Enanta Pharmaceuticals - Q2 2022
May 9, 2022
Transcript
Operator (participant)
Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Second Quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of the prepared remarks. Please be advised that this call is being recorded. I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.
Jennifer Vieira (Executive Director of Investor Relations and Corporate Communications)
Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal second quarter 2022 financial results was issued this afternoon and is available on our website. On the call today are Dr. Jay R. Luly, President and Chief Executive Officer, Paul Mellett, our Chief Financial Officer, and other members of Enanta's senior management team. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC.
Enanta does not undertake any obligation to update any forward-looking statements made during this call. With that, I'd now like to turn the call over to Dr. Jay R. Luly, President and CEO. Jay?
Jay R. Luly (President and CEO)
Thank you, Jennifer, and good afternoon, everyone. Last quarter was an important one for Enanta, during which we made progress in our pipeline and advanced our mission of developing therapeutics for life-threatening viral infections. This progress comes at an important time as we are soon approaching meaningful inflection points in our pipeline. Today, I'll start by detailing our most advanced programs in respiratory virology, where we continue to build an industry-leading treatment portfolio. Respiratory syncytial virus, or RSV, can result in a severe respiratory infection and is associated with significant morbidity and mortality. The virus can cause serious disease in children, the elderly, and the immune-compromised, and there are no targeted treatments or vaccines available. Our robust RSV program includes EDP-938, the most advanced N-protein inhibitor in clinical development today, as well as our newest clinical candidate, EDP-323, a potent L-protein inhibitor.
We're excited by the potential of EDP-938, which currently is in three phase II studies in different patient populations. EDP-938 is an oral potent molecule that has shown robust clinical data in a phase II challenge study, where it was safe and well-tolerated and resulted in a significant decline in viral load and reduced symptoms of infection. Our leadership in RSV is further highlighted by the recent publication of the results of the challenge study in the New England Journal of Medicine. Our most advanced study of EDP-938 is RSVP, a phase II-b trial in otherwise healthy adults with community-acquired RSV infection. The study was designed to confirm in a community-acquired setting the positive results of our phase II-a challenge study and to further characterize efficacy by measuring symptom alleviation and viral load decline.
Enrollment in RSVP is now complete. We are on track to report top-line data from this study later this quarter. Our two other ongoing studies are RSVPeds, a phase II study in pediatric RSV patients, and RSVTx, a phase II-b study in adult hematopoietic cell transplant recipients with RSV. Both are expected to recruit into 2023. Moving forward, our broad clinical development pipeline for EDP-938 will focus on evaluating its potential in populations with greatest unmet need, namely those who are at high risk for severe disease. This includes children, the elderly, adults with other high-risk conditions, and the immune-compromised. To that end, we are also planning to initiate another phase II-b study in high-risk adults, including the elderly and those who have asthma, COPD, or congestive heart failure. We expect to initiate this study in the fourth quarter of this year.
We're excited to add this study to our clinical development program, as we believe EDP-938 has potential to deliver a potent oral antiviral treatment for all high-risk populations. Indeed, we believe these high-risk patients would benefit the most from antiviral treatment with EDP-938. They represent populations in which an even greater benefit is likely to be observed since they have suboptimal RSV immunity and manifest much greater RSV disease severity and mortality, allowing demonstration of the full potential of EDP-938. Adding to our robust RSV portfolio, in February, we introduced EDP-323, a novel oral antiviral therapeutic targeting the RSV L protein RNA polymerase. Preclinical data have shown that EDP-323 has sub-nanomolar in vitro potency against major subtypes of RSV, RSVA and RSVB, and is not expected to have cross-resistance to other classes of inhibitors.
Additionally, in preclinical studies, EDP-323 has shown strong oral absorption and good plasma exposure across different species. We believe EDP-323 could serve as a standalone treatment or may be used in combination with other agents such as EDP-938 to potentially broaden the treatment window or addressable RSV patient populations. We plan to initiate a phase one study of EDP-323 in the second half of this year. Turning to SARS-CoV-2, we're making strong progress with EDP-235, our oral inhibitor of the 3CL protease, also referred to as the main protease or Mpro. EDP-235 is specifically designed to be a once daily oral treatment for COVID-19 without the requirement for ritonavir boosting. Novel variants of SARS-CoV-2 are continuing to emerge, causing new waves of COVID-19 cases globally.
