Theriva Biologics Inc (TOVX) 2017 Q1 法說會逐字稿

Good afternoon, and welcome to Synthetic Biologics' 2017 First Quarter Investor Conference Call. (Operator Instructions) Please note, this event is being recorded. At this time, I would like to turn the call over to Vincent Perrone, Director of Corporate Communications at Synthetic Biologics. Mr. Perrone, please go ahead.

Thank you, Kate, and good afternoon, everyone. Welcome to Synthetic Biologics' 2017 First Quarter Investor Conference Call. Today, I'm joined by our CEO, Jeff Riley; our CFO, Steven Shallcross; and our CMO, Dr. Joseph Sliman.

Synthetic Biologics issued a press release this afternoon, which provided operational highlights and reported our financial results for the quarter ending March 31, 2017. The release can be found on the Investor section of our website.

During our call, Jeff will provide an operational update on our microbiome-focused clinical programs. Steve will summarize our financial highlights and Joe will provide an update on results from subtle exploratory endpoints from our Phase IIb clinical trial for ribaxamase. We'll take questions after our prepared remarks. In addition to the phone line, this call is being streamed live via webcast, which will be archived on our website for 90 days. During this call, we will review several slides, which are viewable via the live webcast. These slides were also filed with the SEC earlier today and are accessible on the Investor Relations page of our website, www.ir.syntheticbiologics.com.

During this call, we will be making forward-looking statements regarding Synthetic Biologics' current expectations and projections about future events. Generally, the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions. These statements are based upon current beliefs, expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in Synthetic Biologics' filings with the SEC, many of which are difficult to predict. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call as Synthetic Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on the account of new information, future events or otherwise, except as required by law.

With that said, I'd like to turn the call over to Jeff. Jeff?

Thanks, Vincent. Good evening, everyone, and thanks for joining our 2017 first quarter investor call. It's an exciting time for Synthetic Biologics and it's been an active first quarter. With 2 Phase III ready programs in clinical development, the Synthetic Biologics' team is more determined than ever to continue our work of advancing our cutting-edge, microbiome-based therapies through late-stage development and towards commercialization. We started the year with the announcement of positive clinical data from our Phase IIb proof-of-concept study for ribaxamase and quickly followed this up with news that the FDA had approved a Phase IIb/III adaptive design pivotal trial for SYN-010. But we didn't stop there. Our goal remains delivering best-in-class and paradigm-shifting drugs designed to improve the quality of life for millions of patients in greatly underserved markets while building long-term value for our shareholders.

During today's call, we will provide a clinical update on ribaxamase, our oral enzyme designed to degrade certain IV beta-lactam antibiotics within the GI tract to protect and preserve the natural balance of the gut microbiome from C. difficile infection, minimizing pathogenic colonization and reducing the emergence of antimicrobial resistance.

And SYN-010, our compound designed to reduce methane production in the gut to treat the underlying cause of the symptoms commonly associated with irritable bowel syndrome with constipation.

Before we dive into our clinical update, I would like to turn the call over to Steve Shallcross, our Chief Financial Officer, who will provide an update on our financial results for the year. Steve?

Thanks, Jeff. During the first quarter of 2017, we continued to efficiently utilize our cash as we began to deploy our capital in support of our 2 lead clinical programs. We remain confident in our ability to continue to manage overhead, while focusing the majority of our financial and human resources on the continued development of our 2 late-stage Phase III-ready clinical assets.

Synthetic Biologics' 2017 first quarter financials were included in the press release, which was distributed over the newswire earlier this afternoon. The company's 10-K for the quarter ended March 31, 2017, will be filed with the SEC later this evening.

General and administrative expenses decreased this quarter from $2.1 million for the 3 months ended March 31, 2017, compared to $2.4 million for the same period in 2016. This decrease is primarily the result of lower employee salary expense and related benefit costs along with reduced travel and legal expenses. Included in these numbers were noncash charges related to stock-based compensation of $698,000 for the 3 months ended March 31, 2017, compared to $643,000 for the same period in 2016.

