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Edited Transcript of SYBX earnings conference call or presentation 8-Aug-19 9:00pm GMT

Q2 2019 Synlogic Inc Earnings Call

Austin Sep 25, 2019 (Thomson StreetEvents) -- Edited Transcript of Synlogic Inc earnings conference call or presentation Thursday, August 8, 2019 at 9:00:00pm 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

* Scott Eric Plevy

Synlogic, Inc. - Chief Scientific Officer

* Todd Shegog

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Conference Call Participants

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* Christopher Lawrence Howerton

Jefferies LLC, Research Division - Equity Analyst

* Edward Andrew Tenthoff

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

* Edward D. Marks

H.C. Wainwright & Co, LLC, Research Division - 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 Second Quarter 2019 Conference Call and Webcast. (Operator Instruction] Please be advised that this call is being recorded. I would now like to turn the call 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, John. Good afternoon, and thanks for joining us on today's conference call. This afternoon we issued a press release which outlines our second 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 this call are Aoife Brennan, President and Chief Executive Officer; Todd Shegog, Chief Financial Officer; and Scott Plevy, Chief Scientific Officer.

During the call, Aoife will provide a brief outline of our recent progress. Todd will summarize our financial results for the quarter, and finally Aoife and Scott will discuss recent events including the topline data that we released in July, and their implications for the development of our Synthetic Biotic platform, before summarizing our upcoming milestones.

Following our prepared remarks, we'll open up the call for questions. As we begin, I'd like to remind everyone the comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date hereof and are subject to numerous factors, assumptions, risks and uncertainties which change over time. Actual results could differ materially from those contained in any forward-looking statements 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-K, or in later filings with the SEC. Synlogic cautions you not to place undue reliance on any forward-looking statements.

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 in our call to discuss our second quarter 2019 financial results, recent progress and upcoming milestones.

We're making great progress in our mission to develop a novel class of living medicines using synthetic biology to engineer nonpathogenic bacteria to perform therapeutic functions. This new class of living medicines can be designed to sense and respond to their environment. Our goal is to design a living medicine that can potentially provide a therapeutic solution at the right time and in the right place to address disease.

We're focusing on diseases that uniquely suit our technology and that have the potential to address unmet medical needs. Our initial programs are designed to address indications in which we have a good understanding of the disease biology, and thus the functionality that we need to have to engineer into the bacteria.

This includes metabolic diseases such as phenylketonuria, or PKU, for which we have designed SYNB1618, a strain that has been engineered with 2 functions to consume phenylalanine or Phe, which is the bad actor, a toxic metabolite in the genetic disorder PKU.

We've also engineered a strain called SYNB1020 to consume ammonia. SYNB1020 is designed to treat conditions that results in hyperammonemia, such as liver disease and urea cycle disorders. And we have an ongoing Phase Ib/IIa clinical study in patients with cirrhosis that will be read shortly.

We also see potential for our Synthetic Biotic medicine in broader disease areas such as inflammatory bowel disease, or IBD, and cancer. We have a collaboration with AbbVie to develop Synthetic Biotic medicines for IBD. And our first oncology program, SYNB1891, is moving towards the clinic. In these first programs we are checking distinct sites of action, small and large intestine and tumor, delivered either orally or via intratumoral injection in order to learn about our platform, its strengths and potential future applications.

We are also currently focused on a single chassis E. coli Nissle as the basis for our engineering, as this enables us to learn iteratively, and to apply that knowledge to future programs.

We've had a very busy first half of the year and are making significant progress in understanding our platform and its future potential. We had several first in our SYNB1618 program. We released our first data generated from administration of a Synthetic Biotic to patients. And we demonstrated for the first time the activity in humans of multiple functions engineered into a microbe, a key differentiator for our platform in complex diseases.

I will recap the data briefly later in the call as well as covering our plan to advance the program. We believe we have a clear path forward to develop a treatment for all PKU patients regardless of age or disease type. We remain on track to achieve the goals we set for our other programs. We expect top line data in this quarter from our Phase Ib/IIa clinical trial of SYNB1020 in patients with cirrhosis and elevated ammonia.

As we've said before, with ammonia lowering data and other supporting outcomes, we will decide on the development [path] for SYNB1020. We also expect to achieve our goal of filing an IND application this year for our first IO program SYNB1891. Our intention is to evaluate SYNB1891 as a monotherapy as well as in combination with the checkpoint inhibitor in patients with advanced solid tumors and lymphoma.

To this end, we announced earlier this quarter that we secured a supply agreement with Roche for access to the PD-L1-blocking checkpoint inhibitor Tecentriq for use in the study. In addition, we continue to make progress with our AbbVie collaboration. I look forward to providing more details on each of these programs in future calls.