This highlights the need for conveniently dosed oral therapeutics, especially given the suboptimal vaccination rates, decreased protection against new variants, and waning immunity observed to date with the current boosters. We believe EDP-235 has the potential to be a best in class treatment for COVID-19 based on the preclinical data demonstrated to date, which positions it amongst the most potent direct acting antivirals currently in development for SARS-CoV-2 infection. In March, the FDA granted Fast Track designation for EDP-235, further highlighting the potential for EDP-235 and emphasizing the urgent unmet need that exists for COVID-19 treatments. Last month, we presented data on EDP-235's in vitro pharmacology and molecular mechanism of action at the annual meeting of the American Society for Biochemistry and Molecular Biology.
These preclinical data demonstrated that EDP-235 is a potent inhibitor of SARS-CoV-2 3CL protease with nanomolar antiviral activity against SARS-CoV-2 variants of concern, including the Delta and Omicron variants. EDP-235 also showed potent antiviral activity against most other pathogenic human coronaviruses, potentially making it a pan-coronavirus therapy. We are on schedule to report preliminary data from our phase I study of EDP-235 later this quarter. This first-in-human single- and multiple-ascending-dose-ranging study is evaluating the safety, tolerability, and pharmacokinetics of EDP-235 in healthy volunteers after once-daily dosing without ritonavir. If supported by phase I results, we plan to advance EDP-235 to the next stage of clinical development in the second half of this year.
We also continue to pursue our respiratory discovery program in human metapneumovirus, or HMPV, a virus that is similar to RSV and impacts a number of vulnerable populations, including the elderly, adults with underlying pulmonary disease, and those who are immunocompromised. We are nearing completion of lead optimization of potent nanomolar HMPV inhibitors and plan to select a clinical candidate in the second half of this year. Moving to hepatitis B, we remain committed to developing a combination regimen as a functional cure for chronic HBV patients. EDP-514, our HBV core inhibitor with Fast Track designation, has demonstrated safe and potent antiviral activity in two phase I studies in different chronic HBV patient populations.
Those who have high viral load, whom we refer to as viremic patients, and those who are on a treatment with a nucleoside reverse transcriptase inhibitor, whom we refer to as nuke suppressed patients. These data suggest EDP-514 has the potential to be a best in class core inhibitor for HBV. We remain focused on evaluating internal and external opportunities for additional components with alternative mechanisms to develop in combination with EDP-514, as we believe that a core inhibitor such as EDP-514 will ultimately be an important component of a successful combination regimen. Before moving to the financials, I'd like to wrap up by highlighting our near-term milestones. We plan to report data from RSVP this quarter and look forward to initiating a new phase II RSV study in high-risk adults by year-end.
We expect to report preliminary phase I data for EDP-235, our oral antiviral specifically designed for the treatment of COVID-19, later this quarter. If indicated by phase I results, we plan to advance EDP-235 to the next stage of clinical development in the second half of this year. We also look forward to initiating a phase I study for EDP-323, our RSV L inhibitor, as well as nominating a clinical candidate for human metapneumovirus in the second half of this year. With that, I'll turn the call over to Paul to discuss our financials. Paul?
Paul Mellett (SVP of Finance and Administration and CFO)
Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30th fiscal year schedule. Today, we are reporting results for our second fiscal quarter ended March 31, 2022. For the quarter, total revenue was $18.7 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $380 million. This compares to total revenue of $20.1 million for the same period in 2021. This decrease is due to treated patient volumes continuing to remain suppressed compared to pre-COVID levels. AbbVie has guided to $1.7 billion for global HCV sales in calendar 2022. As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties for our fiscal quarter ending March 31st will be calculated at 10%, our lowest royalty rate tier in our fiscal year.
You can review our royalty tier schedule in our 2021 Form 10-K. Moving on to our expenses, for the three months ended March 31, 2022, research and development expenses totaled $42.1 million, compared to $41.5 million for the same period in 2021. The increase was driven by the timing of manufacturing and clinical trial costs associated with the company's virology and liver disease programs. General and administrative expense for the quarter was $10.5 million, compared to $8.3 million for the same period in 2021. This increase was primarily due to increased headcount and stock-related compensation expense. Enanta recorded no income tax expense for the three months ended March 31, 2022, compared to an income tax benefit of $7.1 million for the same period in 2021.
