Entasis Therapeutics Holdings Inc. (ETTX) 2021 Q3 法說會逐字稿

Good day and welcome to the Entasis Therapeutics third quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I will turn the call over to Bruce Mackle, Managing Director with the LifeSci Advisors. Please go ahead, sir.

Thank you, operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under US federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof and the Company undertakes no obligation to update or revise the forward-looking statements. Information presented on this call is contained in the press release we issued this morning, which may be accessed from the Investors page of the Entasis website.

Joining me on today's call from Entasis are Manos Perros, President and Chief Executive Officer; and Mike Gutch, Chief Financial Officer. Manos will provide a brief summary of highlights of the quarter and recent weeks before turning it over to Mike for a review of the financial results. Following their prepared remarks, David Altarac, Chief Medical Officer, and Anna Diaz Triola, Chief Commercial Officer, will join Manos and Mike for our question-and-answer session. I will now turn the call over to Manos.

Thank you, Bruce, and good morning everyone. Thank you for joining us on today's call. We will cover what has been a really exciting quarter for Entasis, with compelling data from our lead program, SUL-DUR, and the prospect of a safe and effective life-saving treatment for seriously ill Acinetobacter patients. This morning, we issued a press release outlining recent other highlights for the period, as well as our third quarter financial results. I'll spend a few moments summarizing some of the most significant pipelines and corporate developments before turning the call over to Mike for a review of our financials, then we will be happy to take your questions.

The major news for the period was of course the positive top line data from the ATTACK Phase 3 trial that evaluated sulbactam-durlobactam, or SUL-DUR, for the treatment of Acinetobacter infections. In this landmark study, SUL-DUR demonstrated efficacy in 28-day all-cause mortality with all analysis assessed to date unequivocally favoring SUL-DUR. In addition, there was a statistically significant difference in clinical cure rates at the end of treatment and a test of cure, also favoring SUL-DUR. SUL-DUR was also generally well-tolerated with fewer drug-related adverse events compared to standard of care and a statistically significant reduction in nephrotoxicity with a P value of 0.0002. This finding is particularly meaningful for patients who are already vulnerable and may suffer from multiple comorbidities, which current standard of care options frequently exacerbate.

SUL-DUR is the first investigational agent to demonstrate efficacy in a well-controlled trial in patients with Acinetobacter, rarely seen combination of efficacy and safety in seriously ill patients suffering from drug-resistant Gram-negative infections. Our data is unequivocal and compelling, as I know many of you have found, in antibacterial field, where in recent years we have seen mostly incremental improvements, this is not by chance. First of all, SUL-DUR was designed and developed to treat Acinetobacter from the drawing boards of our last cohort. Then, with ATTACK, we studied SUL-DUR in critically ill patients with few treatment options. These are the patients who will most benefit from SUL-DUR, if approved.

ATTACK was designed to be the single pivotal study, which will underlie filings to regulatory agencies in the US, Europe, and China. This may be a first in the antibacterial field, but the idea of tailoring a clinical study to provide clear efficacy and safety in the appropriate patient population is not new. The scientific and medical landscape, as well as our own work over the past six years, enabled an antibacterial personalized medicine approach that ensures the right drug to the right patient at the right time. This is an approach that has already made a difference in many other therapeutic areas, like oncology and rare diseases.

In our R&D strategy, we adopt some of the same principles that underlie the success in those areas: careful characterization of the medical need, selection of right molecular target and modality, and the diagnostic to select the patients who will benefit most from our new treatments. It is this unique effort in Entasis over the past six years which led to the successful outcome of the ATTACK trial. With the strong top line results that we disclosed, we have high confidence in the data package that we are assembling for regulatory submissions as well as a highly innovative, focused, and streamlined commercialization approach.

Speaking of which, the data that we disclosed this past week is not only compelling proof of the validity of our scientific approach, it also provides evidence which is becoming the foundation of our commercial strategy. Here's a few numbers from the ATTACK trial that really bring this message home. Approximately, 95% of the Acinetobacter patients enrolled in ATTACK have a carbapenem-resistant infection. Over 30% of those patients had spent more than 14 days in an intensive care unit before they were even enrolled. And when treated with today's standard of care, 32% sadly died within 28 days. And that's despite being enrolled in a well-controlled clinical trial and randomized to the best care one can receive today for an Acinetobacter infection.

