Altimmune, Inc.

Greetings and welcome to the Altamune Inc. First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Stacey Jurchison, Senior Director, Investor Relations and Corporate Communications for Altamune. Thank you, you may begin.

Thank you, Melissa, and good morning, everyone. Thank you for participating in Altamune's first quarter 2021 earnings conference call. Leading the call today will be Vipin Garg, our chief executive officer. Additional members of the Altamune team participating on the call today are Will Brown, our chief financial officer, Scott Roberts, our chief scientific officer, and Scott Harris, our chief medical officer. Following the prepared remarks, we will hold a question and answer session. A press release with our first quarter 2021 financial results was issued this morning and can be found on the IR section of the company's website. Before we begin, I would like to remind everyone that remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Altamune cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to COVID-19 and its impact on our business operations, clinical trials, and results of operations. For a discussion of some of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the SEC. I would also direct you to read the forward-looking statement disclaimer in our earnings press release issued this morning and now available on our website. Any statements made on this conference call speak only as of today's date, Monday, May 17th, 2021, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for audio replay on Altamune's website. With that, I will now turn the call over to Dr. Vipengard. Chief Executive Officer of Altamian.

Thank you, Stacey, and good morning, everyone. We appreciate you joining us today for the discussion of our first quarter 2021 financial results and business update. We're trying a new format for our call this quarter and have a slight presentation accompanying our remarks. As Scott Roberts will review momentarily, we have impressive new preclinical data for our ad COVID vaccine candidate that we want to take you through. And the slides will be helpful visual aids. Our development efforts over the past year have set the stage for 2021 to be a data rich period for our company. And we now have multiple investigational candidates advancing in the clinic. For today's call, we want to focus on two of our most promising product candidates AdCOVID, and Alt-801. We anticipate reporting top-line data from each of these programs next month, with data from the Phase I AdCOVID program likely to read out first. As pioneers in intranasal vaccine development, we are especially proud of our achievements as they relate to our AdCOVID program. As an intranasal vaccine candidate, ADCOVID features unique attributes that are not available with currently authorized intramuscular vaccines. And therefore, we strongly believe that if authorized or approved, ADCOVID could become an important tool for the global COVID-19 vaccination effort. With the global pandemic continuing, there is widespread and growing awareness and interest in alternative vaccine approaches. for good reason. Although currently authorized vaccines have demonstrated excellent efficacy, there continues to be a considerable worldwide disparity in vaccine availability and increasing hesitancy around first-generation options. One of the key attributes I want to emphasize for ADCOVID is the potential for excellent tolerability, which is critical for maintaining a high degree of vaccine uptake. Based on experience with our influenza vaccine candidate, Nasovax, we believe that COVID will be extremely well tolerated and easier to administer, potentially even self-administered. In fact, clinical and preclinical studies with our platform vaccine technology have shown a tolerability profile virtually indistinguishable from placebo. So we are very encouraged about this attribute of our vaccine candidate. As a single-dose needle-free vaccine that is expected to be well-tolerated and thermostable, we believe that COVID has the potential to address many of the current shortcomings of the COVID-19 vaccination effort and offer an important option for use in special populations such as pediatrics and maternal immunization campaigns. Pending authorization, we anticipate ADCOVID finding wide acceptance as a booster for revaccination, including for coverage against variants of concerns and as a primary vaccine in the pediatric population and in developing countries based on its ease of intranasal administration and its expected stability profile. Accordingly, we are excited and cautiously optimistic about our upcoming phase one data readout, which we expect to announce in June. If the results of this trial are positive, we plan to quickly transition into a global phase two clinical development program, which Scott Harris will review in more detail momentarily. We are planning for success and in parallel with the development of our phase two program, we have taken steps to ensure our manufacturing readiness. During the quarter, we announced the expansion of our agreement with Lonza to include the construction of a dedicated manufacturing suite for AdCOVID, which will be capable of supplying product for late stage clinical trials and potential future commercial supply. Manufacturing constraints have been a significant hindrance in global COVID-19 vaccine production efforts, and we want to help ensure our ability to supply ad-COVID on a commercial scale if authorized for use. We are operating in an exceptionally dynamic environment as each new victory or setback in the COVID-19 vaccine space recasts the landscape. Consequently, we have had to be adaptable and prepare to alter our course as events and developments dictate. In this context, we anticipated growing challenges in recruiting subjects to a placebo-controlled study as the authorized vaccines have become more widely available. Therefore, we amended our ADCOVID phase one clinical trial protocol to reduce the number of subjects in this study to approximately 80 adults. I am pleased to report that we have now met the target enrollment in our amended phase one at COVID clinical trial and are on track to announce top line data in June. It's important to note that the size of our amended study is comparable to the numbers of participants in phase one studies of the U.S. authorized vaccine and is more than sufficient to demonstrate the anticipated robust tolerability, and immunogenicity of the vaccine. Should the data support moving forward, we anticipate commencing our proposed phase two development program quickly thereafter. Despite the availability of currently authorized vaccines, there is still significant need and opportunity for a differentiated vaccine candidate like AdCOVID that may offer unique attributes. From a public health perspective, the potential to block transmission is important. And for the individual, the nasal route of administration and anticipated tolerability of ad-COVID may also be very meaningful. Feedback from our key opinion leaders and the public suggests that the appeal of an intranasal vaccine remains strong. And we are optimistic about the future potential of our ad-COVID vaccine candidates to make a difference in the global vaccination effort. Before Scott Harris provides an update on the clinical program, I would like to turn the presentation over to our chief scientific officer, Scott Roberts, to take you through some of the exciting new preclinical data that we have recently generated in collaboration with our partners at UAB. The SARS-CoV-2 challenge model that we will be discussing is considered one of the best animal models for COVID-19 research, and we are particularly encouraged by the new data in this robust model. Scott, please go ahead.