Enanta recorded an income tax benefit in 2021 due to the provision of the CARES Act of 2020, which enabled the company to carry back its tax loss in the 2021 period to offset taxable income in prior years. This provision does not apply to periods ending after September 30th, 2021. Net loss for the three months ended March thirty-one, 2022, was $33.6 million, or a loss of $1.63 per diluted common share, compared to a net loss of $22 million or a loss of $1.09 per diluted common share for the corresponding period in 2021. Enanta ended the quarter with $322.5 million in cash and marketable securities.
Enanta expects that its current cash equivalents, and marketable securities, as well as its continuing royalty revenue, will be sufficient to meet the anticipated cash requirements of its existing business and development programs for at least the next two years. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q when filed. I'd now like to turn the call back to the operator and open up the lines for questions. Operator?
Operator (participant)
Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star then the one key on your touch-tone telephone. Please stand by while we compile the Q&A roster. Now first question coming from the line of Brian Skorney with Baird. Your line is open.
Luke Herrmann (Analyst)
Hi, this is Luke Herrmann on for Brian. Thanks for taking the questions. Just a few on COVID. Could you discuss your current stance regarding potential for an evasive mutation of the main protease to reduce the antiviral impact of the existing PIs or EDP-235? And then is there anything specific about the healthy volunteer data you think could be particularly informative about a potential advantage over the competition at this point? Thanks.
Jay R. Luly (President and CEO)
Hi. Thanks. This is Jay speaking. With regards to resistance, you know, we wouldn't expect to see much in an acute infection, like, you know, COVID or even in some instances perhaps RSV. If you have, you know, a good robust molecule going after the virus and it's only five days of treatment, I think that helps minimize things a lot. I don't think Pfizer has reported anything at this as of now. With regards to the healthy volunteer study, absolutely, you know. We'll be looking at safety, of course, first and foremost, you know, demonstrating good safety profile. We'll also learn a lot from pharmacokinetics.
I think, again, the goal here really in this COVID protease space is to try to come up with something that's very convenient not only for the patient but also for the healthcare provider treating the patient. To that end, something that's once daily dosing, and once daily dosing without ritonavir boosting. As you know, ritonavir adds a lot of complexity to the patient care. Those are the main points I think we'll be trying to assess in our healthy volunteer study.
Luke Herrmann (Analyst)
Great. If I could just ask one more. Could you just provide any color on what a phase II design might look like at this point or is that to be announced?
Jay R. Luly (President and CEO)
Well, certainly it'll be to be announced in the future. We're, you know, sifting through all of that right now and in the context of the, you know, changing landscape and, you know, ultimately it's, you know, common to go in and take a look at any viral activity. I suspect there's a good chance we'll be doing some of that, assessing that antiviral activity and then having discussions with regulators to finalize the path.
Luke Herrmann (Analyst)
Gotcha. Thanks a lot. Back in queue.
Operator (participant)
Our next question coming from the line of Brian Abrahams with RBC Capital Markets. Your line is open.
Brian Abrahams (Biotechnology Analyst and Global Sector Head of Healthcare Research)
Hi, good afternoon. Thanks for taking my questions. Two for me. I guess first off on 938, what's the right way that we should be thinking about the potential translatability from the RSVP data to a higher risk population that you're gonna be testing subsequently? I'm just wondering, I guess, if there's differences in immune impairment that might change the impact that 938 might have on viral load or on symptoms between the two populations. My second question is on 235. There's been some, I guess, anecdotal reports on rebound from Paxlovid, and also some recent prophylactic data that didn't quite hit statistical significance.
I'm curious if those evolving data points, I guess, how those shape the way you might think about a development or regulatory path for 235 with respect to the doses, durations, and populations you might study, to best elicit its potential differentiation. Thanks.
Jay R. Luly (President and CEO)
Sure. Addressing EDP-938 on the translation. Again, as you know, we're coming on the heels of some, you know, very strong data in the human challenge study, which of course was in healthy volunteers who were infected with virus, all infected with the same strain, the same level of inoculum, and then ultimately treated. What we saw was a, you know, dramatic reduction in symptoms. We saw a dramatic reduction in viral load. RSVP, you know, steps into the real world. We're dealing with a not terribly dissimilar patient population. They're otherwise healthy volunteers or adults. The big difference is, you know, how did they contract the virus? You know, what was the strain?
What was the degree of inoculum and so on and so forth. One of the gating items is the emergence of symptoms. That's sort of a grand unifier in the patient population is when did symptoms emerge, and then you know getting people dosed and treated within the first 48 hours post-symptom onset. It's a great translational study going from the challenge study to the real world. It's a slightly different patient population than others in the real world. Obviously we have a transplant study going on where people are immunocompromised. We have you know a pediatrics study in young children you know many of whom haven't you know been exposed before and are now being exposed.
