F-Star Therapeutics Inc (FSTX) 2018 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Spring Bank March 11, 2019 Conference Call. (Operator Instructions) As a reminder, this conference may be recorded.

I would like to now introduce the host -- your host for this conference call, Jon Freve, Chief Financial Officer of Spring Bank. Please go ahead, sir.

Good morning, everyone. Welcome to the Spring Bank Pharmaceuticals Fourth Quarter and Full Year 2018 Financial Results and Corporate Update Conference Call. Joining me on this call from Spring Bank management team is Marty Driscoll, our President and Chief Executive Officer. Prepared remarks will be followed by a question-and-answer session. Before I turn the call over to Marty, let me remind you that today's call will contain statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The words anticipate, could, plan, potential, expect, will and other words denoting future events identify statements as forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those disclosed in our press release this morning as well as those disclosed in the risk factor section of our Form 10-K as filed today with the SEC and other SEC reports.

In addition, any forward-looking statements represent our views only as of today, March 11, 2019 and should not be relied upon as representing our views as of any subsequent date.

And now I would like to turn the call over to Marty Driscoll, the CEO of Spring Bank. Marty?

Thank you, John, and good morning, everybody, and thank you for joining us this morning. I believe many of you know that we had a very active and highly productive 2018, and we're looking forward to a similar milestone-filled 2019.

Our efforts in 2018 were highlighted by the continued advancement of our global inarigivir clinical development program for the treatment of chronic hepatitis B. Data from our global Phase II ACHIEVE trial and other development efforts continue to demonstrate to us that inarigivir has the potential to be a simple, safe and selective oral treatment to elevate functional cure rates for patients with chronic HBV as a backbone therapy in combination treatment strategies.

We recently completed the final cohort of our ACHIEVE dose escalation trial, involving the 200 milligram dosing of inarigivir. And we are pleased to announce that a late-breaker abstract describing the top line data from this cohort and the entire study has been accepted for oral presentation at the general session at the EASL International Liver Congress 2019 in Vienna that will take place in mid-April.

In anticipation of our combination therapy approach, a poster presentation involving inarigivir will also be presented at EASL, describing the impressive activity of inarigivir against capsid inhibitor resistant and NUC resistant HBV variance from clinical isolates. This study was conducted by Professor Stephen Locarnini, a preeminent virologist and the principal investigator of the virology core for our ACHIEVE trial.

As you can see, the upcoming EASL International Liver Congress in mid-April will be a busy one for inarigivir and for our company, Spring Bank.

In the first half of this year, we are launching 2 major global Phase IIb trials that we have named CATALYST 1 and CATALYST 2. In fact, we're in the process of launching CATALYST 2 as we speak. These 2 trials will examine the use of the 400-milligram dose of inarigivir as monotherapy and co-administered with a NUC in naïve and virally suppressed chronic HBV patients. There is the potential that we could observe functional cure in some patients in these trials.

As we described at our Spring Bank R&D day back in December, the CATALYST 2 trial includes 2 cohorts of patients who are noncirrhotic virally suppressed. The first cohort of 20 patients will be our Stop and Shock study, whereby we will examine the use of inarigivir dosed once daily for 24 weeks following the cessation of the patients NUC therapy. The endpoints for this cohort include ALT flare and surface antigen reduction and loss with the specialized intra-hepatic virology and immunology assessment using fine needle aspirations.

The second cohort of CATALYST 2 will seek to randomize 40 virally suppressed chronic HBV patients in a response-guided study. The second cohort will be our Suppress and Shock study, whereby patients will continue their NUC treatment and receive a co-administration of inarigivir once daily for 24 weeks and 48 weeks. The key endpoints for the trial will be surface antigen reduction and loss with a specialized intra-hepatic virology and immunology assessment using fine needle aspirations. The results from CATALYST 2 will be instrumental in the design of our pivotal trial for inarigivir in NUC suppressed patients and determine the clinical characteristics of the optimal formulation for either a Stop & Shock or a Suppress & Shock Phase III or pivotal strategy.

We will be conducting the CATALYST trial, number 2 trial in 2 countries. I'm pleased to report that we've already filed the first clinical trial application or CTA in one of these countries for this study, and we expect to file a second CTA in the second country for this study before the end of this month. If these regulatory applications proceed as we hope, we expect to begin randomization of the patients for the CATALYST 2 trial in the next few months.

