Axcella Health Inc (AXLA) 2020 Q2 法說會逐字稿

Good day and welcome to Axcella's top-line data conference call. (Operator instructions) Please note this event is being recorded.

I would now at this time like to turn the conference over to Jason Fredette, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thanks, Ian, and thanks, everyone, for joining us this morning. About an hour ago, we issued a press release and filed an 8-K containing our second quarter financial results, as well as our top-line data for our AXA1665-002 clinical study. We also posted a presentation to our website that will be used as a guide for our call today. Those documents can be accessed by going to axcellahealth.com and going to the Investors & News section. Please access those slides now if you haven't already done so.

On the call with me today are Axcella's President and CEO, Bill Hinshaw, and our Chief Medical Officer, Dr. Manu Chakravarthy. Other members of management are on the line to take part in the Q&A session.

First, please go to slide 2 of our presentation and you'll see our safe harbor statement. We would like to advise that certain remarks we make on today's conference call will be forward-looking, including those related to our expected regulatory engagements and our planned clinical trials under IND. These are forward-looking statements that are subject to certain risks and uncertainties that are detailed in our Form 10-Q for the most recent quarter and our other SEC filings. Those filings can be accessed on our website or the SEC's website. All forward-looking statements represent our views as of today, August 5, 2020, and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update these forward-looking statements.

On slide 3, you'll see a description of Axcella's development model and its clinical approach. The data we're reporting today are generated in non-IND clinical study that was designed to evaluate product candidates for safety, tolerability, and effects on normal biological structures and functions. The study was not designed or intended to evaluate the ability to treat or prevent the disease. Subsequent to initiating AXA1665-002, we announced our intention to develop AXA1665 as a therapeutic. As such, any future clinical investigations of this product candidate will be conducted under an IND filing with the FDA.

And now, I'd like to turn the line over to CEO, Bill Hinshaw. Bill?

Thank you, Jason, and good morning, everyone. We're pleased to share our Q2 results and recap several of our recent accomplishments in today's press release. These accomplishments include positive top-line data for our NASH candidate AXA1125, as well as the completion of a follow-on equity offering that enabled us to further strengthen our balance sheet. We're also excited to be speaking with you now about the encouraging top-line data from our clinical study of AXA1665, Axcella's product candidate for the reduction in risk of overt hepatic encephalopathy or OHE.

Before getting into the details, let me first ground you on what we're trying to achieve overall at Axcella. So please turn to slide 4. We're focused on utilizing endogenous metabolic modulators or EMMs to work with the body in order to tackle complex diseases and [improve health]. And in parallel, our platform today primarily uses multiple amino acids and their derivatives to influence multiple targeted pathways simultaneously. And this approach is distinct from most other small molecules or biologics, which didn't have single targets and mechanisms. Now this multi-targeted approach would also distinguish us within the OHE treatment landscape as you will see on slide 5.

In patients with advanced cirrhosis, the liver has essentially broken down. Amino acids become disregulated, which contributes to an elevation of ammonia. The muscle, which is already in a wasting state, tries to take over the ammonia detoxification process, but it does so poorly. And this ends up creating a vicious cycle, driving further muscle wasting and elevations in ammonia. And ultimately, the whole process can lead to neurocognitive impairment and OHE events.

Now the primary therapies for OHE today are rifaximin and lactulose, both of which simply seek to remove ammonia from the gut. Now rifaximin has an antibiotic that eliminates ammonia producing colonic bacteria and lactulose traps ammonia and causes it to be excreted in multiple loose stools per day. So it's not a pleasant experience for the patient nor one that makes it easy to comply and actually achieve the desired results.

So we believe there's an opportunity to address important unmet needs for these patients by restoring amino acid balance, halting or slowing their muscle wasting process, and reducing the number of OHE events that they continue to experience even while on these existing therapies. Now this would enable us to take a meaningful share of this roughly $1 billion market. We also see the potential to meaningfully grow this market by providing benefit additive to today's approved agents.

Now is the exciting part for us. So following the data from our 001 study that earned an EASL late-breaker, we're excited by the 002 data that demonstrates dose-dependent impact on important neurocognitive measures and sustained statistically significant impact on amino acid balance at a safe and well-tolerated profile. We are eager to take this candidate forward into Phase 2 as we seek to provide a much needed new treatment option for the many patients who have experienced an OHE event.

