Altimmune Inc (ALT) 2020 Q3 法說會逐字稿

Good morning, and welcome to the Altimmune Inc. Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Stacey Jurchison. Please go ahead.

Thank you, operator, and thank you, everyone, for participating in Altimmune's Third Quarter 2020 Earnings Conference Call. Leading the call today will be Vipin Garg, Chief Executive Officer of Altimmune. Other members of the Altimmune executive team participating on the call today are Will Brown, Chief Financial Officer; Scot Roberts, Chief Scientific Officer; and Scott Harris, Chief Medical Officer.

After the prepared remarks, we will hold a question-and-answer session. A press release with our third quarter 2020 financial results was issued last night and can be found on the IR section of our 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 Securities and Exchange Commission. I would also direct you to read the forward-looking statements disclaimer in our earnings release issued last night and now available on our website.

Any statements made on this conference call speak only as of today's date, Tuesday, November 10, 2020. 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 rebroadcast on Altimmune's website at www.altimmune.com.

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

Thank you, Stacey, and good morning. We appreciate you joining us today for a review of our third quarter 2020 financial results and business update. As Stacey mentioned, joining me on the call today are Will Brown, our Chief Financial Officer; Scot Roberts, our Chief Scientific Officer; and Scott Harris, our Chief Medical Officer. After our prepared remarks, we will hold a Q&A session.

2020 continues to be a transformational year for Altimmune and our shareholders. In particular, the third quarter has been an exceptionally busy time as we progressed 5 novel investigational candidates in clinical development. Never in our history have we had so much opportunity to build value and so many promising shots on goal that are advancing towards clear inflection points over the next 6 to 12 months.

I'm especially proud of our accomplishments as they relate to our COVID-19 candidates, as we have achieved so much in a compressed time frame. At the outset of the year, as the pandemic swept around the globe, we rapidly mobilized our expertise to develop a new and promising intranasal vaccine candidate, AdCOVID, that we believe has the potential to combat this global crisis.

We also initiated the development of a promising therapeutic intranasal therapeutic, T-COVID. These product candidates are uniquely differentiated and offer significant advantages compared to other therapeutic and vaccine approaches, positioning Altimmune solidly as a significant player in the COVID-19 arena.

During the third quarter, we made important strides advancing each of these candidates. We continue preparations to initiate a Phase I study of AdCOVID, which is on track to commence this quarter, with a data readout expected in Q1 2021. And we initiated the Phase I/II EPIC clinical study of T-COVID.

With the support of our collaborators at the University of Alabama at Birmingham, we presented new and compelling preclinical data for AdCOVID, showing that AdCOVID can provide potent stimulation of antigen-specific CD4 and CD8 T cells that reside in the lungs, as well as a 29-fold mucosal IgA antibody response against the virus in the respiratory tract. Importantly, these unique respiratory tract-focused immune responses are in addition to the strong serum-neutralizing antibody response we measured.

Finally, we advanced plans to scale up our clinical and commercial manufacturing capacity for AdCOVID through the execution of agreements with multiple commercial manufacturing partners to help ensure our commercial readiness. This morning, we announced an agreement with Lonza to further strengthen our commercial readiness.

In conjunction with these activities, we have maintained an active dialogue with policymakers in Washington, D.C., working diligently to raise awareness of the advantages of our intranasal vaccine approach. The announcement yesterday of preliminary data from the Pfizer vaccine trials is exciting and offers promise for an effective vaccine for COVID-19.

As our CFO, Dr. Scot Roberts, will describe shortly, we believe that AdCOVID offers some very unique attributes that are not being fulfilled by the first generation of vaccine candidates. We believe that if the Phase I data confirm the promising preclinical results we have observed, AdCOVID could play an important role in the world's COVID-19 vaccine armamentarium.

Aside from our COVID-19 programs, we have a broad and deep pipeline of promising international vaccines and peptide therapeutics, including NasoShield, ALT-801 and HepTcell, each of which also made important progress in the third quarter. Specifically, during the quarter, we completed enrollment in a Phase Ib clinical trial of NasoShield anthrax vaccine, and we anticipate a readout from that trial towards the end of this year.

ALT-801 also continues to advance towards the clinic, and we are on track to begin a Phase I study of ALT-801 for the treatment of NASH later this quarter. Similarly, we completed preparations to commence a Phase II study of HepTcell, also scheduled to begin before the year-end.

