Enanta Pharmaceuticals Inc (ENTA) 2020 Q4 法說會逐字稿

Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Fourth Quarter and Year-end 2020 Financial Results Call. (Operator Instructions) Please be advised that this call is being recorded.

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

Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal fourth quarter and 2020 year-end financial results was issued this afternoon and is available on our website.

On the call today is 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. Throughout 2020, we made meaningful advances across our pipeline. Today, I'm excited to review this progress and to share our plans for multiple catalysts in 2021.

Looking ahead, we believe that we are in a unique position to leverage our years of drug discovery experience to deliver new medicines to patients. Not only do we have a robust and growing internal portfolio, which I'll review momentarily. But our efforts are informed by our previous successes, including the discovery of 2 products, which are currently marketed by AbbVie as part of its leading treatment for chronic HCV infection.

In the beginning of the year, we announced our program for human metapneumovirus, or HMPV. And in March, we began working to find a treatment for COVID-19. I'm proud and appreciate my colleagues for their efforts in rapidly responding to the pandemic and for the nimble and creative thinking they applied to translate our extensive experience in virology, notably respiratory virology to fight this global challenge.

Taking a step back by focusing on these 2 respiratory viruses, combined with our work in respiratory syncytial virus, we are establishing our position as one of only a few biotechnology companies explicitly developing a broad portfolio of respiratory virus treatments. We also advanced our hepatitis B compound, EDP-514, a novel core inhibitor that displays potent anti HBV activity and V trail at multiple steps in the HBV life cycle. In February, we announced positive results from Part 1 of our Phase Ia/Ib clinical study of EDP-514 in healthy subjects, which supported further evaluation of once-daily dosing in Part 2 of the study in chronic HBV patients treated with marketed NUC reverse transcript inhibitors, which we refer to as nuc-suppressed patients as well as in chronic HBV infected patients with chronic viral load, not currently on treatment, which we refer to as viremic patients.

Moving to our NASH programs. The past quarter was also marked by the initiation of 2 clinical studies. ARGON-2, our Phase IIb study, evaluating our first FXR agonist, EDP-305 in subjects with liver biopsy-proven NASH and a first-in-human study of EDP-297, a highly potent and targeted FXR agonist, but its there a follow-on as FXR candidate. As we move forward towards the remainder of 2020 and beginning of 2021, we look forward to initiating 2 new Phase II trials for our program in respiratory syncytial virus, or RSV.

Now let's look at our portfolio programs in a bit more detail. I'll begin with our virology focused programs, more specifically, our respiratory virus programs, RSV, HMPV and SARS-CoV-2. I'll start with RSV, where we are developing EDP-938, a potent non fusion inhibitor of RSV A and RSV B.

RSV is a severe respiratory infection associated with significant morbidity and mortality and intent, the elderly and immune compromised adults and a condition for which there is currently no safe and effective therapy. In an average year in the U.S., RSV infections lead to around 2 million outpatient visits among children younger than 5 years old. And hospitalizations of more than 57,000 children under age 5 and about 177,000 older adults.

Our Phase IIb double-blind placebo-controlled study of EDP-938 is designed to enroll approximately 70 subjects up to the age of 75 years, randomized to receive either 800 milligrams of EDP-938 or placebo for 5 days.

Starting in the Southern Hemisphere, recruitment in this study has been affected by the ongoing COVID-19 pandemic and related shutdown in social distancing measures, which have reduced the incident flu and RSV. Thus as we've previously said, we are hopeful that the 2021 Northern Hemisphere RSV season will allow us to finish enrollment in RSVP, but that will be dependent on RSV in as prevalent as in a normal season.

To that end, we are reactivating close to 50 of our existing RSVP clinical sites in North America. These sites are prepared with RT-PCR machines to diagnose patients' RSV and to rule out flu and COVID in the same day, which should make a moment as efficient as possible. In addition, we're working to set up about an equal number of sites in 6 different European countries by year-end and are also planning to add sites in select Asia Pacific territories in 2021.

As we know, COVID-19 is unpredictable, and the rate of enrollment in this trial will continue to depend on the prevalence of RSV infections. And the precautions that people are taking for COVID-19 as the winter progresses in the Northern Hemisphere. Considering that respiratory viruses often have hotspot, we are prepared with many geographically dispersed sites to identify and enroll as many patients as possible in this RSV season.