So now, let me turn the call over to Manu, our Chief Medical Officer, who will provide background on AXA1665's mechanism of action, discuss our study design, and of course, share the data. Manu?

Thank you, Bill, and good morning, everyone. Slide 6 shows the design of 1665. This novel proprietary multi-target candidate contains eight amino acids. And this shows, as shown on the upper left. In advanced liver diseases, a diminished [ureic] cycle capacity and [polysystemic] shunting impairs or bypasses the main route ammonia detoxification, which then leads to the ammonia buildup.

On the lower left, you can see that they're utilizing ornithine and aspartate as key substrates needed to fuel the cycle to detox (technical difficulty) ammonia. Now on the right, we are [utilizing] branch chain amino acids; leucine, isoleucine, and valine to primarily do two things. First, stimulate glutamine synthase in order to provide the substrate for glutamate glutamine conversion and consequently generate the substrate for ammonia removal via the gut. Second, amino acids activate mTORC1, which is a [key] factor regulating protein synthesis and biogenesis.

Finally, we are providing three additional essential amino acids; histidine, lysine, threonine for additional anabolic support. Increased anabolism uses the [aromatic] amino acids which are intentionally excluded from 1665. In totality, we believe this candidate holds the potential to demodulate [hepatic] and muscle metabolism which could ultimately lead to clinical improvements in neurocognition, physical function, and quality of life in patients with advanced liver disease.

Slide 7 recaps our initial clinical investigation with 1665. On the top left quadrant, you see the design of our first clinical study. (technical difficulty) conducted in a single center domiciled setting with a rigorous control of many confounding factors. All subjects received meals with adequate protein content to provide (technical difficulty). All the [backup plan] of this received either the high dose or the low dose of AXA1665 each over a 15-day period.

As is the case with all of our non-IND studies, including the one we'll talk about in just a minute, the primary intention was to determine the safety and tolerability profile. And that goal was achieved with 1665 showing an excellent tolerability profile. In addition, we carefully evaluated a range of biomarkers, some of which are shown in the three remaining quadrants.

On the upper right, you can see the Fischer ratio which is a measure of amino acid metabolism. Previous studies have correlated this ratio, especially the low Fischers ratio with poor clinical outcomes. So it was gratifying to see a notable increase in subjects receiving high dose in the first 15-day period, which you can see in the orange line, and the controlled, which is shown in the blue line, remained unchanged from the expected low baseline. When these subjects then washed out and receive the control regimen in period 2, the previously elevated level was no longer observed, clearly indicating that this was an AXA specific effect. These data also show a very clear dose response as a low dose of 1665 in the second period had no meaningful increase in the Fischer ratio.

Now it was very important for us to ensure that the increase in this ratio was not accompanied by concomitant increase in plasma ammonia since you know that AXA1665 contains additional nitrogen through the amino acids. You can see on the lower left that the high AXA1665 dose -- in fact, the plasma ammonia trended downward from baseline to day 15. We also measured body composition by bio impedence and physical function by the liver frailty index or LFI, which we'll speak more about in a few minutes. Our data on the lower right suggested AXA1665 tended to shift the body composition toward a leaner phenotype, which was accompanied by an improved LSI score, indicating improved physical function.

Having demonstrated 1665's activity across these key measures in the short-term study, we embarked on 002, which is now illustrated on slide number 8. This was a 12 week non-IND study with a 4 week follow-up period in subjects with mild and moderate hepatic insufficiency. At the outset, we sought to achieve a few key goals. First, we wanted to do additional dose ranging. So we evaluated safety and tolerability of 29 grams and 54 grams per day doses, which are the data that bracketed the previous 44 gram per day dose in our 001 study.

Second, we sought to confirm key signals from 001, including dose for hepatic and muscle metabolism in a placebo-controlled, randomized, real-world setting over an extended 12-week duration. And third, and importantly, we wanted to see what activity 1665 might have from a neurocognitive standpoint. This last point is particularly important since neurocognitive changes are commonly seen in patients with HE. Overt HE predominantly is an impaired cognitive state in which patients are confused and disoriented to a magnitude where they are unable to care for themselves. As such, an assessment of cognitive function is therefore highly clinically relevant.

