Enanta Pharmaceuticals Inc (ENTA) 2022 Q1 法說會逐字稿

Good afternoon, and welcome to the Enanta Pharmaceuticals Fiscal First Quarter 2022 Financial Results Conference Call. (Operator Instructions) Please be advised that this call is being recorded.

I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.

Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal first quarter 2022 financial results was issued this afternoon and is available on our website. On the call today are Dr. Jay Luly, President and Chief Executive Officer; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team.

Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call.

I'd now like to turn the call over to Dr. Jay Luly, President and CEO. Jay?

Thank you, Jennifer, and good afternoon, everyone. Enanta had a very productive fiscal first quarter of 2022 as we made significant progress in our RSV and COVID-19 programs, building a strong foundation for important inflection points to come this year.

Today, I'll update you on our clinical development programs for respiratory syncytial virus, SARS-CoV-2, and hepatitis B virus, all of which have the goal of providing safe and effective oral antiviral treatments for viral diseases impacting broad patient populations. I will additionally comment on our ongoing discovery efforts and progress in human metapneumovirus.

Enanta has a successful and proven history of discovering and developing antiviral treatments, as demonstrated by glecaprevir, the HCV protease inhibitor component in MAVYRET, a leading treatment for chronic hepatitis C virus. We have expanded and leveraged this long and deep experience in virology to discover small molecule therapeutics for multiple viruses, recently expanding our respiratory virology pipeline by developing a coronavirus protease inhibitor for SARS-CoV-2 and an L inhibitor for RSV.

The pandemic has made it clear that viruses can cause serious disease, which makes our work especially significant. With that backdrop today, I will start by detailing progress in our respiratory virology programs, where we continue to build an industry-leading treatment portfolio. Our most advanced RSV program is our N-protein inhibitor, EDP-938, which has Fast Track designation and is currently in 3 Phase II studies in multiple patient populations.

Additionally, we continue our leadership in RSV with the announcement of a clinical candidate in our RSV L inhibitor program, EDP-323.

As a reminder, RSV is a severe respiratory infection associated with significant morbidity and mortality. The virus can cause serious disease in children, the elderly and the immune compromised, and there are no treatments or vaccines available for the virus, which was first characterized in 1956. We are excited by the potential of EDP-938, which is a potent inhibitor of the RSV N-protein that has shown robust clinical data in a Phase IIa challenge study, where it was not only safe and well tolerated, but also demonstrated significant effects on viral load and reduced symptoms of infection.

In this human challenge study of EDP-938, we met the primary endpoint of viral load reduction and also a key secondary endpoint of total symptom score. In order to confirm our findings outside of the challenge study setting, we conducted the RSVP study, to evaluate EDP-938 in an adult outpatient population infected with community-acquired RSV and to provide us additional information on symptom alleviation and viral load decline.

Following a period of decreased RSV transmission due to social distancing measures, late last year there was an uptick in RSV activity in various regions of the world, including parts of the United States and Europe, which allowed us to complete enrollment beyond our initial target of 70 patients. We are on track to report top line data from RSVP next quarter.

Our broad clinical development program includes 2 key Phase II studies of EDP-938, evaluating its safety and efficacy in young children and hematopoietic cell transplant recipients with RSV infections. Our clinical trial named RSVP is a Phase II study in pediatric RSV patients, and the trial RSVTx is a Phase IIb study in adult hematopoietic cell transplant recipients with RSV.

Data from these 2 studies will confirm the doses to be used in subsequent pivotal studies in these populations. These studies, which were initiated after RSVP, are expected to extend at least end of 2023. We are monitoring RSV globally and will be providing further updates as the incidence rates evolve. This quarter, we are pleased to announce that we broadened our footprint in RSV by introducing EDP-323, a potent RSV L-inhibitor. EDP-323 targets the RSV L-protein, which is a viral polymerase that contains multiple enzyme activities required for RSV replication.

Preclinical data demonstrate nanomolar potency across the major RSV subtypes, RSV-A and RSV-B, and good absorption and plasma exposure across multiple different species. We envision EDP-323 as a stand-alone treatment or for use in combination with other agents such as EDP-938 to potentially broaden the treatment window or expand the addressable RSV patient population.

We expect to initiate a Phase I study of EDP-323 in the second half of this year. I'm proud of the work we have done thus far in RSV, and I'm excited by the potential of our broad development program, allowing us to extend our leadership in the development of treatment for respiratory viruses.