Assuming we can complete enrollment in the second quarter of 2021, our goal remains to report data in the third quarter of 2021. We also plan to initiate 2 additional Phase II studies with EDP-938, one in adult transplant patients by the end of 2020 and another in pediatric patients in the first quarter of 2021. The adult transplant study named RSVTx is a Phase IIb randomized, double-blind, placebo-controlled study to evaluate the effect of EDP-938 in adult hematopoietic cell transplant recipients and acute RSV infection of the upper respiratory tract. The pediatric trial, named RSVP, will be a Phase II randomized, double-blind placebo dose-ranging study to evaluate EDP-938 regimens in hospitalized or non hospitalized infants and children aged 28 days to 24 months, who test positive for RSV based on an approved diagnostic assay. Our goal for both of these studies to enroll during 2021 and 2022 subject to the potential impact of COVID-19 on the incidence of RSV infections and activities the trial side.

Turning to our other 2 respiratory virus treatments in development, HMPV, a virus that causes respiratory infection was something similar to RSV and SARS-CoV-2 we have discovered several patent molecules. For SARS-CoV-2, we are leveraging our expertise in direct-acting antiviral mechanisms to discover new compounds to treat COVID-19 using a combination of drug target screening and drug design. The advantage of this discovery approach is that you can make potent purchase bulk inhibitors against multiple different targets. While we are encouraged that the vaccine could be available soon, we still see a need for an oral treatment for those in various patient populations who are nonetheless infected with COVID-19.

Regarding HMPV, since announcing our new drug discovery efforts in January, we've been optimizing animal or inhibitor release against this virus. We are hoping to finalize a clinical candidate selection for each program next year.

Let's move on to our hepatitis B program with EDP-514, our lead core inhibitor currently being tested in chronic HBV patients who are nuc-suppressed and in viremic HBV patients.

In February, we announced positive results from Part 1 of the Phase Ia/Ib clinical study of EDP-514 in healthy subjects, which allowed us to initiate Part 2 in chronic nuc-suppressed HBV patients. These encouraging data, which highlighted positive safety and tolerability as well as pharmacokinetics suitable for once daily dosing, were presented in a poster presentation in August at the digital international liver concrete sponsored by the European Association for the Study Of Liver or EASL. Part 2 of the Phase Ia/Ib study, which is now ongoing, is designed to evaluate the safety, tolerability, pharmacokinetics and antiviral activity of orally administered multiple tendinosis EDP-514 versus placebo and up to 24 randomized nuc-suppressed patients over a 28-day period.

Barring any further significant COVID-19 disruptions, we plan to have preliminary data from Part 2 in the second quarter of 2021. Also in our HBV program, in July, we initiated a Phase Ib clinical trial in viremic HBV patients. This randomized, double-blind, placebo-controlled Phase Ib study in viremic chronic HBV patients not currently on therapy has a similar design to the one in nuc-suppressed HBV patients. We plan to enroll 24 subjects at our clinical trial sites in Hong Kong and Taiwan, which are both areas with large unmet need for HBV treatment. We expect preliminary data from this trial in the second quarter of 2021.

And finally, we continue our HBV efforts in search of a novel oral agent against a different HBV mechanism that could be combined with EDP-514 in a NUC, to create an all-oral triple regimen. Progress against that has been strong this year. We'll have further details around this new program and our oral HBV triple strategy early next year.

Shifting gears to our work in nonviral liver disease. We are currently focused on NASH, where we are conducting clinical trials on EDP-305, our first FXR agonist. Based on data from ARGON-1, which was highlighted in an oral presentation at EASL in August, we initiated recruitment in ARGON-2 in July. ARGON-2 is a Phase IIb randomized, double-blind, placebo-controlled, 72 week study in approximately 340 subjects with biopsy-proven NASH with fibrosis. The primary endpoint of ARGON-2 is improvement of fibrosis without worsening of NASH and/or NASH resolution without worsening of fibrosis. We are using EDP-305 doses at 1.5 milligrams and 2.0 milligrams, which we believe will favorably balance strong efficacious target engagement with tolerability.

We are additionally developing EDP-297, our follow-on FXR candidates for NASH with potentially best-in-class potency and targeted effects. At EASL, we presented 2 posters, which demonstrated that treatment with EDP-297 demonstrated significantly reduced fibrosis production and improved the liver function in a rat model of NASH. We are encouraged by EDP-297's preclinical profile, which shows high target tissue distribution in the liver and intestine versus plasma and skin.

In September, we announced the initiation of a Phase I randomized, double-blind, placebo-controlled, first-in-human study designed to assess the safety, tolerability and pharmacokinetics, including the effect of food intake, of orally administered EDP-297 in approximately 74 healthy adult subjects. The study includes 2 phases, a single ascending dose phase enrolling 6 cohorts, including a 2-part food effect cohort and a multiple ascending dose phase enrolling 3 cohorts.

