Altimmune Inc (ALT) 2021 Q1 法說會逐字稿

Greetings, and welcome to the Altimmune, Inc. First Quarter 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Stacey Jurchison, Senior Director, Investor Relations and Corporate Communications for Altimmune. Thank you. You may begin.

Thank you, Melissa, and good morning, everyone. Thank you for participating in Altimmune's First Quarter 2021 Earnings Conference Call. Leading the call today will be Vipin Garg, our Chief Executive Officer. Additional members of the Altimmune team participating on the call today are Will Brown, our Chief Financial Officer; Scot Roberts, our Chief Scientific Officer; and Scott Harris, our Chief Medical Officer. Following the prepared remarks, we will hold a question-and-answer session. A press release with our first quarter 2021 financial results was issued this morning and can be found on the IR section of the company's website.

Before we begin, I would like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altimmune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to COVID-19 and its impact on our business operations, clinical trials and results of operations. For a discussion of some of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC.

I would also direct you to read the forward-looking statement disclaimer in our earnings press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Monday, May 17, 2021, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altimmune's website.

With that, I will now turn the call over to Dr. Vipin Garg, Chief Executive Officer of Altimmune.

Thank you, Stacey, and good morning, everyone. We appreciate you joining us today for a discussion of our first quarter 2021 financial results and business update. We're trying a new format for our call this quarter and have a slide presentation accompanying our remarks. As Scot Roberts will review momentarily, we have impressive new preclinical data for our AdCOVID vaccine candidate that we want to take you through, and the slides will be helpful visual aids.

Our development efforts over the past year have set the stage for 2021 to be a data-rich period for our company. And we now have multiple investigational candidates advancing in the clinic. For today's call, we want to focus on 2 of our most promising product candidates, AdCOVID and ALT-801. We anticipate reporting top line data from each of these programs next month with data from the Phase I AdCOVID program likely to read out first.

As pioneers in intranasal vaccine development, we are especially proud of our achievements as they relate to our AdCOVID program. As an intranasal vaccine candidate, AdCOVID features unique attributes that are not available with currently authorized intramuscular vaccines. And therefore, we strongly believe that, if authorized or approved, AdCOVID could become an important tool for the global COVID-19 vaccination effort.

With the global pandemic continuing, there is widespread and growing awareness and interest in alternative vaccine approaches for good reason. Although currently authorized vaccines have demonstrated excellent efficacy, they continue to be considered -- there continues to be a considerable worldwide disparity in vaccine availability and increasing hesitancy around first-generation options. One of the key attributes I want to emphasize for AdCOVID is the potential for excellent tolerability, which is critical for maintaining a high degree of vaccine uptake.

Based on experience with our influenza vaccine candidate, NasoVAX, we believe AdCOVID will be extremely well-tolerated and easier to administer, potentially even self-administered. In fact, clinical and preclinical studies with our platform vaccine technology have shown a tolerability profile virtually indistinguishable from placebo. So we are very encouraged about this attribute of our vaccine candidate.

As a single-dose needle-free vaccine that is expected to be well tolerated and thermo-stable, we believe AdCOVID has the potential to address many of the current shortcomings of the COVID-19 vaccination effort and offer an important option for use in special populations, such as pediatric and maternal immunization campaigns. Pending authorization, we anticipate AdCOVID finding wide acceptance as a booster for revaccination including for coverage against variants of concerns and a primary vaccine -- and as a primary vaccine in the pediatric population and in developing countries based on its ease of intranasal administration and its expected stability profile.

Accordingly, we are excited and cautiously optimistic about our upcoming Phase I data readout, which we expect to announce in June. If the results of this trial are positive, we plan to quickly transition into a global Phase II clinical development program, which Scott Harris will review in more detail momentarily. We are planning for success, and in parallel with the development of our Phase II program, we have taken steps to ensure our manufacturing readiness.

During the quarter, we announced the expansion of our agreement with Lonza to include the construction of a dedicated manufacturing suite for AdCOVID, which will be capable of supplying product for late-stage clinical trials and potential future commercial supply. Manufacturing constraints have been a significant hindrance in global COVID-19 vaccine production efforts, and we want to help ensure our ability to supply AdCOVID with on a commercial scale, if authorized for use.