Turning to SARS-CoV-2. We're also excited by the promise of EDP-235, our oral coronavirus 3CL protease inhibitor, also known as a main protease inhibitor, specifically designed for the treatment of COVID-19. EDP-235 is on track to being dosing subjects this month. This first in-human single and multiple ascending dose range in study will determine the safety, tolerability and pharmacokinetics of EDP-235 in healthy participants.

In preclinical studies, EDP-235 demonstrated highly potent antiviral activity against SARS-CoV-2 and pharmacokinetic properties supporting a once-daily oral dosing regimen without the need for a boosting agent such as ritonavir, all which indicates the potential of EDP-235 as a best-in-class compound. Specifically, EDP-235 potently blocks the replication of SARS-CoV-2 in multiple cellular models, including primary human airway epithelial cells with an EC90 of 33 nanomolar. Importantly, EDP-235 has shown potent antiviral activity in vitro across a range of currently circulating SARS-CoV-2 variants including Omicron and Delta, giving it pangenotypic potential.

Furthermore, EDP-235 has potent activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. EDP-235 has also shown excellent exposure after oral administration without ritonavir boosting and favorable distribution into key target tissues including lung in preclinical models. This positions EDP-235 among the most potent direct-acting antivirals currently in development for SARS-CoV-2 infection with the potential for convenient once-daily dosing.

With our Phase I study starting this month, assuming supportive data, we would advance EDP-235 to the next stage of clinical development in the second half of 2022.

We also continue to pursue our respiratory virus discovery program in human metapneumovirus, or hMPV, a virus that was first identified 20 years ago and now circulates worldwide with nearly universal infection by age 5. Like with RSV, there are a number of vulnerable populations, including children, the elderly, adults with underlying pulmonary disease and those who are immune compromised. We are nearing completion of lead optimization of potent nanomolar hMPV inhibitors and plan to select a clinical candidate in the second half of this year.

Moving to hepatitis B. We remain committed to our vision of developing a combination regimen to [deliver] a functional cure for chronic HBV patients. EDP-514, our HBV core inhibitor with Fast Track designation, has been evaluated in 2 Phase Ib studies in different chronic HBV patient populations: those who have a high viral load, whom we refer to as viremic patients, and those who are on a treatment with a nucleoside reverse transcriptase inhibitor, whom we refer to as NUC-suppressed patients.

Last year, we presented data demonstrating that EDP-514 has clear clinical evidence of a good safety profile, alone and in combination with a NUC, and displays significant antiviral activity over 28 days with a pharmacokinetic profile consistently supportive of once-daily dosing orally, putting EDP-514 among the best core inhibitors currently in development. We remain focused on evaluating internal and external opportunities for additional compounds with alternative mechanisms to develop in combination with EDP-514, as we believe that a core inhibitor such as EDP-514 will ultimately be an important component of a successful combination regimen.

Before moving to the financials, I'd like to wrap up by reiterating our upcoming milestones. We expect multiple catalysts, including the start of dosing in our Phase I study of our oral 3CL protease inhibitor EDP-235, this month. If supported by Phase I results, we plan to advance EDP-235 to the next stage of clinical development for the treatment of COVID in the second half of this year. We plan to report topline data from the RSVP study of EDP-938 next quarter. Finally, we look forward to initiating a Phase I study for EDP-323, our RSV L-inhibitor, and nominating a human metapneumovirus clinical candidate in the second half of this year.

With that, I'll stop here and turn the call over to Paul to discuss the financials. Paul?

Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our first fiscal quarter ended December 31, 2021.

For the quarter, total revenue was $27.6 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $427 million. This compares to total revenue of $31.7 million for the same period in 2020. As reported by AbbVie, treated patient volumes remain suppressed compared to pre-COVID levels. Royalty revenue was calculated on 50% of MAVYRET sales at a blended royalty rate for the quarter of 13% and on approximately 30% of the CARES sales at a royalty rate of 10% after adjustments for certain contractual discounts, rebates and set-offs, which are now approximately 2.7% of AbbVie's total reported HCV product sales.

As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties for our fiscal first quarter ending December 31 are calculated at the highest royalty rate for the year, and royalties for our fiscal quarter ending March 31 will be calculated at 10%, our lowest royalty rate tier in our fiscal year. You can review our royalty tier schedule in our 2021 Form 10-K.