We look forward to reporting clinical data in the second quarter of 2021. By midyear 2021, we expect to have important new insights for both EDP-305 and EDP-297, which will inform next steps across our NASH program. We will know whether the tissue targeting and potency design elements we introduced in 297 will allow us to better leverage FXR agonists without encountering tolerability challenges. And at approximately the same time, we expect that ARGON-2 will provide us an interim analysis at 12 weeks of treatment on a subset of patients to enhance our ability to prioritize our FXR agonist compounds and seek opportunities more quickly for development of one or both of them in combinations with other mechanisms for NASH.

We are encouraged by the efficacy demonstrated by FXR agonist for NASH with fibrosis, a disease with high unmet need and believe that this mechanism has promise as a potential therapeutic.

We have accomplished all of this while we're still managing the impact of COVID-19 on our lives and business. I'm continually impressed by the team we have built and their ability to maneuver around the challenges with which we have been presented. I want to thank our very talented and committed employees who have worked tirelessly during the pandemic. Their dedication is evidenced by the progress we've been able to make this year.

I'd like to conclude my remarks by emphasizing a few key points. We made significant progress during our fiscal year despite the multitude of challenges presented by the COVID pandemic, including the initiation of 4 new clinical trials, 2 for our HBV program and 2 for our NASH program, concurrent with conducting our ongoing Phase IIb program for RSV.

Further, we are on schedule to initiate RSVTx in adult transplant patients later this quarter and RSVP in pediatric patients in the first quarter of 2021. We were also successful in moving our HBV trial in viremic patients forward as well as in progressing our Phase Ib trial in HBV patients who are nuc-suppressed with preliminary data expected for both of these studies in the second quarter of 2021. And finally, we look forward to advancing our candidates in NASH with the ARGON-2 trial of EDP-305 and the Phase I study of EDP-297.

Looking toward 2021, we are poised for an exciting year with multiple data readouts anticipated across our pipeline. I'll stop here and turn the call over to Paul to discuss our financials for the quarter. 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 fourth quarter and fiscal year ended September 30, 2020.

For the quarter, total revenue was $23.6 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $414 million. This compares to total revenue of $51.3 million for the same period in 2019. The decrease in our royalty revenue was due to lower global HCV product sales as reported by AbbVie. As treated patient volumes have remained below pre-COVID levels. AbbVie now expects total HCV sales of approximately $1.9 billion for the calendar 2020 as treatments remain below pre-COVID levels.

Our royalty revenue was calculated on 50% of MAVIRET sales at a blend of our first and second royalty tiers of 10% and 12%, respectively. And on approximately 30% of VIEKIRA's sales at a royalty rate of 10% after adjustments for certain contractual discounts, rebates and set offs which are now just over 2% of AbbVie's total reported HCV sales.

Our royalties are calculated on a calendar year basis. Therefore, royalties in fiscal first quarter ending December 31 will be 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 2019 Form 10-K.

Moving on to our expenses. For the 3 months ended September 30, 2020, research and development expenses totaled $36.7 million compared to $38.7 million for the same period in 2019. This decrease was primarily due to the timing of our clinical studies year-over-year and COVID-19 related delays in 2 clinical studies that are now ongoing.

General and administrative expense for the quarter was $6.7 million compared to $6.2 million for the same period in 2019. Enanta recorded income tax expense of $10.7 million for the 3 months ended September 30, 2020 compared to an income tax benefit of $0.5 million for the same period in 2019. The income tax expense in 2020 was driven by a noncash valuation allowance recorded against our deferred tax assets of approximately $18 million, which was partially offset by $7.3 million of NOL carrybacks in R&D tax credits.

For the 12 months ended September 30, 2020, Enanta's effective tax benefit was approximately 3% compared to an effective tax rate of approximately 2% for the 12 months ended September 30, 2019.

I'd like to note that the drivers of the decrease in the effective tax rate are covered in the press release. Net loss for the 3 months ended September 30, 2020, was $29.3 million or a loss of $1.46 per diluted common share compared to net income of $9.2 million or $0.44 per diluted common share for the corresponding period in 2019.

The net loss for 2020 was due to the decrease in HCV royalties earned under our AbbVie agreement, which were adversely affected by the COVID-19 pandemic. Enanta ended the quarter with approximately $419 million in cash and marketable securities, an increase of approximately $19 million from our 2019 fiscal year-end balance of $400 million. Notwithstanding our current level of operating losses, our existing cash balances, together with our ongoing royalties are expected to be sufficient to fund our operations for the foreseeable future.