As you can see, we have significant momentum developing, as each of these clinical trials get underway and the catalyst-rich period lies ahead of Altimmune and our shareholders. We expect multiple data readout over the coming months. Importantly, we are well capitalized to advance each of our programs towards these meaningful inflection points.

Looking ahead, I'm very excited about the future potential for our company and pipeline candidates. I look forward to keeping you updated on our progress. I would now like to turn the call over to Scot Roberts to provide an update on our progress related to AdCOVID. And then Scott Harris, our Chief Medical Officer, who will provide a clinical update across our portfolio. Scot, please go ahead.

Thank you, Vipin, and good morning, everyone. As have been mentioned, we believe we have something very special and unique in our single-dose intranasal vaccine candidate, AdCOVID, which has the potential to confer several advantages compared to the first-generation COVID-19 vaccine candidates currently in development. Key among these advantages are single-dose protection, focused immunity in the respiratory tract and the single, simple intranasal route of administration.

During the quarter, Altimmune and our partners at UAB announced compelling preclinical data demonstrating strong activation of all 3 arms of the adaptive immune system following a single intranasal dose of AdCOVID. This broad activation of the immune system included high serum-neutralizing antibody titers that appear to be similar to and potentially even higher than the activity reported in convalescent serum. These data show that the intranasal administration elicits robust systemic immune responses, in addition to the important responses localized in the respiratory tract that I'll describe next.

Specifically, AdCOVID stimulated a strong T cell response to the viral spike protein that was biased towards the CD8 killer T cells. This type of T cell can kill infected cells to clear the infection. Interestingly, we are also able to show that the majority of the stimulated killer T cells were resident in the lungs of the vaccinated animals, precisely where you'd want them to combat a respiratory infection.

Finally and importantly, AdCOVID has the unique ability to elicit nasal mucosal immunity. We demonstrated a 29-fold increase in the mucosal IgA antibody specific to the spike protein, following a single intranasal vaccine dose. This level of induction is well above that associated with protection from disease based on clinical studies of mucosal influenza vaccines, where a two to fourfold increase in mucosal IgA was found to be correlated with protection.

The observed IgA response, together with the lung-associated tissue resident memory T cell response, may provide an enhanced level of immune protection against AdCOVID disease and transmission. These comprehensive preclinical data for AdCOVID were recently published online and are being submitted to a peer-reviewed publication. In the meantime, we are continuing to expand the preclinical evaluation of AdCOVID in collaboration with our partners at UAB and look forward to presenting additional data from these ongoing preclinical studies.

In addition, we recently established a new collaboration with Dr. James Brien, faculty member of the Department of Molecular Microbiology and Immunology at Saint Louis University. We'll be working with Dr. Brien to conduct animal models of vaccine immunogenicity and efficacy. Dr. Brien has extensive expertise in studying the pathogenicity of viral infections and will be an important addition to the Altimmune effort towards COVID-19.

We used the intranasal route of administration exclusively in our preclinical studies. And I'd like to explain why we think that the selection of that mode of dosing is so important, especially in regard to COVID-19.

The intranasal route delivers the vaccine directly to the site of viral entry and replication to stimulate mucosal and cellular immunity directly in the nasal cavity and respiratory tract. There is good evidence that respiratory mucosal and T cell immunity may play a critical role in blocking transmission of the SARS-CoV-2 virus to others by providing what is known as sterilizing immunity, that is the elimination of all virus from the body.

While traditional vaccines delivered via the intramuscular route can stimulate systemic immunity in the blood, it cannot induce mucosal immunity in the nasal cavity. And many experts believe that the first-generation vaccines will not provide sterilizing immunity.

This means that while people may be protected from disease after vaccination, these individuals may still carry the virus in their nose and still transmit it to others. This is one of the reasons why wearing a mask will still be recommended even after you've been vaccinated. We see the potential to stimulate mucosal immunity and resident T cell immunity in the respiratory tract, along with strong systemic neutralizing antibody titers, as a very important differentiator for AdCOVID.

From a logistics and distribution perspective, AdCOVID is further differentiated. Based on data from other vaccines we're developing, we expect AdCOVID to have excellent stability, allowing for common storage conditions at community-based vaccination centers without the need for specialized freezers required of some of the other vaccine candidates.