Research and development expenses decreased to $6 million for the 3 months ended March 31, 2017, compared to $8.1 million for the same period of 2016. The decrease is primarily the result of lower program cost associated with the clinical development of ribaxamase as well as manufacturing and research activities within our other microbiome-focused research and development activities. Research and development expenses include a noncash charge of $437,000 related to stock-based compensation for the 3 months ended March 31, 2017, compared to $409,000 for the same period in 2016. Other income was $5.1 million for the 3 months ended March 31, 2017, compared to other expense of $500,000 for the same period in 2016. Other income for the 3 months ended March 31, 2017, is due to a noncash income of $5.1 million from the change in fair value of warrants that resulted from a decrease in our stock price from the prior quarter. Cash and cash equivalents as of March 31, 2017, was $13.5 million, a decrease of $5.6 million from December 31, 2017. We anticipate cash utilization will remain steady through the second quarter of 2017 due to diminished cost associated with the completion of Phase II clinical trials for ribaxamase and SYN-010 and our ability to effectively manage our overhead expenses.

Now I'll turn the call back over to Jeff.

[Audio Gap] announcement of important clinical milestones at the start of the first quarter, Synthetic Biologics is uniquely positioned amongst our biotech peers with 2 late-stage unencumbered and potentially best-in-class Phase III-ready assets, targeted at addressing largely unmet medical needs.

At this time, I'd like to begin with an update for SYN-010, our program designed to treat and target an underlying cause of irritable bowel syndrome with constipation. Currently marketed in development stage therapies for IBS-C are designed as me-too or even me-better drugs, and function similar to laxatives. These therapies include temporary relief to a long-term and often lifestyle-altering problem and often has serious side effects, most commonly diarrhea. In previously reported studies by Dr. Mark Pimentel at Cedars-Sinai and Synthetic Biologics, methane production in the gut was shown to be the primary causative factor of the symptoms associated with IBS-C. It follows then that by reducing methane production in the gut, we can treat an underlying cause of the pain, bloating and constipation associated with IBS-C. Last year, we announced positive results from Phase II clinical trials, which demonstrated that patients in the SYN-010 treatment groups experienced clinically significant improvements in bowel movements, abdominal pain and bloating as compared to the placebo group. These results provide us with strong scientific foundation and rationale to advance SYN-010 for the Phase III development.

During the first quarter of 2017 and following collaborative discussions with the FDA, we were pleased to announce the approvals of a Phase IIb/III adaptive design pivotal trials intended to further evaluate the efficacy and safety of SYN-010. With a clear path forward for SYN-010's clinical development, we are one step closer to achieving our goal of providing millions of IBS-C patients with a novel, potentially best-in-class therapy that directly targets a root cause of IBS-C. Our SYN-010 program is an important component of our microbiome-focused clinical portfolio, which we believe will contribute to the growth of our company and provide long-term value to our shareholders. With the foundation of our Phase IIb/III pivotal study in place, we continue to work on solidifying its infrastructure with a focus on identifying, evaluating and delivering opportunities to move this program forward in a manner that is consistent with the best interest of our shareholders. We intend to initiate this trial only at a time when the requisite components of the clinical and financial infrastructure are in place to ensure its full, timely and successful completion. To that end, we continue to evaluate and engage in ongoing discussions with several potential U.S.-based pharmaceutical partners as well as interested parties in Europe, China and Japan.

Switching gears now to SYN-004 or ribaxamase, our first-in-class oral enzyme designed to degrade certain IV beta-lactam antibiotics excreted into the GI tract. Ribaxamase is engineered to protect and preserve the naturally occurring gut microbiome to prevent the onset of a primary CDI pathogenic colonization and the emergence of antimicrobial resistance. The presence of a healthy, robust and well-balanced gut microbiome can protect against the threat of infection by blocking colonization by opportunistic microbes. This is because the diversity of microbes present in a healthy gut microbiome acts as a system of checks and balances, allowing the ecosystem of microorganisms to remain relatively steady. When species or microorganisms are eliminated or sharply reduced in the gut, a by-product of antibiotic use, this system is disrupted and may allow for overpopulation by opportunistic pathogenic bacteria, such as C. difficile, vancomycin-resistant enterococci, carbopenem-resistant enterobacteriaceae and Klebsiella. Ribaxamase is designed as a first line of defense against this disruption. Ribaxamase is also specifically formulated to bypass the stomach and avoid systemic absorption, which means it does not interfere with the ability of the antibiotic to effectively fight against primary infections. By protecting the patients' native gut microbiome, we demonstrated that ribaxamase can prevent the overgrowth of pathogenic organisms responsible for the development of CDI and other pathogenic organisms that may emerge as a result of antibiotic use.

