Altimmune Inc (ALT) 2020 Q4 法說會逐字稿

Greetings, and welcome to the Altimmune Year-End 2020 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host for today's call, Ms. Stacey Jurchison, Senior Director of Investor Relations and Corporate Communications at Altimmune. Stacey, you may begin.

Thank you, operator, and good morning, everyone. Thank you for participating in Altimmune's Year-End 2020 Earnings Conference Call. Leading the call today will be Vipin Garg, our Chief Executive Officer. Additional members of the Altimmune executive 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 their prepared remarks, we will hold a question-and-answer session.

A press release with our year-end 2020 financial results was issued this morning and can be found on the IR section of the company's website.

Before we begin, I'd 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, Thursday, February 25, 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'll 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 2020 financial and operating results and 2021 business outlook.

Without hesitation, I can proudly say that 2020 was a transformative year for Altimmune and our shareholders. Our historical development efforts laid the groundwork to enable us to unlock the value of our portfolio as we advance our 5 novel product candidates in clinical development.

I am pleased to say that each of our candidates had the opportunity to reach value inflection points in 2021 and beyond. Never in our history have we had such an impressive portfolio with so many opportunities to build value. As you will hear about in more detail shortly from Scot Roberts and Scott Harris, we believe the intranasal vaccines and peptide therapeutics we are developing may provide novel solutions to unmet medical needs and potentially have highly favorable attributes that are differentiated from existing therapies or treatment approaches.

As a pioneer in intranasal vaccine development, Altimmune has a rich history of vaccine innovation in this field. Last year, we developed this expertise in response to the COVID-19 pandemic, bringing our COVID-19 vaccine candidate, AdCOVID, from concept to clinical development. And this morning, we announced the enrollment of the first subject in our Phase I clinical trial.

If successful, we believe that AdCOVID could offer important benefits in our fight against the SARS-CoV-2 virus. Unlike currently authorized vaccines, AdCOVID potentially offers ease of administration and deployment, optimal target product profile for use in pediatric population, the potential for improved tolerability and safety and the ability to stimulate mucosal immunity in the nasal cavity, which we believe will be critical for preventing viral transmission.

If the clinical data for AdCOVID would parallel to preclinical findings and our clinical experience with our NasoVAX influenza vaccine candidate, AdCOVID could become a leading candidate for COVID-19 vaccination and revaccination. And with the virus continuing to mutate, creating new variants, the need for improved vaccines with the potential to block transmission grows increasingly more urgent.

We also progressed our novel investigational T-COVID immunotherapeutic into clinical testing in 2020 and look forward to data from our Phase I/II study, evaluating, among other things, its ability to prevent progression to severe COVID-19. T-COVID may provide a truly differentiated approach towards treating COVID-19. And we are pleased with the ongoing progress on this program.

During the past year, we also completed dosing in a Phase Ib clinical trial of NasoShield, our BARDA-funded intranasal vaccine for anthrax. And we expect to share the data from that trial with you in the coming weeks.

Moving to our peptide-based liver disease programs, both ALT-801 and HepTcell made important strides in 2020, with ALT-801 beginning Phase I development and HepTcell advancing into Phase II development. We think ALT-801 is a specialty promising candidate in the metabolic disease category. As a balanced GLP-1/glucagon dual agonist, ALT-801 may have best-in-class attributes leveraging potent metabolic synergies and improved GI tolerability. Given its platform in a drug potential to address both NASH and obesity in a multibillion-dollar market, we are excited to see this compound advance and reach significant data inflection points this year.

Finally, 2020 was also a formidable year from a capital raising perspective. During the year, we strengthened our balance sheet, ending 2020 with approximately $216 million in cash, cash equivalents and investments. So we are well capitalized to advance our portfolio through important upcoming value inflection points this year.

I will now turn the call over to our Chief Scientific Officer, Scot Roberts, to give you an update on our pipeline. Scot?

Thank you, Vipin, and good morning, everyone. It's been an especially rewarding year at Altimmune from a scientific perspective as we deployed our expertise to initiate clinical development programs for AdCOVID and T-COVID to do our part to help fight this devastating pandemic.