Recently, AbbVie reported their global HCV sales were $1.7 billion in calendar 2021 and guided to $1.7 billion for global HCV sales in calendar 2022.

Moving on to our expenses. For the 3 months ended December 31, 2021, research and development expenses totaled $48.5 million compared to $36.7 million for the same period in 2020. The increase was primarily due to the timing of manufacturing in support of the company's clinical studies in our virology programs.

General and administrative expense for the quarter was $9.5 million compared to $7.4 million for the same period in 2020. This increase was primarily due to increased head count in compensation expense.

Enanta recorded a minor income tax benefit related to the release of a state tax reserve for the 3 months ended December 31, 2021, compared to an income tax benefit of $3.3 million for the same period in 2020.

Enanta recorded a larger income tax benefit in 2020 than in 2021 due to the provisions in the CARES Act of 2020 which enabled us to carry back our prior tax loss to offset taxable income in prior years. This provision does not apply to periods ending after September 30, 2021.

Net loss for the 3 months ended December 31, 2021, was $30.1 million or a loss of $1.48 per diluted common share compared to a net loss of $8.3 million or a loss of $0.41 per diluted common for the corresponding period in 2020.

Enanta ended of the quarter with $347.7 million in cash and marketable securities. Enanta expects that its current cash, cash equivalents and marketable securities, as well as its continuing royalty revenue, will be sufficient to meet the anticipated cash requirements of its existing business and development programs for at least the next 2 years. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q when filed.

I'd now like to turn the call back to the operator and open up the lines for questions. Operator?

(Operator Instructions) Our first question comes the line of Brian Abrahams of RBC Capital -- I'm sorry, RBC Capital Markets.

I guess just a couple on 235. I'm curious, with some of the latest developments on the progress with other protease inhibitors in the space, wondering how you're thinking about the overall competitive opportunity for 235? Would you be thinking about maybe focusing initially on patients who may not be able to take ritonavir, which Paxlovid is boosted by? Are there other subpopulations you might initially focus on?

And then I'm just kind of curious, it sounds like the healthy volunteer study is on track to start this month. What are your plans for how you might reveal the safety and PK data, which of course, given the in vitro potency, is going to be very important and engaging what the ultimate opportunity, probability of success of the drug to be?

This is Jay. So yes, so the Phase I in healthies is about to begin, via standard SAD and MAD, and we plan to harvest that data here in the first half. And as with all of our other studies, once we've got that data in hand, we'll find the appropriate mechanism and venue to put it out.

Regarding the field in protease, I would describe it as very early yet. There are a few entrants in the space, but as we -- not only in virals, but in lots of other disease areas, it's not necessarily the first one in, it's the high-quality molecules that ultimately stand the test of time. And so again, I think we've built some advantages into EDP-235 from a potency standpoint, from a PK standpoint, from a tissue-targeting standpoint. And overall, we think the profile is a strong one that should compete very well along the longer time frame.

Regarding trials, beyond the Phase I healthy study, of course, we'll be getting into key patient populations. There's the standard risk, high risk, postexposure prophylaxis, et cetera, and we would anticipate tapping into all of those opportunities.

Congrats on all the continued progress.

Our next question comes from Eric Joseph of JPMorgan.

This is Hannah on for Eric. Just a few from us. So first, I just wanted to get your thoughts on the severity of RSV symptoms in patients and how they might compare this season versus prior seasons, given the loss in seasonal emergence? Just wondering if there's any reason to think we might see more severe symptoms in patients this year?

And then also, based on any unblinded looks at patient baselines entering the RSVP study, how should we be thinking about median age entering the study? Are there any prespecified subgroup analyses by age or other risk factors?

Maybe I'll let Nathalie comment on some of these. But again, I don't think there's necessarily anything special about this RSV season versus prior ones. But I'll let Nathalie chime in.

So your question, I think, was about the symptoms of the RSV infection was worse than before. We -- I mean, obviously, we don't have access to unblinded data, but we can monitor current ongoing studies, and even the study that's just completed. And we have not observed any worsening of the symptoms, the way the patients giving themselves to the clinic, as far as we can tell.

All right. And so you don't have any data on median age entering the study at this current time?

Sorry, I'm not sure I understood your question about age?

Median age?

Median age?