Regarding guidance for fiscal 2021, we expect our development expense to be between $145 million and $165 million, and our general and administrative expense to be between $27 million and $33 million. Further financial details are available in our press release and will be available in our annual report on Form 10-K when filed.

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

(Operator Instructions) Your first question comes from the line of Roy Buchanan from JMP Securities.

I had a few on the RSV program. So for RSVP, it sounds like you're more set versus the last quarter in terms of adding agent sites in 2021. Does the northern agent season largely mimic that in North America? And can you provide any specifics on a potential agent site, is China included?

This is Jay. So in terms of Asia and different countries have slightly different season. Some are actually almost year-end. So in the broader perspective, when we look at the Northern Hemisphere, the U.S. and Canada, and we look at Europe. We think if we can build on Asia, that we'll be getting the coverage at least somewhere for maybe 9 or 7 months out of the year.

So I think specifically, we'll come back later with other Asian countries, and particularly that we're picking up. But that's -- the plan is to continue to add some of the sale 2021 time frame. Of course, in the meantime, we'll have lots of North American sites on board. You recall, we were poised with dozens of them previously. So we'll have approaching 50 North American sites and hopefully, at least that many more than the EU by the end of the year. So really trying to pull the topside for many, many sites.

So are any of the North American sites yet open? Do you have any feedback from those sites?

It's just coming up. But what we can tell is, as you recall last year, the season came early. And so this year versus the last year, it's a little quiet so far this year. And we just have to keep an eye on that. We started the screen. But in general, the rates as tracked by CDC are pretty quiet right now. We'll just have to wait and see as the season progresses that the backdrop of COVID and social distancing and the like, what the season will provide.

Okay. Great. And I had a couple on the new Phase II trials, if you don't mind. So for RSVPEDs, how many patients are you planning and the endpoint is progression to lower respiratory tract infection? And then for that trial, do you have investigators lined up. And I guess maybe kind of similar to the last question. Just how are they viewing the current situation and the feasibility of starting the trial?

I'm sorry, are you talking about the Peds study?

Yes, right. RSVPEDs.

Yes. Yes. So the -- on the Peds front, we're aiming to start in next quarter, we're aiming for about 90 patients total. And -- yes. So I think those are the main points in terms of the Peds study itself, or line going to be safety and PK. And then we'll have a part 2 where we'll be looking at the actual virus. So change in RSV shedding, one of the things that we look at. So I need to be given 938 or placebo for 5 days. And we'll be looking at cohorts up to 24 months of age.

Okay. Great. And then one last one on the transplant kind of if you don't mind. So how many sites are you planning for that one? Are you also including Europe? And is there any information on the current RSV rates in the transplant setting, either in the U.S. or elsewhere?

We don't think -- so the sites will come online, we'll get numerous sites up, will be a global study that will have sites and all the obvious sort of territories. There we'll be looking at 938 versus placebo for 21 days. And it jumps a little bit longer because the patients are obviously immune compromised. There aren't a lot of statistics on this specification population. So we just get set up in a lot of the centers during the normal season and out as they come.

Your next question comes from the line of Brian Skorney from Baird.

This is Jack in for Brian. We have one quick one. We're wondering about if you had any updated thoughts with regard to the HBV opportunity for core inhibitors in light of the disappointing news from assembly and their core plus new regimen and the sustained value response data we saw there? I know you're looking at the triple combination internally as well. So we're just wondering what your thoughts were in MI lendings?

Yes. So it was an interesting data set. I have to hand it to them for doing that study. The study was looking at a core inhibitor plus a NUC plus time. So the question is can a core plus a NUC plus time, get you to a functional cure. And again, nobody knew the answer to that question. They looked at different time points over the course of the investigations 3 months and 6 months, 1 year and so forth. And whereas the results that were produced in this initial study weren't particularly positive. There could be a lot of different reasons. It's either NUC plus on core plus more time, although they went for 12 to 18 months.

So it is a -- it's a good chunk of time. It's possible that their first-generation core inhibitor wasn't partner to math. I think that's the main reason why they're working on other generations. EDP-514, our core inhibitor is roughly 10x more potent than the one that you're referring to in that study. And then another possibility, of course, is a core plus a net plus a third agent that actually be the winning strategy to get you there, just applying enough pressure on the virus and from different angles and from different stages of mechanistic intervention. And so all along, we've been working on multiple different mechanisms.