It is not surprising that real-world mortality numbers for these patients often exceed 40%, leading the World Health Organization to recognize Acinetobacter as a research and development priority, and the Centers for Disease Control as an urgent antibiotic resistance threat. Acinetobacter is truly a global unmet medical need, which today's treatment options simply are not able to address. Beyond the undeniable impact on patients and their families, Acinetobacter puts a significant burden on the healthcare system. Treating this insidious pathogen also costs time and costs money. Acinetobacter costs time. The patient's length of stay in the hospital is measured in weeks instead of days. Acinetobacter also costs money. The cost per patient can exceed $75,000 in the US.

While Acinetobacter is a rare pathogen, it is found in a variety of sites of care, including large urban hospital ICUs and outpatient specialty centers, such as transplant, cancer, and burn centers. In addition to diverse settings of care, Acinetobacter is also in a variety of body sites, including the lung, the bloodstream, the urinary tract, and wounds. Today, many patients survive cancer or live long and active lives after organ transplantation. These patients are amongst the ones most vulnerable to drug-resistant bacterial infections acquired in the hospital. These tremendous medical advances and the significant resources dedicated to treating these patients should not be undermined by opportunistic infections, such as Acinetobacter, which used to be and could still be treatable with the right antibiotic.

In this tough-to-treat patient population, the robust data in both safety and efficacy make a compelling case for the adoption of SUL-DUR, if approved, as a life-saving medicine. As we complete the analysis of the ATTACK trial data and prepare for submission of a new drug application in mid-2022, we continue to develop and refine our commercialization approach for SUL-DUR. This will be a targeted commercial approach best suited to maximize the value of SUL-DUR by focusing on sites of care where Acinetobacter patients can benefit the most from a potential life-saving option.

Given the unmet medical need and the strength of our Phase 3 clinical data, we believe that, if approved, we can create a different commercial go-to-market strategy that will be pathogen-focused and result in a more streamlined effort. The next steps are focused on building physician awareness, site of care identification and fertilization, patient identification, and payer engagement. These initiatives will enable us to focus our commercialization efforts on the select areas where the burden of Acinetobacter is higher, with the goal of supporting early uptake of SUL-DUR. Equally important, these efforts will highlight this public health concern that is associated with increased morbidity and mortality due to the limited therapeutic options.

Finally, we will continue to solicit physician and payer feedback on the top line results that will further inform our commercialization strategy and support the value proposition of SUL-DUR. These elements are foundational to creating a differentiated commercial approach that is based on the successes and lessons learned in this space and from other product launches focused on rare, life-threatening diseases. To meet this rapidly developing effort, and our transition to a commercial stage company, in the past quarter we welcomed Anna Diaz Triola as our new Chief Commercial Officer. Anna comes to us from Summit Therapeutics, where she was instrumental in developing the commercial strategy for the Company's first product. With her track record of commercializing products across multiple therapeutic areas, including chronic, rare, and [now infective] products, we are delighted to have her spearheading our efforts to build the commercialization capabilities needed to bring SUL-DUR to market and to complement our R&D platform.

Before turning the call over to Mike, I'd like to say a few more words about the progress we made in the rest of the pipeline. With regards to zoliflodacin, we are pleased with the improving enrollment in the past quarter. In partnership with GARDP, we're continuing enrollment in the global Phase 3 trial in patients with gonorrhea, with clinical trial sites in the US, Europe, Asia, and Africa enrolling actively.

In addition, we are continuing development of our earlier pipeline products, with support from our partners, CARB-X and the NIH. From these efforts, I would like to highlight the introduction of a new first-in-class candidate, ETX0462. This is a novel diazabicyclooctane with antimicrobial activity against multiple Gram-negative pathogens, including Pseudomonas aeruginosa, as well as several high-priority biothreat pathogens. The discovery story of ETX0462 and the many scientific advances that underlie our rational design of novel antibiotics were recently published in the prestigious journal, Nature. This is a significant recognition of the work of our scientists and external validation of the quality of our R&D platform.

With that, I'll turn it over to Mike for a review of our financial results. Mike?

Thank you, Manos. During our third quarter, we reported a net loss of $12.4 million compared to a net loss of $11.1 million for the same period of the prior year. The increase in net loss was primarily related to an increase in general and administrative expenses as the Company initiated select pre-commercialization activities. Research and development expenses for the third quarter were $9.3 million compared to $9.4 million in the same period of the prior year. The decrease of $0.1 million was primarily due to a decrease of $0.5 million in expenses related to SUL-DUR and a decrease of $0.2 million in expenses related to our ETX0462 program, partially offset by an increase of $0.6 million in personnel expenses.