As Vipin mentioned, we believe AdCOVID has unique attributes that distinguish it from other currently authorized vaccines. Most notably, the simple intranasal dosing has potential for single-dose protection and potential to provide both systemic neutralizing antibody and local mucosal immunity in the respiratory tract. Additionally, we've seen excellent tolerability in our NasoVAX and NasoShield clinical studies, which are based on the same platform technology as AdCOVID.

With its anticipated ability to be distributed at room temperature and stored in the refrigerator for years, we believe AdCOVID could be a key COVID-19 vaccine for both vaccination and revaccination and could play an important role in helping facilitate an end to the global health crisis.

During the past year, we completed and provided online the results of preclinical studies of AdCOVID, demonstrating compelling results. Briefly, these data showed strong activation of all 3 arms of the adaptive immune system. And by that, I mean high systemic serum neutralizing antibody titers; robust T cell responses to the viral spike protein, primarily of the killer CD8 T cell type. And importantly, T cells of the resident memory type were also observed in the lung, poised there to combat viral infection. And finally and most importantly, the preclinical data showed a pronounced induction of mucosal IgA specific to the spike protein in the respiratory tract following a single intranasal dose of AdCOVID.

We are very encouraged by these data and believe that the robust IgA response, combined with the lung-associated tissue resident memory T cell response, may yield an enhanced level of immune protection against COVID-19 disease and importantly transmission.

Also, during the year, we expanded our collaboration with the University of Alabama at Birmingham and established a new collaboration with Saint Louis University to build on the accumulating preclinical data for AdCOVID. Specifically, these studies we are conducting with these collaborators are designed to evaluate the efficacy of AdCOVID in challenge models, demonstrate its ability to reduce viral transmission and evaluate heterologous prime boost vaccine regimens. Data from these studies are expected later this quarter.

As you know, the COVID-19 field is a highly dynamic and rapidly evolving landscape. The emergence of SARS-CoV-2 variance is troubling and has raised concerns about the effectiveness of currently authorized vaccines. While we are hopeful that existing vaccines will maintain their efficacy in the face of these variants, we need to prepare for this uncertainty.

Importantly, we have already initiated a development program to address these emerging variants. Our lab is creating viral seed stocks against the South African and U.K. variants, among others. And we are adapting our development plans to evaluate these new AdCOVID vaccines in advanced clinical studies as part of our overall AdCOVID development plan.

With the emergence of these variants, we see the playing field for COVID vaccine -- COVID-19 vaccines evolving as vaccine developers will be required to adapt their vaccine programs to respond to these variants. As the AdCOVID clinical program advances and we establish proof-of-concept in our Phase I and Phase II studies, we are positioning ourselves to advance development of variant COVID vaccine -- AdCOVID vaccines later this year in parallel with the adaptations authorized vaccine manufacturers are making.

We all recognize that we will need to establish herd immunity to extinguish the pandemic. But achieving this level of immunity in the population will be challenging. Polls have shown that there is a high degree of fear and hesitation in our population regarding vaccination. Unfortunately, up to 30% of respondents polled indicate they will not get vaccinated. This may be influenced by reports of side effects, which have been observed with the currently authorized vaccines, particularly following the administration of the second dose. And it is here that our potential for improved tolerability may be important.

The emergence of viral vaccines may create an opportunity for AdCOVID to be used, if approved, as a booster in previously vaccinated individuals to not only potentially provide protection against circulating variants but also to potentially provide against -- or provide the additional benefit of mucosal immunity that can only be achieved through nasal administration. On this front, we are engaged in discussions with key players around the concept of a heterologous vaccine regimen.

Most experts believe that the SARS-CoV-2 virus will become endemic and will continue to circulate in our population for years to come, much like the seasonal flu, underscoring the importance and value of vaccines with improved immunogenicity and tolerability.

There is also a growing acknowledgment that a suitable vaccine for children is an increasingly important priority. As demonstrated in our NasoShield and NasoVAX clinical trials, we believe that the expected attributes of AdCOVID may get ideally suited for use in a pediatric setting as the intranasal administration and expected tolerability profile are well suited to meet the needs of children. We will remain focused on the pediatric segment of the population as we develop our long-range clinical and regulatory strategy for AdCOVID.