On the platform front, we added significant additional capability in synthetic biology with our recently announced collaboration with Ginkgo Bioworks. Ginkgo is a private company based here in Boston that has been very successfully deploying synthetic biology and engineering microbes for industrial applications. We share their conviction that the power of biology and living cells can be harnessed to provide solutions to a range of human problems, including disease. And we share a focus on synthetic biology as a route to achieving this vision.

Synlogic has built a team that understands disease biology and that can -- and use synthetic biology tools to design and engineer Synthetic Biotic medicines and manufacture and develop these novel therapeutics. Ginkgo has access to a vast database of genomic sequences, significant synthetic biology engineering experience across multiple applications, and has industrialized the process of optimization and in-vitro screening of engineered microbes.

As many of you know, we had worked with Ginkgo on a small pilot project in which we asked them to optimize one of our prototype strains using their process, with very compelling results. We've been looking for ways to work together and this collaboration made a lot of sense. Working with Ginkgo will enable us to optimize and bring superior candidates into clinical trials more efficiently.

Ginkgo demonstrated their commitment to our partnership with the equity investment in Synlogic at $9 a share, a premium to the closing price of the stock. Of the $80 million that the agreement brought in, we have committed to spending $30 million for Ginkgo services on a number of projects over the next 5 years or so. We're very excited to work with Ginkgo as their skill set complement and expand our capabilities significantly.

Later in this call I've asked Scott to provide a little more color on our Ginkgo collaboration as we set up our first project with them.

Now let me turn the call over to Todd to briefly run through the financials and our updated guidance.

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Todd Shegog, [4]

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Great. Thanks, Aoife. And good afternoon, everybody. After the close of market today, we released our financial results for the second quarter ended June 30, 2019. And I'm pleased to review the highlights of those results with you now.

Revenues in the second quarter of 2019 were $0.4 million compared to $0.3 million for the same period in 2018. Revenue for both periods is associated with Synlogic's collaboration with AbbVie to develop a Synthetic Biotic medicine for the treatment of inflammatory bowel disease. Total operating expenses for the 3 months ended June 30, 2019, were $13.4 million, compared to $15.6 million for the same period in 2018.

Research and development expenses were $9.7 million in the second quarter of 2019 compared to $10.9 million in the same period in 2018. The decrease was primarily due to decreased clinical development cost for our SYNB1618 program as our Phase I/IIa clinical trial ended and a decrease in nonclinical developed cost for other programs, partially offset by increased research and development support cost. General and administrative expenses were $3.7 million in the second quarter of 2019 compared to $4.7 million for the same period in 2018. For the second quarter of 2018, the company report -- I'm sorry, for the second quarter of 2019, the company reported a consolidated net loss of $12.3 million or $0.45 per share compared to a consolidated net loss of $14.6 million or $0.59 per share for the corresponding period in 2018. I refer you to today's press release for a summary of the 6-month year-to-date results.

Turning to the balance sheet. I'm pleased to report that Synlogic ended the second quarter of 2019 with $149.1 million in cash, cash equivalents, short and long-term investments. In summary, with the additional $50 million in cash resulting from the Ginkgo agreement and our prepaid services investment in their synthetic biology services, we have the balance sheet strength to advance our ongoing and emerging clinical programs through the middle of 2021. Thank you. And let me turn the call back over to Aoife.

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

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Thanks, Todd. As Todd outlined, we have a strong cash position that will enable us to advance our lead programs to the next stage of development and move several early stage programs into our development pipeline. Turning to our lead programs, specifically the recently presented data from expansion cohort of our Phase I/IIa clinical study of SYNB1618 in patients with PKU. We're very pleased with this data as they provided important information about the behavior of SYNB1618 in patients and gave us confidence in our plans for further development of this program. In summary, the data confirms safety and tolerability of the liquid formulation in patients and that SYNB1618 activity in this population was equivalent to that in healthy volunteers. This gives us confidence that we will be able to bridge to the solid oral formulation of SYNB1618 by evaluating its activity and tolerability in healthy volunteers.

We also established that both Phe consuming pathways engineered into SYNB1618 are active in the human gut. Together, these data allow us to estimate how much Phe is being consumed by SYNB1618 within the human GI tract. We can then use modeling to predict blood Phe lowering across a range of doses. While the study was not powered to demonstrate Phe lowering, it did provide valuable information that will be used to design a Phe lowering efficacy trial with this solid material. The main conclusions of the study were presented at top line data in mid-July. However, we will provide the full dataset at the annual symposium of the Society for the Study of Inborn Errors of Metabolism, or SSIEM, which is being held in Rotterdam September 3 to 6. The oral presentation will be given by one of the principal investigators on the trial, Dr. Jerry Vockley, Chief of Medical Genetics at UPMC Children's Hospital of Pittsburgh and an expert in inborn errors of metabolism.

