Entera Bio Ltd (ENTX) 2020 Q1 法說會逐字稿

Good morning, and welcome to Entera Bio's conference call to discuss the interim biomarker data from the Phase II clinical trial of EB613 and the financial and operating results from the first quarter of 2020. (Operator Instructions)

I would now like to turn the call over to Jon Lieber, the U.S.-based CFO of Entera. Please go ahead.

Thank you, and welcome to the call. Joining me on today's call are Adam Gridley, our CEO; Phillip Schwartz, our President of R&D; and Arthur Santora, our CMO. A press release announcing the interim data from the first 50% of the patients enrolled in the Phase II clinical trial of EB613 and Entera's financial and operating results for the quarter ended March 31, 2020, was issued earlier today. For those of you who have not yet seen it, it's available on the Investors section of our website, www.enterabio.com.

On our call this morning, we will share with you a business update and review our financial results, which will be followed by a question-and-answer session.

Before we begin our prepared remarks, I would like to remind you that various statements we make during this call about the company's future results of operations and financial position, business strategy and plans and objectives for our future operations are considered forward-looking statements within the meaning of the federal securities laws. Our forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. In particular, our analysis of the interim data from the Phase II clinical trial of EB613 is ongoing, and our conclusions regarding the data are subject to change based on what we may learn in the coming weeks. Furthermore, developments related to the COVID-19 pandemic continue to evolve. And the extent to which the pandemic will impact us in the future will depend upon the duration and magnitude of such impact and on numerous factors that the company may not be able to accurately predict. These risks are described more fully in our SEC filings and are available on the SEC's EDGAR system and our website. We encourage all investors to read our SEC filings.

All of the information we provide on this conference call is provided only as of today, and we undertake no obligation to update any forward-looking statements we make on this call on account of new information, future events or otherwise.

Finally, please be advised that today's call is being recorded and webcast.

I'll now turn the call over to Adam Gridley.

Thank you, Jon, and thanks to everyone for joining the call this morning. Earlier today, we announced the interim 3-month results from the Phase II clinical trial of EB613 in osteoporosis patients along with our results for the first quarter of 2020. Those 3-month P1NP biomarker results for the first 50% of the patients reported this morning showed meaningful and statistically significant increases in P1NP with our highest EB613 1.5 milligram dose at 1 month. We also saw a dose response at 1 month for P1NP and believe that these data may reinforce the biologic activity of EB613.

While we are currently conducting for the analyses and evaluations of the interim data set, we believe that we have not yet reached our maximal dose. In addition, we believe that the upcoming bone mineral density, or BMD, data at 6 months will be very informative and important for further clinical development in advancing a final dose into a Phase III study, which we have targeted for late 2021 or 2022.

We continue to be strong believers in this program, given the totality of the data we have generated to date, particularly with the highest 1.5 dose and the significant unmet market need for an oral therapy that rebuilds bone.

If our preliminary observations stand and we see meaningful BMD data in the coming months from this interim patient population, we plan to study at least 1 higher dose of EB613. The favorable safety profile of EB613 would allow for dosing flexibility with a higher dose. While we're still working through the details, we believe we can shift our resources to focus on amending the protocol for this Phase II trial to obtain bone marker and BMD data with higher dose of EB613 within our current planned spend for 2020. Further details will be provided as we continue our review of such data in the coming months.

For the patients in the interim data set just reported, we plan to collect their 6-month BMD data to determine if there's a meaningful increase in BMD for the patients receiving the 1.5 dose or other trends. We now expect to report this 6-month bone marker and BMD data in the third quarter of 2020. As a reminder, increases with BMD are typically associated with fracture reduction and are now an accepted endpoint for regulatory approval worldwide.

We also continue to believe that there is a clear unmet need in osteoporosis due to the fact that only a small percentage of patients with this disease are actually treated due to cost, convenience and compliance challenges. For example, we recently completed a global market research study indicating that there is strong preference for physicians and patients for an oral alternative to the currently marketed injectable PTH products. If we are able to generate strong relative increases in the bone mineral density endpoints as compared to other products, we believe there may be a substantial market opportunity for EB613, subject to the successful outcome of any potential future clinical trials.

As a reminder, at our last update on March 26, 2020, we announced we had enrolled 98 patients. And as of today, we have 102 patients. And were it not for COVID-19-related delays, we are on track to achieve the objectives that we had set in 2019 to enroll and complete the Phase II clinical trial of EB613 in 2020.