Finally, I should point out that in addition to the attributes I've discussed earlier, AdCOVID may be further differentiated from other COVID-19 vaccines from a logistics and distribution perspective. Based on the data from our other intranasal vaccine candidates, we expect AdCOVID to have extended stability, which, if demonstrated, would allow for transport at room temperature and storage in simple refrigerators potentially for years without loss in potency, making AdCOVID extremely practical to use.

Given the advantages of our approach, we believe that if the clinical data support our expectations, AdCOVID could become an important part of the global solution to the pandemic and continued presence of the virus as a leading player in the COVID-19 vaccine landscape.

I will now turn the call over to our Chief Medical Officer, Scott Harris, to provide a clinical update on AdCOVID and our other programs. Scott?

Thank you, Scot, and good morning, everyone. As Vipin said at the outset of the call, this is a very important year for Altimmune from a clinical perspective with 5 of our pipeline candidates now advancing into clinical development and meaningful data readouts anticipated throughout the year. That said, we are pleased to announce the initiation of our AdCOVID Phase I clinical trial today.

Given the known and potential advantages of an intranasal vaccine approach, there is considerable interest in our AdCOVID program. To briefly recap, the Phase I trial will evaluate the safety and immunogenicity of AdCOVID in up to 180 healthy adult volunteers between the ages of 18 and 55. Volunteers will receive AdCOVID at 1 of the 3 dose levels administered as a nasal spray.

While the experience from our influenza vaccine platform and preclinical experience from the University of Alabama Birmingham indicate that AdCOVID should be effective after a single dose, we plan to study the effects of both prime and prime boost in this study.

In addition to the primary study end point of safety and tolerability, the immunogenicity of AdCOVID will be evaluated by serum IgG binding and neutralizing antibody titers, mucosal IgA antibody from nasal samples and T cell responses. We anticipate a full data readout from this Phase I trial in the second quarter of 2021.

We continue to explore additional development opportunities for AdCOVID, including, as Scot mentioned, designing studies to address the efficacy of AdCOVID against variant strains; use in a heterologous prime boost vaccine regimen; and use in the pediatric setting.

As our understanding of the pandemic constantly shifts, we remain nimble and will continue to adopt our development path to address these evolving needs and opportunities. Most importantly, visibility into the Phase I clinical data, which we expect to have in the second quarter, will guide these opportunities.

Moving on, our Phase I/II clinical trial with T-COVID has made solid progress. We have completed dosing in the first and second study cohorts, which are predominantly safety cohorts, and will soon commence enrollment in the third and final study cohort, the cohort focused on both safety and efficacy. Cohort 3 includes patients at higher risk for severe COVID-19 infection, such as those 65 years of age or older or those with one or more risk factors for severe COVID-19 complications. The study has been overseen by an independent data monitoring committee, and no significant safety signals have been observed to date.

The demographics, hospitalization rates and death rates with COVID-19 have evolved over the past year. And this has required changes to the protocol to optimizing the chances of a meaningful trial readout. To ensure that a sufficient number of higher-risk patients are enrolled to maximize the quality of the data readout, the study protocol was modified to require that a minimum number of patients meet one or more of these criteria in this final cohort and further modifications are being evaluated. That's the cohort 3. Based on the protocol modification and the anticipated rate of enrollment, we now expect that the data readout from the study will occur in the second quarter of 2021. We feel confident about these protocol changes because while the time line has been extended, we do expect them to enhance the probability of a meaningful trial outcome.

As a reminder, this trial is designed to evaluate the potential protective effects of T-COVID in preventing clinical worsening in patients with early COVID-19 symptoms. We expect to enroll up to 100 patients who are being randomized 1:1 to receive intranasal T-COVID or placebo administered in a nonhospitalized setting shortly after the onset of symptoms. The primary efficacy end point is the proportion of patients with clinical worsening, defined as a 4% decrease in pulse oxygen saturation or the need for hospitalization.

Shifting gears now, let me provide an update on our liver programs. Last year was an important year for the ALT-801 program as we achieved a major milestone, initiating the first-in-human study of this compound. The Phase I trial, which commenced in December in Australia, will enroll approximately 100 subjects in a 6-week single ascending dose and 6-week multiple ascending dose study. The primary pharmacodynamic end points are weight loss and reduction in liver fat. And we expect to have 6-week data readouts in weight loss and liver fat reduction in the second quarter of 2021. These outcomes in particular have been associated with NASH resolution and fibrosis improvement in advanced clinical trials.