So what are the next steps for the program? As I've mentioned on prior calls, moving from the early liquid frozen formulation to our optimized solid oral material is a critical next step. Here establishing our own internal GMP manufacturing capability was critical in allowing us to move quickly. We completed optimization of our fermentation process, established our lyophilization process that maintains cell viability and have made clinical trial materials to support a bridging study in healthy volunteers that is currently underway. We expect to dose the first healthy volunteer study subjects this month.

In the study we will evaluate if our new fermentation process with the solid formulation of SYNB1618 is better tolerated and enables dosing to a higher activity than the liquid formulation evaluated in our Phase I/IIa study. We will establish a maximum tolerated dose. And with this information in hand we'll move into an efficacy study in patients that we believe we can initiate in the first half of 2020. I should also note that we learned a great deal from this study from a platform perspective, which is important as we advance earlier stage programs. We gained confidence that our project phase and the engineered bacteria are doing what they are programmed to do in the human body. We established that we can design bacteria that provide multiple functions in one Synthetic Biotic medicine. We also gained a better understanding of the predictive value of model systems and how they translate into the clinical experience in healthy volunteers and patients. Finally, we learned that our Synthetic Biotic medicines can be active in the small intestine, opening up the possibility for us to advance other programs that require activity in this part of the GI tract.

Switching gears now back to our early programs and platform development, I mentioned earlier that we're moving quickly to maximize the value of our collaboration with Ginkgo and Scott had been hard at work setting this up in his first month at the company. I've asked him to say a few words about how the collaboration is going. Scott?

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [6]

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Thanks, Aoife. As you can imagine, it's been an exciting first few months for me at the company. In accepting this role I was delighted to step into lead what is clearly a great team with broad capabilities. But with the Ginkgo agreement in place, we now have access to a whole new level of synthetic biology resources which really expands the scope of what we can accomplish.

It's been a busy time and both teams are very excited to work together. The Synlogic team is delighted to have the added resources that Ginkgo provides, and the Ginkgo team are very keen to be working on therapeutic applications, which is a relatively new area for them. We have been working to set up a structure of how to work together, how decisions will be made, progress communicated and programs advanced. Another exercise has been prioritizing the many projects that we could embark upon together to determine which have the most impact on both our platform and pipeline. Based on the PKU data that Aoife just reviewed, other metabolic diseases where there is an identified and validated toxic metabolite are priority areas of interest.

In addition, as an immunologist I see huge potential for our platform to address significant unmet medical needs in inflammatory and immune-mediated indications which encompass diseases due to over-activity of the immune response and diseases such as cancer where stimulating an effective immune response against the tumor is an important therapeutic strategy. Importantly, the size and speed of the Ginkgo collaboration directed at strain engineering allows us to focus and expand our internal capabilities on human biology in the translational development aspects of our platform. I look forward to providing more detail in the future, but now let me hand you back to Aoife to wrap it up.

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

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Thanks, Scott. We remain on track to announce top line data from our SYNB1020 Phase Ia/IIb study disclosure. An unblinded independent monitor will confirm our assumption for ammonia measurement were accurate and we will analyze and present the data first as top line data but subsequently as a more detailed presentation as a suitable scientific or medical meeting.

Just to remind you, the endpoints are safety and tolerability and blood ammonia lowering in patients with cirrhosis who have elevated blood ammonia but have not yet had a crisis or being hospitalized. The study is powered to detect 15% to 20% ammonia lowering which is the effective seen with other drugs in this indication. We look forward to sharing the data and our plans for a hyperammonemia program in the coming weeks.

We also remain on track with plans for our IO program. We've already made the clinical trial material for this program, and as I mentioned earlier, have an agreement with Roche to secure a supply of a checkpoint inhibitor. Again, I look forward to sharing more information around our specific clinical trial plans on future calls.

And finally, as you've heard from Scott, we're also working on advancing several new pipeline programs and look forward to providing more detail and preclinical data as the year progresses.

To sum up, at Synlogic we're designing for life using the tools and principles of synthetic biology to rationally engineer living medicines that have the potential to dramatically change the life of patients. With this quarter's activities we're making significant progress in our understanding of the potential of our synthetic biotic platform to address unmet medical needs for patients in a variety of indications.

We have several development milestones to look forward to during the rest of the year. Importantly, we have a strong cash position that will allow us to achieve these milestones and advance our lead in emerging clinical programs.

Besides the SSIEM presentation, we will be participating in several investor conferences over the fall, including the Wedbush conference later this month at which investors will have the opportunity to meet Scott. I'd like to thank you for joining us this afternoon. We will now open up the call for questions. John?

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Questions and Answers

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Operator [1]

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(Operator Instructions) First question coming from the line of Joseph Schwartz from SVB Leerink.

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

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I'm Joori dialing in for Joe. I was wondering, for our first question, if you could talk a little bit about your bridging study for SYNB1618. Just more detail, how many subjects you plan to study, what doses you will be studying. And could we expect the doses you identified using your mathematical model, which was [3E11 CFU] and [5E11 CFU], if those are some of the doses that you're thinking to test in your bridging study? And I have a couple of follow-ups.