CATALYST number 1 will involve 60 treatment naïve non-cirrhotic HBV patients randomized to 3 cohorts. The first cohort of 20 patients will involve inarigivir monotherapy dosed once daily for 12 weeks, followed by the coadministration with Gilead Sciences Vemlidy or tenofovir alafenamide, sometimes also called TAF; 25 milligrams for 12 weeks.

The second cohort of 20 patients will involve the use of inarigivir dosed 3 times weekly for 12 weeks, followed by the co-administration with Vemlidy for an additional 12 weeks.

The third cohort in CATALYST 1 will involve 20 patients, who will receive inarigivir dosed once daily 400 milligrams, co-administered with Vemlidy for 24 weeks.

The 3 defined responder patients from all cohorts at 24 weeks will continue the co-administration of inarigivir and Vemlidy for an additional 24 weeks. We're fortunate that Gilead has agreed to supply the Vemlidy to us for this trial, thereby relieving Spring Bank of some of the drug supply cost burden for this study.

The endpoints for CATALYST 1 are HBV DNA and RNA reduction, e antigen loss and surface antigen reduction or loss. We could have top line data from a couple of the CATALYST 1 cohorts by early 2020. Together with data from the ongoing Gilead trial that is examining multiple doses of inarigivir, co-administered with Vemlidy for 12 weeks in treatment naïve chronic HBV patients, we could have sufficient data early in 2020 to inform our Phase III program for treatment naïve patients, particularly involving the advancement of SB 9225, which is our fixed dose combination of inarigivir and tenofovir disoproxil fumarate or the generic version of Viread.

We will conduct the CATALYST 1 trial in multiple countries including the United States. We will file our regulatory applications for this trial in the -- early in the second and through this third quarters of this year. We have recently completed positive pre-IND discussions with the FDA regarding inarigivir related to the CATALYST 1 trial, and it is our plan to file our first IND for inarigivir in the middle of this year. If we continue to execute on our clinical development and operations effort for the CATALYST trials, we should be in a position to deliver multiple data readouts from these trials throughout 2021 and continuing into the early part of 2021.

As we disclosed last year, we expanded our HBV clinical trial collaboration with Gilead to include the study of inarigivir 200-milligrams dosed once daily with Vemlidy in treatment naïve HBV patients and inarigivir 100-milligrams dosed once daily co-administered with a NUC in virally suppressed HBV patients. With this expansion, Gilead is currently studying the co-administration of inarigivir 50-milligrams with Vemlidy and 200-milligrams co-administered with Vemlidy in treatment naïve HBV patients and inarigivir 100-milligrams plus a NUC in virally suppressed HBV patients.

Gilead is executing and funding the multiple cohorts of this trial, providing to us what essentially equates into a sizable sum of nondilutive capital, since we are relieved that the cost burden to conduct these important examinations of the once daily 12-week dosing of multiple doses of inarigivir, co-administered with NUC in treatment naïve and virally suppressed chronic HBV patients. We highly value our HBV clinical trial collaboration partnership with the Gilead HBV team. Although we do not control the release of data from this ongoing Gilead-sponsored study, we anticipate data from this trial could be presented at a major scientific conference later this year.

A few minutes ago I mentioned SB 9225, our fixed dose combination of inarigivir and TDF, or tenofovir disoproxil fumarate. We recently completed a successful manufacturing campaign, involving an initial quantity of SB 9225 tablets. Dependent on the data generated from the CATALYST 1 trial plus Gilead's inarigivir co-administration -- co-administered with Vemlidy studies, we will progress the SB 9225 development effort this year to be ready to enter a Phase III program with the compound in 2020. We just launched a liver biopsy study, involving the use of 400-milligrams inarigivir for a 6-week dosing period in treatment naïve patients. This innovative compelling trial will seek to examine the intra-hepatic immunological profile of inarigivir. If we continue to progress on schedule with this trial implementation, we could be in a position to present preliminary results from this study at a major scientific conference in the second half of this year.