So we'd have something in addition to a new core inhibitor and we're making pretty good progress on that front. So I think earlier next year, we'll have more to sort of discuss around our progress on that front and also on our strategy of coming up with a potential triple. I think for us, we're highly focused on all-oral treatments, as you know, some of the -- well, historically, people have used interferon as an injectable with the workout of net, but it's sort of a poorly tolerated treatment that leads to very, very low cure rates. Other folks have been using some RNA approaches to add injectables to oral agents. And that's an interesting approach that some others are taking. We're highly focused and committed to, if we can come up with an all-oral regimen, we think in the end, having all overall therapies that potentially could be put together as a fixed-dose combination and that could be disseminated to the millions of people, hundreds of millions of people globally that suffer from this infection that, that would offer significant advantages overall. So highly focused on all-oral agents. And hopefully, with the addition of a new panel oral triple.

And your next question comes from the line of Akash Tewari from Wolfe Research.

This is Amy Li on for Akash. We just had several on RSV and then one on HBV. So on -- for your -- starting with your Phase IIb and stem cell transplant, do you have any data supporting the safety of longer-term dosing with EDP-938? And then why did you set the symptom onset cutoff to be 3 days instead of 2 days like you did for outpatient adults? And then on the RFB outpatient trial, how many patients are currently enrolled in this trial? And is there any way to modify it into a Phase II/III registrational trial? Additionally, how are you ensuring that patients will be dosed within the right time window? And then one last one on HBV. One hypothesis why assembly's core inhibitor failed is that the drug doesn't completely stop the formation of new cccDNA and we were just wondering what the in vivo or in vitro potency of EDP-514 is to specifically inhibit cccDNA formulations?

Well, let's start with the first one. So 3 days versus 2 days in terms of transplant, I think is -- it's in the range. We're looking at 48 hours was the inclusion criteria for RSVP. There was nothing special about that other than we believe that sooner is always likely to be better. Fluid (inaudible) are often within 2 days or 3 days since 48, 72 hours in there are probably pretty reasonable time frames to be looking at.

We certainly have all the talks as we asked to support this type of study progressing forward. So what were some of your other questions? I couldn't write them down fast enough. Hello? Did you get off the line?

Can you hear me?

I can.

Okay. Great. I apologize for that. Yes, so for the RSV L...

How about one at a time?

Yes, for sure. Yes. So outpatient trial, how many patients are currently enrolled? And is there a potential to modify it into some sort of a Phase II/III registrational trial?

Yes. I think this is -- it's really a Phase II study that we're using to capture the initial data in that patient population. So our plan is for it to be a Phase II. We don't really discuss recruitment on ongoing trials other than the set targets for where we are, where we expect to have data. So it's -- but then again, to be clear, RSVP is not a registrational study that is instead to be supportive of the entire program overall to better assess the feasibility of a window, et cetera.

And so we again, are able to get people to arrive with symptoms within the 48-hour time line. And so again, I think we'll the bigger wildcard is what will the season be and the presence of COVID and social distancing and potential lockdown. So that's something that no one has any idea. We'll just have to go into and sort out.

Okay. Great. And then our last question on Hepatitis B. Just wanted to know what the in vitro and in vivo potency of EDP-514 is specifically on inhibiting cccDNA formation?

In terms of cccDNA formation, as I recall, that's been the it's in the nano range. I want to say it was around 30-nanometer or so. Again, this is something that you determine in vitro at the time of infection. So 30-nanometer or something like that.

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

I have 2 questions. Maybe the first question is what do we know about the viral kinetics? Obviously, RSV is different between a hospitalized patient -- a pediatric patient versus immunocompromised. And how do we really capture this efficacy in the next stage of development? So I think commenting on that would be helpful. And then the second one question is recently, at the meeting, we saw data from another FXR agonist that had very encouraging biomarker data, but failed to achieve histological benefits. So how do we think about sort of the mix of correlation especially as we think about data for the first generation and second-generation of FXR agonist?

Sure. So starting with the second question first. I think tropifexor is the FXR you're referring to, correct? It was in a 48-week study, and they did see a lot of the markets moving in a lot of the right directions. They did see pruritus. But they didn't see -- I don't think they had stat ergon fibrosis improvement. And I think one of the key differences, people generally view Intercept's results as being the sort of the benchmark ones to be looking at for the -- as leadership in the class. And I think one of the big differences was they didn't go 72 weeks. So that's obviously what we've built into our ARGON-2 study. Again, many people have looked at shorter duration lines and various levels of success in terms of trying to demonstrate an effect on fibrosis. So we just looked to intercepts point study of Phase III work and designed argon to accordingly.