General and administrative expenses were $4.3 million for the third quarter compared to $3.2 million during the same period of the prior year. The increase of $1.1 million was driven primarily by increases of $0.3 million in legal costs, $0.3 million in personnel costs, $0.2 million in consulting costs, and $0.1 million in insurance-related costs. As of September 30, 2021, cash and cash equivalents were $44.1 million compared to $53.2 million as of December 30, 2020. Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the second quarter of 2022.

With that, Manos, back to you for closing remarks.

Thank you, Mike. The past quarter has set in motion a series of firsts for Entasis. We completed the Phase 3 trial of SUL-DUR, our first product candidate, setting the foundations of our first regulatory submissions for a product that could become the first potential treatment for patients with Acinetobacter. At the same time, our R&D organization continues to produce world-class science. The talented team, that I have the privilege to lead, is committed to translating our accomplishments into value for our shareholders. And looking beyond the many numbers that we shared with you today, we recognize that our work is ultimately about patients, and we are proud to bring these future life-saving treatments to all patients who need them.

Operator, we are ready to take questions.

(Operator Instructions) Louise Chen, Cantor.

This is Carvey in for Louise. We have a couple of questions here. So following the positive top line data for Phase 3 SUL-DUR for this quarter, when can we expect a full analysis of the study? There's subgroups that are most interested in under our study. Second, you have guided mid-2022 for SUL-DUR NDA submission. So just want to get a deeper understanding of the task at hand in preparation for the NDA. Perhaps, talk a little bit about some of the contingency factors that might sway your timeline.

I will turn it over to David to address both your questions -- David, our Chief Medical Officer. But before I do that, just repeat something that we mentioned on our webinar a couple of weeks ago when we announced the data, it is a fairly comprehensive set of top line data from a Phase 3 trial. While we do expect, as you pointed out, additional cuts of the data and additional analysis, we see the data that we presented from the top line analysis as pretty definitive when it comes to the key endpoints, that both relevant for regulatory approval and, as I mentioned earlier, for the factors that will set the foundations of our commercialization. But, David, over to you.

Yes. Thanks, Manos. As Manos just mentioned, when we identified what we would include in the top line data, it was important to ensure that we effectively communicated the critical endpoints, the critical analyses of the study. And to that end, we reported out, obviously the 28-day all-cause mortality. The other very important clinical endpoint, which was clinical cure, as well as the critical safety data, including the overall adverse event profile and the nephrotoxicity. And as you've seen, all were highly, highly indicative of an advantage for SUL-DUR compared to the comparator.

In terms of when we have additional data, we are in the process of currently evaluating that data. We obviously will report that when we have the opportunity to look at the totality of the data, but we are currently evaluating all of that. And to the specific point of the specific question, there are a couple of other endpoints that we think will be informative but will not meaningfully change our conclusions or everyone's conclusions based on the data that we reported. So we'll be looking at some microbiologic outcomes, we'll be evaluating some pharmacokinetics. There'll be some data around how long patients were treated, compliance to that treatment regimen, obviously more specifics on the safety. We reported overall safety, but we'll have more specifics on comparisons between the two treatment groups in the safety database.

And then to your specific question around subgroup analyses, we have a bunch of subgroup analyses that we'll be looking at, including breakdown by things such as age, gender, underlying condition, i.e., pneumonia versus bloodstream infection, whether the patient had a mono-microbic infection or polymicrobial infection, the region of care, their underlying condition, as well as a variety of other things. And so we'll be able to report those out again after our full analysis.

As for your second question, Carvey, which is the timeline of the FDA submission, we've guided, as you pointed out, to mid-2022. We have a pre-NDA with the FDA. Of course, once we complete the data analysis, (technical difficulty). Again, we are pretty confident of the timeline. We're not expecting to derail that. But until we have a discussion with the FDA and confirm with them that the patents that we have is (technical difficulty), obviously, we'll update with any changes after that.

Jim Molloy, AGP.

I had a quick question on -- I figured with fast track and QIDP designation, I think the expectation is for potentially a priority review. When would you expect to know should you get that and if you'll get that? And then can you talk a little bit about -- again, assuming you get a good review and approval, a little more detail potentially on the US sales team for the size, the call points and the status of bringing them on board.