Many experts in the field of viral hepatic infectious diseases believe, as we do, that in order for functional cure rates to substantially elevate for patients suffering from chronic HBV, the hepatic immune system down-regulated by the virus must be reactivated. We believe that inarigivir, the only orally available hepatic-selective immunomodulator, has the potential to become a backbone in the combinatorial treatment of HBV. Since the chronic HBV patient population is quite heterogeneous, we don't believe a one size fits all strategy will be appropriate in the effort to substantially elevate functional cure rates for a broad slot of HBV patients. Rather we believe combinatorial treatment modalities will be tailored for certain differing patient demographics and clinical needs. However, we do believe that an effective immunomodulatory agent will be required at the core of most, if not all, of these combinatorial treatment modalities. An important pillar of our inarigivir development strategy is establishing this concept that inarigivir could be a backbone to the varying combinatorial strategies in the future treatment of chronic HBV. Of course, we have initiated the first phase of this effort by focusing on the co-administration of inarigivir with the current of standard of care, the NUC. This is the work that Gilead has been doing and we will continue with our CATALYST trials.

We are now exploring triple drug combination strategies, involving the use of inarigivir with complementary mechanisms of action for optimizing functional cure rates. I'm pleased to tell you that we're pursuing this strategy by advancing deeply into discussions related to new clinical trial collaborations with other investigational HBV compounds that have differing mechanisms of action, including capsid inhibitors and the siRNA compounds.

We strongly believe that we could enter into at least one additional HBV clinical trial collaboration in the coming months, such that inarigivir, together with a NUC, could be engaged in a triplet treatment study just before the end of this year. While the inarigivir and SB 9225 HBV clinical developments are alone exciting for our company, we have also been busy progressing our lead immuno-oncology development candidate from our next-generation STING agonist platform. That product development candidate is SB 11285.

We advanced our IND-enabling program for SB 11285 in the latter half of 2018, and we are in the process right now of conducting pre-IND strategy discussions with the FDA for the initial clinical development plan of the intravenous form of SB 11285.

Our current plan, dependent on the discussions with the FDA, is to submit an IND for the IV formulation of 11285 in the second quarter of this year. And if we proceed as planned, we should be able to initiate the first clinical trial for an intravenously administered STING agonist in the middle of this year.

Giving you our timelines, we could also be in a position to have generated phase Ib data for SB 11285 by the end of this year or early in the new year 2020.

Throughout the year 2019, we will also continue to progress the development of our investigational antibody drug conjugate, or ADCs, linked with our STING agonist from a platform of analogs we have. This ADC program is advancing, and we're optimistic we will have candidates that we can take perhaps into IND-enabling toxicology over the next year.

We're also exploring additional delivery methods for SB 11285 as well as other compounds from our STING agonist platform, including a nanoparticle formulation.

In August of 2018, as many of you know, we raised approximately $41 million in gross proceeds from a public offering of our common stock. The proceeds from this offering together with the significant cost relief, which essentially equates to non-dilutive capital, associated with the Gilead-sponsored inarigivir plus Vemlidy trial, allows us to fund our company for a lengthy period of time, during which, we expect to generate multiple data readouts from our inarigivir HBV clinical development program, including the Gilead sponsored study and our SB 11285 STING agonist phase Ib/II program.

As our press release issued just prior to this call will detail for you, we ended 2018 with $64 million in cash and we expect to burn an average of $6 million to $8 million per quarter under our current plans. We will continue to be efficient with our shareholders capital as we execute on the advancement of inarigivir, SB 11285 and our early R&D programs. It's important to note that during the use of proceeds period, if you will, with our $54 million in cash, we have multiple data readouts beginning later this year through 2020, which we are highly optimistic can be catalyst for our company's valuation.

I thank you for listening to my remarks. And with this, I'll now turn it over to John.

Thank you, Marty. Now I'd like to review our financials as of December 31, 2018. Our cash, cash equivalents and marketable securities were $64.4 million as of December 31, 2018 compared to $50.6 million at December 31, 2017.

As Marty alluded to, we anticipate that this balance will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2021.

Net cash used in operating activities for the 12 months ended December 31, 2018, was $25.2 million compared to $17.7 million for the same period in 2017.

Total operating expenses for the 3 months ended December 31, 2018, were $6.6 million, consisting of $4.6 million of R&D and $2 million of G&A compared to $6.3 million during the same period in 2017, which consisted of $3.9 million of R&D and $2.4 million of G&A.