In fact, we expect to have the ability to ship AdCOVID to vaccination centers at road temperature, greatly simplifying its distribution and simply -- and significantly reducing costs. When combined with our simple, scalable manufacturing process, AdCOVID has the potential to exceed the World Health Organization's expectations for COVID-19 vaccine.

Finally, as I previously mentioned, we believe that AdCOVID will have a excellent safety profile, virtually indistinguishable from placebo, as these characteristics have been demonstrated in clinical studies with our intranasal vaccine candidates, NasoVAX and NasoShield. Of course, we are hopeful that the first wave of COVID-19 vaccines will be successful.

However, we strongly believe that there's an opportunity for a second wave of next-generation vaccines like AdCOVID to complement or supplement our vast global vaccine requirements. It's important that we have safe and effective vaccine available quickly, but it's (inaudible) file that we advance next-generation vaccine options with improved logistics, immunogenicity and safety.

Recently, the CDC indicated that with respect to vaccine effectiveness, several considerations beyond the primary goal of protection from symptomatic disease will be important. One of these considerations is understanding the effectiveness of a combination-vaccine regimen. That is a regimen that combines 2 different vaccines to provide protection.

We believe that the single-dose activity of AdCOVID is particularly well suited for combination with the first-generation COVID-19 vaccine because it has the potential to provide the necessary boost to the other vaccine, while also providing the benefit of mucosal IgA and T cell activation in the respiratory tract. We are currently exploring the possibility of using AdCOVID in that setting as well.

In parallel with these efforts, we are scaling the manufacturing process to meet the requirements of Phase II/III clinical testing and a potential commercial launch of AdCOVID. We have already formed alliances with key commercial manufacturing partners that have deep experience in the manufacture of viral vectors, and we are continuing discussions with other potential strategic manufacturing partners.

I will now turn the call over to Scott Harris who will provide an update on AdCOVID and our other pipeline programs. Scott?

Thank you, Scot, and good morning to everyone. We're making excellent progress with AdCOVID and plan to begin a Phase I clinical trial this year. We anticipate the trial will enroll up to 180 subjects at 3 dose levels to receive either a single- or 2-dose regimen. The study will evaluate the safety and immunogenicity of AdCOVID, including total serum IgG, serum-neutralizing antibodies, nasal mucosal immunity and T cell responses.

As Vipin mentioned, we anticipate a data readout from this study in the first quarter of 2021 and, pending the results, are preparing to move rapidly into Phase II development. Based on prior experience with our other intranasal vaccine candidates, we expect potent immune responses in a well-tolerated safety profile similar to placebo.

In addition to our clinical study in adults, we are also exploring the opportunity to study AdCOVID in adolescents and children down to 2 years of age. It is now appreciated that these groups confer a heightened potential to transmit the SARS-CoV-2 virus to teachers and parents. We believe that the simplicity and ease of delivery of an intranasal vaccine, combined with the excellent safety profile of our intranasal Ad5 vector vaccines demonstrated in prior clinical trials, would be ideal for use in adolescents and children, allowing them to return safely to school and allowing parents to get back to work.

We also made significant progress during the quarter on our GLP-1/glucagon dual receptor agonist for NASH, ALT-801, and readying this program to begin Phase I development. We recently received clearance from the Human Research and Ethics Committee in Australia, and we have filed a Clinical Trial Notification with the Australian regulatory authority. We expect to commence dosing in a Phase I clinical trial of ALT-801 before the end of this year.

The trial will enroll approximately 100 subjects in a 6-week single-ascending dose and multiple-ascending dose study. The primary pharmacodynamic endpoints in this trial are weight loss or reduction of liver fat, which we expect to have readouts on towards the end of the first quarter of 2021. If the data are positive, we anticipate this will be a significant value-generating event for Altimmune as it will place ALT-801 squarely in the forefront of NASH development.

In parallel with this study, we are planning to conduct a follow-on 12-week study in patients with nonalcoholic fatty liver disease, or NAFLD. We had originally planned to conduct this 12-week study in the U.S., but we believe that study time lines could be accelerated by conducting the trial in Australia. We expect a data readout on this trial in the third quarter of 2021. We expect to transition rapidly to a full Phase II biopsy-based trial on NASH endpoints around the beginning of 2022. We are still on schedule to file an IND for ALT-801 in the United States in the middle of 2021.