You know, later this year, we're gonna have a study in high-risk adults who are either elderly or have you know, another issue going on that puts them at high risk in an RSV infection setting. Each one of them is a little bit different, but I think, you know, you're gonna be firmly grounded on the fundamentals. You know, the fact that the drug has a very strong PK, very, very good exposures, half-life, Cmin's. It's a very potent drug. It has a high barrier to resistance. All of the things, all the boxes that you could check along the way, are in place. I think, you know, these are tremendous confidence-building steps and, you know, you mentioned, you know, could there be a.
I would say the most different patient population is perhaps the immunocompromised, where obviously you know you don't have the helping hand of a competent immune system you know working alongside the antiviral. To that end, we're mitigating some of that by dosing for 21 days, a longer duration. Ultimately, in severe immune compromise, you know, maybe that will in a rare instance you know spawn the need for a combo with a molecule, for example, like EDP-323. You know, it's about as good of a interesting translational confidence-building step as you could do. You know, in these high-risk patient populations, I'll remind you that they're at high risk. Sort of goes without saying.
Often the viral loads are higher, and often the duration of infection is longer, and often the consequences along the way are more substantial. It will, I think, be an ideal backdrop for a strong antiviral to really showcase, you know, an effect in that high-risk patient population. Steady as she goes. You had a question, a couple on Paxlovid. I think what one was about a fairly rare, I think it is, sort of rebound of symptoms in patients. You know, one can think about different durations. I think, you know, a duration of five days was what Pfizer used.
I think there was some discussion in the Pfizer arena and some recent discussions from regulators recently around the context of, well, if you see such a thing, should you be dosing with another five-day course. I think that was recommended against, at least, for now, that it should be fine dosing with the first course. In the rare instance where something appears a bit later, it's probably not enough of a deal to really focus on any further treatment. Obviously, we'll be progressing our molecule with our eyes wide open in terms of the latest and greatest on that front, but I think that's the state of play on that.
Did you have one other question on Paxlovid?
Brian Abrahams (Biotechnology Analyst and Global Sector Head of Healthcare Research)
Well, I think you kinda covered it, but I was just getting at, you know, some of the possible shortcomings that are beginning to emerge and maybe some slightly disappointing data on the prophylactic side, if that sort of changes how you might gear EDP-235 for future development to most differentiate it and maybe take advantage of some of the potential advantageous properties, like potency.
Jay R. Luly (President and CEO)
Got it. Yeah, I think in these, you know, in the sort of standard risk, lower risk patient population, I think people are still trying to sort through what are the best endpoints to be looking at there. You know, I think Pfizer had their run at it with some fairly stringent endpoints. The question is, you know, what will that set of endpoints look like in the patient population as the virus continues to, you know, evolve? You know, we'll be paying close attention to that. The same is true with post-exposure prophylaxis.
Again, some of the first trial information is starting to come out, but I think, you know, figuring out the dynamics of, you know, how and when, you know, to get that drug on board to make a difference in that patient population. These are all things to sort out. But having one that is more accessible and easier to use without limitations based on ritonavir, DDIs with other drugs. You know, it's one thing if you're trying to treat a single patient who's infected. It's another to prophylax and then bring it into a broader swath of family members or their close contacts, where each of them, you know, might have different circumstances that are confounded by ritonavir.
Each one of those things would need to be carefully thought through and sorted through, and meanwhile, the clock is ticking. You know, you wanna try to mitigate that by getting people on drug as soon as possible. That's why we're really focused on things that are easy to use and hopefully without ritonavir boosting.
Brian Abrahams (Biotechnology Analyst and Global Sector Head of Healthcare Research)
Makes sense. Thanks so much, Jay.
Jay R. Luly (President and CEO)
You're welcome.
Operator (participant)
Our next question coming from the line of Yasmeen Rahimi with Piper Sandler. Your line is open.
Speaker 14
Hi, this is Swapna for Yasmeen. A couple of questions for us. We have been, like, speaking with experts and KOLs and protease inhibitors who suggested that the ritonavir boosting might be a critical component to maintain efficacy, especially in light of growing variants. How confident, like, what gives you confidence that EDP-235 will not require a ritonavir boost and could have a similar efficacy? Then second question is, like, at what juncture do you plan on partnering this asset? Like, if you could walk us through the decision tree of, like, when that could happen. Thanks for taking our questions.
