the product. And that's kind of the third objective. So we anticipate having data from all 3 objectives. I think all 3 are important as we think about setting ourselves up for success in subsequent phases of development. And as soon as we think we have an answer on all 3 fronts, we'll be providing an update to the investment community.

Anything else, Richard, that you'd like to add there in terms of what I've outlined to Joori.

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [4]

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No, no. I think that you've pretty clearly stated the goals completely.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [5]

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Does that answer your question, Joori? Any follow-on questions there?

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Joori Park, SVB Leerink LLC, Research Division - Associate [6]

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Yes. That's very helpful. And then in your press release, or I guess, sorry, in your prepared remarks, you said that the study will be completed by year-end '19. I was just wondering if we could expect the data -- if you could just provide some more clarity on that. If we could expect the data by year-end as well, or does that mean you have to do analysis and that it's more likely to be like early 2020 because you plan to initiate your Phase II in PKU patients in 1 half '20.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [7]

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Yes. So I think either way, we feel we'll be able to meet that guidance around initiating the Phase II study. The study will be complete at the end of the year. So it's hard for us to -- sometimes some things are coming, and you're relying on external labs to analyze samples between Thanksgiving and Christmas. So I feel bad on providing guidance where I'm out of the control of these. And when it's so close to holiday time, it's really hard for us to call, a single sample that needs to be repeated, could put us into the first quarter next year. So it will be -- in the next couple of months, I can say, I think as something that hopefully I don't have to dial back at a later point, but we're hopeful to get it out and to get the study completed as soon as possible because we really feel that getting into the PKU patients again and demonstrating Phe lowering is really going to be important for the program. So we want to make sure that we make progress quickly towards that goal.

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Joori Park, SVB Leerink LLC, Research Division - Associate [8]

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Okay. Great. And my next question has to do with manufacturing. I know you put a lot of energy and thought into developing your second-generation oral -- solid oral formulation. And I was just wondering, are there additional updates you foresee implementing in the near future to either increase the potency or allow for better tolerability to dose higher? And how those changes could be implemented into your trial? Do you have to do additional bridging studies to introduce new updates? Or is there an easier way to introduce the updates into the clinic?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [9]

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Yes. So I think there are a couple of -- as you know, with the new platform company and with the [RT] program, we're going to be constantly evolving the platform and looking at better ways of doing things. I think the changes fall into 2 buckets for me. Number one is formulation. Right now, we're in this powder, we're looking at what that's going to look like eventually as the commercial presentation across -- our aim for this program is to have something, an offering from 2-year-old to an 80-year-old. So it's possible that there'll be different presentations and formulations across that kind of end users based on just the characteristics of that population. So for sure, we'll continue to scale up manufacturing and to get higher scale as we move forward into later phases of development and do bigger trials and prepare for commercialization. We'll continue to do things that increase kind of the "yields" of the manufacturing and that continue to look at formulation changes that will help us kind of be more patient-centric and provide options to patients in terms of what the product actually looks like at the end of the day.

I think the second bucket of changes will be things that we do to leverage our Ginkgo partnership. And I think I discussed one of the things that was really exciting to me when we established the Ginkgo partnership is when we have a biology and when we think that we have a product where we can really make a difference for patients, being able to leverage the throughput and the optimization that Ginkgo can bring to bear on the genetics, I think, is a really key driver for me of establishing that partnership. So we start to work on pipeline programs that will feed future development programs, and we've also started to work on thinking around backups for programs that we think are really exciting, like the PKU program. So we're hoping to show some kind of data around how we're thinking about that in the early part of next year, as we alluded to in the script, and we'll be providing you with some updates there.

But we think we have a really interesting potential opportunity for patients with PKU. We think we have biomarkers that are informing us that we're on the right path. We're hoping that the 1618 product gets there, but we're also, in parallel, working on next-gen programs using the toolkit that we got access to with Ginkgo.

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Operator [10]

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Your next question comes from the line of Yigal Nochomovitz with Citi.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [11]

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This is Samantha on for Yigal today. You mentioned that the SYNB1891 study was going to be looking at solid tumors and lymphomas, but I wonder, is that going to be all-comers? Or have you narrowed down specific tumor types that you expect to enroll?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [12]

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Yes. That's a great question. Maybe I'll hand that one over to Richard to address the specific inclusion, exclusion criteria.