The data we announced today was a planned interim step in advance of the third quarter completion of enrollment and our subsequent plan to report the final bone marker data for all of the 160 patients planned to have been enrolled in this study and the 6-month bone mineral density data.

As we evaluate the BMD and other data from this study, we believe we will have a better understanding of what additional dosing levels we need in order to initiate a potential Phase III study. Our assessment of the data that we shared with you today and the potential proceed to higher doses includes feedback from leading outside clinicians that have designed and conducted osteoporosis clinical trials.

Operationally, we will be carefully monitoring our spending with the goal of continuing to extend our cash runway by prioritizing various activities. With the planned reduction in spending, our current cash is sufficient to support our planned operations into the second quarter of 2021, and we believe this time line may be extended as necessary depending on the outcomes of the upcoming BMD data release in the third quarter of 2020.

We also continue to entertain interest in our underlying technology platform from potential collaborators and partners.

We have continued to make good progress on EB612 for hypoparathyroidism. In our previously published data, we confirmed that oral PTH is effectively delivered into the bloodstream and activates PTH-dependent biological pathways that are inadequately activated in patients with hypoparathyroidism. Phillip will talk a bit more about EB612 later in the call.

In addition to advancing our internal PTH programs, we also continue to support preclinical work on the first molecule covered by our collaborations with Amgen. We're pleased with the progress we have made and are working with Amgen to move the research and development program forward in accordance with Amgen's project plan and objectives.

I'd like to now turn the call over to Dr. Art Santora, our CMO, to discuss the Phase II trial of EB613. Art?

Thanks, Adam. The Phase II clinical trial is a dose-ranging, placebo-controlled trial in female patients with osteoporosis or low BMD and is being conducted at 4 leading medical centers in Israel. Patients were randomized to receive either a placebo or 1 of 3 doses of EB613: 0.5 milligram, 1.0 milligram and 1.5 milligram. We chose these doses based on our prior pharmacokinetic data showing the maximal concentration of PTH in blood, Cmax and area under the concentration time curve, AUC, after a dose of EB613 and believe these doses would encompass the potential optimal dose equivalent to a 20-microgram injection of FORTEO. Total enrollment was targeted at 160 patients with approximately 40 patients in each arm.

As a reminder, this trial was designed to evaluate the effects of EB613 on multiple biochemical markers, including P1NP, a bone formation marker; and CTx, a bone resorption marker at both 3 and 6 months; as well as a standard set of safety assessments.

We are also evaluating the impact of EB613 on bone mineral density, BMD, after 6 months. P1NP serum concentration is an indicator of the rate of new bone formation, and CTx serum concentration is an indicator of the rate of old bone resorption by osteoclasts, the cells that remove old bone.

PTH and analogs are osteoanabolic because they stimulate bone formation, as measured by P1NP, much more than they increase bone resorption, which is measured by CTx. It is the relative difference between bone formation and bone resorption that determines BMD increases, and the balance of modeling and remodeling is an important factor in our consideration for our next steps with this program.

Other endpoints included in this study include additional markers of bone formation and bone resorption and a variety of other measures at 3 and 6 months. The limited interim analysis of changes in P1NP and CTx of the first 50% of the patients at 3 months was part of a trial design and prospectively planned.

Finally, demographics from this trial are consistent with other previously reported trials in the literature. The ability of our investigators to follow their patients has been excellent with 72 of the 80 patients randomized completing month 3 visits even with the COVID-19 restrictions. And there have been no serious product safety-related adverse events or drop backs in the trial.

Overall, our safety profile appears to be favorable and would support higher doses based on the data available today. Our analysis of the data as reported in today's press release indicate that the P1NP biomarker data after 1 month of treatment with EB613 was quite favorable with the 1.5 milligram dose and was not associated with an increase in CTx.

We also saw a dose response at this time point, but it was clear that we had not yet achieved a maximally effective dose.

The biomarker data for both P1NP and CTx, collectively, as well as placebo response at 3 months clearly require additional analyses of all available data by our experts over the coming weeks.

In the third quarter of 2020, we intend to analyze the 6-month BMD data as it becomes available. This data will inform our continued clinical development plans for EB613 and our planned Phase III study design, which we have targeted for 2021 or 2022.

I'll now turn the call over to Dr. Phillip Schwartz, our President of R&D, to share some updates with you on EB612 and our Amgen program.