We are operating in an exceptionally dynamic environment as each new victory or setback in the COVID-19 vaccine space recast the landscape. Consequently, we have had to adapt -- to be adaptable and prepare to alter our course as events and developments dictate. In this context, we anticipated growing challenges in recruiting subjects to a placebo-controlled study as the authorized vaccines have become more widely available. Therefore, we amended our AdCOVID Phase I clinical trial protocol to reduce the number of subjects in this study to approximately 80 adults. I am pleased to report that we have now met the target enrollment in our amended Phase I AdCOVID clinical trial and are on track to announce top line data in June.

It's important to note that the size of our amended study is comparable to the numbers of participants in Phase I studies of the U.S. authorized vaccine. and is more than sufficient to demonstrate the anticipated robust tolerability and immunogenicity of the vaccine. Should the data support moving forward, we anticipate commencing our proposed Phase II development program quickly thereafter. Despite the availability of currently authorized vaccines, there is still significant need and opportunity for a differentiated vaccine candidate like AdCOVID that may offer unique attributes.

From a public health perspective, the potential to block transmission is important. And for the individual, the nasal route of administration and anticipated tolerability of AdCOVID may also be very meaningful. Feedback from our key opinion leaders and the public suggest that the appeal of an intranasal vaccine remains strong, and we are optimistic about the future potential of our AdCOVID vaccine candidate to make a difference in the global vaccination effort.

Before Scott Harris provides an update on the clinical program, I would like to turn the presentation over to our Chief Scientific Officer, Scot Roberts, to take you through some of the exciting new preclinical data that we have recently generated in collaboration with our partners at UAB. The SARS-CoV-2 challenge model that we will be discussing is considered one of the best animal models for COVID-19 research, and we are particularly encouraged by the new data in this robust model. Scot, please go ahead.

Thank you, Vipin, and good morning, everyone. While our AdCOVID vaccine candidate is progressing through our first-in-human trial, we continue to conduct preclinical studies with our collaborators at the University of Alabama Birmingham and Saint Louis University. We will be reporting on additional data from other preclinical studies shortly, including a study evaluating the ability of AdCOVID to provide cross-protection against the emerging variants of concern. But today, I would like to share with you the results of 2 important preclinical studies that provide exciting insights into the activity of AdCOVID.

The preclinical study results we are presenting today build on the results of efficacy challenge studies we have previously shared with you, showing that a single intranasal dose of AdCOVID completely protected mice from clinical signs of infection and resulted in a greater than 1,000-fold reduction in SARS-CoV-2 virus in the lungs of vaccinated mice.

If you refer to Slide 5, you will see that these results are graphically presented. One of the points I'd like to emphasize about the human ACE2-transgenic mouse model we have used is that it is a very stringent model for controlling viral replication with very high levels of infection and viral replication in the lungs. In our new analysis, we evaluated the effect of AdCOVID vaccination on the amount of infectious virus in the lungs of mice infected with SARS-CoV-2.

The left and middle portions of the slide show the profound reductions in viral RNA that resulted from vaccination with AdCOVID. As you can see on the right-hand portion of the graph, vaccination with AdCOVID resulted in an inability to recover infectious virus from the lungs of challenged animals 3 days postinfection, whereas nearly 300,000 platforming units that is greater than log5 of virus were recovered from the lungs of the unvaccinated control mice.

It is important to emphasize here that these results were obtained following a single intranasal dose of AdCOVID. We are excited about the ability of AdCOVID to provide sterilizing immunity in vaccinated mice in the face of such high levels of viral replication, as it may have direct relevance for AdCOVID to provide protection from COVID-19 and, more importantly, block transmission.