The median age? We haven't looked at the data base yet that are being -- collecting. So I don't have the median age. But if you look at the criteria of eligibility, it's from 18 to 75 years old. And so we would expect something, I would say -- and if I have to guess, I would say something along the line of [64].

Okay. And just wondering, based on -- or assuming success in the RSVP trial, could you describe what next steps would look like -- would look like towards the pivotal program, specifically how would a program in general adults be prioritized relative to pediatric and transplant populations? And would either of these trials be gating factors to end of Phase II discussions with the FDA?

So we're going to focus post-RSVP on high-risk patient populations, and they fall mainly into 3 buckets the peds, transplant, and then other adult populations that are at higher risk. So those will be the basic patient populations that we'll be targeting, 2 of the 3 of which we've got ongoing now.

Our next question comes from Yasmeen Rahimi of Piper Sandler.

Two questions for you. A frequent question from a lot of our clients are just to understand how big the RSVP outpatient population is -- adult population is? So can you maybe share with me some of the market research that Enanta has done? How big is this addressable market? .

And then the second question I have is in regards to L-protein inhibitor entering the clinic into the second half of 2022. What is the strategy there? Like which patient population would you be prioritizing that are you going to go into the peds or immunocompromised or would you try it all populations?

So yes, the -- now again, the RSVP -- so called the RSVP patients population, otherwise healthy adults, which is probably not where the -- it's a great sort of staging trial, and it's a great bridge from our challenge study into other patient populations, adult and peds. But it's not the main patient population that we would be focused on, instead going after the 3 high risk ones that I had mentioned.

That's not to say that, of course, an otherwise healthy adult that's presenting with RSV couldn't be addressed by our drug. It's just that on the route to approval and looking at the critical markets to address on the registration pathway, it's really going to be in the peds, transplant, and higher-risk adult populations. In terms of the L-protein, we just see -- we're going out in RSV, I think, in a very significant way. There aren't any approved therapeutics out there. We hope to be the first, or certainly among a small number of drugs that could be approved in RSV over a reasonable time frame. And we just -- as you know, we've been working on human respiratory viruses long before the pandemic, because we saw it as a major medical need from a therapeutic standpoint. So when we size up a situation like that, we usually are doubling down on our strengths. And so I think having an inhibitor like 938 is great, has high barrier, it's very potent, it's once-daily dosing. We've already demonstrated strong antiviral effect. So it should be fine along the way as a single agent.

But we also are looking at other direct-acting antiviral mechanisms, too, and L-protein polymerase. There's another very interesting target from a replication perspective. So exactly how we tuck that in -- could it be pursued principally as another single agent in, say, maybe a different patient population, perhaps? You could think about different ways to position these if we had multiple of them. Or mightn't we put two of them together in certain patient populations that might be very advanced in their infection, otherwise very hard to treat, maybe severely immunocompromised patients that would just struggle with anything. And/or might we use it to explore -- could we widen the treatment window of any -- versus any single agent alone.

We all know that in these infections, viral infections, there's a ticking clock. You have a defined window based on what virus it is and what mechanism you're pursuing. And whatever that window is for 1 mechanism, by putting 2 drugs together, hitting it harder earlier, mightn't you be able to -- or hitting it harder, mightn't you be able to postpone treatment a little bit longer before therapy is administered. And in so doing you would obviously be increasing the addressable patient population, which would grow the market opportunity significantly.

So there's just various different ways, once you have a couple of tools, that you could exploit them, and we'll be looking into that as we evolve it. But 323 is a very strong looking molecule, very potent, great PK. Again, we'll have it in the clinic in the second half, and we'll be tracking, hopefully, a very successful other pathway using our N-protein in EDP-938.

So I think the question from a lot of investors will come in is how do we take the RSVP study and understand translation in the more vulnerable populations? So have you been able to provide some clarity how this first study could really derisk RSVPs and RSVTx?

It's a step-wise derisking. I think actually one of the most significant derisking events for EDP-938 happened in Phase 1 healthies, when we established that a really potent molecule with a high barrier to resistance could be administered safely and could deliver very nice drug exposures. So that gave us great confidence going into our first RSV infection study, the so-called challenge model where, as you know, it performed incredibly well.

All of that said, that wasn't a virus that had been administered to patients -- volunteers under a controlled setting, but it was still a real virus and real patient population. But -- so to demonstrate good viral kinetics and good safety in that setting was further derisking, now we're taking one step further and doing it with real-world virus -- or real-world infection, I should say, so that people are catching the strain that's going around, presenting in a very natural way to a treater, and then we treat them.