Thank you very much, Art. Good morning, everyone. I would like to provide you with a brief update on EB612 for the treatment of the orphan disease hypoparathyroidism. As a reminder, our goal is to treat patients' acute symptoms while normalizing serum and urine calcium levels to minimize the long-term effects of supplement use. We believe this would be applicable to patients with different levels of disease severity.

Based on interest from several parties and the announcement of data from other competitive trials in hypoparathyroidism, we recently conducted additional work on EB612, including the identification of formulation enhancements that we believe will provide a strong foundation to advance this program to evaluate its ability to become a first-in-line therapy in a market with significant unmet need.

As part of this work, we have focused on a treatment algorithm that would replace PTH at physiological levels throughout each day to better control both the short-term symptoms and the long-term complications of the disease without the need for subcutaneous injection. As part of this work, we are evaluating the possibility that twice or 3 times daily dosing may mimic endogenous pulsatile PTH activity and, therefore, result in a better PK/PD profile.

If we are able to extend the overall exposure and AUC for each dose, we may be able to increase the calcemic effect while also limiting the risk of hypercalciuria. We believe that a longer tail as measured by AUC may provide more control of supplements in urinary calcium.

Our goal is to finalize those formulations and preclinical work over the next 6 to 9 months and then determine our next clinical development steps to advance this program to a worldwide Phase III trial.

Our collaboration with Amgen for the development of an oral anti-inflammatory agent has continued, and we are pleased with the progress we have made to date. We are continuing to support the collaboration, and Amgen has completed several studies that have included the evaluation of different formulations of their drug. We believe our technology is performing well and that we have been able to rapidly create different formulations with different PK/PD profiles to support Amgen's activities.

We also continue to focus on the development of our platform as it relates to the evaluation of new APIs. Those are new pharmaceutical ingredients, and believe that these efforts may have the potential to generate value through their additional validation of our technology platform and/or through potential business development activity.

I'll now turn over the call to Jon Lieber, our U.S. CFO, to cover the financial results.

Thank you, Phillip. Revenue and cost of revenue for the quarter ended March 31, 2020, were $42,000 and were solely related to the research and development services provided to Amgen. There was no revenue or cost of revenue in the quarter ended March 31, 2019, as the plans for our work to support the collaboration were still in the planning phase with Amgen.

Total operating expenses for the 3 months ended March 31, 2020, were $2.9 million and included $1.6 million in research and development expenses and $1.3 million in general and administrative expenses.

Research and development expense for the quarter ended March 31, 2020, consisted primarily of headcount-related costs, external costs related to the conduct of the EB613 Phase II clinical trial and consulting expenses and fees related to the preparation of an IND application for EB613.

General and administrative expense for the quarter ended March 31, 2020, was primarily made up of salary and related expenses, including share-based compensation, professional fees, D&O insurance expense and legal fees.

Net comprehensive loss was $2.9 million or $0.16 per ordinary share basic and diluted for the quarter ended March 31, 2020. As a reference point, we currently have approximately 18 million primary shares outstanding and 26 million fully diluted shares outstanding.

At March 31, 2020, Entera had cash and cash equivalents of $13.3 million. And in our 6-K that we intend to file today after the U.S. financial markets close, we'll report approximately $11.5 million in cash and cash equivalents as of May 12, 2020.

Based on current operating plans, we expect our 2020 operating loss to be approximately $10 million or less. This is subject, of course, to the expected timing of product development plans, including EB613 and subject to any continuing impact of COVID-19 on our operations. As a result, we currently believe our cash position will fund our operations into the second quarter of 2021.

I'll now turn the call back to Adam for concluding remarks before we go to Q&A.

Thanks, Jon. We appreciate everyone's patience and support as we evaluate the results of the interim data from the EB613 Phase II clinical trial, our upcoming 6-month biomarker and BMD data (technical difficulty) higher-dose arms expected in the coming months.

We have been aggressively managing our financial and human resources with the goal of maintaining financial flexibility during the COVID-19 crisis and plan to continue to do so. We also continue to believe the market opportunity and need for better therapies in a convenient oral format is substantial. This has been supported by recent market research and clinician feedback that such oral forms could be their product of choice for patients with moderate-to-severe osteoporosis.

We also believe our technology platform offers several benefits to potential collaborators that have expressed interest in our underlying synergistic patent-protected combination of protease inhibitors and absorption enhancers to both deliver and protect macromolecules.

We remain committed to opportunistically advancing those programs while protecting our financial resources, with the goal of advancing the Phase III as soon as practicable as we select our final dose.