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [13]

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Sure. It'll essentially be all-comers, but they'll have to have failed conventional treatment, including checkpoint inhibitors. And that'll be solid tumors and lymphoma. So it's a traditional Phase I -- cutaneous traditional Phase I criteria where they will, again, would have to had failed conventional therapies.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [14]

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Correct. And it's cutaneously accessible tumors as well, Samantha, is another criteria. And so we're not enrolling patients with deep visceral tumors. There has to be at least one cutaneously accessible tumor that can be injected to qualify for the study.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [15]

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Got it. And that kind of gets to my follow-up question on how big -- is there any exclusions on the size, the diameter of the tumor as well as the cutaneous location you just mentioned?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [16]

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Yes. My -- I'm trying to remember -- we're [pull up the thing] now while we're talking. My understanding is they have to meet the criteria of measurable per the RECIST criteria, which I believe is 1 centimeter in diameter.

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [17]

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1 centimeter.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [18]

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1 centimeter. So the injectable tumor has to be a minimum size to enable, but the volume of injection is very, very small. So that's not going to be a limitation. The inclusion of the injectable tumor, which really is based on the measurable criteria per RECIST.

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [19]

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Yes. RECIST in -- [RECIST in] LYRIC. So depending on the tumor type.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [20]

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Got it. So there's no upper bound to the size that was [admitted for] inclusion?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [21]

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Correct. Yes.

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [22]

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Yes. There's no upper bound. As Aoife said, visceral tumors will not be included or tumors close to arteries or other [nerves] will be excluded also.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [23]

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Got it. That makes sense. And then I believe you mentioned this, but perhaps you could clarify. The injection will go into the same location for each dose? Or will you be -- I mean I guess, as the tumor maybe responds, will you be changing the location to go with that response?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [24]

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Correct. So the first -- we choose an injectable lesion. So long as it meets the criteria for being an injectable lesion at each visit, we'll continue to use the same lesion, but we have built in flexibility that as that tumor regresses, obviously, we saw that in our preclinical work and in our preclinical tox that we get tumor regressions. If that happens in the clinic with the primary lesion, then there's criteria in the protocol that the investigator can choose a second tumor that meets the criteria as injectable. If they don't -- if patients don't have a second tumor that meets the criteria for injectable, they would continue with the monitoring phase of the study or with the checkpoint inhibitor, depending on which arm of the trial they're in. Does that make sense?

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Operator [25]

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Your next question comes from the line of Ram Selvaraju with H.C. Wainwright.

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Boobalan Pachaiyappan;H.C. Wainwright & Co, LLC, Research Division;Equity Research Associate, [26]

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This is Boobalan dialing in for Ram. I just wanted to talk to you a little bit about 1618 and its clinical development cost. Maybe you can tell us a little bit about how much is the next stage of clinical development for 1618 likely to cost? And what format is it slated to take? And maybe you can also elaborate a little bit on your learnings from your biomarker modeling work into this program.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [27]

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Yes. So I think there's a financial part and a clinical part to that question. I maybe ask Gregg to address the financial part in terms of the impact on the runway, and then we'll we address the modeling question separately, if that works, okay?

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Gregg D. Beloff, Synlogic, Inc. - Interim CFO, Pincipal Acounting Oficer & Principal Financial Officer [28]

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Sure. And not to make anyone's life difficult in terms of [preparing] models, but it's not our approach or our practice to give guidance specifically to programs. As you know, there are general costs that we sign when we look at a CRO, and there will be some variation around them. Specifically, what our financial guidance is and will continue to be is that we have cash on the balance sheet sufficient to support not only 1618, but 1891 as well as our other initiatives, new programs, platform development through 2021.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [29]

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I think to jump to the second part of the question and just to echo what Gregg said, the reason these rare diseases are interesting ones for us is as well as the patient need and the unmet needs, and generally the trial sizes and development costs tend to be on the lower end.

In terms of the question for the modeling, what we've shown, and I'll jump in to kick it off and then jump in with Richard to add any details that I've overlooked. But what we know is that the bacteria consuming phenylalanine within the GI tract, and we're able to measure that consumption. And if you assume that one mole of phenylalanine consumed by bacteria is the same as one mole of phenylalanine excluded from the diet of a patient with PKU, you can start to make a nice relationship between the activity of the bacteria and the impact on blood Phe lowering. So that's kind of the underlying assumption to all of our modeling, and that's kind of what we're basing our decision criteria on as we think about how good this needs to be to move to the next phase of development.

So Richard, anything you wanted to add there in terms of how we think about modeling and...

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Richard J. Riese, Synlogic, Inc. - Chief Medical Officer [30]

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Yes. No, I think -- yes, I mean that's exactly right. Our goal here is to use the modeling to help us predict how much consumption it will take to affect Phe levels in the serum. And our next strategy, our next step is to show Phe lowering next year as we move on into the next study.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [31]

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Does that answer your question?