So I think it's yet another derisking step along an evolution. Rarely in clinical medicine or clinical investigations, do you have such checkpoints to be able to establish that your drug is actually doing what you had hoped for it to do -- and granted, every patient population is slightly different, and we'll explore those as we do. But again, I think the profile of the drug, the fact that it's a really potent antiviral and it appears to be working in every study that we put it in, it bodes well.

Our next question comes from Roy Buchanan of JMP Securities.

I guess start on EDP-235. It sounds like the next trial is going to be -- after the Phase I, is going to be treating patients in the second half of the year, maybe a Phase I/II. Just curious if you guys plan to run multiple Phase Is in addition to the one that you're going to start this month, and if so, what those might be?

Well, I mean, you're always doing other kinds of ancillary studies along the way in development, such as DDI studies. Is that what you were thinking of, those types of studies?

Yes. Anything. Sure.

No, I think those are the main ones. Once you have SAD, MAD, you understand your exposure and tolerability, you kind of know what your dosing parameters are for Phase II, so you don't want to be slowing that down Phase II/III, and so -- but there's always other studies that we're doing in parallel in terms of DDIs, et cetera, et cetera. Those will help down the road with special patient populations.

Okay. Great. And then I had one on 514. I guess just curious maybe if you can speculate if that could be back into the clinic this year? And what about -- I guess how are you guys thinking about the combos, maybe there are some less ideal agents out there that you could partner with just to get more data on the compound? What about running maybe a longer combination trial with just a NUC? Some KOLs have mentioned to us that might be something worth exploring, anything like that?

No, those are all good questions. I think to answer your first and probably direct question about is it likely to be in the clinic this year, I won't say that it couldn't be under any circumstance, but what I would say is we're really focused on -- we have 514. We -- it plays well with NUCs. We've done it on a 1-month study with a 2 -- making up a 2-drug combo. We saw very nice behavior in terms of the 2 drugs playing well together, good safety profile in the combination. We have observed good antiviral effects, et cetera, et cetera.

So it's -- the 2 drug foundation now is just like waiting for an ideal third ingredient to be added. And again, we thought we had that one lined up before. It turns out we don't now. And so again, we're looking sort of both internally and externally for what I think will hopefully be a great next combo ingredient. I don't know, I don't really necessarily want to be pursuing the lesser-ideal ones. To me, that's maybe just not a great use of capital. But as it pertains to -- for a longer NUC study, I think, was your other question, could you do a core and a NUC for a really long time? I mean that's probably not super high up on our list. But it is something that I know KOLs think could work over time, you just have to be patient enough to run those kinds of studies and sort of launch that satellite over and then hope that it reports data back after a significant period of time.

So those are interesting studies that maybe should be done in some fashion someday, but again our principal focus right now is looking for something that would make for a great third agent to add, such that we could get to a functional cure, and hopefully in a more reasonable amount of time.

Our next question comes from Zegbeh Jallah of ROTH Capital.

I think we just have a few. The first one is, in the Phase IIa RSV study you had symptom improvement that was being evaluated as a secondary endpoint, and you did show some impressible reduction in nasal mucus. But I think I was just kind of curious about symptom improvement being a primary endpoint for the Phase IIb study? And if you're going to be looking at nasal mucus, how important is that endpoint to patients? And is it likely that you'll be looking at some additional symptom measures for the Phase IIb study?

Yes. So good question, Zegbeh. So yes, in the Phase IIa study, this is so-called challenge study, we did -- I think virology was the primary and symptom score was the secondary, and you can look at all kinds of things,. But I have to say one of the most curious endpoints I've encountered in my career was mucus weight, which you -- which turned out to be actually very interesting endpoint to look at and it actually mirrored other data quite well.

That said, the going -- as you advance, viral loads on later-stage trials will be interesting, but symptom scoring is going to be more important on the path to registration, and so there will be a number of different symptoms that are observed in that capacity that will add up to the overall score. It was one thing to do the mucus secretion in the challenge study setting, because these patients were domicile, they were inpatients. And it's very easy to collect all the kleenexes and weigh them. In an outpatient study, that's just not practical, right? So from RSVP onward, that's a tough one. But we'll have plenty of other [stuff] to look at.