We have also evaluated how vaccination with AdCOVID affects the development of inflammatory lung disease associated with the infection of SARS-CoV-2 virus. On Slide 6, you will find low- and high-magnification pictures of lung sections obtained from human ACE2-transgenic mice 4 days postchallenge with SARS-CoV-2. What is important to note here is that the massive lung inflammation observed in the unvaccinated mice after infection with SARS-CoV-2, shown on the left-hand side of the slide, was essentially prevented following vaccination with a single intranasal dose of AdCOVID, shown on the right-hand side of the slide. These data are, of course, consistent with the ability of AdCOVID to dramatically reduce viral replication and completely neutralize infectious virus in the lungs of infected mice and provide further evidence of the potent protective effects of AdCOVID vaccination.

As I mentioned earlier, we will be reporting on the ability of AdCOVID to induce cross-reacting antibodies that are able to neutralize the emerging variants of concern. Recall that another way AdCOVID that is differentiated from nearly all other COVID-19 vaccines, either authorized or in development, is that we are targeting the immune response specifically to the receptor-binding domain, or RBD, of the viral spike protein.

We believe that by doing this, we can focus the immune response on the most relevant portion of the spike protein, which may result in a differentiated neutralizing antibody response that includes antibodies that are not present in response to the entire spike protein targeted by other vaccines. We look forward to sharing the results of those important studies with you shortly. On a related note, we are advancing the preclinical evaluation of several variant AdCOVID vaccines, including AdCOVID P1 as we prepare for a clinical study of that vaccine later this year.

I will now turn the presentation over to Scott Harris to discuss our clinical efforts. Scott?

Thank you, Scott. We're encouraged by the progress we have made in our Phase I AdCOVID clinical trial and our comprehensive plans for a global Phase II development program. Let me begin with a brief review of our Phase I clinical design and the outcomes we anticipate reporting in June. Please refer to Slide 8 of the earnings call deck.

As Vipin noted, we amended our AdCOVID Phase I protocol due to the challenges of recruitment in placebo-controlled studies in the U.S. as a result of the widespread availability of authorized vaccines. We have adjusted our enrollment in this study to approximately 80 subjects, randomized 5:1, to receive 1 or 2 doses of AdCOVID or placebo administered in 3 dose groups. Immunogenicity readouts will include neutralizing antibodies, anti-spike IgG and anti-spike IgA as an indicator of mucosal immunogenicity measured 28 days apart after the first and second doses. Top line results on antibody responses are expected in June with T cell readouts expected to follow approximately 4 to 6 weeks thereafter. As Vipin noted, the size of the trial was similar to the Phase I studies of the authorized COVID-19 vaccines and more than sufficient to demonstrate a clear vaccine effect and establish the tolerability profile of AdCOVID.

Moving on, we have developed a robust slate of Phase II clinical trials to support our anticipated AdCOVID target product profile, which is shown in Slide 9. As you can see from this slide, the planned Phase II studies are meant to directly support the key elements of our differentiated target product profile, or TPP, to evaluate whether AdCOVID will boost the natural immune responses to wild-type and variant vaccine -- variant viruses. We plan to conduct a study of naive and previously infected but unvaccinated individuals in low-access countries. To confirm our belief that AdCOVID will boost the immune response to wild-type and variant viruses in previously vaccinated individuals, we plan to conduct a revaccination study with parental and variant vaccines in the country with good vaccine access such as the U.S. This study will also confirm the ability of AdCOVID to provide mucosal immunity to individuals previously vaccinated with a parental COVID-19 vaccine.

To confirm that AdCOVID will be well tolerated in immunogenic in children down to 2 years of age, we plan to conduct an age-based de-escalation study in young children and adolescents. And finally, we believe the safety of AdCOVID in pregnant and breastfeeding women can be established by conducting a maternal immunization study to demonstrate that AdCOVID is safe for use in pregnant and breastfeeding women.

Switching gears now and moving to Slide 11 and our ALT-801 program. We anticipate a top line data of our Phase I clinical trial next month. The ALT-801 Phase I clinical trial is evaluating single ascending doses and 6- and 12-week multiple ascending doses of ALT-801 in overweight and obese subjects. At this time, we've completed enrollment in the single-ascending-dose and 3 planned cohorts in the multiple-ascending-dose phase of the trial.

Looking ahead, we anticipate reporting 12-week data in the third quarter of 2021. If the data from this trial were positive, we plan to transition to a 52-week Phase II biopsy-based trial in NASH patients in early 2022. We also anticipate filing an IND in the second half of the year to initiate a separate NASH study in the United States.