During the first quarter, we announced positive top line results from our global Phase IIb randomized, placebo-controlled, proof-of-concept clinical trial for ribaxamase, which consisted of 412 patients. We were very excited to report that ribaxamase achieved its primary endpoint, significantly reducing the incidence of CDI by 71.4% in patients as compared to placebo. Preliminary analysis of our Phase IIb data also demonstrated a statistically significant reduction in new colonization by VRE for the patients receiving ribaxamase as compared to placebo.

During our last call, we discussed the analysis of several exploratory endpoints designed to determine ribaxamase's ability to protect the gut microbiome from antibiotic-mediated dysbiosis. At this time, I'd like to turn the call over to Dr. Joe Sliman, our Chief Medical Officer, who will provide an update on the results from several of these endpoints. Joe?

Thanks, Jeff. At this time, I'd like to provide a brief update on several of our exploratory endpoints from our Phase IIb proof-of-concept clinical trial for ribaxamase. For those of you following along on the webcast, please turn your attention now to our slideshow. If you're following along on the phone, these slides were filed as an 8-K with the SEC earlier today and can be found in the Investor Relations section of our website at www.ir.syntheticbiologics.com.

And now on to the show. So we'll obviously start here by saying that we will be making forward-looking statements in this presentation as expected. So let me open up by talking about our study, our Phase IIb proof-of-concept study of prevention of C. difficile infection. So let's just back up for one second and review what we're talking about here and what the objective of the study was. So antibiotics disrupt the balance of the normal commensal microbial species and the bacterial population in the gut. In doing so, they allow for the overgrowth of opportunistic and antibiotic-resistant pathogens. The disruption of this natural balance of the microbiome is referred to scientifically as dysbiosis. And it is multifactorial, there's many different things that can affect it, which is diet and other environmental stimulants, but the use of antibiotics has been demonstrated to be -- to have the most profound effect. Now antibiotic-mediated changes to the natural balance of the gut microbiome is reflected in a measurable way by the loss of microbial diversity, and these reductions in the diversity or the density and broadness of the population of microbial species in the gut is associated with different disease states. Damage to the microbiome due to antibiotic use is not always completely reversed after the antibiotic is removed or the antibiotic course is completed. And in fact, the greater the antibiotic damage that is done, the less likely that the changes to the microbiome will ever recover back to a normal healthy state after that antibiotic is withdrawn.

Moving on to Slide 5. So let's take a look at a schematic here of how our drug works. Normally for an infection, you would go into the hospital and you would receive -- you'd be diagnosed with, say, pneumonia and you would be indicated for a course of intravenous antibiotics for 3 days, 5 days, 10 days, 2 weeks, whatever. You'd receive your antibiotics. Those antibiotics would go directly into your bloodstream, they would circulate and after they do their job, they would be extracted from the bloodstream by the liver as the liver does its job, and prepared and excreted through the bile salts into the gut and for a passage out of the body. That antibiotic, it's important to remember, is still active when it's excreted into the bile and in the gut where it continues to do what it -- nature designed it to do, or what people designed it to do, for some antibiotics, which is kill microbes in the environment in which it exists. And this is where SYN-004 comes in because SYN-004 ribaxamase is specially formulated and designed to be taken orally, co-administered with those IV antibiotics. It survives the stomach and emerges, so to speak, in the first part of the small intestine where it meets up with the excreted antibiotic that is being passed from the bile into the gut, and it deactivates or inactivates that antibiotic before the antibiotic has a chance to do any type of damage or cause any type of change to kill the microbes in the gut.

So moving on, next slide. This is a schematic of how we were able to measure the effect of the antibiotic on the gut microbiome, and how we were able to measure the effect that ribaxamase has at preventing and preserving the gut microbiome. So this is a schematic of our study. It was devised into 2 treatment periods. The first treatment period was the actual in-hospital period of receiving intravenous antibiotics, and that lasted anywhere from 5 to 15 days or occasionally more, and that was completely determined at admission by the primary investigator at the site as indicated for that particular infection and that particular patient. The patient would be indicated for ceftriaxone and then be enrolled in the study, divided or randomized, I should say, one-to-one to receive coadministration of either oral placebo or oral ribaxamase 4 times a day. Those patients were treated with both antibiotic and ribaxamase or placebo, and at the end of the treatment period there would be a 72-hour window in which we would take a sample. Now we took a sample at screening. We took another sample at 72 hours following the completion of treatment, and then the patients were discharged for a 4-week follow-up and we would take an -- or actually it was a 6-week follow-up total because there was a ability to look at patients for another 2 weeks. But we took a third sample at 4 weeks following the completion of treatment. So 3 samples per patient, screening 72 hours after treatment completion and 4 weeks after treatment completion and we were able to compare the results.