I would take the first question, and then I'll hand it over to Anna Diaz Triola to answer -- to give you an outline of our forward-looking thoughts on commercial build. In terms of the product and submission review timeline, you are absolutely correct; we are a QIDP product. We have fast track review. We do expect -- as you know, I think the clock is six months plus two months for review. We're not guiding on approval or on launch, but you can run your own numbers. After that, as you pointed out, we're looking to launch the product as close as possible to approval. We've been making the necessary investments on both the manufacturing side, and then with Anna joining us last quarter, we're starting to prepare for the commercial launch. So, Anna, do you want to give Jim a little bit of an overview of how you see things develop over the next few months?

Sure. Yes, good morning. Happy to. So with the top line results really supporting the commercial strategy, I think we can now begin to reimagine a new go-to-market approach. So our strategy will focus on this rare pathogen and on healthcare organizations where we know Acinetobacter is a problem today and where SUL-DUR can potentially save lives, as we see in the top line data.

Based on our current analysis, there are approximately 500 healthcare organizations where Acinetobacter is a problem. So this is great because it allows us to really focus on these sites of care that have limited treatment options, and as a result see the unintended consequences of increased hospital length of stay, increased cost per patient, and increased mortality rates.

Furthermore, I think this also allows us to be very focused and streamlined in building the commercial team. The sales force ramp will be informed by the NDA submission and the anticipated approval date of SUL-DUR thereafter. But by focusing on this rare pathogen, we believe that you do not need a very large sales force to address this opportunity. So our intention is to build a leaner commercial footprint with associated infrastructure that allows us to really maximize the value of SUL-DUR, and we think a company like ours can be very successful in addressing the unmet need of treating patients with Acinetobacter.

Manos, I'll turn it back over to you.

Thanks, Anna. Jim, hopefully we best answered your questions.

Yes, thank you. I was hoping for -- you might have an idea of the number on the sales force. And then also can you talk a little bit about the EU timeline? I know you've publicly stated you're anticipating a partner in the EU and thinking on the timeline for EU filing and a potential approval there vis-à-vis the US and potential partner signing timeline, please.

Okay. Absolutely. I'll turn it over to Mike to speak about partnering strategy. As you pointed out, we were looking for a partner for European launch and we do have a partner in Asia-Pacific with Zai Lab. As you know, we found a study in China as part of a global trial, which should lead to a relatively short timeline for the Chinese regulatory submissions. This of course is the responsibility of our partner, Zai Lab, and our priority as a company is of course US business. A company our size, it can most likely make the biggest difference. And for Europe, we'll look for partnerships.

Mike, can you give Jim a little bit of an outline of our strategy there?

Yes, happy to do that. This is Mike. I think as we've discussed previously, and as you're aware, multi-drug-resistant Acinetobacter is a global health issue, and there are significant patients in need not only in Europe, as you mentioned, but also in Russia, the Middle East, and Israel, and South America. So our objective is to try to make sure that we provide access to SUL-DUR to all of these patients in need to maximize the value of SUL-DUR. So not only are we in discussions to try to find a partner for Europe but, ideally, we would like to find a partner -- a global partner outside the US to bring SUL-DUR to all of these patients in need. Obviously, I can't comment on any ongoing discussions at this time, but we'll certainly update when appropriate.

Ed Arce, H.C. Wainwright.

This is Thomas Yip asking a couple of questions for Ed. First, congratulations again on the positive ATTACK data. Perhaps kind of switching focus to earlier programs, first question for 0462, can you tell us when should we expect a first clinical study for the program, and perhaps some initial thoughts on what first-in-human study would look like?

Good morning, Thomas, and thank you for your kind words. We're obviously very pleased with the ATTACK top line data, and we're very excited about ETX0462. As I mentioned earlier, this is a candidate we just introduced. We had the publication in Nature, which pretty much summarizes the status of the program, where it stands today. So it's still preclinical. We still have the IND-enabling work to perform. And when we have a better idea of the exact timeline of the completion and the clinical strategy, we will certainly guide to that, but we're unable to do so at this point.

However, to give you a flavor of what the first clinical study might look like, you can look back at what we've done with our existing programs, SUL-DUR and zoliflodacin. And for both of these, we had a very thorough evaluation of the program preclinically, and then in Phase 1 to establish both the pharmacokinetic, pharmacodynamic relationships and exposures at the right body sites before proceeding to a patient study. And it is likely that we will follow a similar approach with ETX0462. We believe that that methodical approach is best able to provide data for regulatory submission and review and to inform the design and the conduct of the Phase 2 and Phase 3 trials.