And then, I'm sure you get this one a lot, but just kind of curious about the 5-day treatment period for the RSVP study. I know you used the same treatment period in a prior study, but I was just wondering, is that really long enough, or, based on the MOA of the N-inhibitor, it's likely that no additional benefits could be gained from treating longer?

Well, I guess you could never really know the answer to that without doing the study, but what we did find in this patient population that in RSVP, we think it will substantially mirror the challenge setting, that should be -- we think that should be adequate. When you get into the immune compromised setting, RSVTx, the hematopoietic cell transplant recipients or however you're immune-suppressed in the first year post transplant. And for these individuals who don't have a competent full immune system helping them, we are dosing longer; 21 days, in fact, in that study. So there may be certain pockets or patient populations where you want to have the latitude to be able to dose longer. But ultimately, the goal is to try to find a convenient dosing regimen that is adequate and quite effective. And generally speaking, the shorter you can make that, the higher you're going to have compliance and the better the product profile is overall.

Got it. I was thinking that it was probably related to also being cautious of the burden to patients. And then the last one here is just about the combo strategy. So if you were to do a combo with the N and L, do you start with the N-inhibitor and then follow with the L, or do you just onboard both of them at the same time?

And then I'm just going to squeeze in a question here for Paul regarding MAVYRET revenues. 2021, our revenues came in lower than what AbbVie guided to at the beginning of the year, which was $2 billion, and I think it came in at $1.7 billion, and they've guided modestly for 2022 at about that $1.7 billion. So I was just wondering how should we be thinking about the cadence of revenues beyond 2022, and how that has factored into your projections [where] I think you said a run rate for the next 2 years?

Regarding what happens after 2022, it's really all up to the COVID pandemic situation. You're correct, AbbVie as guided again for fiscal -- for calendar 2022 at $1.7 billion. So they're expecting a flat year to 2021 with no relief, I guess, from the COVID suppression impact. What happens after that is really going to be up to, you know, are we through with variants? Is there going to be a fall in Omicron? It's unknown at this point in time. And I would say that the 2-year guidance we gave on cash was based upon our existing cash balances, our R&D and G&A guidance for fiscal '22 and, obviously, our AbbVie HCV royalties for the next fiscal year. So we look at that whole picture, and we feel comfortable that we've got at least a 2-year run rate on cash.

And to answer your other question, if we were doing a combination study, we would add the drugs together at the same time.

Our next question comes from Jay Olson of Oppenheimer.

Congrats on the progress. I think there's been some discussion about using Merck's molnupiravir together with other antivirals in a combination approach to treat COVID. Is that something you would consider with EDP-235? And if so, which drugs would you consider combining it with?

And then if I could ask a financial question, assuming AbbVie's guidance of $1.7 billion in 2022 sales indicates that MAVYRET is stabilizing, would that support a level of royalties that could continue to support Enanta's operating expenses for the foreseeable future?

Right. I think, as Paul sort of just outlined, the $1.7 billion that they're guiding for the year is pretty much where they came in now, and that's what's built into our forecast. We model based on their guidance. And we do see that as propelling the cash runway for that 2 year -- at least the 2-year period based on current cash and anticipated royalty revenue.

Regarding your question about combos, there's no indication right now that you need combos. It is an acute viral infection. We have potent antivirals, it appears to be, from what we can see with antiviral drugs going after COVID, the 5-day treatments are sort of the norm, much like we had already established in our RSV study.

So I would say that there could be the need for combinations down the road, but we don't see that need yet. But nonetheless, we're anticipating that having more mechanisms rather than fewer down the road could be a valuable thing. So we're not just working on protease in-house cure. When the pandemic started, we started multiple different programs, and we're hoping to harvest other agents of other mechanisms over time. So stay tuned on that front. But in any event, to your direct question, I don't see the need at this time to be doing those combination studies. I'm not sure what you'd be trying to establish.

Our next question comes from Brian Skorney of Baird.

This is Luke Herrmann on for Brian. In thinking about RSV development strategy, from earlier questions, it seems like you're leaning towards the high-risk RSV populations for the initial registrational path. In a situation that RSVP reads out positively. Do you think the RSVPs and RSVTx studies might serve as pivotal for those indications? And otherwise, what can we expect the pivotal program to look like? And would you choose to move it forward yourself?