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

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So in terms of the bridging study, it's going to be in healthy volunteers. We will start at a dose that was well tolerated with the liquid, and then we will dose escalate. Obviously we would like to see that we can get a well-tolerated dose within the range that we identified as being potentially efficacious in terms of Phe lowering. And as we dose escalate, we'll learn whether that's the case.

So in terms of the design, it's really been designed to answer 3 main questions. The first one is to identify the maximum tolerated dose of the solid oral formulation. The second objective is to identify whether a dose ramp, meaning if we start as a low dose in individual patient, increase them up over time is going to improve the maximum tolerated dose or the tolerability profile. And in the Phase I trial we saw that patients often had, if they had nausea and vomiting it was usually on the first dose. And if they continued with dosing, generally the nausea and vomiting dissipated. So that leads us to believe that similar to lots of other drugs that a dose ramp around the initiation of dosing may actually help improve the tolerability around the kind of start of the dosing period. So that's going to be the second objective.

And then the third objective, because we're giving live bacteria, we really like to study the impact of buffering. We're giving bacteria into an acidic stomach environment. And understanding the impact of stomach acid on the activity of the bacteria would really help us think through how this product could be formulated going forward into feature Phase II trials, whether it needs to be enteric coated, protected from stomach acid, whether we need to administer buffering at the same time. So it's really kind of a pragmatic drug development objective, if you will, but I think a very important one as we start to think about setting up subsequent studies for success and being able to provide guidance to patients in those studies to make sure we give the products the best chance of being successful in those subsequent trials.

And so that's kind of the 3 objectives. The study design is around answering those 3 questions. And as soon as we have data, we'll absolutely be disclosing those data.

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Joori Park, SVB Leerink LLC, Research Division - Associate [4]

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Okay, great. And then the last -- at your last conference call you briefly talked about your mathematical model. And I was just wondering if you can just talk a little bit more about the considerations that were made to identify the doses that you think could achieve your target product profile.

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

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Yes, so the mathematical model is really based on 2 main kind of pillars, if you will. The first pillar was data that was available in the literature, before we started working on PKU, and that was really around understanding the impact of dietary phenylalanine impact, dietary Phe content on blood Phe levels. So was looking at healthy volunteers and healthy subjects, patients with PKU and how much dietary Phe reduction would result in a subsequent to Phe decrease.

What we did, we took that model and we calculated how much Phe was being consumed by our bacteria. So we made the assumption that reducing dietary Phe intake was going to be the same as having a bacteria consuming Phe within your GI tract. I think that's physiologically a pretty reasonable assumption if you think of kind of a Phe-in, Phe-out type of balance. And so we made the assumption that the bacteria consuming Phe, we should have the same impact on blood Phe as reducing dietary Phe intake.

And then what we did was we calculated based on our biomarkers how much Phe our bacteria were consuming within the GI tract. And we plugged that into the model to create a prediction of how -- what the impact on blood Phe would be. And what that showed us was that the biomarkers are very nice at 7010, but that we really needed dose in the range of 3E11 to 5E11 to achieve our target product profile.

So I think it was very instructive. It told us what we needed to do. I think the 2 key risks going forward with the program are can we achieve that dose in a fashion that's well-tolerated. And then the second key risk is, is our modeling correct and does it actually predict Phe lowering. And those -- we have a plan to address both of those questions and think we can do that in very short order.

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Operator [6]

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Next question is coming from the line of Yigal Nochomovitz from Citi.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [7]

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This is Samantha on Yigal. I just like to build on the prior 2 questions. And I wonder if you can say if you have any evidence that you've generated suggest that new manufacturing process for 1618 could support the tolerability as the range that you're looking for. And specifically like outside of the thinking you've previously shared that the solid formulation will not have the cell particle contaminant. Is there any other evidence preclinically on that?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [8]

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Yes, the unfortunate thing, Samantha, is that there's no preclinical model of GI tolerability. So we've dosed to very high doses and several preclinical models and have not identified any nausea or vomiting. But that really is not informative in terms of derisking and tolerability in the clinic. I think our best evidence and what gives us a lot of confidence that we potentially have addressed the issue is from the 1020 program where we're dosing currently at 5E11 in the clinic, and that dose has been very well tolerated even in the patients with liver disease. So we think that when we look at the comparability and look at the critical quality attributes across both the 1020 program, the liquid formulation of 1618 and the new [Lyle] formulation of 1618. It looks much more like 1020s than it does the original liquid 1618. So I think that's the best evidence that we have that we're in the ballpark. But obviously time will tell. And the study to answer that question definitively is ongoing. And we'll know pretty shortly.