Operator, please open up the line for questions.

(Operator Instructions) I show our first question comes from the line of Jason McCarthy from Maxim Group.

It's Dave on the line for Jason. (technical difficulty) As you guys make progress with regard to EB613 and EB612, I just wanted to see if you guys planned on onboarding any clinical trial sites in the U.S. or EU?

Dave, great question. Indeed, we do, as we think about the Phase III trial, whether it be for EB613 or EB612. The benefit, of course, of the 505(b)(2) pathway in the case of EB613 is that we can do one Phase III trial based on feedback that we've already gotten from the FDA. We would envision that this would be a global registrational trial. We've noted that we've been in the process of preparing for an IND with the FDA based on all of our previous very positive conversations. And ideally, we'd like to be able to do a trial in the United States and Europe and then also consider opportunities in the Pacific Rim. Given that the regulatory environment is such that you're starting to see greater global cooperation, we'd rather be able to do one trial that would be sufficient for global approval. So indeed, that is part of our plan. Art, of course, has worked in this space for a long time, and we've already been starting to consult with experts in that process.

EB613 (technical difficulty) I just want to make sure I (technical difficulty). With regard to (technical difficulty) I heard this correctly. We can expect a BMD data readout in 3Q '20. And then you guys expect to initiate the Phase III trial in either late 2021 or early 2022. Is that correct?

That's correct, Dave. That's very consistent with the guidance that we had provided previously. Obviously, COVID had an impact initially over the last couple of months. We have actually seen Israel start to return to a more normal cadence. Patients are starting to return back to the hospitals. The hospitals are starting to open up, so that we can get some of the bone mineral density data, which is collected via a DEXA scan. And we anticipate the time lines will hold, where we will be collecting now the (technical difficulty) mineral density data in the third quarter, and that's based on the first 50% of the patients that we reported today. Those patients have largely come into the trial by the early part of 2020, and that takes us out into the third quarter for that.

We also anticipate that we would be completing enrollment with the remaining roughly 60 patients left to come into the study, including those with a higher dose. And then as we follow those patients, we would anticipate that, that data would support initiation of a Phase III trial, potentially as early as late 2021 or early 2022. So our plans are in place. COVID had a moderate impact on enrollment as we disclosed back in March, but we're starting to now come out of that. Patients are starting to screen, and then we'll determine which dose is appropriate to take further in this study.

Great. And then if we could just switch gears here briefly to EB612. Could you just shed some color on what parameters are currently being looked into and if that would be needed to support your continued progress into a Phase IIb or a Phase III?

Sure. Happy to do so, and then I'll turn it over to Phillip. So at a top level, we had reported our Phase II PK and PD data back in the fall of 2019, and that was a direct comparison against the highest doses of NATPARA, which is the only product that has been approved for hypoparathyroidism. Unfortunately, that product is on recall right now. And we are in the process of determining a couple of formulation enhancements, so that we can come up with an ideal profile that may actually treat not only the symptoms, but ultimately the resulting downstream effects of the disease.

Phillip, do you want to comment a little bit more on the planning work that we've been doing and trying to identify the optimal profile that may make this a first-line treatment opportunity?

Yes. Thanks, Adam. Yes, indeed, we're looking at reformulation and the reformulation that we have is not necessarily going to be particularly drastic. We believe that we can lengthen the tail, which is how long the drug lasts in the bloodstream. And that's primarily responsible for the calcemic effects seen with parathyroid hormone or PTH.

Additionally, because of this longer tail, we anticipate or there's a good -- a decent probability that we'll be able to reduce the frequency of dosing, meaning that the dosing for milder patients may be a b.i.d. and the dosing for more severe patients who need to control urinary calcium maybe t.i.d. or 3 times a day.

I just want to remind everyone that hypoparathyroidism is an extremely heterogeneous disease and that it activates and portrays itself very differently for different patients. And therefore, the idea of having all of these different doses available and having the flexibility of changing the frequency and the doses is very, very compatible with the patient profile of hypoparathyroidism and could be very useful in treating these patients.

(Operator Instructions) I show no further questions in the queue. At this time, I'd like to turn the call over to Mr. Adam Gridley, CEO, for closing remarks.

Excellent. Thanks to everyone for taking the time this morning. We appreciate you joining the call. We look forward to providing you with an update on our progress overall and on the company's progress as we move forward. Thanks so much. Have a good day.

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