We also recently announced the results of our GLP toxicology studies, which showed no dose-limiting adverse effects and an excellent GI tolerability profile. Based on the design of the molecule on our preclinical observations, we believe that ALT-801 is better tolerated than similar therapies and will achieve weight loss and improvement of liver fat in the Phase I trial without the need to dose titrate for GI intolerability, which has adversely impacted other GLP-1 candidates.

Moving now on to our HepTcell program. We are on track to begin a Phase II trial this quarter. The Phase II trial is designed to evaluate the antiviral activity of HepTcell in chronically activated patients, and it's an important milestone stone in our goal to develop a functional cure for this disease. The unmet medical need in chronic hepatitis B patients remains high as currently approved therapies achieved minimal rates of functional cures. We believe this to be a multibillion-dollar opportunity as reflected in recent analyst reports.

The HepTcell Phase II trial will enroll up to 80 patients with chronic hepatitis B. HepTcell would be administered intramuscularly once-monthly for a total of 6 doses. The primary endpoint is virologic response, with secondary endpoints of safety, immunologic criteria and other assessments of virologic response. Depending on the population being treated, the immunotherapeutic mechanism of HepTcell is intended to work alone or in combination with the new antiviral therapeutics that are being developed elsewhere for the disease. We anticipate having a data readout from this study in early 2022, and we will keep you apprised of our progress as all of these studies advance.

Switching gears to T-COVID, our intranasal therapeutic for COVID-19. We commenced dosing in a Phase I clinical trial that we're calling the EPIC study, which stands for the Efficacy and Safety of T-COVID in the Prevention of Clinical Worsening in COVID-19. The EPIC Trial is designed to evaluate the potential protective effects of T-COVID to prevent clinical worsening in patients with COVID-19 symptoms. The double-blind trial is expected to enroll approximately 100 patients, who are 18 years and older, with COVID-19.

Patients were randomized 1:1 to receive either intranasal T-COVID or placebo, administered in a nonhospitalized setting shortly after the onset of symptoms. The primary endpoint is the proportion of patients with clinical worsening, defined as a 40% decrease in pulse oxygen saturation or the need for hospitalization. We have multiple sites that are actively screening and enrolling patients, and we are continuing to add new sites for the study. Based on the current enrollment rate, we anticipate a data readout from this trial in the first quarter of 2021.

If successful, because T-COVID could prevent the development of more severe disease with any respiratory pathogen, not just SARS-CoV-2, we could potentially use as a pre-exposure or post-exposure prophylaxis against COVID-19 or other respiratory pathogens, for which vaccines have yet to be developed. Recall that this study is being 100% funded by the U.S. Army Medical Research & Development Command. If successful, we plan to initiate a Phase II/III clinical trial early next year and commence discussions regarding Emergency Use Authorization.

During the third quarter, we also announced that we had completed enrollment in our Phase Ib clinical trial of NasoShield for anthrax. We expect the data readout from the study toward the end of this year. Importantly, if NasoShield is shown to be safe and effective, we could be eligible to receive remaining options under our $133.7 million contract with BARDA, which could be awarded to fund Phase II clinical testing and begin stockpiling of NasoShield in the strategic national -- our stockpile.

I will now turn the call over to Will Brown, our Chief Financial Officer, who will provide an update on our financials for the quarter. Will?

Thank you, Scott, and good morning, everyone. For today's call, I will be providing a brief update on our third quarter 2020 financial results. More comprehensive information can be found in our Form 10-Q filed with the SEC yesterday afternoon.

At the end of the third quarter, we had cash and short-term investments totaling $206.8 million. The increase from our year-end balance of $37.3 million is primarily attributable to the receipt of $132.2 million in proceeds from a public offering completed in July, approximately $41 million in proceeds from the exercise of warrants and $26.6 million from proceeds from our at-the-market facility through September 30, 2020.

With these proceeds, Altimmune is solidly capitalized to advance our pipeline candidates into 2022. As Scot Roberts noted, a major driver of cash utilization in future periods will be the scale up of manufacturing for both AdCOVID and T-COVID to meet the demands of both of these COVID-19 product candidates.