So I think the other thing is the Novartis study, we -- I don't believe it was hugely powered in terms of the numbers of subjects also. So I request on, I guess, the powering in order to get a difference from placebo and also the shorter duration of the study that they did. I think some of these fibrosis improvement endpoints are just necessarily going to be -- (inaudible) more patient.

And Peds, peds usually present with the upper airway infection, they had a high viral lay in the respiratory tract initially. And the key whether it's immune compromised or not is to make sure -- try to prevent -- try to catch the infection when it's an upper airway infection. Prevent it from the virus from sort of going down the elevator shaft into the lower airway, which is where become -- start to have as much of the inflamatory disease going on as you do viral disease. I think symptoms can be assessed them or specific outcome scale.

In transplant, you'll -- we'll be looking for patients that have initially upper airway disease and try to have the prevention of the lower airway complications. It's a -- I'm not specifically able to point to the lease right now, anyway, I'm not. I think you can on the differences in terms of how that viral course plays out and you compromised one. But I do believe longer treatment duration is is warranted in that patient population.

Your next question comes from the line of Zegbeh Jallah from ROTH Capital Partners.

I have 2 quick ones for you. I think the first one is, I've seen that you've been really busy with multiple studies. I'm just curious about the point RSV studies, do you think that they could hamper the enrollment of the ongoing Phase IIb study? Also, what are some of the risks that you think should pause or delay the study since Paul did mention increased costs associated with some studies, being slowed or delayed due to COVID?

So what was the first part of your question? Were they competing for one another, the studies?

Yes. Just competing for enrollment. Or do you not expect that to be a problem?

Among their studies or between our studies and other studies?

Between your studies?

Yes. No, I think the -- each requires significant internal resource, but they're very different and diverse patient population. So I don't expect any real challenges there.

The question I enclosed there is a question. I mean, we do know people have been -- as we were setting up for the Southern Hemisphere, in late spring, no one really knew what the once the time would look like in the Southern Hemisphere. And it turns out due to a lot of the mitigation strategies that places like New Zealand, we're right on top of -- they were able to stem the tide of COVID significantly. But with that, acute travel bands and lockdown a social distancing and closing comes up. They did pretty much prevent many other respiratory viruses from really occurring. And to that end, you can look at it through is one of the major centers for that an RSV as well. So there was very little with regards to that some of the other respiratory infections due to COVID mitigation strategies.

And now we're rolling into what looks like a pretty nasty COVID situation emerging in the northern Hemisphere, particularly in the U.S. and EU. And so we'll just have to see. The most we can do is have sites set up everywhere. Again, we'll have approximately 100 sites in the U.S., EU and ultimately in parts of Asia to to try to capture a total patients. And -- but it is going to be in some major COVID dependent, I think. Hopefully, we won't have some of the specific trial impacts that we had in the earlier COVID wave in North America, but no one can rule those sorts of things. And we'll just have to see what some of the social distancing and other sorts of things plays out in terms of rates of diagnosed RSV and flu and other kinds of things.

So take the season we're rolling into, but we're just set to watch.

Makes sense. And then just a quick follow-up here about the NASH data expected in mid-2021. How much that of do you that or would you actually like to have after time lead out? And then based on the enrollment that you're seeing now, how confident are you that you'll be able to achieve that?

So are you talking about 305 or ARGON-2?

I suppose both of them, more 305 since you had some cohort.

Yes. Okay. Yes. Well, we're on track. I mean, please guidance that we gave, we have 2 bits in NASH. In fact, we have a lot of catalysts coming in sort of the first half of the year, we'll have 2 in HBV in the second quarter. We're also expecting to have data from our follow-on FXR 297 in the second quarter. And in our Phase IIb study of EDP-305, in so-called ARGON 2 study, we're hoping to have enough patients hit the target for the interim analysis threshold that we can then have that informed decision-making around the whole NASH program.

So again, we'll have all kinds of data to look at in that time frame. Right now, things are running along and going generally smoothly. So anything can happen between the middle of next year with regards to COVID. But it would be something that we're not currently seeing that we're on track for those targets that we guided to tonight.

Your next question comes from the line of Eric Joseph from JP Morgan.

From our recent interactions with KOLs, there's a lot of interest in pursuing FXR as a combination regimen. And you talked about exploring some non FXR modalities in NASH. Just what's your latest thinking on the -- what will be an attractive mechanism to partner with either 305 and 207? And do you have a sense of whether development of a combo regimen of 2 novel agents would be feasible as an initial registration strategy?