So next slide, Slide 8. And that is the top line results for our study, and I want to reemphasize our primary endpoint, which was the significant reduction of the incidence of C. difficile infection, CDI, in these patients as the primary endpoint. We achieved the primary. Our overall rate of CDI in our placebo group was 3.4% and this was actually pretty high compared to a comparable group of patients per the literature in these types of hospitals. And by that, I mean, this is not your general hospital across the country or across Europe and the rest of the world where some hospitals are better than others. These are only hospitals that can pass FDA audit and inspection for pivotal studies. Okay, so that's important to keep in mind. So these are relatively clean hospitals. We had a placebo rate of 3.4% and we were able to reduce that rate in the ribaxamase group to by about 70%. We used the regular clinical definition for CDI, which was diarrhea, loose stools in the patient of 6x within 24 hours, and we took a stool sample from those patients and sent it to the central or to the local lab at the hospital, where they used a toxin test using their own procedures of how they would normally diagnose patients in the hospital. We then took those specimens and we shipped them off to a central lab for confirmation, and you can see that's on the left-hand graph, that's our middle columns -- middle pair of columns, and you can see that we actually ended up finding 1 additional case of C. diff in the placebo group, but otherwise it was exactly the same to confirm what the local lab found. And in the third column, there is no orange column there, is the patients who were treated. And so among patients who were not just identified but having C. diff, but actually merited standard of care treatment for C. difficile infection, we had basically no patients who met those qualifications or that criteria in the treatment group, but we had plenty of those in the placebo group.

Moving over to the right-hand graph. This is our main exploratory endpoint and this is reduction in vancomycin-resistant enterococcus in the gut microbiome at screening versus 72 hours, and then at screening versus 4 weeks, and you can see that we reduced the new colonization with VRE in the treatment group by a significant margin with very high levels statistical significance.

The next slide, is a -- the first graphic that we'll use to describe how we measure and determine microbial diversity within the gut microbiome. How we prevent its destruction and how we -- how ribaxamase improves its recovery. So on the left-hand side, the blue balls on the graph represent the range of diversity, meaning number of species you'll see on the x-axis present in samples in the gut microbiome in the placebo group. T0, meaning the screening sample, and there is about 2,200 to 2,300 species present at screening. Following treatment with ceftriaxone and placebo, all the way down the straight line to T1, the ball labeled T1, you will see that there is about a 50% loss of microbial diversity in these patients within 72 hours of -- the sample being taken within 72 hours after the following treatment. Then after 4 weeks of recovery time, meaning after the treatment is completed, these patients had only recovered about half of their microbial diversity. That's in the placebo group. On the ribaxamase group, which is the right-hand graph using the orange balls, you will see that we had approximately the same screening diversity in the treatment patients, so 2300-ish species. You will see that in patients who were treated or co-administered ribaxamase with their ceftriaxone, they only had a reduction down to about 2,100 species and then after 4 weeks of follow-up, they had basically completely recovered their normal diversity.

So moving on to Slide 10. This is another representation of looking at diversity of the microbiome, and so this is a scatter plot of the diversity in patient samples. The orange oval represents the screening sample and you can see that the broadness of diversity within the microbiome is comparable between the placebo group on the left and the ribaxamase group on the right. After 72 hours of -- 72 hours following the completion of treatment, I'm going to try let the slides catch up here for a minute. After 72 hours of following the completion of treatments, you will see that the diversity of the microbiome in the placebo patients was everywhere. It was all over the map. And there was a significant change in the diversity and change in the composition of the microbiome, whereas there was a very little change in the ribaxamase group. And then, when you take another sample at 4 weeks following the completion of treatment, you'll see on the left-hand side, there's been some recovery in the placebo group, but not a whole lot, but the ribaxamase group, the blue ovals, the ribaxamase group has recovered just about to complete overlap with where they were at screening. Again, ribaxamase is not only reduced the amount of diversity lost, but it improved recovery time as well.