Turning to the income statement. Revenues for the third quarter were $2.9 million compared to $600,000 in the third quarter of 2019, reflecting an increase in U.S. government contract revenues during the current period as a result of our T-COVID program. Research and development expenses were $17 million for the quarter ended September 30 compared to $8.7 million in the same period last year. The increase year-over-year is primarily attributable to an increase in the contingent liability for stock-based milestone payments associated with ALT-801.

The initial milestone payment has now been triggered with the successful filing of the Australian CTN at the end of October. And accordingly, we will be paying the split by our shareholders a noncash payment of approximately 1.7 million shares during the fourth quarter. Also impacting costs in the third quarter were increases in spend related to the development costs for IND-enabling studies for ALT-801 and increased development costs for AdCOVID and T-COVID candidates.

For the third quarter of 2020, our G&A expenses were $4.2 million compared to $2.2 million in the prior year period, reflecting increases in compensation, legal and professional costs as we advance multiple candidates towards clinical development. Our income tax benefit for the quarter was $500,000, which represents the estimated third quarter portion of our 2020 net loss.

Note that we have filed a tax refund claim with the IRS and expect to collect approximately $3.9 million, which represents an NOL carryback of our 2018 and 2019 losses, enabled by tax law changes attributable to the CARES Act. Finally, net loss attributed to common stockholders for the third quarter was $17.8 million compared to $10.9 million in the same period last year, with net loss per share equaling $0.54 in Q3 2020 versus $0.74 per share for Q3 2019.

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

Thank you, Will. As you've heard, this has been an exceptionally productive year for our company, with exciting progress on all front. Each of our product candidates made important advances year-to-date.

By the end of the fourth quarter, we'll have 5 novel pipeline candidates in clinical development, with much anticipated data readouts over the next -- for each of these programs over the next several months. This is a remarkable accomplishment and sets the stage to allow us to reach multiple value-creating inflection points throughout 2021.

Importantly, keep in mind that we are not a one-product company. We have a maturing risk-diversified portfolio with 2 novel technology platform, both our intranasal vaccine platform and our peptide-based liver therapeutic platform, each with multiple candidates poised to reach important milestones in the months ahead. Never have I been more excited about the opportunities in our portfolio and the opportunity to address important unmet medical needs as we evaluate clinical proof-of-concept for these candidates over the next several months.

In summary then, with each of our product candidates advancing, a solid financial foundation and momentum building in our pipeline, we see significant opportunity ahead for Altimmune and for our shareholders, and we are committed to fully realizing this potential. Once again, I thank you for your continued support for Altimmune and for your participation on our third quarter conference call.

That concludes our formal remarks. I will now open the call for Q&A. Operator, could you please instruct the audience on the Q&A procedure?

(Operator Instructions) And the first question will be from Yasmeen Rahimi with Piper Sandler.

A number of questions. Maybe the first one to start off with, I think, given the data yesterday that we saw from mRNA vaccines and 90% effectiveness, that raised a lot of questions from investors. Trying to get a better understanding, what do we know about mucosal immunity and intranasal vaccine approaches to achieve a similar efficacy bar? So that's one.

And then the second one is, you mentioned that you're planning to move forward into running a pediatric -- having vaccine for a pediatric population. So what is the bar for that? What are specific requirements that you need to check off to achieve that? And then I have a NASH question.

Apologies here. Vipin, I believe you may be on mute if you're speaking here.

Yes. I'm sorry. I was on mute. Sorry, Yasmeen. Thank you for the question. Let me just first start out by congratulating our colleagues at Pfizer. They presented great preliminary results yesterday. And I think we believe that it bodes well for all vaccines in development for COVID-19 space.

We had been anticipating this. And we believe that, moving forward, there would be additional vaccine candidates that would be needed that have other attributes in addition to good effectiveness. And I think that's really the hypothesis that we would be -- we have been working with. We think the intranasal delivery brings some very unique attributes.

So let me turn it over to Scot Roberts to sort of quickly walk you through that and put it in perspective, the effectiveness data that we saw from Pfizer yesterday. Scot?

Sure. Yasmeen, thank you for the questions. So I think that, as Vipin indicated, there was -- we weren't surprised, and we were happy, along with, I'm sure, everyone else, that the Pfizer vaccine demonstrated a high level of effectiveness at the time points that they looked at, so far. And based on the preclinical data and the Phase I and Phase II data that was out, that seemed that it was likely to happen, and we expect other vaccines to also turn out to be effective in the first wave here.