The baseline demographics for the 60 enrolled subjects in the study who received at least one 1665 of placebo. (technical difficulty) On average, someone enrolled in the study were approximately 58 years of age, 60% were female, majority were obese. Other baseline characteristics on the lower half of this slide are consistent with the population with mild hepatic insufficiency with approximately 90% of subjects having a Child A score and a mean ammonia across the cohorts in the low 40s.

All subjects were non-sarcopenic, indicated by normal skeletal muscle index. By design, all enrolled subjects were peripheral with an average LFI of 3.9. Also, more than a third had evidence of MHE as determined by key neurocognitive tests, the Stroop test and the PHES test, which we'll talk about subsequently.

Now let's turn to slide 10 for the data, starting first with amino acid metabolism and the Fischer ratio. Again, the Fischer ratio is the ratio of branch chain amino acids to aromatic amino acids. It was reassuring to see the replication of the data from 001 on many levels. First, we continue to see the increase in Fischer ratio as early as week two, and are pleased that the changes are now sustained over the longer duration, indicating that the amino acid metabolism, changes, and the impact from 1665 are not a transient finding.

Second, the magnitude of change is dose-dependent and is statistically significant, with a low-dose arm achieving a 19% increase and a high-dose arm achieving 41% increase at week 12 from baseline. There was no change in the placebo.

Third, the absolute increase at 12 weeks of 1.3 units as shown on the graph on the right with the high-dose arm resulted in a total FR value of approximately 4.5, which is nearly identical to the same magnitude that we're seeing in the 001 study at week two.

And finally, the improvement was driven in part by decreased circulating plasma aromatic amino acid levels, phenylalanine and tyrosine, which are thought to contribute to impaired neurotransmission and potentially could impact cognitive function.

Next, we looked at ammonia changes. As many of you know, ammonia is nutoriously challenging to measure and can vary significantly based on a variety of factors. As a result, it has been shown to be a poor predictor of clinical events and is not an approvable endpoint. That being said, ammonia is clearly a key contributor to the pathogenesis of HE and importantly, the direct readout of the consequence of nitrogen metabolism. Since we are providing additional nitrogen via the amino acids in 1665, it was therefore important for us to ensure that plasma ammonia levels didn't increase.

And indeed, as you can see on slide 11, it was reassuring to see that plasma ammonia levels generally remained flat across both the active arms. And these levels were comparable to the placebo levels which had no excess nitrogen. In a subgroup that showed evidence of MHE at baseline, their baseline ammonia levels were higher than in the overall population. And in this subgroup, as shown in the graph on the right, both AXA1665 doses showed a decreasing trend in ammonia of approximately 7% at week 12, whereas the placebo treated subgroup remained very similar to that of the overall population. What these results suggested was that AXA1665 effect maybe more pronounced in dose with greater impairment at baseline.

Now please turn to slide 12, showing measures of muscle structure and function. You'll recall that AXA1665 was designed to work through hepatic and muscle metabolism. In this particular population, non-sarcopenic subjects, you can see that the peripheral thigh muscle as well as the core muscles around the L3 spine remained stable across all the groups.

In the bottom panels, you'll see the LFI, the liver frailty index. As a reminder from our discussion of the 001 study, the objective here is to lower the LFI score. And an absolute reduction of 0.3 or more has been associated with the inability to perform activities of daily living. On the lower left, you'll see that each of the arms saw a modest reduction of LFI of approximately 0.1 across all of the overall population. If we now look at the proportion of subjects in each arm that met this prespecified threshold of 0.3 or better LFI reduction, we see a higher percentage in the 1665 treated arms achieving this clinically relevant threshold, whereas only one subject in the placebo reached that threshold.

Important role that certain amino acids within 1665 play in muscle metabolism and protein synthesis, along with the results we have seen from both of our studies, provide us with confidence in this candidate's potential to show clinical benefit in an appropriate population with advanced liver disease and muscle wasting.