Jay R. Luly (President and CEO)
Sure. I mean, ritonavir is. I mean, we know what the drug did without ritonavir. The spectrum was, I believe it was three times a day dosing and over a gram dosing and so forth. I think someone made the call that in the grand scheme of things, it would be better to do ritonavir boosting in order to get adequate drug exposure than a BID regimen would be acceptable. There's no magic about it. I mean, it's an HIV drug. It's a known boosting agent and boosts lots of drugs, and that's both the benefit and the confounding element of ritonavir boosting.
If you can demonstrate, you know, similar or better PK and you don't need ritonavir, then there's no reason to use it. That's the angle that we're exploring. Obviously, that product profile tests very well, and we, you know, we're in the process of sorting that out, you know, even as we speak. With regards to partnering, you know, You know, I've said previously that our expectation is, we will team up. You know, this is a global pandemic. You know, it's bigger than we are, so to speak.
I think you know, to that end, much like we did in the area of hepatitis C, to take on a really global problem like that just made a tremendous amount of sense to you know, to team up. We you know, our plan is to do that, and our plan is to do that you know, really in enough time such that you know, when it comes time for global supply chain, that and global launch that we're well partnered up. You know, in terms of supply chain for clinical trial supply through registration, we've got all of that under control. We're thinking about the phase you know, after that.
That's where, given the timing and often compressed timelines you find in COVID, we'd be, you know, looking to do that sooner than we might otherwise. But it's definitely in the plan.
Operator (participant)
Our next question coming from the line of Akash Tewari with Jefferies. Your line is open.
Akash Tewari (Global Head of Biopharmaceutical Research)
Hey, guys. So given the RSVP study completed some time in January, is the C-suite fully blinded to the data at this time? If that's the case, what gives you the confidence to initiate the high-risk study before getting a chance to look at the RSVP data? Additionally, I noticed on the press release today you mentioned RSVP was run in a low risk in otherwise healthy population. Is it fair to say the chances of outright success for this trial are low given the background patient dynamics? Thank you.
Jay R. Luly (President and CEO)
Yeah. Thanks for the question. I mean, it brings up, you know, again, an interesting point that, you know, the progression beyond RSVP is sort of independent as we look at these high-risk patient populations. You know, of course, we're looking to, you know, demonstrate safety in that patient population and also hopefully, you know, symptom reduction and viral load changes. You know, when you look at high-risk patient populations, as I mentioned before, you know, you've got a bigger dynamic window. Maybe this is getting at your question about the low risk difference in low risk and high risk in the COVID case. You know, people demonstrated efficacy in high-risk patient populations without yet doing it in lower risk.
I think in part has to do with the dynamic range and the endpoints that you're able to work with. Again, I think it's an interesting translational study. You know, I view them independently.
Operator (participant)
Our next question coming from the line of Roy Buchanan with JMP Securities. Your line is now open.
Roy Buchanan (Equity Research Analyst)
Hi. Thanks for taking the question. Just a couple quick ones for me that, on the RSVP study, Jay, I think you said, it's designed to show a 40% benefit. I just wanna check that's at 80% or 90% powering.
Jay R. Luly (President and CEO)
It's an 80% powered to show a 55% effect.
Roy Buchanan (Equity Research Analyst)
Okay.
Jay R. Luly (President and CEO)
The minimal separation or effect size that you can detect and with the sample size is 40% reduction. As long as the final results show a 40% reduction, the study will be positive.
Roy Buchanan (Equity Research Analyst)
Okay, great. For the EDP-235, the phase I, later this quarter, you said preliminary data. I just wanna check, are we gonna get both the single ascending and multiple ascending results this quarter, or is it just the single ascending?
Jay R. Luly (President and CEO)
We should have most cohorts from SAD and MAD. You know, we'll see if we have all, but we should have most of them.
Roy Buchanan (Equity Research Analyst)
Okay, great. I'm gonna throw in one more, I guess. The RSV ped study, is it stratifying between hospitalized and non? I didn't ClinicalTrials.gov, I don't see a specification between upper and lower respiratory tract infections. Is it stratifying by that? Then I guess is it safe to assume that the hospitalization would imply a lower respiratory tract infection? Thanks.
Jay R. Luly (President and CEO)
I'll let Nathalie answer this one. The hospitalization part is in part because, again, this is the first study in peds, and you're gonna do it in a very careful environment. That's the nature of the hospitalization. Nathalie, do you wanna comment on any stratification?