There may be more to the ALT-801 study. As noted, now on Slide 12, Novo Nordisk and Lilly have executed successful Phase III programs that have derisked the obesity space previously occupied by unsafe and ineffective drugs. However, GI and tolerability has been the Achilles heel of GLP-1-based treatments with side effects leading to treatment discontinuation. If the impressive weight loss and safety of ALT-801 in preclinical studies are translated to the clinical setting, ALT-801 could become a best-in-class treatment for this multibillion-dollar indication. The filing of an IND in obesity is being evaluated with the final decision based on the upcoming Phase I data readout.

I will now turn it over to Will to give an update to our first quarter financial results. Will?

Thank you, Scott, and good morning, everyone. For today's call, I will be providing a brief update on our first quarter 2021 financial results. More comprehensive information can be found in our 10-Q filed with the SEC today.

Altimmune ended the first quarter with a robust balance sheet, including cash and short-term investments totaling approximately $227 million as compared to $216 million at the end of 2020. The increase in our net cash during the current period is attributable to $34.2 million of net receipts during the quarter primarily due to our utilization of the at-the-market, or ATM, offering program partially offset by approximately $20 million of cash used for operating activities. With these additional cash receipts, we remain solidly capitalized to advance our pipeline candidates through potentially value-generating inflection points in 2021 and beyond.

Turning to the income statement. Revenue in the first quarter of '21 was $800,000 compared to $2.2 million in the first quarter of 2020. The change in revenue between the periods was primarily due to a decrease of $2 million in BARDA revenue due to the timing of clinical trials and development activities for NasoShield, which is partially offset about $500,000 in revenue attributable to the T-COVID program.

R&D expenses were approximately $12 million in the first quarter compared to $7.2 million in the first quarter of 2020, which represents an increase of $4.7 million. The change is primarily the result of an increase of $5.4 million related to development activities for our COVID programs partially offset by a decrease of $1.5 million in charges related to the contingent consideration liability in connection with the acquisition of ALT-801.

G&A expenses were $3.8 million in the first quarter of '21 compared to $2.3 million in the prior period primarily due to increased stock comp expense and additional labor-related costs. Net loss for the 3 months ended March 31, 2021, was $14.9 million or $0.38 net loss per share compared to $3.9 million or $0.26 net loss per share for the first quarter of 2020. The difference in net loss is primarily attributable to higher research and development and general and administrative expenses.

I will now turn it back over to Vipin for his closing remarks. Vipin?

Thank you, Will and Scot Roberts and Scott Harris, for joining me today and sharing your perspective. And thank you, those of you on the call today and are listening to the replay for your continued support and interest in our programs. We have several promising and important shots on gold this year. As you have heard, we are eagerly awaiting the data readouts from both the AdCOVID and ALT-801 programs. We believe there is tremendous opportunity to create value for our stockholders if either or both programs advance. I'm confident in the clinical development strategy we have laid out to further the development of our AdCOVID and ALT-801 candidates and look forward to sharing the initial top line data and our continued progress with you.

Operator, that concludes my formal remarks. Could you please instruct the audience on the question-and-answer procedure?

(Operator Instructions) Our first question comes from the line of Seamus Fernandez with Guggenheim Partners.

So just wanted to ask a few here. First, on the AdCOVID program. Has the agency approached your team with any questions with regard to the possibility of coagulation safety issues and being able to disprove that preclinically? I know this is very challenging and perhaps not possible. But just wanted to get a better sense of that from your perspective. And then in terms of the change from 180 patients and reducing that number down to 80, can you just give us the reasons for that? Is it just confidence in the data that you see upcoming in the Phase I clinical data set and then that will be obviously expanded and borne out in the full Phase III? And was that agreed upon with FDA in terms of just the size of the required clinical study?

And then if I may, just 2 additional questions. As we think about the data that you are anticipating to be able to move forward with conviction in the Phase II clinical studies, what's the threshold for neutralizing -- IgG-neutralizing antibodies that you believe is necessary to move forward with a single dose of AdCOVID?