Now let's turn our attention to Slide 13 to discuss our findings in neuro cognition. At the top left, you can see the changes in the PHES from baseline to week 12. PHES is composed of five different tests and is considered to be the gold standard for diagnosing minimal hepatic encephalopathy. An increase in the PHES score indicates improvement. We were very pleased to see that the positive directional change for both doses where those receiving the higher dose achieving statistical significance. And on the right, you can also see a dose-dependent increase in the proportion of subjects who achieved a two point change in PHES, which is considered to be a clinically relevant threshold based on what has been seen with other therapies.

On the bottom left here, the Critical Flicker Frequency, which is a newer physiological test that measures the frequency at which a flickering light appears as not a flickering to a subject. An increase in frequency indicates improvement. And on the bottom right is the Stroop test administered via the EncephalApp, which is a validated measure -- a sensitive measure of MHE. This is a time test. And so, a reduction in time is considered to be an improvement in cognitive speed and flexibility.

Dose-dependent directional improvements in both of these psychometric tests were also seen in this study. In some, it is encouraging to not only see the consistency and the change across all three different psychometric tests, but also of a magnitude that could support the potential of 1665 as a therapeutic for OHE.

Slide 14 presents the safety (technical difficulty) profile of 1665 and our 002 study. As a clinician, it's always reassuring to see a very clean profile. And indeed, similar to what we saw with 1125 read out a few months ago, 1665 is also very well tolerated with a generally benign safety profile in this hepatic impaired population. These were mostly mild and moderate generally noted as unrelated to the study product. In fact, the only AEs observed in two or more subjects were mild nausea and increased bowel movements, both in the high-dose group and neither requiring intervention.

There were four discontinuations in the study due to AEs all in the 1665 dose-on group. There were also a total of 4 SAEs, 2 in the placebo, 2 in the low-dose, none of which were attributed to 1665. One of the AEs included a COVID-19 related death. A second death in the study was attributed to a sudden myocardial infarction prior to any product administration in the run-in period.

Now let me turn things back over to Bill.

So thank you, Manu. As you can tell, we're very pleased with the findings from this study. And slide 15 serves as a good summary.

First off, we once again saw activity on multiple targeted biologies, and AXA1665 was shown to be safe and well tolerated. Continuing to validate our EMM platform -- and I want to stress this serves as our fifth consecutive study across our portfolio with successful outcomes. It's also important to point out that both AXA1665 and our other lead candidate for NASH, AXA1125 were designed as recently as 2017. And we're now already planning to bring them into Phase 2 and Phase 2b clinical trials, respectively. We believe the speed at which we've been able to generate a substantial amount of human data and progress them through this advanced stage really does demonstrate the power of our EMM platform and approach.

Now as it relates specifically to AXA1665, we are excited by the concordant effects seen across the neurocognitive measures, which are arguably the most relevant markers as it relates to a manifestation of OHE episodes. The effects on amino acid metabolism replicate the findings from our clinical study -- our previous clinical study, and we're dose-dependent, statistically significant, and sustained.

And despite the additional nitrogen load, ammonia levels remained stable across all arms, while declines were seen in the active arms of the MHE subgroup. And we continue to believe in this candidate's potential to enhance hepatic and muscle metabolism, including physical function in a relevant population with advanced liver disease.

We look forward to presenting these data at future medical conferences. And in the meantime, we plan to share the results with additional investigators and medical experts as we refine the design of our planned Phase 2 clinical trial. This trial will seek to confirm the encouraging findings in neurocognition, while also evaluating AXA1665's impact on muscle metabolism and physical function in a population with advanced and decompensated liver disease, such as those who have experienced a prior OHE episode. We're targeting the first half of 2021 for the initiation of this trial, which will coincide with the planned start of our Phase 2b trial for AXA1125 in NASH, demonstrating our continued ability to execute our clinical programs.

I would like to extend Axcella's thanks to all of the subjects and investigators that participated in this study.

Now before opening the call to your questions, I also want to congratulate Dr. Shreeram Aradhye on his addition to Axcella's Board of Directors, and Manu on his promotion to Executive Vice President and CMO. As many of you know, Shreeram joined Axcella in May of last year as our Chief Development Officer. At the end of this month, he will be stepping down from this position to accept the new full-time role with Manu taking over his day-to-day activities. Together, Shree and Manu have done a fantastic job of building out our clinical and regulatory teams. So we're well prepared to take our next steps and continue our clinical programs. And I'm very happy we'll have the opportunity to continue benefiting from Shree's counsel as a Board member going forward.