Nathalie Adda (Former SVP and Chief Medical Officer)
Yeah, sure. Thank you, Jay. I can just complement the answer. There's no stratification in our first in pediatric study. There was mainly a requirement from regulatory because of safety purposes, and that was necessary just for the first cohort. It doesn't mean necessary that the kids will come with an LRTI.
Roy Buchanan (Equity Research Analyst)
Got it. Thank you.
Nathalie Adda (Former SVP and Chief Medical Officer)
You're welcome.
Jay R. Luly (President and CEO)
Welcome.
Operator (participant)
Our next question coming from the line of Eric Joseph with J.P. Morgan. Your line is open.
Speaker 13
Hi, this is Hannah on for Eric Joseph. Thanks for taking the questions. First, just can you talk a little bit about some of the gating items to reporting data from the RSVP study enrollments been complete since the end of last year? I'm just wondering if there's any work left to complete prior to announcing that data. You're planning to initiate the RSVP study or the RSV study in older adults at high risk by the end of the year. Just wondering, from a sense of timelines, would you be anticipating being able to complete the study within one RSV season? Which data sets from which studies would you need to have in-hand prior to designing or initiating a phase III pivotal study? Thank you.
Jay R. Luly (President and CEO)
Sure. With regards to the high-risk patient, it's a study again. We'll get started in the second half of this year. You know, historically, it's been almost impossible for anyone to recruit a season or recruit a study in exactly one season, certainly in one North American season. You know, as you know, you start in Northern Hemisphere, and you go to the Southern Hemisphere. It's really just gonna depend on what RSV rates look like in terms of the speed to enrollment. Till we get into the actual season, it's really hard to provide you know, granular guidance. The good news is, as we roll through the study, and we have a pretty good sense as we go.
This study should enable a phase III registration study. You know, this is something that we'll discuss with the agency as we have an end of phase II meeting. I think the other question about RSVP, the study did finish enrollment late last year. I think one of the gating items was pulling in all of the virologic data samples from an outside vendor who is doing the clinical virology. It's really related to that. We're on track to report our top line this quarter.
Speaker 13
Just to follow up on the pivotal, thinking about the pivotal design for RSV. Would each phase II study, do you then plan to evaluate a pivotal opportunity in that setting, or would you wait until all three studies have completed? Well, I guess all four studies now have completed.
Jay R. Luly (President and CEO)
No, we wouldn't wait. We would definitely.
Speaker 13
Okay.
Jay R. Luly (President and CEO)
Not wait.
Speaker 13
Okay. Makes sense. Thank you.
Jay R. Luly (President and CEO)
Yep, you're welcome.
Operator (participant)
Our next question coming from the line of Jay Olson with Oppenheimer & Co. Your line is open.
Jay Olson (Biotechnology Equity Research Analyst)
Oh, hey, thanks for the update, and thanks for taking the questions. For RSV, how are you thinking about the monotherapy versus combination opportunities in various different patient populations? What's the best strategy to advance both EDP-938 and EDP-323?
Jay R. Luly (President and CEO)
Sure. Actually, I'm gonna dish this one over to Tara Kieffer to chat a little bit about that strategy.
Tara Kieffer (SVP of New Product Strategy and Development)
Sure. No problem. Hi, Jay. This is Tara. So we're certainly looking at EDP-323 that advances into the clinic, and we'll be, you know, looking at that in a typical phase I study and then understanding a little bit more about the characteristics and antiviral activity on its own and then thinking about potential combinations down the road with EDP-938. That would be either to, you know, look at different patient populations or potentially expanding the treatment window, you know, the opportunity of when we're able to treat patients after symptom onset. We'll be, you know, thinking about how best to bring both of those compounds forward alone and which settings we might try in combination.
Certainly both compounds have the ability and the profile to you know move forward as a monotherapy, and there may be settings where we you know want to look in combination.
Jay Olson (Biotechnology Equity Research Analyst)
Great. Thank you. If I could ask a follow-up on EDP-235. Do you expect EDP-235 to benefit from an emergency use authorization? Also, will future studies of EDP-235 require an active control line?