We recently amended the study protocol to continue our clinical trial in Australia and plan now to incorporate the 12-week study in patients with nonalcoholic fatty liver disease or NAFLD into this study. We believe that by incorporating the 12-week extension to this study, we can avoid any potential impact of COVID-19 and maintain study time lines.

The 12-week data on weight loss, liver fat reduction and noninvasive markers of inflammation are expected in the third quarter of 2021. If the data from the study are positive, we expect to transition rapidly to a full Phase II biopsy-based trial on NASH end points in early 2022.

The market opportunity for a balanced dual agonist GLP-1/glucagon candidate is substantial as there remains a significant unmet need for NASH therapeutic, potentially such as like ALT-801 with a PK profile that permits once-weekly dosing as well as improved GI tolerability.

As the evolving clinical data for tirzepatide illustrate, improvements in weight loss can be achieved over GLP-1 monotherapy with a dual agonist strategy such as ALT-801. However, while the safety profile of tirzepatide was generally similar to that of the well-established GLP-1 receptor class, clinical benefit was realized only with a protracted 20-week incremental dose titration schedule and a significant number of dropouts due to GI side effects still occurring. Clearly, there is room for improvement in this class.

Based on our dose modeling with ALT-801, we have reasons to anticipate robust weight loss and an acceptable safety and tolerability profile without the need to dose-titrate. Keep in mind as well, the preclinical data for ALT-801 demonstrated superiority to semaglutide in overall weight loss, reduction in liver fat, NAS improvement and effects in liver fibrosis. If these results can be substantiated in the clinic, we believe that ALT-801 will present a significant opportunity in the metabolic disease space.

Moving on to our HepTcell program. We achieved another important milestone in 2020 commencing our Phase II development program. The Phase II trial is designed to evaluate the antiviral activity of HepTcell in chronically infected hepatitis B patients and is an important milestone on our mission to develop a functional cure for this disease.

The unmet medical need in chronic hepatitis B remains high as currently approved therapies achieve minimal rates of functional cures. Similar to ALT-801, we project HepTcell to be a multibillion-dollar opportunity if successful. The Phase II trial is expected to enroll up to 80 patients with chronic hepatitis B. HepTcell will be administered intramuscularly once monthly for a total of 6 doses. The primary end point is virologic response with secondary end points of safety, immunologic criteria and other assessments of virologic response. We anticipate having a data readout from the study in the first half of 2022.

Finally, before I wrap up, we completed dosing in our Phase Ib clinical trial of NasoShield for anthrax last year. The data readout from this trial is projected to be available in the coming weeks. As we are developing NasoShield under a contract with BARDA, if NasoShield is shown to be safe and sufficiently immunogenic, we could be eligible to receive remaining options under our $133.7 million contract with BARDA. We could be awarded to fund Phase II clinical testing, followed by the stockpile of NasoShield in the Strategic National Stockpile.

And with that, I will now turn the call over to Will Brown, our Chief Financial Officer. Will?

Thank you, Scott, and good morning, everyone. For today's call, I'll be providing a brief update on Altimmune's year-end 2020 financial and operating results. More comprehensive information can be found in our Form 10-K filed with the SEC today.

Altimmune ended 2020 with cash and short-term investments totaling $216 million. The increase in our net cash year-over-year is the result of the receipt of approximately $124 million in net proceeds from a public offering, $48 million in net proceeds from the issuance of common stock from our ATM program and $41 million in proceeds from the exercise of warrants.

Today, we entered into an equity distribution agreement with Piper Sandler, Evercore and B. Riley under which we may offer and sell up to $125 million of our common stock for working capital and general corporate purposes. We feel this is a good corporate housekeeping measure, which gives us optionality into the future.

We are solidly capitalized to advance our pipeline candidates through at least the next 12 months of operations, pending results from our ongoing clinical programs. A significant element of our anticipated cash utilization in 2021 will be directed towards manufacturing scale-up in advanced clinical trials as we progress AdCOVID through development.