Thanks, Eric. So I think, I felt our combos are really interesting because there's some elements of FXR, I mean, FXR is a little bit of a sort of a utility here. I mean it goes after some of the pro fibrotic mechanisms, it's got some anti-inflammatory components. And there's also effects metabolically. And so these are some of the hallmarks of the disease. So as such, it could really tuck-in with many of the different mechanisms that are under study. And there are a bunch of them out there. So I think there was a reasonably solid rationale to tuck-in an FXR and with virtually any of the other classes.

Ultimately, in terms of combination strategies, I think clearly, some people are thinking to fix those combinations. Some people are thinking of maybe taking single agents forward so that they can be mixed and matched. I think both of those are possibilities. But in the end, you know you're going to need likely to have a combination. So our plan is to generate interesting in the case of 305 interesting Phase II data set that would enable us to even through having checked at the interim analysis at 12 weeks next year to then think about peeling off a dose that could then be used in combination with another agent from somewhere else.

So that's the plan there. I think as the field matures, this is very likely to end up in combinations that if they're oral could potentially fix those combinations. I know that was one of the approaches that Gilead was clearly taking at the beginning when they were looking at their multiple single mechanisms and in combinations. So it's almost reminiscent to the days of hep C. And so that's following it down further on. But if combination studies show promise of one sort or another, I would imagine that people will go forward with combinations for approval.

Okay. Great. And just a follow-up on HBV, if I could. Just picking up on your comments about the potential for an all-oral triple regimen. Any light you can share on what the third leg of vet tool might look like? And I guess, is there a parts component to the HBV life cycle that could be a life cycle that could be adopted here? And I guess, when we -- when you're able to say more about what that mechanism might be, would you be surprised on its identity relative to some of the other points in the life cycle that are being pursuits or either HBV or HCV?

Yes. Thanks for the question. We're not quite ready tonight to sort of (inaudible) that we expect that we will be by early next year. So on that front, stay tuned, but we've been sort of grinding away for a long time in the background on other hep C stuff. I mean we've sort of hinted to that over time. And I think we're getting to the point now where some of this is hopefully getting pretty close. So -- and again, our plan is to try to go for all oral, but stay tuned.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

Starting on NASH, I was wondering if you could speak broadly about your views on the evolving regulatory landscape there. And how you might incorporate that into the development program? For instance, are there additional noninvasive tests you may explore to ensure easily translatable methods for identification of patients where benefit risk of an FXR is optimal? Do you have any views on what the accelerated approval endpoints are and whether those might evolve?

Yes. Thanks for the question. As you know, we're -- everybody is focused on trying to get rid of biopsy is not only an endpoint that just one that is important for approval, but also in terms of more robustly now looking for a noninvasive test that could stratify patients in a better way and also perhaps give you a more informed and reliable readout in histologic endpoint.

So we'll be working on with the scientific community to explore this within our programs. We hope that the landscape will change before our registration study, and there is a chance that it good. There's a chance that it may not. But nonetheless, the field is moving very solidly in the interaction. There's a lot of encouraging signs, even coming out of AASLD on that front. It's probably not quite right there. But for now, we're still including histologic readouts, obviously, in our study because that is the best at this time, at least in terms of targeting approvable endpoint.

But I suspect that landscape will change, and it could change by the time one is ready for Phase III.

Got it. And then on the earlier stage respiratory programs, human metapneumovirus and the SARS-CoV-2. I was wondering if you could talk about the potential time lines for development there once you select lead candidates. And what's the -- how does the recent success of vaccines for COVID-19 impact our prioritization of development among those early stage programs? Is there a role you would still potentially see for a COVID-19 therapy, for instance, in stockpiling?

Yes. So absolutely. I think the last few weeks and including, I guess, in part today, there's been a lot of news on the vaccine front, and much of it's quite encouraging. I think there's sort of the things we know and the things we don't know. Number 1, we don't know what the the efficacy rates are going to be broadly across all sorts of different patient populations. That's number 1. Or do we fully know yet or although there's some encourage you since that your ability may be in a good direction, but are you just really -- you need a lot more information to understand how fully efficacious vaccines are and further how much they do or don't have you the need for therapeutics.

So I think there's questions about even long-term safety, there's questions about compliance in terms of getting vaccinated. And so for the foreseeable future, I think there are going to be people for one reason or another, who turn up testing positive for COVID-19. And to that end, particularly in people who are symptomatic or otherwise fairly early in the stage of their infections, this is where it makes fantastic sense to have a therapeutic. So we'll continue down this path with the full expectation that there will be the need in some form for therapeutics.