So with that, let's open up your call to questions. Ian, would you please provide the instructions?

At this time we will now begin the question and answer session. (Operator Instructions)

Julian Harrison, BTIG.

Hi, good morning. Congrats on these data. Just two from me. First, you've previously indicated you might be able to move into a potentially registrational trial for 1665 as the next step for this program. Just want to know, is that no longer the case? And if so, can you talk about the decision to back away from that?

So good morning, Julie, and thank you for your question here. A couple of things. We see this as a very successful outcome. As you know, this study was conducted in the non-IND setting. And we saw the important impact on neurological cognitive findings for the first time, we replicated and extended our amino acid metabolism impact that you saw in the Fishers ratio. And that based on our 101 and our science that we've built AXA1665 around gave us a lot of confidence to proceed.

So with that said, when you look at starting the next trial, you of course, are looking at what will give you the best chance of success and what we'll do that in an efficient way. So you understand the impact and the effect size that you're trying to design. And prior to starting a full registration trial with a cost and patient impact that you have to consider there, we believe the next step is a Phase 2 that would be highly informed efficient and derisk the next stage in advance. Because this is looking at patients specifically in advanced liver disease. We've demonstrated all of these impacts in mild to moderate and predominantly mild patients. And we believe that in an increased dysregulated state, we will be able to have potentially have an additional impact.

So we're looking in that specific advanced liver disease patient population to replicate and confirm our neurocognitive findings such as MHE remission and OHE events. We'll better understand the muscle metabolism and function impact again in that patient population. And that will allow us to design and readout, hopefully, a successful trial that could be smaller and shorter than otherwise we would have to embark on at this stage. And that would allow us to bring a new treatment option for the patients. And I go back to the fact that we designed AXA1665 in 2017. And at this stage, just three years later, we're talking about moving into a Phase 2, which is a pretty remarkable timeline.

Okay. That's helpful. And then my last question. I was just wondering if you're still considering a label expansion opportunity for 1665 in the broader patient population of cirrhotic patients suffering from frailty, not necessarily just goes with the kind of concept we want to pursue. If that is the case, can you just briefly walk through from perhaps an updated timeline there and what the data points are currently informing that decision?

Yes. So we continue to believe that the multiple biologies that we're targeting with 1665 will play an integrated and important role to the outcome of patients with OHE. And that may in fact -- as you know, we're working through muscle metabolism. And that may indeed, in a more advanced patient population, offer benefits in terms of frailty and sarcopenia. That's part of what we want to evaluate in the next program. And at that point, that would allow us to continue to plan for potential additional opportunities outside of OHE. At this time, it would be premature to talk about timing because of the stage we're in. Of course, we'll update you appropriately as we go along and develop those plans.

Great. Thanks very much.

Thank you, Julian.

[Liana Moustafos] of [Wedbush] Securities.

(inaudible) for Liana. And thanks for taking our questions. Following up from the question on the path forward, could you give us any idea as to what a Phase 2 would look like from an endpoint standpoint? Thank you.

I'm sorry. From what standpoint, I just couldn't understand the last part.

Yes, yes, I apologies if I didn't sound clear. But could you kind of clarify looking forward with the FDA -- in your communications with the FDA, what they would be looking for endpoints going forward?

Okay. So thanks for the question here. And we've actually had extensive interactions with not only the FDA but also European authorities. So we feel very well positioned about our next steps forward there. And again, it would be premature to describe the exact design, scope, and scale of the program because this data is very recent and we will continue to work with the medical experts to finalize it. What I can tell you is, we're clear that the end point is around the risk of reduction of OHE episodes and potential for to Julian's question continued impact on muscle function and overall quality of life. So those are very clear guidances we have from all the agencies we've interacted with, and we're in a position to factor that into our design. And again, we plan on initiating the program in the first half of '21 after finalizing the design and updating you at that point.

All right. I'll jump back into the queue and let someone else ask the questions. Thank you.

Thank you.

Yasmeen Rahimi, Piper Sandler.