Yes. So again, I think once you have the data for RSVP, we'll have that information, and of course we'll to have that discussion with the agency. That could inform how the future of the development program looks like on the path to registration, but at this time, we are not currently expecting that those 2 studies are necessarily registration studies.

Is that helpful?

Yes.

I'm sorry, did you have another question?

It was just other -- if those weren't registrational, what would pivotal development look like, if you can speculate at all?

Yes. I think the FDA -- I mean, I think the FDA and EMA both want to, I think, focus on high risk as the expedient path to approval. So I think that's what we need to do.

Our next question comes from Roanna Ruiz of SVB Leerink.

So I wanted to circle back to your COVID asset. So for 235, do you have any thoughts on what percentage of patients out of the total eligible patient pool for antivirals might be really fully unable to take an antiviral that has ritonavir boosting, maybe possibly due to drug-drug interactions or things like that?

Yes. It's hard to get your hands on that exact number now. Maybe that is -- it's more of a Pfizer question. I think the -- but what I will say is there's a very substantial amount of the pharmacopeia that is influenced by ritonavir dosing. So you just need to understand what other concomitant meds patients are on and understand what potential impact ritonavir would have. Do you need to take people off certain meds? Do you need to dial them down or dose adjust? In some instances, ritonavir can reduce exposure of other medicines; might you need to dose elevate other drugs to compensate for that?

So there's just different things going on that you need to be able to understand. And I think any time a patient's on concomitant meds, it's a question that physicians will need to understand and explain to patients and then set up whatever plan of attack that you would need to set up to make sure everyone is safely medicated. Our hope is to just sidestep that issue entirely.

Yes, makes sense. And then a quick one for your RSV programs. I was curious, for the Phase II studies in pediatric and transplant patients -- are there any other strategies or levers that you can pull to further accelerate the enrollment of those trials? And when are you -- what are you tracking to help you make that kind of decision if you want to apply those additional strategies?

Yes. So we're looking at new strategies all the time. The other thing you do is improve your catchment in terms of trial sites, et cetera, et cetera. I think it's just a question of how you adapt protocols to make it friendly for -- not -- friendly's maybe the wrong word, but make it convenient for parents of peds to enhance enrollment, not having extensive barriers or extensive blood draws, other kinds of things that might slow things down a little bit or put people on the fence in terms of coming in and participating in the trial.

I think one of the other things just during the pandemic, the transplant recipients are probably among the most cautious people, right, because they are immune-suppressed. They have to be incredibly careful post transplant because of COVID. And -- so that raises other special challenges during the pandemic, but we're just going to have to -- just like with RSVP, we had to -- that was compromised by the pandemic for a while, and we just needed to be ready with sites in all the appropriate spots for when things opened up a little bit and then take advantage of harvesting the trial enrollment. So I don't know that there's any special tricks, we're just always trying to optimize enrollment every which way we can without jeopardizing the study, of course.

(Operator Instructions) Our next question comes from Liisa Bayko of Evercore ISI.

Just wanted to get a sense, so you'll have Phase I data for the COVID program looks like in the second quarter. Is that going to come before or after do you think the RSV data? And then how quickly would you be -- would you be able and prepared to go into Phase II/III with your COVID program from wrapping up the Phase I?

Yes. So I can't really, I guess, speak to which data would come first. We haven't -- we're going to begin dosing 235 soon, and we'll get into that study and get the various cohorts progressed. So depending upon how many doses we have, et cetera, et cetera, it's safe to say they're probably both Q2, but exactly which one's first, I can't really speak to today.

And then your other question, obviously we'll be preparing for the steps to Phase II, III after the Phase I to get into that as quickly as we can, making sure drug supply and sites, et cetera, et cetera, are lined up. And so we'll be doing it as quickly as possible starting in the second half. So stay tuned on that front.

Okay. And is that part of your assumption in your guidance? And I'm just looking at R&D because you came in at around $49 million this year. I feel like you have a lot going on in your pipeline yet you're guiding to $168 million -- sorry, $150 million to $170 million. Where -- like how do we kind of make the math work with all these studies going on? Is there something I'm not -- I know a couple of things have probably wrapped up from the fourth quarter, maybe are wrapping up in the first quarter. But given that (inaudible). So how do we think about that?

Sure. No, there's wind down costs and so forth associated with some of the NASH studies, et cetera, et cetera, that won't be obviously carried through through the rest of the year. We're -- but I think the plan is still intact and encompasses what we're aiming to do with these various programs.