I think one of the take-home messages might be that the level of neutralizing antibody that's required for protection might be relatively low. As you know, the Pfizer did a good job on that, but it wasn't a very, very high level. And so I think that, that certainly creates an opportunity for multiple vaccines to be able to achieve a level of neutralizing antibody that's associated with protection.

To your initial question about the role of mucosal immunity. Of course, we've been making that story key to our discussions because of the importance of mucosal immunity for respiratory viruses, such as COVID-19, that grow in the respiratory tract and especially in the nasal cavity with respect to SARS-CoV-2. And so obviously, having mucosal IgA and respiratory-associated T cells sets up for a situation that represents a better control of infection than perhaps vaccines that don't have those activities.

If you look at the overall arc of the discussion and the concerns and the focus of the development of these COVID-19 vaccines, it's evolving over time. Initially, it was all about neutralizing antibody. Do we get it? How high is it? Then the conversation evolved to the role of mucosal immunity, a number of KOLs highlighting the importance of that for virus like SARS-CoV-2 that replicates to high levels in the nose and can be spread that way and can also seed infections to other parts of the body.

Following the mucosal community, and as these things get closer to an EUA, the discussions really turned on to logistics. Can we ship these things? And what are the shipping around cold chain requirements? How can they be stored? Is it going to be convenient at a doctor's office? Or is it going to be at a central site that has the specialized freezers to take care of that?

And then even more recently, I think you'll see that the conversation is beginning to turn on transmission. And how do we stop people that have been vaccinated and are protected from getting disease themselves from still spreading the infection to others, which is, I think, a real possibility as a number of people have highlighted so far.

And I believe that the conversation has evolved yet again towards the use of the vaccines in pediatric populations. And so I think that, essentially, all of these later points, mucosal immunity, the logistics, cold chain issue, the ability to block transmission and having a vaccine that's especially appropriate for pediatric adolescent and childhood use, AdCOVID really is able to check all of those boxes.

And so I think that, as we've been saying all along, this is a fantastic start for the world to have an effective vaccine. But there are many other aspects that continue to be important, and we believe that we can make a significant contribution in that area.

And Scott, could you talk about the pediatrics?

Sure. And thanks, Yasmeen. So there is a very strong precedent in the science of vaccines to develop vaccines for children, MMR and many other viral vaccines. So that precedent exists, and the agencies are comfortable with this.

It could be argued that children get less severe disease, questioning the need to vaccinate kids. But it should be pointed out that children are very potent transmitters of the disease to their teachers and parents, and an effective vaccine would allow children to return to the school and for their parents to return to work.

One really has to question whether the intramuscular vaccines like the Pfizer vaccines could ever be used in children because of the route of administration and the reactive genicity with injection, which can be severe, whether parents would allow their children to get injected. And based on the safety and tolerability profile of our AdCOVID vaccine that we anticipate, plus the intranasal route of administration where there's a precedent for this in influenza, we believe that the pediatric space is ideal.

We've not had formal discussions with the agencies at this point, but we do plan to do that. And we would most likely start, typically, in a descending-age fashion, starting with older children going down to younger children. And we believe children down to the age of 2, at least encompassing the school years as well as the nursery or day-care years, would be very well accepted by the agencies.

And then one question I had on the NASH program was early in the fall, we had gotten some preliminary data from the nonhuman primates showing no GI tolerability, no GI side effects. Can you maybe remind us again if, with other GLP-1 agonists, whether those observations were made in nonhuman primates with sort of the [transferabilitiy] of -- if we don't see GI tolerability in the nonhuman primates, is there a chance that we will not be seeing that in the Phase I study? So if you could comment around that, that would be very helpful. And I'll jump back into the queue.

Thank you, Yasmeen. So the amount of information of the tox studies of other programs in the public domain is somewhat limited. But on the summary basis of approvals and other public demand information that we are able to identify, they describe significant intolerability incentives in their models, and this translates to the intolerability they're seeing in humans.

We not only have the observational data from our toxicology studies. We have a mechanistic basis for this being that the peak concentration achieved with ALT-801 after a subcutaneous injection is reduced compared to the GLP-1 agonism.