Jay R. Luly (President and CEO)
There's, in terms of a control arm, I think we don't know. This is gonna have to ultimately be discussed with the agency. With regards to EUA, again, that's sort of a facts and circumstances on the ground at the time, in terms of, you know, the agency decides what gets emergency use authorization. In some instances, as you've known, they've given it, and then they've pulled it back, depending upon, you know, the evolution of the virus, and the severity. Right now, you know, there is a thought that EUA could possibly be available in high-risk patient populations but needs to be confirmed ultimately, obviously through discussions with the agency.
Jay Olson (Biotechnology Equity Research Analyst)
Great. Super helpful. Thank you both very much.
Jay R. Luly (President and CEO)
You're welcome.
Operator (participant)
Our next question coming from the line of Seva Challa with Roth Capital. Your line is open.
Seva Challa (Analyst)
Hello. Thanks for taking questions. I do have a few here. The first one, Jay, is just about your EDP-235 program relative to Paxlovid. We've been looking at the chemical structure, and we've just been wondering, you know, what you did to kinda optimize your molecule relative to theirs. Then how do you expect these programs to be differentiated in the clinic?
Jay R. Luly (President and CEO)
Well, much as I could or much as I would love to, we won't get into chemical structures this evening. Suffice it to say, you know, this is what we do at Enanta. Among the things we do at Enanta is just very good at drug candidate optimization. It's a process that we know well, we've done many times on protease inhibitors and have ultimately got to market with two protease inhibitors. This process is no different. It's been a very strong drug discovery effort, and now we're gonna supplement that with a very strong development effort. I'm sorry, the second part of your question.
Seva Challa (Analyst)
I was just wondering how you.
Jay R. Luly (President and CEO)
Differentiation.
Seva Challa (Analyst)
Expect the molecules to be different in the clinic. Yeah.
Jay R. Luly (President and CEO)
Yeah.
Seva Challa (Analyst)
Efficacy-wise or safety-wise.
Jay R. Luly (President and CEO)
Yeah, sure. You know, it's very easy to make. Well, I shouldn't, we shouldn't trivialize it. It's easy to make a really potent molecule sometimes, but having all the other drug candidate characteristics that you would like to have on top of that can often erode the potency gains that you had. So getting everything put together in one package is the art and the challenge here. We just spent a lot of time focused on DMPK characteristics of the molecule, making sure that the molecule had, you know, really good oral absorption, had really good half-lives, had very good trough drug concentrations, had very good distribution into important target organs, in this case, lung tissue.
It was an iterative process, you know, of working through lots of different molecules, lots of different chemical classes, and then ultimately refining all the various attributes, including lots of virology, into a single molecule to take forward. I think, you know, so far the preclinical safety has been very good. Moving into the clinic soon, we'll have the clinical correlate to that in terms of safety and importantly PK. I think those are ways that you can differentiate starting in phase I. We certainly have differentiated already preclinically.
Seva Challa (Analyst)
Thanks. Then the follow-up here is just about another catalyst, the RSV program. I think everyone's been trying to figure out, you know, how would this translate to the high-risk patient population. I just kinda wanted to follow up one of the questions regarding which patient population do you think it'll be more difficult or easier to kinda show a treatment benefit? I know you are doing the high-risk because of the more addressable patient population, but in terms of translating the data from the less severe patients to the more high-risk patients, you know, which patient population is it more difficult to show a benefit in?
Jay R. Luly (President and CEO)
That's a very good question, but a very hard one to answer. It's because they're all unique. You know, in peds you've got, you know, you have kids that, you know, even from a DMPK standpoint, kids are different, and they're not just little adults. Then you have a slightly different clinical presentation in high-risk elderly populations. Sometimes they have other comorbidities and that can be confounding. The immune-suppressed obviously have very different things going on. You know, to look at three very different patient populations and say which is gonna be the hardest, very hard to do that from where we sit today.
That said, it is fairly easy to understand how each of those patient populations, you know, could benefit from an antiviral versus not getting one. That's in the end what we need to show. As long as we can show a good clinical benefit, we will have moved the ball down the field where no one's done it.
Seva Challa (Analyst)
Thanks, Jay. The last one here is a combo question. The first part is just about, you know, plans or more detailed specifics about the human metapneumovirus program. I think one of the things we liked about the pipeline initially was the multiple shots on goal, so I think people are just really interested in kinda understanding, you know, where you are with your next development candidate. The second part here is for Paul. Can you talk a little bit about, you know, capital allocation towards these different efforts, including early-stage development efforts, and then whether or not the expenses associated with the NASH program have all fallen off. Thanks again.