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Samantha Lynn Semenkow, Citigroup Inc, Research Division - Senior Associate [9]

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And then on your new modeling work, is there any way that you can, like validate the reliability of the model, specifically as any way to benchmark against FDA-approved drugs like Kuvan?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [10]

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Yes, the -- so what we've actually done to validating this work is ongoing, is we've actually plugged in patient data back into the model. And we think that the most applicable benchmark for us is patients who've changed their diets and reduce their Phe intake. We think that's the kind of -- that's the system that we think is going to be most applicable to our product.

So what we've done is we've been working with a number of KOLs to identify data sets where they have the pre diet change Phe levels. They can have good dietary information on someone who made a major switch in terms of their diet, and then post that change data. That's actually what we've been doing to try and make that model as robust as possible. We think it's a really interesting model that can help not just our program, but multiple other programs as well in terms of thinking through developments of therapies and PKU. And so we've been kind of excited to provide that tool to the academic community and they'd be very excited to kind of start playing with this and validating it with their own dataset.

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

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Those are helpful details. And then even just building on that, what is the variability in PKU patients' Phe levels, say like day to day or week to week among normal patients outside of a clinical trial or just being monitored by the physician?

And relatedly, do you expect this to impact your ability to effectively detect Phe lowering in the planned Phase 2 trial considering that patients might fluctuate their diet in an outpatient setting?

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

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Yes, yes. So that's 2 good questions. I think there's several different components in there, Samantha. The first one in terms of the [assay] variability for this Phe assessment, which is about the coefficient of variability, it's somewhere around 15%. So even if you take one patient and do a sample and repeat it 3 or 4 times, you'll see a Phe of about 15%. In terms of the prior longitudinal studies, the standard deviation of blood Phe in prior trials is about 250 micromolar. And so that's kind of what we're dealing with. But I think we'll take all of that into consideration, the design at the Phase II trial and we'll absolutely be kind of providing greater detail on the design of the powering of that study and the assumptions at a later time point. But that's the work that we're currently doing now. It's really working out.

I think what's the sample size we need, what the assumptions are around variability had to limit variability to the extent possible by controlling diet and providing lots of supervision so that patients maintain a stable diet in a Phase II trial. So that's all work that's ongoing. And as soon as we have those details nailed down with the various regulators, we'll absolutely be walking you to them.

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Operator [13]

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Next question is coming from the line of Ted Tenthoff from Piper Jaffray.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [14]

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Really a lot of interesting points in the discussion and particularly liked Scott's commentary on just how the Ginkgo relationship changes. And that last comment on variability was really interesting to me too.

Can I get a sense for sort of as you look forward any kind of particular data that you have clinically so far? And then you kind of weave in the capabilities from Ginkgo. How does that change and how does that sort of help you prioritize future indications?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [15]

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Yes. We've been doing a lot of work, as you would imagine, Ted, on that and how we can best leverage. And it's always a matter of balance. It's a focus. But we can really move forward and where we can really be disruptive as well as the kind of exploring areas outside of that narrow area of focus and just it's a yin yang to get the right balance there. Having access to Ginkgo's capabilities is wonderful, but we also have to make sure that it doesn't, that we don't let it run away with us and that we start being spread too thin across multiple different areas of biology.

So I think while the access to the capabilities are amazing, it hasn't really changed our focus, which is on metabolic diseases and immunomodulation. We think that there are ample opportunities within those kind of 2 biology areas and lots of diseases with unmet medical needs there that we think we're going to focus on initially. And I think those diseases really fall into 2 buckets. The first bucket that we've been prioritizing are programs that we can take forward ourselves through mid- and late-stage development with reasonable Phase II/III designs, where we really can identify patient populations adequately, where there's not a lot of work required in terms of developing new registrational endpoints. There's no perfect. There's no more low hanging fruit in drug developments.

But considering all of the various, the usual kind of attributes, we'll be selecting those that are relatively straightforward to form an internal type kind of product that we can take through commercialization ourselves. I think that's been a key success factor for other platform companies that have gone before us. And so we're learning from their path and pursuing that.

I think the second bucket are diseases where we see really an exquisite biology fit. So occasionally you come across biology and data that's just too good to ignore. And it may be that those are not an ideal fit for our internal pipeline. I think inflammatory bowel disease, which is Scott's passion, maybe falls into that category. And large Phase II trials and undoubtedly a very competitive commercial landscape and -- but we see great applicability and synergy with our science and our data. And I think those are great programs to be advanced in the context of a collaborator who really brings the capabilities around mid- and late-stage development to kind of those new disease areas.

And I think you'll continue to see that mix of internal and partnered programs as we move forward. But we're planning to be discerning in our partnership because I think that can be quite distracting if you don't choose the right partner in the right program. So if that's kind of the balance that we're seeking, I don't know, Scott, if you have anything else to add to that, but that's kind of the strategy.

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [16]

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I think what Ginkgo is going to add to this is taking what Aoife just went over in terms of how we prioritize and enabling us to move a lot faster in terms of generating strains and troubleshooting some of the problems that would take our talented internal team a long time to do. They have now many, many more pairs of hands and automation potential to work through this in a hurry. So we should be able to really hopefully talk about getting more programs quicker towards clinical goals.