The company's net loss for the 3 months ended December 31, 2018, was $5.4 million or $0.33 per -- net loss per share basic and $0.37 net loss per share diluted, respectively, compared to a net loss of $1.5 million for the 3 months ended December 31, 2017, or $0.11 net loss per share basic and diluted.

And now, I'd like to turn the call back to Marty.

So ladies and gentlemen, thank you for hearing us this morning in our remarks. I think I'd now like to open it up to the Q&A. And Maury Raycroft, you win the lottery. You were the first in line this morning, so if you still would like to ask the question, Maury, I will turn it over to you.

Our first question comes from the line of Maury Raycroft with Jefferies.

Congrats on getting the late breaker accepted at EASL. I am definitely looking forward to the data there. I don't know how willing you are to help set the stage for the update there, but if you can provide any more details as to what to expect? And particularly, whether you're seeing a dose response or if you're plateauing with the 200-mg dose? And then if you can just remind how the data from ACHIEVE read into the 400-mg CATALYST dose?

Sure. So Maury, you know that we reported the primary endpoints of safety dose-dependent anti-viral efficacy for both HBV DNA and RNA at the [earlier,] that's this 25, 50 and 100. The DSMB, the Data Safety Monitoring Board for the trial met in early December to review the safety and tolerability, which they did at the latter stage of each 12-week inarigivir dosing period of these cohort. And there were no tolerability or safety issues. Indeed, the tolerability, once again, was quite impressive at the 200-milligram dose. However, the last patient -- last dose of the 24-week dosing period only occurred a few weeks ago. Full analysis of both the primary and the secondary endpoints actually is still going on. We don't know the data. And so I can't give you any insights into the data. And moreover, we wouldn't want to undermine the principal investigator who'll be presenting the full data at the general session at the EASL. So unfortunately, I can't give you the insights this morning.

Got it, that's fine. Another question on ACHIEVE. I'm just wondering if there's any update on perspective with baseline biomarker trends with IP-10 in ex antigen. And how -- if those could influence the patient type you enroll into the CATALYST studies?

Yes. So I don't know, we don't know the data on serum IP-10 baseline levels, but that is the part of the analysis for 200-milligram dose as well. So we will have that, and it will be highly informative for the 400-milligram dose in both CATALYST trials and other work that we'll be doing. I can tell you that we're excited about data from the 400-milligram dose from a healthy volunteers study that we conducted in the fourth quarter of last year. We did a classic drug, drug interaction study, it's part of your -- frankly part of your regulatory efforts. This will all be part of our filings to look at potential drug, drug interactions. This was dosed in healthy volunteers. The 400-milligram dose was used for the first time in these healthy volunteers. And we're impressed with evidence -- good evidence of innate immune activation. The 400-milligram dose had a favorable profile on the activation of innate immunity in PBMC from these patients, without excess peripheral cytokine production. There were lack of any safety or tolerability issues with the earlier doses is one of the reasons that we're so excited about pursuing the 400-milligram dose. So to be clear on your question, we will have serum IP-10 from the final cohort. All of this information including this interesting immune -- innate immune activation data from the 400-milligram dose in healthy volunteers is one of the reasons it's informing us on the excitement for the study of 400-milligram dose. And as we do this work in addition with the fine needle aspirations that we're conducting in the CATALYST trials, as well as the liver biopsy study we think we will be able to fashion a good picture for patient stratification and optimizing responder rates.

Got it. That's helpful. And just out of curiosity, with that innate immune response you're seeing and you mentioned before that in lot of patients that you treat you get immune flare up. Is that a dose response as well where you see more of that at the higher doses? Or do you see it in more patients at the higher doses?

Don't know that. Because again, we're -- when we did our drug, drug interaction study, we're studying this 400-milligram dose. Again, the principal basis for this study was to look at metabolic pathways, particularly to the liver; the drug, drug interactions, if there were any, and -- but we took PBMCs from these patients, these healthy volunteers who would receive the 400-milligram dose. So it was just the 400-milligram dose. And again, we'll be presenting these data in the coming weeks, and it's evidence of the innate immune activation. Again, without excess peripheral cytokine production.