Joe, just as an aside, the slides are not going the same speed.

Yes so I realized that.

Now we're caught up.

Yes, now we're caught up.

Sorry about that.

No, that's okay. I'm getting ahead of the slides here. Hopefully, people have copies of these that were filed. We've moved on to Slide -- is it 14? We're waiting for Slide 14 to come up, which is our heat map. And our heat map is, you may -- people may recall -- or the heat map that we put out before from our animal model studies. There it goes, now it comes up. This is our actual human patients in our Phase IIb study. So the top 2 rows represent the placebo patients and the bottom 2 rows represent the treatment patients we have in ribaxamase. At the top, you'll see the time 0, which is the screening sample and the time 1, which is 72 hours following the treatment. And ribaxamase group is the same. And on the right-hand side, you'll see those narrow strips and those are the your resistant organisms. So keep that in mind as we do these slide builds here. I'm waiting for the slide build, there it goes. So you'll see that in the placebo group, you have a significant loss of diversity in the gut microbiome from time point screening 0 to 72 hours after completion of treatment, whereas in this ribaxamase group, you have essentially identical samples, at least according to the heat map. So your diversity is relatively the same, whereas on the right-hand side, you'd see a significant overgrowth of resistant organisms in the gut on the placebo group but down in the ribaxamase group, you see that those -- in the boxes there, you see that there is relatively little change in the abundance of those resistant organisms.

And so now we're going to move on to Slide 17, which is our conclusions for our Phase IIb study. And that is, again, just to reemphasize as we wait for the slide to come up. I want to emphasize we hit the primary endpoint, SYN-004, ribaxamase achieved its primary endpoint demonstrating a statistically significant relative risk reduction of greater than 70% with high level of statistical significance in the rate of C. diff infection in patients treated with ribaxamase compared with the placebo patients. We also saw a significant reduction in the new colonization with vancomycin-resistant organisms in patients receiving ribaxamase versus placebo as well. Secondarily, we significantly reduced the ceftriaxone-mediated loss of microbial diversity. We reduced the ceftriaxone-mediated eradication of normal species and reduced the overgrowth of pathogenic species, the ribaxamase patients had a restoration of their microbial diversity shortly after a ceftriaxone was removed compared to the patients in placebo group, who only really got partway back to normal recovery of their normal microbiome after 4 weeks.

And Slide 18. This is our next steps. Just to let everybody know that we will be looking at additional exploratory endpoints to look at the ability of ribaxamase to prevent the proliferation of both antimicrobial resistance both in colonization as well as in the proliferation of antimicrobial resistance genes in the gut microbiome in the presence of antibiotics. We have already met with the CDC once and presented our -- the first part of our data, and now we will plan on meeting with the CDC following the completion of this analysis for -- of a antimicrobial resistance. Keep in mind that this is being done in partnership with the CDC using a brand from the CDC. So we will continue to share that data with them as it comes along. And of course, we -- from a regulatory perspective, we will plan to request an end of Phase II meeting at some point later this year to determine the regulatory pathway forward.

And with that, we will eventually take questions but for now, I'm going to push it back to Jeff to complete the call.

Thanks, Joe. Just as an aside note, everybody, I mean, it -- the data that we have is -- we have so much data, it's unbelievable. I mean, think about we have several 100 patients with roughly 2,000 species per patient and we're basically crunching all of that data, trying to really look at exactly what's happening, but what we've seen from the top is what Joe just pointed out, which is we are seeing a profound impact on the reduction antimicrobial resistance, we're going to identify as specific-resistant genes. That's what we're doing with the CDC in a deep sequencing. But in addition to that, we're going to continue to map out this data as we go forward. I'm sorry the slideshow didn't go very well, the way it's set up is not very clean. But you can download this presentation again from our website and kind of walk through the PowerPoint builds and, hopefully, that will help understand the data set because, again, it's a very robust -- easy to say, but very difficult to show graphically.

And with that, and we are excited with the results. With ribaxamase's mechanism of action and provided a compelling demonstration of the potential of ribaxamase to help address serious health and economic impacts associated with CDI, antibiotic-mediated pathogenic colonization and, of course, AMR. Ribaxamase remains positioned as the leader in clinical development for microbiome-based interventions, specifically designed to prevent the incidence of primary, and I'm going to repeat that, primary CDI in AMR resulting from antibiotic-mediated dysbiosis of the gut microbiome.