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Operator [17]

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Next question coming from the line of Raghuram Selvaraju from H.C. Wainwright.

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Edward D. Marks, H.C. Wainwright & Co, LLC, Research Division - Research Analyst [18]

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This is Edward on for Ram. First off, Aoife, I liked your post this week in LifeSciVC blog. So (inaudible). So in -- just in the first question, I'm wondering if you're planning on assessing 1891 as a monotherapy? And in combination with Tecentriq either simultaneously or sequentially? And as -- to as much as you can, describe the arrangement with Roche. I was wondering if you're restricted from testing 1891 in combination with any other checkpoint inhibitors while you're working with Tecentriq.

And then moving forward, considering with Dr. Plevy was talking about with the different immune possibilities in cancer, whether there's other combination regimens you're evaluating currently.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [19]

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Yes. So in terms of the study -- and thanks for your comments on the blog. It was the product of a long flight home from Europe last week. So I'm glad you enjoyed it.

The -- in terms of data oncology study. So it's going to be in 2 parts. The first part you're going to do monotherapy with 1891. The dosing regimen is going to be an injection once a week for 3 weeks followed by monthly injections thereafter. We've demonstrated preclinically that in contrast to some of the small molecule STING agonist, which really have a very short half-life within the tumor, our bacteria persists within the tumor microenvironment for about 7 days. So that's how we kind of came up with the weekly kind of induction regimen followed by monthly maintenance. And that was the regimen that was most unefficacious preclinically.

So once we have some data on the safety of the monotherapy and hopefully some PD data based on our biomarkers, we'll be combining with Tecentriq. The Tecentriq study design is that we'll start -- we'll initiate both treatments simultaneously. And obviously the Tecentriq dosing regimen is not weekly, but, you know, there will be concurrent dosing based on the Tecentriq label and then based on the regimen for 1891 that we would have evaluated in the monotherapy part of the study.

And the reason that we did the collaboration with Roche for Tecentriq. We had a number of different options. The reason that we did the one with Roche is they tend to be very flexible and amenable with supply agreements, with very few strings attached in terms of exclusivity or other kind of restrictions in terms of what we can do with the 1891 program. And that was a really important consideration for us because obviously we want to make sure that we can follow the data, move as quickly as the data suggests, if needed, and start to think about other potential kind of specific tumor types and explore other opportunities for 1891 kind of unencumbered by an obligation to a supply partner. So that was kind of the beauty of the Roche agreement.

And as soon as we have more detail on our overall kind of oncology strategy, Scott is currently working on that, we'll be providing additional detail about how we're thinking about both 1891 and other opportunities for [bacterian] cancer.

We'll say finally, when we started this journey about 2 years ago, we started to talk about bacteria as therapeutics in cancer, we got kind of funny looks from people. But recently there's been a number of high-impact papers from other groups not affiliated with Synlogic, and that I think has started to kind of move the needle in terms of an acceptance and appreciation that there really is a true kind of therapeutic potential for bacteria. So we've been very gratified to see that.

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Edward D. Marks, H.C. Wainwright & Co, LLC, Research Division - Research Analyst [20]

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I see. And then just following up on some of the details that you mentioned with the Ginkgo arrangement and then some of the comments that Dr. Plevy mentioned in his prepared remarks about inflammatory and immune-mediated diseases. I was hoping you could go into a little more detail around the strategic intent of exploring this synthetic biotic platform in the sorts of diseases, particularly IBD. Even though you just mentioned that, it was much more likely to be a partnered program. I was wondering if there is any way that you would move it on yourself? Or if you are going to be using it for a partnered program, what kind of arrangement you'd be looking for in that regard?

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

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Yes, so I could start off and then present -- pass the mic over to real pro. Obviously there has been a lot of therapeutics developed for inflammatory bowel disease, but there's still tremendous unmet medical needs. And some of the other small molecules or protein biologics, it starts to become a case of diminishing returns on those programs where they're going after smaller and smaller incremental improvements. But other companies have been unable to deal [with the direct] other orthogonal issues within the biology of the disease like barrier function and other things that we think our platform could be really uniquely positioned to address and really move the needle for patients who've exhausted all available treatment options. We think the other component of our platform that we've just recently demonstrated with PKU program that could be really transformative is this idea that combining multiple factors within 1 kind of therapeutic so that you can maybe address inflammation and barrier functions simultaneously. So that's really kind of the vision. And we're not there today, but we're very, very excited about the potential to really make a meaningful impact for patients with IBD and think that it could be a good fit.