Turning to the income statement. Revenue in 2020 was $8.2 million compared to $5.8 million in 2019. The change in revenue year-over-year reflects an increase in revenue from our U.S. government contracts due to the timing of manufacturing and clinical trial activities for both our NasoShield and T-COVID programs.

Research and development expenses were $49.8 million in 2020 compared to $17.8 million in the prior year. The increase was primarily attributable to increased costs related to the development of AdCOVID, T-COVID and ALT-801 and includes an increase in the contingent liability for stock-based milestone payments associated with the acquisition of ALT-801.

General and administrative expenses were $13.2 million in 2020 compared to $8.5 million in 2019. The increase year-over-year is attributable to additional employee compensation as Altimmune's workforce expanded during the year as well as increased professional costs.

Income tax benefit in 2020 was $5.4 million compared to $60,000 in the prior year. The increase is attributable to the CARES Act passed on March 27, 2020, which made temporary changes regarding the utilization and carryback of net operating losses. We are in the process of filing refund claims with federal and state authorities to collect this cash benefit.

Net loss attributed to common stockholders for the year ended December 31, 2020, was $49 million or $1.91 net loss per share compared to $20.9 million in the prior year or $1.60 net loss per share. The difference in net loss is primarily attributable to higher research and development expenses and G&A expenses, offset by higher revenue and an increase in the income tax benefit.

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

Thank you, Will and Scot Roberts and Scott Harris, for your remarks. The tremendous effort and dedication the entire Altimmune team has tirelessly demonstrated over the past year has brought us to this important juncture, with each of our portfolio candidates now in clinical development and poised to make important advances this year. As you heard on this call, we have a data and catalyst-rich period ahead of us as we anticipate multiple data readouts from 4 of these programs in 2021: AdCOVID, T-COVID, ALT-801 and NasoShield, with HepTcell data anticipated in 2022.

If successful, we believe that each one of these programs has the potential to advance science and medicine and address important outstanding unmet patient needs. We are extremely proud of where we have come as a company in a short time and where we are positioned today, and we look forward with much anticipation to the future. We will continue to work tirelessly for patients and for our shareholders to realize the full potential and value of the opportunities in our portfolio.

We look forward to keeping in touch and keeping you appraised (sic) [apprised] of our progress as the year unfolds. Once again, I thank you for your continued support of Altimmune and for your participation on our call today.

Operator, that concludes my formal remarks. Could you please instruct the audience on the Q&A procedure?

(Operator Instructions) Our first question comes from the line of Yasmeen Rahimi with Piper Sandler.

This is Rachel on for Yasmeen. Can you provide us with some color on what type of activities are going on to add additional AdCOVID vectors targeting the emerging SARS-CoV-2 variants? And how long would it take to develop new vectors to combat these new?

Yes. Scot Roberts, do you want to take that question, please?

Sure. So the preparations that are currently underway include making a variant of vaccines against the primary variants that are circulating, the South African, the U.K., the one in California, we've seen there's a new one here in New York that shares a lot of commonality with the South African.

And so it's easy for us to make these changes within the vaccine. And our goal is to create a number of viral seed stocks and have those prepared and released so they can be used for GMP manufacturing in preparation for trial, conducted in a region where the variants are circulating. So this is really all about getting ahead of the curve, doing our best with the information that's available to us to make these variants and have them ready to go so that we can then execute.

So the whole process is fairly quick for a vector like ours. And to have these then available to us and dropped into the manufacturing process, which is the same as we've discussed earlier for all of our vaccines, which is a tremendous advantage, then that puts us in the best position to respond quickly to whatever the current environment is.

That's incredibly helpful. And can you also provide some color on how discussions are going with regulators in regard to design and considerations for pediatric trials? And when can we expect details on time lines for pediatric trials?

Scott Harris, do you want to take that question, please?

Sure. Yes, we're having active discussions right now with the agency. There's nothing that we can really disclose at this point because those discussions are not final. But we're looking to implement a pediatric trial in the middle of the current year.

Congratulations on your progress.

Our next question comes from the line of Seamus Fernandez with Guggenheim.

So yes, congratulations on all the advancement. Just wanted to ask a couple of questions here. First off, could you guys update us? I know you did -- you've kind of got this single ascending dose that's proceeded with 801 overseas. I love the decision to move forward and have the Australian trial expand to the 12 weeks. So can you just update us a little bit on, do you have some visibility from that trial in terms of the tolerability profile from the single ascending dose program?