Jay R. Luly (President and CEO)
Yeah. Human metapneumo, as I said in my opening remarks, program's looking, you know, very exciting. You know, we've made a lot of drug candidates at Enanta and, you know, we're taking it down to finalist molecules right now for human metapneumo. To remind, some of you who don't remember, the human metapneumovirus is sort of the second leading cause of everything that RSV does and in basically the same patient population. The young, the elderly, high risk, the immune-compromised. It's a very nice complement to RSV. We've got two candidates moving forward in RSV, obviously. Human metapneumo and COVID, of course, will really round it out. From a capital allocation perspective, you know, we fund them as needed.
It's all stage dependent. You go through sometimes, you know, get into safety studies. That becomes very expensive for the preclinical side of things. You get into phase one. It's all charted out basically in terms of how we're laying out the pipeline evolution and the timing of all the things that we've got going on. That allocation changes around a little bit. What I will say is you are correct. You know, we're the clinical trials in NASH, you know, were wound down. We do have a discovery program that's you know quite interesting that we'll be presenting at EASL that is just sort of the last phase of the internal NASH activities.
We, you know, really the focus there is now that we have two FXRs where we've defined doses for future combination, it would ultimately reside in potential combinations down the road through business development activities. But those would be activities that would be conducted by the partner. Okay. Thank you.
Seva Challa (Analyst)
Thanks.
Operator (participant)
Our next question coming from the line of Roanna Ruiz from SVB Securities. Your line is open.
Roanna Ruiz (Analyst)
Good afternoon. A question on your new adult RSV study. Could you talk a bit more about the rationale behind selecting high-risk patients that have asthma, chronic obstructive pulmonary disease or congestive heart failure over other possible comorbidities that could have conferred high risk? I know it's still in the works, but are you considering doing anything to help balance enrollment across these subgroups in the future trial, or are you thinking about other levers that you can pull here?
Jay R. Luly (President and CEO)
Sure. Why don't I ask Nathalie to take that one on in terms of the other subpopulation patients chosen and why?
Nathalie Adda (Former SVP and Chief Medical Officer)
Maybe just simply answering that, you know, one of the patient populations that we are defining at higher risk of developing severe progression of RSV disease are well established, not only in FDA regulatory guidance, but also, you know, from a clinical standpoint. Patients with high risk are defined as being age of more than 65 years old, so they will be part of our next study for adults with high risk outpatient study. Typically, the ones that have COPD, that have congestive heart failure and asthma are also candidates to develop progression to severe disease with RSV. It is important obviously, you know, to look at that patient population to better understand, once you use an antiviral treatment, how you change the course of the progression of the disease.
Those are mainly the justification of why we are defining our adult high-risk patient, this way. Did I answer your question?
Roanna Ruiz (Analyst)
Yep. I was curious if you would do anything to balance enrollment across the different subgroups?
Nathalie Adda (Former SVP and Chief Medical Officer)
There's no particular need to stratify within this group. You know, there will be certainly, you know, once the study is enrolled completely, you know, as you know, we always look at different subpopulation if we need to. There's no need to stratify for now.
Roanna Ruiz (Analyst)
Understood.
Nathalie Adda (Former SVP and Chief Medical Officer)
Again, I think Jay has mentioned earlier that, you know, we will give a little bit more color on the protocol design, as we are getting closer, you know, to disclose it, and that's the discussion with our regulatory.
Roanna Ruiz (Analyst)
Got it. One more RSV question from me. Do you have any updates on how recruitment is going and with, for the RSV peds and, RSV TX studies? Have you noticed any seasonal trends or unusual seasonal trends, et cetera, across your different sites?
Jay R. Luly (President and CEO)
Yeah. As you might have seen, the RSV kind of spiked up, and it spiked back or trailed back down, and so it's actually very low rates, you know, presently. I think, you know, like before, we'll be looking for, you know, spikes in the southern hemisphere, followed by ultimately spikes in the northern hemisphere in the fall and early months.
Roanna Ruiz (Analyst)
Okay. Great. Thanks.
Jay R. Luly (President and CEO)
You're welcome.
Operator (participant)
Thank you. I will now turn the call back over to Jennifer Viera.
Jennifer Vieira (Executive Director of Investor Relations and Corporate Communications)
Thank you everyone for joining us today. If you have any additional questions, feel free to contact us by email or call the office. Thanks, and have a good night.
Operator (participant)
Ladies and gentlemen, that does end our conference for today. Thank you for your participation. You may now disconnect.