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [22]

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Yes. So to maybe paraphrase what Aoife just said, I think the future of therapeutics for any complex inflammatory disease where IBD might be one of the poster child is -- poster children is combination therapy. One target just isn't good enough and that's why response and long-term remission rates are so low across these immune-mediated inflammatory diseases. What a better platform and one of my excitement in coming to this over to Synlogic was the ability of this platform to be specifically designed for hitting multiple targets either within the same bacteria or mixing and matching combinations of bacteria. And although in a classic drug development fashion we may focus on monotherapeutic to -- for validation of the platform and proof of principle, the real excitement in my mind in these complex diseases is in combination therapy.

And maybe this is a biased opinion, but if you're looking at systemic inflammatory diseases spondyloarthropathies, neuroinflammation, other conditions of inflammation of the joints, it all starts in the gut. So I think we have a novel platform years down the road to really answer some pretty interesting questions.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [23]

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Spoken as a true gastroenterologists.

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [24]

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Slightly biased, but I think there is some truth there.

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Operator [25]

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Next question coming from the line of Mark Breidenbach from Oppenheimer.

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Mark Alan Breidenbach, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [26]

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Aoife, just wondering given the similar levels of phenylalanine turnover you've seen in healthy volunteers and in PKU patients, should we really be looking at the bridging study as a potential basis for a go/no-go decision on conceived continued development? Or is that an unfair thing to say?

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

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No. I think if you're -- if -- every time you do the clinical trials, if you're not prepared to make a go/no-go decision then you should really question whether or not you're doing that study. That's my drug development bias. So I think the beauty of the modeling is it kind of puts a line in the sand in terms of what dose level we need to get to. We think that we have addressed the tolerability issue based on the analytic data that we have. But if we get back into the clinic and we find that we can't get into the ballpark that we think we need based on our modeling then I think we'll have to have a real cold look at whether that program moves forward into a Phase IIc lowering type of a trial setup.

So I think we're prepared to do that and to look very critically at the data if it turns out that we can't actually get to the dose level that we think we need to see efficacy.

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Mark Alan Breidenbach, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [28]

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All right. That's fair. And I'm also wondering if we should at all be reading into the fact that we're not talking about a bridging study for SYNB1020 yet. Presumably, if we're moving forward with that program you would want to switch to the dry powder formulation as well, correct?

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

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Correct. Yes, yes. So we haven't slowed any next steps with that program. Similarly to 1618, we looked at the data. We (inaudible) something funky with the biomarkers. They haven't been as expected. We wouldn't have obviously moved ahead with investment in the bridging study. I think you can expect similar for 1020. And you're absolutely right in your assumption, the only path forward for these programs is with solid oral [liocalite] type of formulation. And we believe that there is a lot of transferability to what we've learned on 1618 to the 1020 program. And we've learned a lot by fixing it for 1618 that we think can be applied really across any of the oral programs that are coming behind.

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Operator [30]

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(Operator Instructions) Next question coming from the line Chris Howerton from Jefferies.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [31]

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So I think one of the -- most of them have been asked obviously, but one thing that I would like maybe a little more information on, if you can provide it, was Aoife you had said that you had given a prototype strain to Ginkgo earlier and the results of that was very encouraging and obviously kind of spurred this further collaboration. In terms of that optimization that they had done previously, what features did they optimize? Was it cycle time? Was there potency? What about it was actually better in your mind?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [32]

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Yes. So with the MSUD program and we had presented some of the data at (inaudible) when we optimized, it was a very kind of a limited pilot study. But we had built a strain, we had tested maybe 10 -- with the 3 enzyme pathway we had tested a couple of orthologs at each of the enzymes in a kind of artisanal type of way. We had optimized it to the extent possible here and we said okay, this is our best effort, let's pass it over to Ginkgo.

And the real question there was does screening thousands of orthologs of each individual enzyme actually do better, perform better than our kind of our artisanal craft type of process that we have here. And that was basically the (inaudible) of what they did. They didn't look at any other kind of optimization work. They basically took each enzyme into 3 enzyme pathways, screened multiple different versions based on their genomic sequencing data that they have that's proprietary to Ginkgo. They came up with a small subset that appeared to perform in a cell-free system most potently.

Then they did another, I can't even remember how many, couple of hundred kind of combinations. And this is the kind of work you can only really do when you have this industrialized kind of automated type of setup. You're talking about thousands of different experiments running in parallel and they have all the bioinformatics wrapped around that so that they can process that very, very rapidly.

That was kind of a nudge of what they did there. We think that was powerful. It turns out that more is better. And the more you screen the higher likelihood you have of achieving something with substantially improved potency. But I will say that they have additional capabilities and expertise that we didn't assess that we're very excited to start kind of accessing, screening multiple different orthologs of individual enzymes kind of only component to their capabilities. And we'll now be tapping into multiple other capabilities that they've established through their other work as well. So we're pretty excited to get going there.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [33]

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Got it. Okay. And then so perhaps related to the prior commentary related to getting 1618 profile to the appropriate amount of Phe lowering at a tolerable dose. Would there be an opportunity to optimize that organism construct using the Ginkgo Bioworks platform?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [34]

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Yes. So Scott is smiling here. That's something I've been nagging about every day, so I might just pass over to him to touch on that.