Looking ahead, we continue to analyze data from additional exploratory endpoints and to evaluate ribaxamase's ability to prevent the emergence, spread and proliferation of specific antibiotic-resistant genes amongst organisms in the gut microbiome. This includes analysis through funding, the award of 2 Synthetic Biologics from the Center of Disease Control to support the deep sequencing that we're doing with respect to the Phase IIb study we just completed.

We met with the CDC last month, in April, to share preliminary data and following the full completion of that analysis in the coming months, we plan to meet with the CDC again to share our complete findings and to brainstorm as to what we're going to do at the end of Phase II meeting with FDA later this year. We believe ribaxamase has the potential to act as a first line of defense against unintended and damaging effects of antibiotic therapies to the gut microbiome, and represents a disruptive and simple approach to antibiotic resistance and antibiotic therapy that may directly lead to more efficient and effective use of antibiotics.

I'd like to pause for a moment to announce that Synthetic Biologics is headed to Chicago this weekend to participate in Digestive Disease Week from May 6 through May 9. In addition, I'm very proud to announce that 4 abstracts highlighting the research from both our ribaxamase and SYN-010 programs were submitted and accepted for a presentation.

You can visit our website at www.syntheticbiologics.com for the dates, times and locations for each of these events. Members of the team will also be available at booth 1508, again, 1508, located in the exhibitor's hall, if you'd like to swing by. I know there is several retail folks that are going to come by. Please come and let us take care of you. We'll also have a video there. We can't say too much more than that, but there is an epic video that we think everybody is going to enjoy watching, which outlines what we're doing in the company and specifically with ribaxamase. And with that, I'm going to turn back -- the call back over to Vincent.

Thanks, Jeff. Kate, we'd like to open the phone line to questions. Can you please describe the procedure to ask questions for our listeners?

(Operator Instructions) The first question comes from Katherine Xu of William Blair.

I think the one of the pressing questions or issues right now is on the financing side. So can you, Jeff and Steve, comment on how you plan to go about to raise financing for the company and both ways, straight from equity perspective and also from a partnership perspective? And then on the partnership side, can you just give us some more color on what partners are looking for in the SYN-010 program?

Katherine, it's Jeff. I don't want to rule out an equity raise. We never want to do that, but the reality is we have to get a deal done and that is our primary focus in the company is to complete a partnership with a mid- to large-size pharmaceutical company as soon as we possibly can. I can't really give you more details that that. We are in multiple discussions on SYN-010 with companies that you would know and maybe even a couple of European companies that you may not know. And that does include a couple of Japanese companies as well. We hope to get that over the line in a relatively -- as soon as we possibly can. There will be nondiluted capital from such a deal. And we will, obviously, then move that Phase IIb/III study forward as rapidly as we can at that point in time and then continue to create value there. We are talking to some larger investors as well. There is, obviously, a potential for them to take larger positions. As a company, we're keenly aware that the market has been brutal, there is very, very few financings that have been done by folks out there. So we are being frugal with our money. We don't anticipate any large expensive items over the next year or so until such time as we do get a partnership for SYN-010. We are in discussions as well. We just started those because we just announced the data back at JPMorgan on ribaxamase, and it's interesting to note that there is another drug out there that just recently got approved by Merck, it's called bezlotoxumab, it's an antibody, but it's used as a preventative approach to reduce C. diff infection in recurrent C. diff patients. So this is in the recurrent C. diff, not the primary. But they literally are launching that product as we speak. Obviously, it's for a different group of folks. It's a different approach. It has minimal impact as far as we're aware on antibiotic resistance and all of that. But it does look like it does have an impact and they were able to get that approved, I believe, in February. So that drug is moving along. We are very excited for these guys as we think our approach is very complementary, and that will help us build that marketplace as well because there are going to spend, obviously, a significant amount of capital to build that. They have done the pharmacoeconomic models as well, which even at their higher price point for an antibody, still makes a lot of sense. I know that's -- I wanted it around a little bit, but the reality is, Katherine, we're keenly aware of the financial. We are -- we think we are ideally situated to ride out the storm, if you will, until such time as we do get a partnership. Do you want to add anything?

No, I think you got that. And I guess the only point I'd make, Katherine, follow-up on that is that as we talked on the last call, our monthly fix burn is somewhere in the neighborhood of about $1 million, $2 million or so. And it should remain there pretty much as -- until we get to that point in the future where we address your primary question.