We noticed that peak concentration that drives that intolerability. So we have mechanism and animal observations that would support our view that we will not need to dose titrate going forward in our programs, which is also a tremendous commercial advantage in allowing high-level dosing right from the start rather than titrating up over a long protracted period of time, but also better tolerability that will maintain compliance.

And the next question will be from Mayank Mamtani with B. Riley FBR.

Congrats on the progress. So maybe just following up on the commentary on both immunogenicity and specific comments on sterilizing immunity. Scot, could you maybe compare and contrast for us your recent preclinical publication? How did the IgG on neutralizing titers compared with the original beyond that Pfizer experience?

And then specifically on sterilizing immunity, obviously, you're doing some work in preclinical models with Dr. Brien. How are you thinking to validate this? And with all the regulators and including your partner with DOD, how are you thinking of educating them maybe on the importance of that? Because as obviously was talked about, including at the Ad Com, a lot of focus is on neutralizing titers and ultimately efficacy.

Sure, Mayank, and thank you for the question. So with respect to how does our preclinical data, what did it show and how did it compare to Pfizer, recall that we had extremely high serum IgG concentrations as well as neutralizing titers. So neutralizing titers, approximately 100 to 600, with wild-type, [full side] reduction neutralizing titer of the virus.

So those values, first of all, identify AdCOVID as being able to stimulate a robust systemic immune response. And so we do get neutralizing antibody titers, and we do get high serum antibody titers. And that's consistent with what we saw in our influenza program, where, again, the intranasal dose -- single intranasal dose gave very high -- approximately equivalent serum antibody titers to a commercial flu vaccine.

So our approach, while intranasal induces this high systemic antibody response, the IgG was as high as anybody's. We measured it in a different way, but we're able to use a Rosetta Stone, if you will, and make some correlations with how other people are expressing their data, and that appears to be among the highest. And as I said, the neutralizing titer is around 600, very high, higher than most convalescent serums. It's coming in around 100 to 200.

So we feel very confident about our ability to generate the systemic immunity and provide protection through that route, similar to what Pfizer has done with this Phase III study. But in addition to that, what we were able to show and I believe that we are the only ones right now that are able to show that, we give strong mucosal immunity, IgA antibody together with resident T cell populations, CD8 killer T cells that are resident in the lungs, stay there and not circulating around, poised to respond to the infection.

So this combination of a broader mucosal immunity, if you will, that comprises IgA and the CD8 killer T cell response in the lung is a unique characteristic of AdCOVID, and I think it makes perfect sense that, that's going to help with the overall protective effect and, importantly, offer the possibility of blocking transmission. And that will be critical for lowering the R0 and getting over this pandemic sooner.

Maybe a follow-up. How do regulators currently think about this? As you think about clinical trials or even animal models, you are thinking about with Dr. Brien, how are you thinking to validate this further? Any comment on that?

Well, I think that the work that Dr. Brien will be involved in is on this point of heterologous prime-boost. And this is, again, where we feel that the combination of AdCOVID with any of the first-wave or first-generation vaccines makes a lot of sense because of our ability to boost the systemic immune response. But bring along with it, this mucosal immunity, this T cell response in the lungs, represents a clear advantage.

So I think that those data will be helpful for laying the groundwork for an initial clinical study, looking at the heterologous prime-boost approach. And we look forward to sharing those data with regulatory agencies and conducting that trial.

Great. And then on the specific communication plan for first quarter for AdCOVID, you obviously have the prime-boost and also the single-dose. What are you thinking in terms of follow up? How much do you think you'll need in order to make that decision to move to a Phase II/III? Because at some point, doing placebo-controlled trials would become infeasible. So I'm just curious how do you think about that?

I think Scott here is...

Scott, do you want to take that?

Yes. Well, thank you, Mayank. So we'll be able to evaluate our vaccines -- immunogenicity of our vaccines at different stages. So we'll obviously have a result after the prime and after the prime-boost. We will continue to evaluate that, over time, and there will be overlap. I do not think that there will be any problem conducting placebo-controlled trials going forward.

If any approvals with a small [A] occur, there would be Emergency Use Authorizations. But those ongoing trials, per the FDA Ad Com about a week ago, will not be unblinded. And there will be no requirement until there's any approval at all for any kind of active comparator or noninferiority trials. So we believe that we will have the space to conduct the program that we planned.