Great. I'm very happy for you. I have a number of questions for you. So maybe the first one to start off would be, can you kindly comment on why the study did not include any Child-Pugh B patients? I know the design was going to include that. So if you could comment on that. Then the second question is, what would be helpful for us is has Critical Flicker Frequency and Stroop off time -- are those invalidated in other clinical studies? Can you help us to visualize what magnitude differences and those cognitive have been considered clinically meaningful? And then I have another follow up.

Okay. Thanks, Yasmeen. I'll start with the first question and then ask Manu to build on it. And then to your second one. And thanks for the congratulations on the data.

In terms of the nature of the population, as you guys know, this is a non-IND study. And as such, we're looking at safety, tolerability first, muscle function and structure as well as liver function and structure in that setting. And if you go to more advanced patient populations, you have the risk of events that could cloud that outcome. And so we did enroll Childs A and B. It was part of the criteria, both in 001 and in 002. We ended up with a predominance of mild populations in this particular study. So that's why we ended up with that distribution.

Now we're very pleased again in that population to be able to see these cognitive effects replicate the amino acid metabolism effects and have stable muscle and ammonia. I'll have Manu expand on that and then answer your question about CFF and Stroop. Manu?

Hi, Yasmeen. So, Child B was certainly included in both studies. It's roughly about the same proportion. So it's not vastly different in that regard. In regard to your second question, so we measure three type of metric tests because they measure three different sort of domains if you will. The gold standard, just reinforce that again, is the PHES because it includes a paper pencil format. And includes actually five different tests that patients have to do and it basically looked at many different domains. And so that has been in some ways the gold standard, the most validated.

More recently, there have been data around this Stroop, the Encephlap through the group in Virginia. That would certainly be another test that measures cognitive speed and flexibility. And then finally, the CFF is more a neuro physiological test -- amongst those three, probably the one that has the least validation. So we've really focused on the most validated, the gold standard, which is the PHES, and so shown data -- where we showed the data on all three, the data where we're most pleased about is on the gold standard test.

And the only thing I would supplement there is we did indicate and review how this looks at versus other agents that have been in development. And the range we've demonstrated in this population is certainly well within the range of the therapeutics that have achieved utilization and approval. So that's a great leading indicator for us that we're in the right zone.

Thank you. And then my follow-up question is, maybe could you comment on on sort of -- the Fischers test ratio test data was phenomenal and consistent with what we had seen. And when you look at the ammonia handling, we don't see as much of the dose response between the low-dose and the high-dose (technical difficulty) when we measure ammonia, given that (technical difficulty) imminently. So if you could just kind of comment on the ammonia data around, it would be very helpful for us. Thank you.

Sure. So again, just to remind everybody, ammonia is notoriously difficult to measure. It's very variable. There's a lot of vagaries in terms of how it's measured. So generally speaking, most of the sort of the acceptance in the field is that it is a highly variable biomarker. And the key thing for us was to make sure that ammonia levels were not increasing because remember, we're giving nitrogen into the system via the amino acid that's contained in 1665, which is reflected by the Fischer ratio, as you astutely pointed to. So we are, in a more sustained way, reprogramming the metabolism, if you will, increasing the basal levels of brand chains, decreasing the basal levels of aromatics.

And what -- especially the latter one, the aromatics in particular can also contribute to ammoniogenesis if you don't get incorporated into protein synthesis. And so, by looking at the overall pattern and the sustained pattern, the conclusion that we've made is that not changing ammonia levels is a reflection of that improved metabolism and improved profile. Not seeing the on the dose response, if you will, and looking at just the variability, it's not surprising for us at this point. Given the normal variance of ammonia, we may not be really separating between the two doses.

And Yasmeen. Your the second part of that question was broken up a little bit. I would -- in case we didn't answer fully. But there are two other pieces I would point out. One is while the baseline ammonia in this study was abnormal, it was in the 40s, whereas in our 001 study, it was in the 60s and 70s. And as Manu pointed out during the presentation, the MHE population, which was slightly higher did show a greater improvement on ammonia reduction. So this is something, again, in a more disregulated population of advanced liver disease patients, we will be tracking carefully.

Great. Thank you so much for taking my questions, and congrats again.

Thank you. Absolutely.

Paul Choi, Goldman Sachs.