Incremental to that, on the prime boost plans, could you guys just give us a general sense of what type of a product do you think would be the ideal partner for your assets? And are you in discussions with some of the potential players that are already in -- or poised to be in market as a partner vaccine or partner prime boost? To us, it seems like a really unique opportunity to collaborate especially given the need to potentially reduce transmission with the antibody program. And I'll have a couple of other follow-up questions, but let's start with those 2.

Yes. So maybe we can take these questions in reverse order and go to the -- your question about the prime boost first. Scot Roberts, do you want to take that and just describe the features of the ideal candidate for prime boost?

Sure, Vipin, happy to. So when we think about what's the best way to move forward as a community to respond to the pandemic, obviously, you want a well-tolerated vaccine and you want a vaccine that can block transmission because it's through transmission and through the growth of the virus and other individuals that these variants that we're wrestling with pop up. And so cutting that off at the start is clearly advantageous.

And so with our mucosal immunity, which is clearly best suited to block infection and block transmission and our anticipated exceptional tolerability profile, we think that as a boost to whatever regimen, AdCOVID offers significant advantages.

So that said, obviously, boosting a strong prior immune response is going to be more beneficial than boosting a weak response. And I think that the -- having a good T cell response will also be helpful because then with the mucosal administration, you can pull those T cells into the respiratory tract, further improving the immunity. So I think that there are probably some better and some second-tier combinations. But in a general sense, that's how we're thinking about things.

Yes. And I would just add that it's important to realize that if COVID-19 or this disease becomes an endemic, we're going to need yearly boost. So it really doesn't matter what vaccine people received at the beginning. You're going to need -- year-after-year you're going to need a boost. So as long as you have a safe and well-tolerated vaccine that's blocking transmission and developing this mucosal immunity, we think we can really be used as a boost with any of these existing vaccines. So along those lines obviously, but data will dictate that, but we'll see how the whole field develops.

Great. And maybe just if I can, can you guys update us how you're thinking about the updated FDA guidance? Obviously, there's a lot in there. But in terms of the guidance on variance in particular, how are you thinking about the development of and advancing your own vaccine targeting -- AdCOVID targeting those variants? Are we talking about variant single intranasal administration original plus a variant prime boost, monthly, daily constructs? Just trying to get a sense of what's possible and how you're thinking about the updated FDA guidance. I think that's probably the big question that investors are wrestling with right now.

Yes. Scott Harris, do you want to address the regulatory perspective, the FDA guidance?

Yes. So the guidance that was written was oriented predominantly to vaccines that are under EUA. So there's a bit of guesswork as to how to apply it to vaccines that have not currently done clinical trials.

Clearly, there's going to be a need to establish the effectiveness of the vaccine oriented around the strain. We would hope that, that could be done by a correlative protection. In other words, based on immunogenicity, but that will -- rather than a full clinical trial. So there's a potential there of not conducting a full Phase III trial. But we don't know what that current potential is.

And there's clearly a great interest in the use of boosters against the variants in order to get protection against those new strains. And again, the concept would be that this would basically be based on an immunogenicity rather than a clinical readout. But we're going to have to see how the agency treats the vaccines that do not currently have EUAs.

Got it. Perfect. Yes...

And Scott Harris, do you want to address the question about 801?

Yes, sure. Yes. So Seamus, we're very happy with the way the trial is proceeding right now. We've made a decision not to make any announcements about the look of the data so far because that would constitute interim analyses, which are not provided for in the protocol, and would be disruptive to the commitments made to regulators. So what I can say in general is that the trial is progressing well. It's moving ahead the way we would -- we thought, and we're going to have the readouts, which we believe will be very positive, for 6 weeks in the second quarter and for 12 weeks in the third quarter.

Great. And then just one final question. Can you just update us on sort of the structure of the U.S. IND going forward? And that's my final question just in terms of the advancement into sort of the full NASH program. Just wanted to get a sense of what the needs are from the IND perspective. And then with the data that you have from Australia, do you believe that you can initiate the full Phase II NASH study using those data?