Yes. Seamus, maybe what we can do is divide and conquer. So Scot Roberts, do you want to take the first part of the question and then turn it over to Scott Harris and perhaps come back for the third part of the question?

Sure. Happy to, and Seamus, thanks for the questions. So with respect to the FDA and the TTS, no, there has been no communication about that. The FDA is clearly aware of our GLP toxicology studies, where we were able to demonstrate that there was no systemic dissemination of the vector following intranasal delivery. And while there's more questions than answers about the mechanism of this effect, one thing that does seem to be more likely than not, I would say, is that, that systemic exposure of the vector and vector components may have the catalytic effects on the PF4. So in the absence of that, I think we're in good stead. As you said, trying to prove a negative there would be very difficult, especially given the rarity of this, but no formal communication or informal from the FDA on that point.

And Scott, do you want to go ahead and handle the clinical question?

Right. And then I'll turn it back over to you, Scot, for the final question. So Seamus, we have a lot of confidence in the size of the study. The readouts are clearly comparable to the size of the Phase I studies of the authorized U.S. vaccines. I think that gives us additional confidence and also based on the readouts of our prior studies. And we've had no specific indication that this would be unacceptable to the agency, especially in view of what I've just mentioned.

Scot, do you want to answer the third question?

Sure. And that question related to our expectations for neutralizing antibody in order to continue the program forward, especially as a single-dose vaccine. And to begin with, Altimmune will still refrain from numerical expectations because of the variability in the assays and the way that they're done. And so as far as a titer, I don't think that it's productive to go down that road. I think most people are comfortable with the relationship to convalescent sera and, of course, the sera variant may need to be characterized and understood with the components that made up that convalescent sera. So we certainly expect to be in the range of convalescent sera.

I think one of the things that we've learned from the studies that have been conducted so far is that really surprisingly low levels of neutralizing antibody are associated with protection. And we've learned that primarily from the inactivated vaccines, which really have, what I would consider to be astonishing low neutralizing antibody titers. And so when we think about that and when we think about the other immunogenicities that we are bringing to the table, the mucosal immunity, especially, and the strong T cell responses, we feel that a neutralizing antibody response on par with convalescent sera is a home run for us.

Our next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Thank you for the great update. I also have a number of questions. I'll just go ask them one by one. Maybe the first question for you is can you comment on whether we would be seeing in June data on both the single and the dual shot or -- given or just for one. And if you could just help us -- I know fine-tune a little bit more granularly when in June you should be expecting that data. Is that early June, mid-June, end June to the extent you can comment on? And then the third question that I think is really important on top of the minds of many of our clients that we speak with is what are the steps forward beyond that. Can you maybe highlight what would be the size of the Phase II, Phase III, the time lines around that? That would be really helpful.

Absolutely. Scott Harris, do you want to take the first question?

Right. Yasmeen, thank you for your questions. Yes, we will have data on both the single and the double doses in the June time frame. And right now, we are confident that we will be announcing in June. We haven't provided specifics on exactly when that will occur in June.

Regarding the future programs, as you can see, there are -- there is a robust list of studies that will support the Phase 2 program and build the target product profile. Obviously, these studies are in different sizes because they have different objectives so that, in all, the Phase II program will be large. And there are many different Phase II studies to compare against but we have a multitude of Phase II studies, so it's an approximation, I would say, that the Phase II program is large and will be executed between the readout in June and the end -- toward the end of the year.

Maybe if I could just have a follow-up on that same question. We understand there are quite a number of debates depending on the geography whether a placebo would be needed in future Phase II, Phase III and whether orthogonal vaccine approaches -- if you could just comment on those types of discussions where maybe regulators stand on, that would be helpful. And then I have one NASH question.

Right. Well, as you know, because of the availability of authorized vaccines in the U.S., it's been increasingly difficult for any sponsor to do a placebo-controlled trial. That paradigm will change as we move to the variant vaccines and revaccination where there would be some latitude to do that. Clearly, as one goes around the world, there's -- there are many opportunities to study the vaccine in unvaccinated populations where a placebo control would be very acceptable. And that has been the basis of the strategy of moving some of the Phase II programs, at least one of the studies, to a low-access country.