Got it. And just one last quick question, just a clarification, I may have missed this in your prepared remarks. But for the liver biopsy study, so you're going to do the liver aspirates from the CATALYST study, but then in the press release, you've got the separate liver biopsy study which is going to be the single center. Where are those patients coming from? What dose are they going to get? And maybe can you just talk more about that study?

Yes, sure. So this study is being conducted in Singapore. It's been conducted with a globally known hepatologist, and the laboratory work is being Bertoletti and his team in at a Duke-associated immunology lab, highly respected in Singapore. Patients -- these are treatment-naïve patients. They will be randomized into 1 of 2 dosing cohorts. The 1 cohort, they will receive 400 milligrams inarigivir once daily for 6 weeks. The other cohort of patients will receive 400 milligrams, 3 times a week inarigivir for 6 weeks. There's a baseline liver biopsy conducted. And then at the end of treatment 6 weeks, there will be a liver biopsy conducted in a full intra-hepatic immunological and virological panels will be conducted with those data. The study is launching as we speak. We're optimistic that we could be screening patients here in the next few weeks. If that should occur, as Ned has said to me several times, we could be disclosing patients -- or data on some of the patients in this trial in the latter half of this year.

(Operator Instructions) Our next question comes from the line of Katherine Xu with William Blair.

So can you just elaborate again why the TIW -- the 3 times a week dosing, just a little bit reminder of that. And then the other thing I wonder whether you have guys done any experiment on the synergies between inarigivir and other agents, in particular RNAi and cPAM, which one it actually synergizes better with? I'm curious about that and whether there's any data there are or any just theoretical comment might be helpful as well? And also, a while ago, I think there was thinking that there's the possibility of combining inarigivir with Gilead TLR-8 agonist as well. That one is producing Phase II data, as well as just curios whether there is any thoughts along that line? And then lastly -- thank you for indulging me. The -- do you expect any single antigen activity of SB 11285. We haven't seen much single-agent activity of STING agonist so far from the intratumoral injection routes. I'm curious, with the IV -- with an IV agent, whether you're expecting any difference there?

Okay, Katherine. Can I ask you to repeat the first question. I got all -- I got the 2 or 3 others. What's you first one again?

So just, why the...

Oh, the 3 times a week -- I'm sorry, the 3 times a week, yes. So Ned -- all of you know Ned Afdhal, of course. By the way, Ned is flying back from London. He is returning from the end points conference, another major conference that occurred in London over the weekend between EMA, FDA and industry. Looking forward to talk to him about the results of that. Ned has a desire to study the 3 times a week as a comparison to once daily dosing, to see if there is -- I think he would term it as an immunological half-life that could be perhaps different from a pharmacological half-life, i.e. at the dosing of the 400 milligrams, are you inducing immune acquisition that is sufficiently effective at 3 times a week as compared to once a week. That's essentially what it is. And he wants to study that in the CATALYST 1 trial. And that's what is, again, is simply a curiosity about every other day dosing if you will versus once a day dosing to see if by activating the immune system, you have similar efficacy over time as you might with once a day dosing. In terms of combinatorial strategies, no, we don't have data comparing inarigivir plus a capsid versus what it might do with an siRNA. I can tell you that work is going on in those fields at this time, but we have no data to share this time with you, Katherine, about any comparative data that we might be able to present to you today. We're optimistic, as I said in my prepared remarks, that we could be in the clinical before the end of the year with one, perhaps both of those treatment modalities, accepted in separate trials. Our discussions are going very well and we think we could be doing that. Regarding the Gilead TLR-8, I don't have anything to report on that. We have a deep and wonderful collaboration with the Gilead HBV folks and certainly -- I guess you know something and I believe they may be revealing data here over the next year, but I don't have anything to report on that. I think still they need to disclose their Phase II data with the TLR-8 at this time. But we're certainly open to that. We want to continue to explore different treatment modalities with them. The relationship is excellent. Regarding SB 11285, I guess we have a little different view perhaps view on the data reported by Merck and more importantly by Aduro late last year in terms of the data. We're actually encouraged by the clinical data presented for these earlier generation STING agonist compounds. You know they were delivered by the intratumoral route, obviously? But clearly, particularly in the case of Aduro's data, it shows that when given by the intratumoral route, the STING agonist clearly shows target engagement and up-regulation of immunity. We also took other very positive insights from the data presented by both companies. They showed a good safety profile, even at doses as high as 3 grams, and there was evidence of a partial response, even with the monotherapy. So we think the Adural and the Merck data validate the continued development of STING agonist for combination therapies. I don't think anyone in the field is asserting that STING agonist will be given as monotherapy. We certainly don't believe that's the case. And it's clear that both Merck and Novartis are pursuing in Phase II combination trials, their intratumoral STING agonist. So I think that's evidence that they remain excited in my judgment on the continued development. In our study, the Phase Ib, will be a classic dose escalation. We'll be looking for doses that can be administered with a relatively good safety profile as monotherapy. And we'll be looking at target engagement in assessing all those important cytokines that represent the Type-1 interferon cascade. We don't believe the STING agonist will be administered in monotherapy. So we we'll quickly segue in 2020 into our combination program, giving the intervenous STING agonist in combination with the checkpoint inhibitor.