Yes, thank you, and good morning, everyone, and congrats on the data. Maybe just one clarification with regard to the trial -- on the 1665 data. Can you maybe just remind us, was there any background therapy allowed in addition to 1665? I know new medicines were not allowed in the two months prior per the exclusion criteria. But can you just remind us what background therapy levels were like?

Yes, hi, Paul. All background therapies regarding HE were excluded. So the people were not allowed to be on lactulose or rifaximin during the study. All the other meds that they would have been on of their normal comorbidities like diabetes, hypertension, hyperlipidemia, et cetera, those were all allowed.

And they were giving guidance in terms of (inaudible) as we had previously, in this case, it's just not in a domiciled setting right now.

Great. Thanks for that clarification. And then just on the neurocognitive endpoints, specifically with regard to PHES. Can you maybe just comment on how that compares and just understanding that how that might compare to and translate to a [Comscore], which, as you know, occasionally use as well in terms of diagnosing this population, and the degree of acceptance, I guess, and utilization of PHES in real-world clinical practice?

Sure. So the PHES is designed specifically for MHE or minimal hepatic encephalopathy. And then just by definition, a minimal hepatic encephalopathy can only be detected by using such tests. It's not the manifestations are not overt and hence, that's why its not called overt hepatic encephalopathy. ComScore is mostly a scoring system looking at sort of grading the cognitive decline, mostly in an overt hepatic encephalopathy setting. And then typically, the ranges of zero and one in the same category as the MHE score. So, they're not exactly the same score if you will, because they measure different things.

What we can say is that when we looked at with all the caveats of cross-study comparisons across multiple different other trials that have used other agents for treatment of OHE like lactulose or (inaudible) and probiotics, et cetera, and you compare what their scores are PHES, it ranges anywhere between an improvement of somewhere between 2.1 and 3.2.

So when we look at our scores, it's essentially the PHES score of placebo-adjusted change of around 2.2 is right in that zone. So in that way, we basically can do a sort of, as I said, with all the caveats of cross-study comparisons, get a sense of where we are with 1665 on the PHES in relation to other therapies.

And then, Paul, I think one of the other aspects that Manu and the experts in the field that has been talking with the indicators, progression to OHE is a known event from MHE. And a significant percentage of those populations do that. And that would be the population that you'd be looking at that would warrant intervention.

Okay, great. That's helpful context.

And then, in terms of my last question, maybe just pivoting to 1125, have you set a date for your discussion with the FDA? And then following that meeting, how would you plan to communicate to the market your plans and any specifics on the Phase 2b? Thank you for taking our questions.

Yes. Thank you, Paul. So 1125, as you're alluding to, we had very important and exciting data we shared earlier in the quarter about our results of the 003 study where we saw consistent effect across all the biology. A safe and well-tolerated profile. Exciting data related to the diabetic population that we look to take forward in a planned Phase 2b.

Now as a matter of course, we don't typically comment on timing and nature of our interactions in specificity with the FDA or other regulatory agents. What I can tell you is we remain on track for our time to initiate the program and the Phase first half of next year. We will post to the exchanges and final trial design, which we've shared with you in the past. You can expect we will be looking at important measures that are expected in a Phase 2b. That we will share with you once we finalize that in exchange with the agency and are ready to initiate. We'll update you at that time. Everything is [all right].

Thank you, Paul.

(Operator Instructions)

Geoffrey Porges, SVB Leerink.

Good morning. This is Brad on for Geoff and congrats on the data. I appreciate the can you describe the detail of the planned Phase 2 trial, but can you just comment on the typical duration of a Phase 2 IND trial for HE? And then there have been quite a few NASH updates in the quarter, both clinically and regulatory across the space. So I would like to hear from you if these have changed your thinking on competitive positioning for 1125. Thank you.

Okay, great. So I'll have Manu start with the first one and then I'll comment on the second. Manu?

So in regards to the Phase 2 duration, trials can range quite a bit. Depends on what the sort of the key goals are. But generally speaking, most OHE trials span somewhere between 6 and 12 months largely to accumulate sufficient number of events of OHE population. So typically, it's in that range.

Yes. And Brad, as you're aware, this will range on, as Manu has described, the design, also your effectiveness in collaborating with the medical community in enrolling. We have a good relationship with this group and they're very keen about our modality. And as Manu has shared the data with some of the experts, they are quite encouraged. So we look forward to collaborating with them on the next stage.