Yes, absolutely. So very often, in fact, in most cases, the IND is filed before clinical trials. But many sponsors, Seamus, have chosen to go outside of the U.S. in their Phase I, particularly Australia, and the FDA is very comfortable with that.

So we'll actually come into the IND process with clinical data rather than just preclinical data, which puts us at a great advantage in terms of the discussions. And in fact, that's specifically how the program was designed, to have a much later discussion of the clinical program at the time of the IND because we are coming in with clinical data. That IND is to set up the Phase II trial that we talked about earlier in the presentation. And we anticipate it will be filed approximately the middle of this year. We obviously will have clinical data from the Phase I trial to support that.

So we're very happy with the timing. And we feel very confident about the ability to initiate that Phase II trial in the first part of 2022.

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

I was hoping to get some clarification on the timing for data for AdCOVID. I know there was a belief that you could potentially have data on a subset of patients by the end of this quarter and full data in Q2. But it looks like, at least in the PR, you're mentioning full data in Q2 with no mention of any subset of data in Q1. Can you clarify that for us?

And my second question is just related to, what do you think the buoy is for moving AdCOVID into a Phase II? Do you need to see neutralizing antibodies in the nasal cavity as well as in the serum before you say, okay, this is something that can be moved into a Phase II? And the reason why I'm asking that is because as you think about running a Phase II or Phase III based on potential -- in trying to get potential approval based on surrogate protection, how important are those markers for that eventual approval essentially?

Scott Harris, do you want to start? And maybe Scot Roberts can jump in.

Sure. So we've not made any changes in our position. What we're emphasizing here is the availability of what we consider to be meaningful data. So while we will have data in the first quarter, we wanted to emphasize that the meaningful readout would occur in the second quarter. And we're emphasizing that in the call today and the press release. And that's when we really feel that the full communication when the trial results can occur.

I'll defer to the second question to Scot to answer.

Yes, no. So on the point, what do we need to see to be confident in advancing? I think that neutralizing antibodies are clearly part of the picture. That's how -- it's really the only measure because our strong T cell induction and our unique ability to generate mucosal immunity, those are unique attributes, and so difficult to compare across platforms.

And so the neutralizing antibody is going to give everybody the confidence that this thing is working the way we expect it to and then also will be necessary for use of a surrogate protection, as I alluded to before. We think that things are moving along very quickly and that there's a real opportunity there and, by the time we're in advanced clinical studies, to take advantage of that. So again, that's going to be based on neutralizing antibodies. So that's clearly a key.

As far as the -- neutralizing in the nasal cavity, that's something that we'll be looking at, and that's fine. I think for the Phase I, clear demonstration that we have, the induction of IgA, like we've seen in all of our other intranasal clinical studies, is expected. And I think that you need to check that box. Neutralizing whether or not those -- whether or not with those assays get executed. And with -- depending on a number of other factors, we don't see that as necessarily critical at this stage. There's a number of other opportunities to validate the role of the mucosal immunity. It's already been established, as you know, with influenza and RSV. And we're looking at those. And so in the Phase I, I think the presence of IgA and clearly the neutralizing antibodies, and of course, we'll have the T cell data also.

Our next question comes from the line of Mayank Mamtani with B. Riley FBR.

Congrats on the progress. So maybe first, focusing on the first quarter catalyst, can you talk a little bit about the design of the heterologous study that -- it seems like you added Saint Louis University to the collaboration recently. Can you just talk about what is the design, what animal models you're looking at and sort of what helps you understand better about the transmission blockade of AdCOVID from that study?

Scot Roberts?

Yes. So we're -- in that study, we're -- the model is the transgenic mouse model. That's a model that Saint Louis has been using for a while and is very expert at. And what we're doing is comparing the vaccine activities and efficacies of a RNA vaccine that closely mimics the RNA vaccines that are currently authorized in AdCOVID.

And so these will be used as single agents and then combined in a heterologous prime boost, looking at the order of addition, which vaccine comes first, to understand the overall immune responses, which is -- which order provides the best immune response, how best to control and approach the replication of the virus in the respiratory tract. And so really just understanding the system of how the interaction of 2 different vaccines proceeds.