And then just 1 or 2 questions on RSVP. The strain that you used in the challenge study, is that like pretty representative of kind of how the different virus out there -- and it just came to my attention because you talked about the strains going around right now. How similar or divergent can strains be for RSV from -- compared to what you looked at in the challenge study? Because as I recall yours was one of the more, it seems like, I don't know if the right word is virulent or whatever, but you had one of the higher viral loads as I was kind of looking across other challenge studies, it looked like you had a pretty serious virus that you were using in the challenge study.

Yes. No, I think it's a standard -- Yes. No, sorry to interrupt, Liisa. But I think it's a standard virus that has been used, some Memphis Strains, and used in multiple challenge studies. I think it may differ a little bit in terms of when people elected to dose. We waited to dose once the viral load had reached a certain threshold, not a certain number of days post inoculation. So we inoculated people in that challenge study with the virus, waited for the viral load. We check people twice a day by RT-PCR, waited for the viral loads to start to climb up and waited until they got up to about 3 logs, as I recall, and then we started dosing.

So obviously, if you dose sooner than that, you'll be dosing with a lower viral load. So that's probably the variable there. I think ultimately, it's a real virus, but you do need to ultimately get out into the real world where you're going to run into different -- slightly different strains. You might have RSV A, you might have RSV B, it might be various subtypes along the way. But this is why we did a lot of work on clinical isolates before embarking on the study. We weren't using just lab streams of things, et cetera, et cetera. We've had geographically dispersed live virus samples from different patients and different seasons, et cetera, and we tested our drug against them and the drug performed uniformly very well against the clinical (inaudible).

So it is a variable, but that's the real world, right? That's real-world infection. And that's among the things that RSVP will be looking at. But I think we've tried to fence in as much as we could possibly fence in from a derisking prior to doing this.

Okay. And then just final question for me. So you mentioned you dosed around 3 logs, and I see from your graph, your trial says that makes sense, it's when you started dosing. How does it relate to like symptoms and when patients start feeling symptoms and present, because I think that's what a lot of people are trying to figure out is like that window of opportunity you have. I know it has to be within 2 days of symptoms, but you started dosing on day 3 here. How does -- sorry, not on day 3 -- at 3 logs of viral loads. How does that relate to kind of the onset of symptoms and that kind of stuff?

Well, if you -- and we've got these slides in our corporate deck on our website, it's probably what you're looking at -- but if you look at the symptoms, by the time people were 3 logs in the challenge study -- and this is the trial we're talking about, the challenge study -- at time people were 3 logs, they were also starting to express at least 1 symptom, and so they were becoming symptomatic.

So then if you translate that into the real-world study now and, say, in RSVP, what is the window? What is the window that we could possibly be dosing patients in? You're not going to get people to come into your study or into the doctor's office, period, within 24 hours of symptoms, right? Nobody sort of does that. They languish a little bit before they pick up the phone. And so the earliest you might reasonably expect to catch a patient in a real-world setting is within 48 hours.

And that's obviously what we were able to do in RSVP. That was, in fact, it was one of the parts of the study we were just doing, just to make sure we could catch RSV patients within 48 hours of symptom onset, and that indeed was the case. That's the requirement for flu. You have -- if you want a flu drug to work, you've got to catch people in the first 48 hours or maybe 72 hours of symptoms if you want that drug to work. We don't know what the window is for RSV. It's probably more forgivable -- forgiving, I should say, than flu, where it's a real tight window.

We're starting to get experience now in the community with regards to COVID, right? It appears that you can -- maybe there's a 5-day treatment window for COVID. Where does RSV lie? These are among the things that we'll ultimately be sorting out in various studies. But just for the very specific RSVP trial, we did put that 48-hour to the strength on there just because we didn't have a basis to necessarily make it much longer. We just said, well, let's assume it's like flu. And then we can always go longer. You don't want to -- you don't want to make the wrong guess at the beginning of your development life. So I think that's where it is. You can't practically do it shorter than 48 hours, and we saw no reason necessarily to go longer than 48 hours. So I think it's a good sweet spot.

At this time, I'd like to turn the call back over to Jennifer Viera for any closing remarks. Ma'am?

Thank you to everyone for joining us today. If you have additional questions, feel free to reach out and contact us by e-mail or give us a call at the office. Thanks so much. Have a good night. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.