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Scott Eric Plevy, Synlogic, Inc. - Chief Scientific Officer [35]

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Yes. Absolutely. And to Aoife's point before. There -- maybe what's most in their wheel house is just screening massive amounts of enzymes and coming up in a high throughput manner with enzymes with better activity. But this is an example where they may help us snoop out other potential bottlenecks that are -- that could be limiting activity. And we literally on a day-to-day basis are having many interesting and productive conversations around these pathways on how we might do better in the future.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [36]

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Got it. Okay. All right. And then maybe in terms of formulation and delivery, one is just a very simple clarification because I didn't hear exactly what you said, Aoife. For delivery to the small intestine, how is that specifically achieved? And what do you think that get to you?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [37]

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Yes. So that's one of the questions that we want to address in the current bridging study. We're looking at the impact of acid pH buffering versus no buffering, comparing side-by-side.

So we still, my hypothesis is that this will be a product that's consumed with food with some kind of acid buffering either in enteric coated capsule or some kind of buffered delivery. And that that's what will give us the best activity in the small intestine? So that's kind of the hypothesis. We're going to evaluate that in healthy volunteers. We think that the fact that the healthy volunteers in PKU patients look so similar really allows us to answer lot of these important questions using a healthy volunteer model so that when we go out with a Phase II/III type of solution, we know that it's something that's really been optimized for activity. So that's kind of how we're planning to address that. And as soon as we have kind of more clarity on exactly what that looks like, we'll absolutely walk you through it.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [38]

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Right. And so I guess if I understand it, right, there is -- the low pH of the stomach could reduce the viability of the drug substance and the buffering would help it in terms of kind of activity in the small intestine is what I heard you say. But why is that specific to the small intestine? I guess I don't quite understand that.

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

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Yes, I think the issue with the small intestine compared to the large intestine is such the bacteria needs to be kind of -- you need to get them to the stomach acid and then be active right away whereas if you're doing colonic delivery they may get released halfway down the small intestine, that's perfectly fine. So I think it's depending on where you want them to get. I think really will depend on how rapidly you want them to be available and active.

We have access to some human gut simulation systems that we've built internally where we can look at the impact of stomach acid and pH and buffering on cells, and we absolutely see in those stimulation systems that pH has an impact on viability. And so we're expecting that that will be the same in the human.

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Christopher Lawrence Howerton, Jefferies LLC, Research Division - Equity Analyst [40]

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Okay. And I'm sorry to ask another question, but is there any reason to believe that there's a bio-geography -- bio-geographical component to its phenylalanine consumption? Like would it be more effective in the small intestine or some other component the GI tract?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [41]

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Yes, absolutely. There is very little Phe in the colon. So that's what we really want to optimize (inaudible) live bacteria are co-located with phenylalanine. And we think that magic happens through the small intestine. And that was validated by the biomarker data we saw where we saw kind of a 46-hour duration of activity based on plasma TCA. So that completely validated our thoughts based on physiology.

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Operator [42]

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Next question coming from the line of Julian Harrison from BTIG.

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Julian Reed Harrison, BTIG, LLC, Research Division - Analyst [43]

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And congrats on all the recent progress. So as you get closer to an IND filing for 1891, do you feel like you have a good sense on how accepting the FDA is of the general approach? There have been some partial (inaudible) in the past for intratumoral therapies involving bacteria. So I'm curious if there's anything intrinsic about 1891 that makes it risk mitigated from a safety standpoint?

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [44]

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Yes, so Julian you're spot on, this isn't our first rodeo in terms of getting INDs open. So we've taken all the usual kind of precautions, meeting with the FDA ahead of time, making sure that we have a robust risk mitigation plan going in. So we have kind of all of that in the works and are hopeful for a positive outcome. But obviously, you can never be 100% sure.

In terms of the bacteria, we really feel that synthetic biology gives us tools to both increase the efficacy but also then to help with some of the potential safety concerns that we see with other live bacteria, particularly when used in the (inaudible) of cancer. But the biggest risk obviously has been infections historically. And that's why some of the other programs have ended up on a clinical hold. Our bacteria are disabled, they don't actually replicate in vivo. We validated that in multiple preclinical models and there are pretty confident with that. So we think that that will give the FDA reviewers a level of comfort, particularly around the infection risk. But time will tell. And as soon as we have an update, we'll actively be providing that to you.

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Operator [45]

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I am showing no further questions at this time. I would now like to turn the conference back to our speakers.

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Aoife M. Brennan, Synlogic, Inc. - President, CEO & Director [46]

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Thank you, John. 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 evening.

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Operator [47]

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Ladies and gentlemen, this concludes today's conference. Thank you for your participation. And have a wonderful day. You may all disconnect.