Okay. Thank you, that makes sense. Speaking of zoliflodacin, can you tell us what are your goals and anticipations for the program in the next coming year, 2022?

Yes, absolutely. As you know, this is a program that we are developing in partnership with GARDP, and GARDP has deployed their resources and funding to conduct a trial in four continents, and we have sites at each of those locations now enrolling actively. As you recall, this is a product that we developed for gonorrhea. Gonorrhea is a high medical need due to resistance, and we have a product that works against both drug sets, even drug-resistant gonorrhea (technical difficulty), but gonorrhea is rarely lethal, and so we had slower anticipated enrollment due to COVID. As you may recall, we had suspended enrollment for about a quarter at the start of the pandemic in 2020.

And things have been progressing, I would say, more slowly than either our partners, GARDP, or as we hoped. As a result of that, we are unable to provide time guidance on this trial at this point. We will do so if we have -- when we're closer to completion as we were for SUL-DUR. COVID remains unpredictable as you know, but we are seeing improved enrollment across a number of geographies, and we are confident that this product will be developed in a relatively short timeline. We'll provide you a better more time -- more accurate guidance, once again, as soon as we have numbers, which we're feeling more confident about given the ongoing pandemic.

The hope is of course that the results are going to be every bit as exciting as the results for SUL-DUR and that we can build on those to underlie a commercial launch and take this product to the patients around the globe. And with GARDP, we are -- we kind of pre-empted Jim's question on how will we get this registered. That's right, because GARDP has a number of territories in developing world countries that they will take the lead for distribution and we, of course, have at this point the developed markets, including US and Europe.

Understood. Thank you for taking our questions, and we look forward to SUL-DUR's NDA filing.

Operator

(Operator Instructions) Robert Driscoll, Wedbush Securities.

Just wondered if you could expand upon patient identification for SUL-DUR, and the work that you might be doing on that front going forward here?

And absolutely, we will. I will turn it over to Anna, who, as I mentioned, has a background both in infectious diseases but also in rare diseases. Anna, do you want to take Robert's question?

Yes, of course. So patient identification really is pulling from the rare disease part of the spectrum in terms of really trying to hone targets and prioritize sites of care. Currently, we're underway, actively preparing for commercialization, and patient identification is a key part of understanding where does this pathogen live today, what are the risk factors that we need to be aware of for it to emerge in the future. So patient identification is important in rare diseases as it is here, as we follow the rare pathogen, Acinetobacter, and that really blends in with the other initiatives that are also in progress around focusing on physician and site of care identification and prioritization.

So as you know, there is no specific code for Acinetobacter, and we're currently underway with triangulating around the opportunity by considering uptake of other novel branded agents in the past, so a historical reference, as well as understanding sites of care where nosocomial infections are today or have the potential of emerging quickly. And then within that, patients that demonstrate Acinetobacter-like or indeed Acinetobacter infections. Together with physician site identification, prioritization, and patient identification, these are the tools that we will need to be more focused and streamlined when we build the rest of the commercial team to really home in on areas where Acinetobacter is a problem and where SUL-DUR can potentially save lives. Did that answer your question?

Thank you very much. Yes, absolutely.

(Operator Instructions) And with this, there are no further questions in the queue. I would like to hand the call back over to Manos for any additional or closing remarks.

Thank you, operator. Just a couple of more minutes with a few thoughts on the past quarter and on the quarters to come. Because SUL-DUR ATTACK is now pretty much behind us, we are looking at the last sets of data and analyzing the last cohorts, cohort certifications, but the data from this trial is very much still ahead of us. Really excited to be using it, as Anna pointed out, to understand where we can make the biggest difference for patients and to understand where we can create the greatest value for our shareholders as we build the commercialization effort in the US.

A lot of work ahead of us, of course, with the NDA filing and hopefully subsequent approval in a relatively brief timeline, which we're gearing up for, and continued excitement for our pipeline, with zoliflodacin also in Phase 3, coming in hopefully close behind with more guidance on that in the coming months and the rest of our pipeline with earlier programs, including ETX0462 now moving towards IND.

We're very delighted to be able to share the news with you. We're excited about the future as we transition from an R&D organization with a pipeline to an R&D and commercial organization taking our first product to patients. Thank you all for participating in this morning's call, and look forward to reconnecting next quarter.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.