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Boobalan Pachaiyappan;H.C. Wainwright & Co, LLC, Research Division;Equity Research Associate, [32]

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Yes. Absolutely. And then the AbbVie collaboration is pretty intriguing. Might we see any lead candidates to be formally designated or advanced into clinical studies in 2020 maybe?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [33]

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Yes. We're -- because AbbVie is the decision maker, we all think it's a really interesting collaboration, it's been a great one for us, continues to be very healthy, multiple targets, obviously, in that collaboration that we are unable to disclose. And also, our progress, we'll be able to disclose when we achieve milestones. But other than that, I'm afraid it remains at a slow [pace.] So that's -- it's going well is I think all we can say is at this stage.

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Boobalan Pachaiyappan;H.C. Wainwright & Co, LLC, Research Division;Equity Research Associate, [34]

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Okay. Great. I think I might know the answer for the next one. So this is in regards to Ginkgo Bioworks. So maybe you can provide a bird's eye view on this collaboration and maybe what kind of therapeutic area you're working on, on any lead candidates that will be disclosed from this initiative?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [35]

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Yes. So the Ginkgo collaboration is a really great one for us because it allows us to access state-of-the-art synthetic biology infrastructure and capabilities that would be very challenging for us to build internally in a company of our size. It's automation, it's high throughput, it's all of their kind of IT and data management infrastructure. We say about the collaboration that we're the architects and they are the builders. So we have a -- the idea for a strain comes from us because we believe we kind of understand the biology and the diseases we plan to pursue. We'll come up with an idea that for instance, we want to design a strain to consume phenylalanine, and we think there's unmet need in PKU, it could be a good opportunity for our platform. We'll work with our Ginkgo partners to think about all the various enzymes and pathways that exist within the microbial world that consume phenylalanine. We will initiate a technical development plan together where we assign specific performance criteria of what that needs to achieve based on our understanding of disease biology and translation. They will screen multiple genes, come up with some small [test] candidates for us to test, and we'll continue to iterate it in that way.

I think as we mentioned on the call, we haven't spoken about the specific data yet. But early in the new year, we'll provide more visibility to specifically what we're working on with Ginkgo. But so far, it's been a great working relationship, and we've really enjoyed kind of getting up to speed and starting to work with them.

Scott, I know you're leading a lot of the work. Is there anything there that you'd like to add to what I've just said?

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [36]

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Yes. I guess I just want to make the point that this is by no means a CRO-type relationship, and the interactions and collaborations is really bidirectional. And we value their intellectual input into the projects very, very much. And just at a very high level, we've had conversations where we propose an application, and they have knowledge of a particular pathway that may be relevant to this application from some of the work they've done in the industrial application in the past. So it's -- it really expands our intellectual bandwidth as well.

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Operator [37]

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Your next question comes from the line of Mark Breidenbach with Oppenheimer.

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Mark Alan Breidenbach, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [38]

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I just got one on -- it's related to the new solid formulation for 1618. I'm trying to get a sense for what the kinetics of reanimation would be for these lyophilized bacteria and if that's compatible with your expected transit time of the bacteria through the GI tract. I mean if we're trying to keep them all in the small intestine, do we have to worry about some sort of delay or lag before they would wake up from their lyophilized state? If you could comment on that.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [39]

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Yes. Absolutely. Bacteria are pretty intriguing to me. They're pretty amazing. They never cease to amaze in terms of the speed of how they come back to life. So the bacteria double -- E. coli double every 20 minutes. So everything is on a much shorter time scale compared to kind of human minutes and human years.

We have shared some data on the lyo in NHPs and in mice, showing that the profile in terms of the kinetics is superimposable on the liquids. So it's -- in those models, it's been very rapid, and it appears to function in vivo very similar to the liquid product with no lag required for "kind of waking up." We will measure blood TCA in the bridging study, so we'll be able to share similar types of data with you from humans. But based on everything we've seen so far in both the IVS system and in some of the preclinical models, lyo appeared to be interchangeable with the liquid product. Is that fair to say, Scott?

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [40]

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Yes. Spot on, exactly.

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Operator [41]

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Your next question comes from the line of Ted Tenthoff with Piper Jaffray.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [42]

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So just coming back from [SSIEM,] I was wondering as you kind of look at the (inaudible) landscape if anything else maybe jumps out either in addition to PD-1, PD-L1 as targets for potential combination for a novel STING agent.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [43]

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Yes. That's a great question. Could have used the benefit of being at [SSIEM.] I was only following along on Twitter. So I didn't get much of the real time. So I think some of the things I saw, certainly looking across the spectrum of all of the data that was shared there with certainly a lot of intriguing support for innate immune activation and innate immune agonists in cancer, and I think some pretty nice data in terms of responders across kind of various programs and approaches to innate immune activation. I felt that there was some really nice data for intratumoral approaches that may overcome some of the hesitancy that's been there to date with i.t. routes of administration. I think both of those things increase my conviction in SYNB1891.