I would say that the regulators have not been very specific about the question of placebo control. Clearly, the FDA is quite interested in placebo-controlled studies more so than comparator-controlled studies. They're more robust. But the specific requirements have not been announced by the agency.

Maybe this is another question for you in relation to the announcement to file an IND for the obesity indication. Just if you could highlight to us the thoughts behind that and then why this is a focus for the second half and maybe how different is the regulatory path for obesity versus the NASH, that could be very helpful for us.

Right. Thanks for the question, Yasmeen. Well, as you know, when we announced our program in 2019, the regulatory space in NASH and obesity were quite different. And as you can see since this time, there's been somewhat more uncertainty about the acceptability of surrogate end points in NASH but much more confidence in programs like the Novo Nordisk and the Lilly programs to move ahead. As you know, we previously had ineffective and unsafe drugs in this space. And now we have the prospect of 2 approvals in the near future, both on GLP-1-based compounds, in obesity with robust efficacy but really very concerning tolerability with lots of discontinuations. We believe that we can beat that. We think that's a low hurdle. And we think based on our phase -- in our preclinical studies, that we can achieve excellent, if not better, weight loss with better tolerability and the prospect of even not needing dose titration. And obviously, we'll speak to that with our study results.

So NASH and obesity are both billion-dollar indications, and it behooves us to take on both because we not only have a drug for NASH and obesity -- and remember that more than 80%, if not more than 90% of patients, with NASH are obese. So consequently, if you're treating obesity, and you do get an indication of obesity, you're naturally capturing most of the entire NASH space and not just the people who have NASH but also NAFLD. So it's an opportunity that we're strongly considering. It's much going to be based on our readouts and the amount of weight loss that we see in our Phase I study and, consequently, the decision to file that IND and develop a program will be data-driven.

Yes. And I would just add, Yas, that we're not deemphasizing NASH. We just think that there's a parallel opportunity here in obesity that became very clear to us as we go and talk to KOLs, we talk to potential strategic partners. Everybody wants to know what about obesity. It looks like you have a drug for obesity as well. So it became clear, and our preclinical data clearly shows that, and if we see similar weight loss in our human trials, then by all means, it makes sense to proceed with obesity in parallel with NASH.

Our next question comes from the line of Kelechi Chikere with Jefferies.

Yes. Congrats on all the progress you've made over the quarter. Just a few questions for me here. You mentioned you would like to see neutralizing antibody titers on par with convalescent serum. I'm hoping you can provide a little bit more details around that convalescent serum. Is that sera incurred are mostly from mildly infected individuals, hospitalized patients? Any color there would be greatly appreciated.

And I guess also just related to another question that was asked earlier. I'm hoping you can provide a little bit more details around your latest thoughts on the data set that you think you'll need to generate to support a regulatory filing. Is it just immunogenicity data? Is it efficacy data? Any color there would be helpful. And I guess just -- and is that something you think you can generate on your own? Or do you anticipate needing a partner for that?

Scot Roberts? Thank you, Chikere -- Kelechi, sorry. Scot Roberts, do you want to take the first question?

Sure. All I can say at this point is we'll be providing the description and composition of the convalescent sera as we release the data so that those data can be interpreted at that time. Okay.

Kelechi, this is Scott. Thank you for the second question. As you know, the landscape is rapidly changing. I think there's scientific consensus of a correlative protection being neutralizing antibodies, but the regulators have to accept that. If the regulators do accept a correlative protection, we could get authorization or approval based on an immunogenicity readout. And that may come with a later obligation of doing an outcomes-type trial. But if the approval or authorization is based only on the correlative protection that is immunogenicity, the obligation to do trials, the size of the trials is much smaller. It's probably a safety database of approximately 3,000 subjects. And as you know, it's much larger for outcomes trial. So clearly, we could do a trial of that magnitude. A much larger trial is something we would anticipate doing with a partner because of the expense of the trial, and the landscape is rapidly changing and we need to remain flexible and we are.