Our next question comes from the line of Ted Tenthoff with Piper Jaffray.

Quick question, if I may. So a lot were answered, but what still needs to be done for the intravenous STING approach? And can you talk a little bit about the ADC. What's the goal of that different approach?

So we -- what more needs to be done? We don't believe any more needs to be done in terms of our IND-enabling program. We've conducted a series of IND-enabling talk studies, various ADME studies and so forth, and we're discussing all of this with the agency at the current time. We're optimistic. We have conducted all of the IND-enabling work that we need to do to go into the clinic in the middle of this year. Of course, the FDA has to agree with that. So simple answer, Ted, we believe we've done the work. We continue to do work with our IV SB 11285 on a nonclinical basis. But we believe we have sufficient information provided to the agency that could allow us to get into the clinic. And of course, a key element of those discussions will be our Phase Ib/II clinical program design. So optimistically, we'll have good discussions with the agency and we'll be able, as we said, to file our IND here in the second in and get into the clinic. The goal of the ADC programs, Dr. Kris Iyer and his team designed our STING agonist platform to have a chemistry that allows for conjugation with antibodies. We have successfully linked analogs from our STING agonist platform to certain antibodies. One for a liquid tumor and another for a solid tumor. Dr. Iyer and his team have successfully done the leakage. The early work is encouraging to us. And our intention would be to have one or both of these ADCs to be progressed as new clinical development programs for different cancers. Obviously, the one ADC for hematological cancer [or more,] the other for a solid tumor cancer. If the program were to continue development, we could be entering IND-enabling talks for those programs in the next year.

Our next question comes from the line of Elemer Piros with Cantor Fitzgerald.

If you could please clarify, Marty, on the timelines for both CATALYST 2, which, I suppose, would be updated before CATALYST 1. I just wanted to understand better from CATALYST 1 at the 12-week time points, would you anticipate to announce results at that point?

So just to step back. So as we mentioned, the ACHIEVE results, 200 milligram, both the 12 and 24 dose, will be presented at EASL as an oral presentation in the general session. As we said, we believe although we don't control the actually public release of the data, it is highly likely that Gilead will be presenting later this year, the Gilead sponsored study for inarigivir plus Vemlidy, the 50 and the 200 milligrams plus Vemlidy and treatment naïve and the 100 milligrams on top of the NUC in the virally suppressed population. Our CATALYST 1 trial is then probably the next data readout because it involves 12 weeks of dosing of our 400-milligram dose. Just to remind you, there's 3 cohorts. The first is inarigivir given 400 milligrams once daily for 12 weeks, followed by a subsequent 12 weeks where the 400 milligrams inarigivir is dosed with Vemlidy for another 12 weeks. Second cohort is this 3 times a week dosing schedule of 400 milligrams inarigivir and then the subsequent 12 weeks that 3 times a week inarigivir is combined with Vemlidy. And then the third cohort is 400 milligrams daily plus Vemlidy for 24 weeks. If we meet our timelines and we're on track to do that with the filing of the CTAs, if enrollment for the study occurs as we schedule it to and we estimate it to, we could have data for the 12 weeks of those 3 cohorts by the end of this year early in 2020. So the Gilead data combined this is plus our data 400 milligrams by the end of this year early 2020, plus the liver biopsy data, plus some of the early fine needle aspiration data that we're deriving, as well as our ACHIEVE 200-milligram data, is the reason that we believe together in the aggregate will inform us on our first Phase III strategy. And while it could be our first Phase II trial in treatment naïve with SB 9225 perhaps by the second or mid-part of 2020 -- second quarter or middle part of 2020. That's our plan, that's our hope.