And then with regard to the meeting with the -- preliminary meeting with CDC, what kind of feedback did you get from them? I mean, can you sort of talk about it from a -- in a qualitive kind of sense or are they enthusiastic about it? What aspect of the data were they excited about? And what other endpoints or -- it -- from a (inaudible) and also from a public health perspective that they would want to see more data for?

Joe, you want to take a whack at that?

Yes, I will try that. Katherine, this is Joe. The CDC was very excited about our primary endpoint, to be honest with you. They were very impressed with our rate in our placebo group, especially given the patient -- not just the patient population, but as I mentioned, the hospital sites that we used being -- they are very highly regarded, high-end Phase III type of sites, typically don't have very high rates of C. diff and we were able to get a reasonable rate, and we were able to show very clear statistical significance in a reduction in C. diff infection. They're interested in our AMR data, obviously, because they're funding it. And that is their primary interest because they're interested in moving the program forward as I know we've mentioned before, from a -- I would say, a public policy type of viewpoint, we can get it into the hospitals and make sure it's available to reduce the incidence rate across the board.

Does that answer your question, Katherine?

Yes, yes, I mean, I think -- I guess next steps are just a more data to them and then you and the CDC and the FDA kind of design the next step of the study?

Well, yes, actually our KOL feel like this was a very strongly performed -- designed and performed study. It actually is a superiority study. It's superior state of care, which of course is nothing, or placebo in this case representing nothing. And so, I mean, we basically -- we hit the endpoint. It's designed as a pivotal. We don't know that it counts "as a pivotal" yet because we haven't had that discussion. But we -- if we were to design a pivotal study, which was our intent all along, this is what it looks like. There might be some tweaks to some of the exploratory endpoints depending on label negotiations, but for the -- the primary one is CDI, incidence of CDI and prevention of incidence of CDI, I should say. So we will discuss the next steps about additional studies and maybe patient population broadening, that kind of thing, but I mean, I think this is a pretty clear picture of what you see is what you get from a baseline standpoint. So yes, we would probably provide more patients if that's what they need, but the study is going to look fairly much the same.

The other takeaway, Katherine, to your last question, since ribaxamase is clearly being viewed by the CDC and other group -- governmental groups as a public-policy-style drug to treat a condition that causes a significant amount of public health expenditure. There is money available also from the governmental side of the equation. We have not applied for it yet, but we're preparing to do so. That does take significant -- it takes a longer time period, right, and doing -- and regular financing but it's nondilutive. So again, from a shareholder perspective, we're very focused on not doing another financing if we can avoid it, obviously, because where we are today, and getting that partnership as soon as we possibly can in addition to potentially some government support as well.

The next question comes from Keith Markey of Griffin Securities.

Steve, earlier in the conversation, you mentioned that you thought that the cash utilization rate would remain fairly stable. Could you elaborate, are you talking on a per quarter -- the next quarter, current quarter we are in or are we talking through the end of this year?

I would say through -- definitely in the next quarter and subsequent quarters to follow. I'd assume in your models about $1 million or $2 million or so in burn. The burn this last quarter, mind it, was a little heavier and that was due to the fact that we had some run-out costs for the ribaxamase trial that we just finished. But I'd model out about $1 million, $2 million or so a month.

Great. And then turning to the question about the next the trial's structure. Is it your intention not to try to possibly go after protecting the microbiome as a primary endpoint and rather just focusing on the C. diff indication because it would seem that you would require a lot fewer patients if you were going to use the protective approach, rather than the C. diff?

Keith, this is Joe. So the answer to your question is twofold. First of all, we have a primary endpoint of C. diff infection, which the agency has already given us the go-ahead to use. So that's what we hit -- we hit the endpoint. So it makes sense to keep that as our primary. Now to your question about that being able to run a smaller study, theoretically, with numbers and all that kind of stuff. That's all contingent on having conversations with the FDA, and there is no guidance on that at all. Not to say that they're not open to that conversation. They have demonstrated a willingness to talk about that in the past, but I can't predict with any degree of certainty what we're going to get from this point on because now the things start to get real, right? With respect to label negotiations and what constitutes a file and blah, blah, blah. So all those things I can't say one way or the other. But I can tell you that if we continue on with the primary endpoint of CDI, that's a -- that's an acceptable endpoint because they told us it is. And we know we can hit the endpoint because we did it already. So I mean, you take that for what it's worth, but I just -- I can't speak to which way it's going to go. Maybe they'll surprise us, maybe we'll have to take the straightforward approach first. It's up in the air so far.