Obviously, if we can reduce the amount of viral shedding or replication and ideally even remove it completely, that has direct knockdown effects for transmission. So that's kind of like the 30,000-foot overview from the studies that are going on there at Saint Louis University.

Great. And maybe on the second question if I can follow up on your comments made previously on the FDA guidance and also on the experience with flu. As you think about the nAb titers, the FDA guidance was not very clear in quantifying it, which turns out to be a positive for the field that the bar is not that high. But I'm just curious, what do you think, relative to natural infection, your nAb should be when you think about progression to the next step? Any quantitative color you could provide?

I'm reluctant to do that because currently, I think we're getting close to having harmonized assays performed with harmonized reagents. And so you can really do the comparisons and understand what's going on, "This is what they got, this is what we got," in a meaningful way. We're not there yet.

The WHO has released at the end of last year the critical reagents that are necessary, these qualified sera that are -- have assigned values for neutralization and IgG binding. And so that's going to be critical. I mean I think we all have a sense of what -- like a neutralizing titer of like 20 or something like that is not going to be too exciting, but I think we'll get up into the hundreds. When you compare that to convalescent sera that's available, then we can put these things in perspective.

So I think to be quantitative at this stage right now is -- would be less informative. I think that we're getting close, though, to having those types of conversations that everybody wants to have, how these things really do relate to each other, but we're not quite there yet.

Got it. And obviously, in the context of the emerging variants, that could become even more interesting because the median convalescent serum numbers could also change.

But maybe just the final question was on the modularity of the platform. As you saw from the testimony given by the frontrunner vaccines on Tuesday, it does seem like adenovirus platform in general may not have the same time lines in which they can come up with a new vaccine for the variants. I'm just curious, like with your platform, again, unclear on timing. But still, can you provide the differences between your vector versus the Ad26 that is part of the J&J vaccine?

Sure. So you're right, the ad vectors aren't changed as quickly as the RNA. And that's why the RNA vaccines really got the attention and the initial funding to get where they are now. And that's fantastic.

The important question is, how quickly can we make the variance in relation to the evolving landscape of circulation of that variant? And so we can make these things in a very short amount of time, right, on the order of a month and have these ready. And so the viral dynamics and the population are not changing that quickly. There's plenty of time to understand what's going on, where you're doing your work and have the right vaccine. So yes, not as fast. But fast enough? Yes also to that.

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

Congrats on all the progress. Just 2 questions for me. We talked a lot about AdCOVID. I was hoping if you can extrapolate, if things go as planned, what the next steps look like in terms of a next study, if that could be registrational and when that could kick off.

And then second question on 801. You discussed that you're expecting robust reductions in liver fat and body weight. I was hoping you could help us quantify kind of expectations given this first readout will only be 6 weeks in duration.

Yes. Scott Harris, I think you can handle both of these.

Yes. So we are -- we've just initiated the Phase I trial of AdCOVID with a readout that will occur -- a full readout which will occur now in the second quarter. And we are planning right on the heels of that to initiate a Phase II trial, which would probably start toward the end of the second quarter. And that trial is looking like a traditional Phase II trial with -- in studying all age groups as well as a larger number of patients on the immunogenicity and safety readouts.

Regarding the second question, I'm going to defer to comments that were made by Juan Pablo Frias in a recent conference call and also look at the semaglutide data that was recently published in New England Journal on a weight loss trial. That was not a NASH trial, but the results of that trial were very similar to the NASH trial that was published at the end of last year. And with that, at 6 weeks, they had a reduction of 3%. Now it should be pointed out that all subjects in that trial were placed on a restricted diet with a net negative of 500 kilocalories per day as well as exercise. And with that, even the placebo subjects in the 6 weeks lost 1%.

So if one were to take the 3% gross and subtract the baseline 1% due to diet and exercise, which we cannot implement in a Phase I study because it's a safety and tolerability study, not an efficacy trial, and that we couldn't do in a Phase I first-in-human trial. If you look at the net at 6 weeks, it would be 2%. Now we think that's the floor, and we think that's a minimum to show that we're at least on par with semaglutide, and we think we can do better.

That's very helpful. Congrats on all the progress.

You're welcome.

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

Yes. Thank you, everyone, for listening in today. We hope you'll join us on our next quarterly earnings call. And have a nice day.

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