I think the final part of your question is really around kind of combinations and is there another way to think about innate immune activation other than the kind of traditional route of monotherapy in combination with checkpoint inhibitors. And certainly, some intriguing data that combination with, for instance, radiotherapy, chemotherapy that has given us food for thought. I think it's too early to say that anything is active and in the hopper yet, but certainly, I think some provocative data that where we may actually have further ability to differentiate and have had some interesting conversations with oncologists around that. But we're also open to any ideas that you have, Ted, because I know you follow the space very closely.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [44]

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Well, I have another quick question too because sort of thinking about lesion access. I'm wondering if there's anything you've seen kind of on the device side that may make accessing visceral lesions something that would be achieved or intratumoral injection of the (inaudible).

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [45]

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Yes. I think that's another great question. My belief is that there's no tumor in the body that's not accessible with interventional radiology. While our initial study is going to be limited to cutaneously accessible tumors, that's really just because we can monitor safety in local inflammation more easily than you can with something that's a deep visceral tumor. I think multiple other programs like the Replenine data in -- with the non-colitic virus given intratumorally, they included a really broad set of tumors from very deep visceral lesions to cutaneously accessible ones. So I really don't see that there's an impediment from a ability to access these tumors with the right intervention radiology and in specialist centers.

I think devices, there's some really nice ones out there, where like [quadrafuses] and some of those that helps in terms of distribution within tumors that we haven't evaluated yet. But certainly, we continue to have talks with investigators and radiologists to really work out what's the best approach of accessing some of these tumors. But so far, the feedback that we've received is that radiology guidance really enables pretty much any tumor to be accessed. We're obviously not going like intracranial, but certainly, any visceral or soft tissue tumor can be accessed in -- did you want to say something, Scott?

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [46]

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Yes. Certainly, we've also spoken to many investigators who would be interested in endoscopic, bronchoscopic, cystoscopic administration of a synbiotic as well. So I think the future possibilities in terms of moving away solely from an i.t. approach is something we're really interested in doing.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [47]

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I'm really excited to hear more about the progress of the orphan programs as well.

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Operator [48]

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(Operator Instructions) Your next question comes from the line of Thomas Shrader with BTIG.

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Julian Reed Harrison, BTIG, LLC, Research Division - Analyst [49]

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This is Julian on for Tom. I just have a couple on 1891. First, in dose escalation, are you keeping the amount of STING agonist or dacA copies per bacteria generally constant? Curious how strong of a DIAL you have on this. And if you're keeping it constant in your Phase I, can you briefly talk about how you arrived at the current construct currently being tested?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [50]

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Yes. Sure. So I'll answer that. And in terms of we -- the dose escalation will be in colony-forming units or live cells, and because we integrate within the genome, it's not expressed on their plasma. So that's pretty constant per live -- every live cell will have the same genetics, essentially. So we're able to escalate it based on the number of live cells across the cohorts. So it's a little different to maybe some of the other viral vectors and other bacterial vectors for gene therapy that you may cover, Julian. We really integrate so that we have good control over the "potency," and we measure dose based on the number of live cells. So that's kind of how we've been thinking about that. Does that answer your question?

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Julian Reed Harrison, BTIG, LLC, Research Division - Analyst [51]

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It does. That's helpful. And then for my second question, I was just wondering if you could talk about any biomarkers that are uniquely indicative of STING pathway engagement? And will you be collecting data on any of these in the monotherapy stage of your Phase I?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [52]

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Yes. Great question. I might hand you over to Scott to answer that one for you, Julian.

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [53]

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Yes. We'll be doing biopsies and fine needle aspirates pretreatment at day 8. And we have a biomarker analysis, which will include qPCR and Nanostring. What we're really interested in looking for is the immediate downstream targets of STING activation, which is going to be type 1 interferon production and signatures in that pathway. And we believe we have an idea on what fold elevations we're going to want to see both from our preclinical modeling and some of the work from other STING agonists that have been done in humans in the field. So we'll have a biomarker plan that will hopefully be able to have us demonstrate target engagement in the context of the study.

And I would be remiss if I didn't remind everyone that this is a Phase I study. And ultimately, the primary endpoint is safety here.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [54]

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Great. Yes. Good addition, Scott. Thanks for that reminder.

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Operator [55]

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(Operator Instructions) We have no further questions at this time. I will now turn the call over back to the presenters.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [56]

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Thank you, Charlie. We'd like to thank you for joining us on today's call, and we look forward to updating you on progress across our developing pipeline in the coming months. We'll be available later today if there are any follow-up questions. Good night.

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Operator [57]

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