Right, right. And I guess that part of it will depend on your discussions with the FDA and with the CDC, and then perhaps determining a marketing strategy as well.

Well, that's definitely the case. You hit it all 3 correct, yes.

Okay. And then if I can ask a question about the first slide in the appendix that you have. SYN-004, protected microbial diversity. Could you elaborate a little bit about alpha diversity and its importance?

So I can. I'm not sure that this is the right thing to do, because I don't have my scientific smart people with me. Basically, it's different ways to measure it is really what we're talking about. We're talking about total speciation, which -- I guess, the best way to look at it is total speciation or its taxa is the more proper way to look at it, which is a measure of the composition, the overall composition within the microbiome. So number of taxa groupings of types of bacteria, so to speak, or types of organisms. Beta diversity is a little different. Beta diversity measures a little bit more, what's the right way to put it, types within -- it's kind of types within -- subtypes within types. I can't really explain it any better than that. There is different bacteria that exist within different taxa, right? They're all -- they're all -- I am going to make up a word here, serratia type bacteria, but they're different subspecies or whatever for them.

Just to add to that, Keith, this is Jeff. There is multiple parameters on the diversity side, there is the chao, there is beta, there is alpha. The other matrices you want to look at is density as well, right. So if you have 50 trillion, 60 trillion bugs living in your gut, you are going to obviously wipe out diversity when you're giving somebody an antibiotic, but you are also going to wipe out just a sheer vast number of these guys. And when you're wiping out those sheer vast numbers, that's what enables colonization to occur, right, where there's basically unlimited food supply for some of the tougher organisms and they compete like crazy and they grow, they split every 20 minutes to the exponential at that particular point. So that measurement is a really tough measurement to make as well because you're looking at it after the fact. But the reality is we'll reduce -- antibiotics reduce the density of the bugs and then it also reduces diversity, both are very critical to having a healthy gut, as we all know.

Yes, in fact, I would imagine that the composition of the bacteria to begin with in a sense almost in a way determines what the outcome is going to be because there could be some bacteria in the gut of one person that would be more susceptible to an antibiotic than other bacteria, and that could vary from one person to the other.

Correct. And one person -- a pathogen for one person may not be a pathogen for somebody else, because all of our guts are different. So when you're measuring individual by individual, which is why those charts look like they do and that is very difficult to get, is because everybody's baseline with that diversity is very different, right? Everybody's baseline. So you are really looking at the change in that baseline of each individual and then overlaying that on top of the overall data set. And even with that diversity, that complexity, we were able to see a significant improvement in the patients that were on ribaxamase versus placebo. So they -- exceptionally exciting. If you really love this subject, go look at the Merck package insert for their drug bezlotoxumab, ZINPLAVA I think is it's what it's called. Go look at their package insert and they'll walk you through kind of the studies that they did, which were somewhat similar, but with an antibody. And you'll see the difference between what we got and what they got, and I think you'll be -- I don't want to talk about it, but it's exceptional what our drug is doing in a very safe manner.

(Operator Instructions) There are no additional questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Riley for any closing remarks.

Thanks, Kate. In closing, the start of this year was one of progress and clinical momentum for Synthetic Biologics. We believe strongly we have a very unique and diversified late-stage microbiome-focused clinical portfolio, unlike anybody else's out there. It leverages existing and well-defined guidance from the FDA, while applying cutting-edge microbiome science to effectively deliver positive therapeutic outcomes. We are proud of the progress we've made at the start of the year. Obviously, the markets have been exceptionally difficult, but again, we have 2 fantastic drugs of the intrinsic value that is yet to be unlocked and we're working on doing that, obviously, in a variety of ways, and we look forward to getting to Chicago here in the next couple of days and presenting some of this other data that was in those slides at DDW. Our scientific crew is going to be presenting those in detail. Again, please if you happen to be at DDW, please come and see us. The video that we're going to show will be up on our website after DDW. It was done by DDW. So we can't show that right away, but after the show we are allowed to put that up on our website and everybody can look at that as well. And with that, thank you for your -- for this evening and take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.