Yes. And Kelechi, I would just add that with regards to future development and funding, we continue to talk to multiple sources. We think our Phase I data, the quality of that data is going to be critical in advancing those discussions. So both -- we are in discussions with potential corporate partners as well as with the government sources of funding to develop our vaccine, and we'll continue to do that. It's really going to be data-driven, mainly this Phase I data that we are expecting here soon.

Our next question comes from the line of Jon Wolleben with JMP Securities.

Just a follow-up on ALT-801 and the obesity indication. I was hoping you could give us a little more context on what you'd want to see to differentiate with just moving forward in NASH versus adding on the obesity indication. What kind of magnitude of change do you want to see, I guess, in body weight? And then also with the GI tolerability profile, what would make it interesting to compel you to move forward in obesity?

Scott Harris?

Yes, Jonathan, thank you for the question. So what I'd rather do is relate or bring in outside opinions and these have been stated, and refer to Juan Pablo Frias, who is an expert in the space. And he's publicly stated that anything greater than 2% at 6 weeks, he thinks, would be a success. Could you please refresh me on the second part of your question?

So my question is when you're making a decision before in obesity, how -- what magnitude of difference do you need to see in between just moving forward in NASH or adding on obesity? Just trying to kind of understand when we see this data, are you going to, at the same time, say, this is worthwhile in obesity? Or is it going to be a decision later on?

Well, it's really the same decision because if we get that kind of weight loss that we're anticipating, we're going to have a successful NASH drug because weight loss is the most potent mechanism for treating NASH. And we think that all of the beneficial effects of weight loss are going to convey to NASH. So we believe that the decision point would be to both on -- would be the same ones in both programs.

Our next question comes from the line of Liisa Bayko with Evercore ISI.

I'm just looking at Slide 5, where you're discussing the sterilizing immunity in mice. And so can you -- what is the -- actually the definition of sterilizing immunity? And what's the difference between -- how do you think about the replicating viral RNA versus the infectious virus? And maybe you can discuss a little bit of the differences in between those and what actually is sterilizing.

Scot Roberts?

Sure. Happy to answer. So let's start with sterilizing. I think a consensus definition of that would be no infectious virus, the inability of the virus to replicate in the host and that means also to spread. And that's what we demonstrated in the lungs, that no infectious virus could be found. Now when we looked at the RNA, the total RNA, which includes both the input dose, the dose that was given to challenge the animals with the SARS-CoV-2 and any replication that occurs, that RNA is certainly representative of the virus being present, but it's not equal to infectious virus. And the reasons for that are numbers of overlay -- the neutralization may happen a little bit later. But more importantly, not all of that RNA is necessarily encapsulated in a virus particle that represents an infectious unit.

You've got mice cells that release the RNA. So there's a lot of RNA signal that may or may not be associated with virus particles. And then those virus particles may or may not be neutralized by mucosal antibody, for example. So that's the disconnect between the RNA and the infectious virus. But I will note that, on that slide, if you look at the infectious, the replicating virus, you can see that 2 of the animals had no detectable replicating RNA either. And so we are really driving down the ability of the virus to replicate and to the extent that we cannot find, in a very, very sensitive assay, any infectious virus present in the lungs of those animals.

Okay. That's helpful. And then I guess the amount you're exposing -- the amount of virus you're exposing the animals to, is that consistent with what you'd see if you came -- I mean I'm just trying to understand how that relates to real world. If you can provide...

Probably much higher, probably much higher.

So very high levels?

Yes. Yes, much higher. I mean and that's typically how the -- the challenge studies typically use around 10,000 infectious units, and that's in the range of what we're using here. That varies by experiment but certainly around that. That's probably a lot more than you're getting from somebody's sneeze or something like that.

Okay. Very helpful. And then as you kind of think about what's going on, where we are with the pandemic and in terms of our availability of vaccines, is the emergency use authorization, sorry, always hard to say that, EUA, is that still something that you think is available to sort of the next generation of vaccines? Or do you think full approval is going to be in the cards? So how are you thinking about the regulatory strategy?

Scott Harris, do you want to take that?