So one additional question on the CATALYST 1 trial, to understand that there is a responder criteria at the end of the 24-week period, a, if you could spell out that responder criteria, please; and is there a responder criteria moving on from the [trial B] time point into the co-administration with Vemlidy portion up to the 24-week period.

In answer to your second question, no. No, we're -- in other words, the dependency of going into the co-administration, the initial 12 weeks is not dependent on the responder analysis. But there is a predefined responder at week 24. So at the 24-week dosing period in all 3 cohorts, a responder one, who has a greater than one half log reduction in surface antigen or more, can continue on therapy for another 24 weeks. So for all 3 cohorts, at 24 weeks if the patient has a predefined -- this predefined responder mark which is greater than half a log or more in surface antigen they can continue on an additional 24 weeks. The purpose is simple. We want to see if we could achieve functional cure at these durations of dosing.

(Operator Instructions) Our next question comes from the line of Taylor Feehley with Chardan Capital Markets.

So just wanted to follow-up on a couple of the earlier questions. You explained a little bit about what you're hoping to see from the liver biopsy study. But could you give us your perspective on what the key metric will be from those aspirates? What is the one thing that maybe we should zero in on? And then a quick follow up on the CATALYST study and then possible Phase III program. You mentioned that the first trial with the fixed dose combination will be starting mid-20. But how many additional trials may be required for Phase III? And will you have to finish the CATALYST 1 and 2 trials before you initiate the others that may be required?

Great. Let me answer those last 2 questions first. We don't know the answer to what our pivotal trial program will be. We will have to have an end of a Phase II or a post Phase II discussions with the FDA. We have had discussions with the agency. They have commented on clinical development programs. It went very well, was very positive. We have a sense of the size of the safety database that will be required. So the data will inform us, the data will guide us from the Phase IIb program is probably the best answer I can give you, Taylor. But the discussions -- the pre-ID discussions with the agency went very well, we're very pleased with that. I think you know that in the fall, the agency issued a draft guidance for HBV investigational compound developments. So that's a good guide for us. But total number of patients and so forth, the data from our Phase IIb and the discussions with the agency will guide us on that. I will say that the -- I don't believe we have to complete the CATALYST trials before we go into Phase III. If Ned is confident in the dose, it's either as monotherapy or in combination, we'll advance into our Phase III program, while the Phase IIb programs continue. I will mention the great curiosity we have from our CATALYST 2 trial, particularly with the Stop & Shock is that could be -- form the basis for our monotherapy strategy. If in cohort number 1 from the CATALYST 2 trial demonstrates that inarigivir 400-milligrams dosed for 24 weeks has the potential for an elevated functional cure rate in that population, that could be our monotherapy strategy in a pivotal trial program. And we will know that in probably in the first half of 2020 to the middle of 2020. And then as I mentioned in the treatment naïve population, based on the co-administration work that Gilead's doing, plus our 400-milligram work in CATALYST 1, we think that could inform us for our SB 9225, the fixed dose combination Phase III strategy. So I hope that characterizes for you, Taylor. The data will inform us and then we'll take this data and have further discussions with the FDA. But we have a sense of what we need to do based on the discussions we've already had with the agency. To your first question, frankly, I'd prefer that Dr. Afdhal give you the more specifics of that. But I can tell you that I know he wants to basically see the -- measuring the classic ISGs and the other evidentiary markers of the innate immune activation from the liver. It's a deep immunological and virological study, but I think he would tell you, he's looking to assess the classic evidence of innate immune activation intrahepatically. And -- we could certainly follow up in a later discussion where we could share with you the full panel of the various markers that we're going to measuring, if you like.

Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Driscoll for any final comments.

Well, thank you, all. Thank you for giving us the time this morning. We look forward to keeping you informed on our milestones, and we'll work very hard to achieve these milestones, continue to be efficient utilizers of our shareholders' capital. And we're looking forward to the coming weeks, in particular, the European -- the International Liver Conference in mid-April. Thank you again. And please follow-up with us if you have additional questions.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.