With regards to that and human metapneumo, which is the virus for which there is no current vaccine, same with RSP. Coming back to human metapneumo and our SARS-CoV-2 program. I'd say they're tracking pretty similarly right now, even though we -- I mean, we announced our human metapneumo program and in January with some early leads and then we announced the start of this beginning to look at -- SARS-CoV-2 in the March time frame, but the scientists have made really good progress. I'd say we've got potent molecules, very put molecules from -- against both of those viruses. And we're now turning potent molecules -- selection of potent molecules then to the finalist candidates for clinical development.

So we're targeting to have, hopefully, one from each of those programs as a candidate for next year. And then from the time -- I think your -- part of your question was from the time of your candidate selection, how long until you get it in the clinic? There, you've just got to finish a lot of IND-enabling things. But typically, 9, 10 months, something like that, is back and achievable, at least in our hands, by the criteria that we use to nominate our candidates. So again, we're hopeful to try to harvest the candidates for each of those viruses next year, which would really begin to round out as our goal is really building out sort of a leading human respiratory virus portfolio with the flagship of RSV.

In just weeks, we expect that we'll have 3 different Phase IIs going on. Just FYI, we haven't stopped working on RSV research. We're still exploring other mechanisms there to consider. Again, not because we don't have tremendous faith in 938. But we just want to continue to establish a leadership position there, looking at any reasonable mechanism start comparing them, even looking -- we don't think we need combinations or recent, but maybe there is a certain patient population that would profit from having a combination. And if that's the case, we would love to have that for an off-the-shelf aspect that we have and have 100% ownership of.

So that's going in an RSV. Again, hopefully, soon, we'll be supplementing that with a human metapneumo agent. Human metapneumo, second leading cause of pretty much everything RSV causes. And then COVID therapeutics too, we've got a watchful eye on how vaccines are going to play there. But again, I think there's no one who wouldn't want to have an effective COVID-19 SARS-CoV-2 agent available to them something that was safe and oral, and that could be administered at early stages from the first sign of a positive test and without needing to head into an infusion center either for a monoclonal antibody or an agent that's injectable. So this remains a strong goal. And I think in the aggregate, it really builds out an interesting sort of portfolio of human respiratory viral [app].

Your last question comes from the line of Jay Olson from Oppenheimer.

We have 2 of them. The first question is about GSK's RSV vaccine, which they announced today was moving into a Phase III study. If that vaccine is eventually successful, would it have any long-term impact on your view of the market opportunity for an RSV therapeutic? And then we have another question about NASH.

Yes. Maternal -- this is the maternal vaccine, is that right?

Yes, that's correct.

Yes. I mean that approach has been tried before and had promising results in Phase II only not to hold up in Phase III studies. I think there's just a fair number of questions around that strategy, not least of which is the degree of penetration and compliance in terms of doing mandatory or not mandatory that are doing broad vaccinations of pregnant women for something that may or not end up being a a big issue.

I think there's other questions that are reimbursement questions, how these things getting paid? Will people really reimburse for something that again is a -- well, it's just a question of the dollar value per benefit garnered there. Because some of these vaccines may not be that durable and you're ultimately just maybe postponing the inevitable. I mean children reliably get RSV infection. And if they usually rely on a few years of successive RSV infections to sort of build up a certain immunity to it. But if they -- if there's a break in that, maybe it's not sort of a durable one that we're going to be prone to getting these infections anyway.

So I think there's big questions around the efficacy piece of that approach. And once again, one in which I think you would want to still have under any -- even under any vaccine scenario, a robust armamentarium of small molecule there periods. So there's -- I think there's been safety hurdles in that area.

Okay. Great. And then our second question is about NASH, and we are wondering if the CRL that Intercept received and then the subsequent work they're doing to resubmit their NDA, have any impact on your own development plans for an FXR agonist in NASH? And specifically, if you would consider targeting a narrower NASH patient population with advanced fibrosis?

I think we just need to fully understand the situation. I'm not sure anybody really knows -- know all the details around at CRL. For us and for our immediate next steps, they're on a certain path that we've outlined and defined again today. And they're not -- so there's literally no impact of that based on our current ongoing activities.

I think we as a NASH company in part and all other NASH companies should be watching what that CRL meant just to fully understand it. But until we have a lot more granular detail around it, I'm hesitant to sort of recommending course changes at this time.

I will now turn the call back over to Jennifer Viera for closing remarks.

Thank you, everyone, for joining us today. If you have any additional questions, please feel free to give us a call or send me an e-mail. Thanks so much. Have a good night. Buh-bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.