Hey, Liisa, the -- there are differences between authorization and approval. The major difference is the amount of follow-up or time. Typically, with approval, it's 6 months. But with authorization, it's only 2 months, and we're seeing that play out right now as the Pfizer vaccine is being filed for approval. It's basically the amount of safety data that you have. It's fairly clear that there is a need for a multitude of vaccines even in the U.S., especially as the variants come out. And more than likely, the FDA will take a strategy to keep pace with the emerging need, which is every day we'll probably continue to issue authorizations that would be the prospects that we would see. But obviously, that's up to the agency.

Okay. And then as you're thinking about Phase II as well, how are you thinking about variants versus sort of, I guess, the wild-type variants? And that's my last question.

Right. We have -- are in the process of manufacturing variant vaccines. I'll let Scot talk more deeply into that, but we will have that vaccine for a study towards the end of this year. And that will be a revaccination study or a study in previously infected individuals. So we've built out the entire variant program. We're manufacturing the vaccine. We will have it available, and we will put it into a Phase II study to go along with our other Phase II studies as outlined in the slides that have been presented.

I can go ahead and add my perspective on that. I think that we can imagine 2 scenarios where we're, -- as I indicated in the call, we're very keenly interested in the ability of the prototype AdCOVID vaccine, which is directed against Wuhan's isolate, to neutralize in a very effective way, variants of concern. And that stems from the fact that our approach is fundamentally different from the majority of the vaccines. We're focused on the RBD and that could bring interesting new antibody repertoire to the table, for example. So we certainly need to understand that.

And in the context of variants that are mildly different, and that's how I'd really characterize the ones that are out there right now, they're mildly different compared to the parental strain. We'd have to see. There may be an opportunity to continue using the prototypic one. But we're not resting on that. We can't assume that that's going to be the case, and we can't assume that a variant that is really very different, a different serotype, for example, no longer neutralized on any level or something like that, might -- or has clear enhancement of disease might come along. And so the importance of being able to match a vaccine to the variant is still vitally important. We're prepared for that.

And as Scott indicated, we're going to conduct the clinical studies that are required to show that when we make a variant, everything is behaving the same, the safety, the immunogenicity, and that will pave the way for responding in real time as necessary for a variant that is really a departure from the prototypic strain or what might be circulating. So I think we've got the 2 plays here: one, involving the possibility that the prototypic provides protection, sufficient; and then one where we're clearly engaged on and able to execute, where you do have the matched variant vaccine for the variant that is at hand.

Our next question comes from the line of Yuan Zhi with B. Riley Securities.

This is Yuan. So can you provide some update on your preclinical rodent study you are conducting to study transmission? And where do you think we are as a society in appreciating the residual unmet needs that remains to be addressed, considering the wider-spread use or availability of EUA-approved vaccines and the now easing of the mask mandate? And also, can you provide some update on the T-COVID program? And is there any learnings about that platform from that experience?

Scot Roberts, do you want to go first?

Sure. So with respect to the transmission study that's -- those studies are ongoing. We're very much looking forward to those and to having clear data showing the ability of AdCOVID to block transmission. In the greater context, I think that the ability to effectively and I should say, most effectively, block transmission is still an important aspect of AdCOVID despite the clear indications that the authorized vaccines are having an effect on shedding and likely an effect on transmissibility. It's not at all clear that, that effect is as strong as it could be, and that's something that you'd want in a second-generation improved vaccine. So when we think about AdCOVID in the context of the EUA vaccines and what we're learning there, we still see the advantages, the improved tolerability and the potential for even better or best-in-class ability to block transmission. And as you indicate, with the masks-off situation that we find ourselves in now, that is just as relevant now as it ever was.

And then I'll let Scott Harris talk about the T-COVID program.

Yes. And thank you for your question. Obviously, one of the learnings that we've had is the difficulty of trying to conduct these studies. And we've obviously -- it's obviously impacted the T-COVID study as well. We're continuing to enroll. We're continuing to assess the readout, which is still scheduled in the second quarter in June. And if there's any change to that based on the shifting dynamics, we'll inform our investors.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Dr. Garg for any final comments.

Thank you very much for joining us and participating on the call today. We hope you'll join us on our next quarterly earnings call. Have a nice day.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.