In terms of NASH, yes, there's been quite a bit of movement in the field. We remain and feel encouraged by that outcome to be very open with you, because our belief is that the exchange related to the intercept CRL is more of a intercept specific dialogue with the agency that the drive and focus as to what is designed to be registration endpoint still remains, and it's kind of a risk benefit tradeoff. And that's where we get very encouraged that we believe the multiple simultaneous interventions with the 1125 design on metabolism, inflammation, and fibrosis continue to position us as a potential first-line agent in that area, as well as the potential differentiation we've discussed on diabetes that we will evaluate.

I also want to mention that the pediatric needs in this population are real and growing. And with our safety modality and position of the program where we can investigate that earlier than most, we feel well positioned to take the next step with a Phase 2b in the adult population, have the regulatory exchanges on that path forward on pediatric and timing, and then come back to you guys with the update.

So we know NASH remains a big, complex disease with lots of space for interventions and benefits. And we're excited for the potential for 1125 to play an important role there.

Ian? The next question?

(Operator Instructions)

(inaudible)

Hi, good morning. This is (inaudible) on for (inaudible). Congratulations, team, on the data. A number of our questions have been answered so far. So just maybe a quick one from us. I just wanted to get your thoughts on how you think about the dose selection moving forward, appreciating that, but they are continuing to be optimized? And just wanted to on kind of -- yes, if you could provide a bit more color on the breadth of data generated at the 44 gram on in 001 relative to what we're seeing here. And if there's any plans to test additional doses in the Phase 2? And maybe as a follow-up, given the data that we're seeing in the MHE subjects here, if there are additional subgroup analyses or plans to enrich the patient population. Thank you.

Great. I'll start and Bill certainly can chime in here too.

So regarding the dose selection. So just as a quick reminder, if we think about our two programs, 001 and 002 studies. We've had the opportunity to test wide range of. We've gone from 14.7 grams per day, all the way to 54 grams per day. And in the first study, we were able to establish what is called the floor effect, meaning at least identifying one pharmacologically inactive dose, which is the 14.7 grams. So that was one of the key reasons why we bracketed the other two doses around the 44 grams, which was our first active dose. So we went to 29 grams, which was the one step below 44 grams, and a one step higher, which was 54 grams.

So between these two studies, we believe there's sufficient dose ranging information. The second is that we have enjoyed sort of the tolerability and safety profile, which has allowed us to go to these higher doses relatively quickly. So that was one of the key reasons why we were able to go to 54 grams per day in the 002 study.

And the third point is that when you look at the Fischers ratio, which is in our view, the most proximal readout of 1665's action, if you will, we have a very clear dose response on that key biomarker. So again, 14.7 grams, not much of an effect. 29 grams, somewhere in between. And then you have 44 grams and 54 grams giving the same magnitude of effect. So we believe that we have identified a fairly good dose response and we are in a good position to take our approach forward in our Phase 2 study.

And with regards to the subgroup question, so certainly this is an ongoing analysis that we are embarking on. The most immediate and obvious subgroup that we've been able to share with you is the MHE subgroup. The additional analyses that will be going forward and sharing with our medical experts and our other key clinical advisors, and we should be able to come back with a more fullsome analysis after that is completed.

And I think the only thing I would add there is the purpose in going into the Phase 2 with the advanced liver disease population gets us into a more enriched and disregulated population. And then to Manu's point, we'll discuss with the experts in the additional stratification that we believe is there. We already know on the pre frail, we'll be looking at the sarcopenic dynamics as well as the MHE.

Great. That's very helpful. Congratulations on the data and thanks for taking our questions.

Thank you.

At this time, this concludes our question-and-answer session. I would now like to turn the conference back over to CEO, Bill Hinshawfor any closing remarks.

Okay. Thank you very much, Ian. Thank you all for joining us today and sharing our enthusiasm for our data. We're excited to have another study continuing to demonstrate the platform of our EMM approach and have impact on biologies, multiple, and simultaneous, and a safe and well-tolerated profile to date. So thank you for tuning in everyone. We hope to speak to some of you very soon in September once the conference season picks back up. Until then, enjoy the rest of your summer and stay safe.

Thank you, everyone.

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