Great, Scott. And maybe staying with you, a quick question on 801. In light of the combination data sets we are starting to see with GLP-1, with THR-beta, with ACC, including [AASLD], so how should we think about -- obviously, you have 1 compound with the dual agonism that GLP-1 was the one. So how are you thinking about the follow up that you had here in terms of liver fat reduction and weight loss going into first quarter readout?

Right. In our animal studies, ALT-801 was far superior to semaglutide, emphasizing the importance of the glucagon component when added in a 1:1 ratio to the GLP-1 component. So we think that we're going to get potent, more potent weight loss and more potent reduction in liver fat.

People -- experts such as Stephen Harrison, in looking at that data, said it's the best preclinical data he's seen with really very superior reductions in liver fat, which we think will translate to reduction of inflammation and also in reduction in fibrosis. We recognize that a lot of these compounds have achieved very impressive levels of liver fat reduction. And that, that liver fat reduction will translate to reduction of fibrosis.

But we also expect, in addition to that potent reduction of liver fat, to get a potent weight loss, which, by itself, is extremely important in the national history of national obesity. That addition or reduction of obesity, in all of the mechanisms that are affected by the reduction of obesity, will complement the pure reduction in liver fat and result in superior reductions in liver fibrosis. So we're quite optimistic that we can beat the findings in the prior studies.

(Operator Instructions) The next question will come from Jon Wolleben with JMP Securities.

Just a couple for me. I was hoping if you could give a little more color on the EPIC Trial and any kind of dynamics you're seeing that's resulting in the slower-than-expected enrollment, whether it's not having sites in particularly hot areas or screening criteria or competition for patients? And is there anything you have to do to accelerate enrollment or just need a little bit more time? And do you think this is -- the dynamics could have any effect on your AdCOVID trial, which will be starting soon?

Right. Thank you, Jon. So the more prolonged time line was not unexpected. It was actually expected.

We had a tremendous amount of upfront contracting considerations with the Department of Defense that we had to clear, and that took a lot more time than we thought. And in addition, as we were about to launch the trial, we recognize that the incidents in the sites that we had planned, which were back in the spring, but that had shifted.

So consequently, we implemented additional sites in new locations. So it was, in a sense, a planned setting back of the start of the trial. The trial is now enrolling aggressively. We're optimistic that we'll have a readout in the first quarter.

But these were necessary steps in order to affect contract with the government. And we think this is -- in the Department of Defense, we think this is extremely important and worth the prolongation of the time line because they absolutely need in the military to have a therapeutic like this. So strategically, we decided it was extremely important to enable those contracting processes to occur and set back the time lines.

That's helpful. And just one more for me on manufacturing. In the announcement this morning with Lonza, you mentioned that your goal is to produce commercial vaccine next year. So I was hoping if you can discuss the path forward to getting commercial vaccine available and to launch what you think about timing. And any specifics about what Lonza brings to the table versus BioGene, whether it's additional scale or some specific capabilities that are added today?

Yes. No, absolutely. I can take that question, Jonathan. So with regards to manufacturing, our strategy has been to engage with multiple CDMOs, multiple partners and really not just in the U.S., but also work with partners that have a global footprint because, ultimately, you need to produce the vaccine all over the globe. So I think that's really what's been driven by, in addition to BioGene and Lonza, in fact, we have one additional partner, and we are in discussions with the fourth one.

So our strategy has been to have -- to be working with multiple partners. So when we have to be -- when we have to produce hundreds of millions of dosage in different parts of the world, we would be all set up for that.

So BioGene has been a great partner for us for our clinical trial needs, and they're also expanding their capabilities to provide some commercial quantities of vaccine, but then Lonza has much larger facilities. And another partner that we are working with that we've not announced at this point also has much larger capacity.

So what we're trying to do is really expand our relationships that have multiple options because we think, ultimately, capacity is going to be an issue for all of these vaccines. And having the ability to work with multiple partners gives us the flexibility where we can have parts of the capacity at each one of their facilities and provide vaccine on a worldwide basis.

Got it. That's helpful. Congrats again on the progress and looking forward to the updates.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Vipin Garg for any closing remarks.

Yes, thank you, everyone, for listening in today. We look forward to speaking to you again on our next earnings call.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.