Thank you, Vipin, and good morning, everyone. While our ad-COVID vaccine candidate is progressing through our first in-human trial, we continue to conduct preclinical studies with our collaborators at the University of Alabama Birmingham. and St. Louis University. We will be reporting on additional data from other preclinical studies shortly, including a study evaluating the ability of ADCOVID to provide cross protection against the emerging variants of concern. But today, I would like to share with you the results of two important preclinical studies that provide exciting insights into the activity of ADCOVID. The preclinical study results we are presenting today build on the results of efficacy challenge studies we have previously shared with you, showing that a single intranasal dose of ADCOVID completely protected mice from clinical signs of infection and resulted in a greater than 1,000-fold reduction in SARS-CoV-2 virus in the lungs of vaccinated mice. If you refer to slide five, you will see that these results are graphically presented. One of the points I'd like to emphasize about the human ACE2 transgenic mouse model we have used is that it is a very stringent model for controlling viral replication with very high levels of infection and viral replication in the lungs. In our new analysis, we evaluated the effect of ad-COVID vaccination on the amount of infectious virus in the lungs of mice infected with SARS-CoV-2. The left and middle portions of the slide, show the profound reductions in viral RNA that resulted from vaccination with ADCOVID. As you can see on the right-hand portion of the graph, vaccination with ADCOVID resulted in an inability to recover infectious virus from the lungs of challenged animals three days post-infection, whereas nearly 300,000 plaque-forming units, that is greater than log five of virus, were recovered from the lungs of the unvaccinated control mice. It is important to emphasize here that these results were obtained following a single intranasal dose of ADCOVID. We are excited about the ability of ADCOVID to provide sterilizing immunity in vaccinated mice in the face of such high levels of viral replication, as it may have direct relevance for ADCOVID to provide protection from COVID-19, and more importantly, block transmission. We have also evaluated how vaccination with AdCOVID affects the development of inflammatory lung disease associated with the infection of SARS-CoV-2 virus. On slide six, you will find low and high magnification pictures of lung sections obtained from human ACE2 transgenic mice four days post-challenge with SARS-CoV-2. What is important to note here? is that the massive lung inflammation observed in the unvaccinated mice after infection with SARS-CoV-2, shown on the left-hand side of the slide, was essentially prevented following vaccination with a single intranasal dose of ADCOVID, shown on the right-hand side of the slide. These data are, of course, consistent with the ability of ADCOVID to dramatically reduce viral replication and completely neutralize infectious virus in the lungs of infected mice and provide further evidence of the potent protective effects of ad COVID vaccination. As I mentioned earlier, we will be reporting on the ability of ad COVID to induce cross-reacting antibodies that are able to neutralize the emerging variants of concern. Recall that another way ad COVID is differentiated from nearly all other COVID-19 vaccines, either authorized or in development, is that we are targeting the immune response specifically to the receptor binding domain, or RBD, of the viral spike protein. We believe that by doing this, we can focus the immune response on the most relevant portion of the spike protein, which may result in a differentiated neutralizing antibody response that includes antibodies that are not present in response to the entire spike protein targeted by other vaccines. We look forward to sharing the results of those important studies with you shortly. On a related note, we are advancing the preclinical evaluation of several variant of COVID vaccines, including EdCOVID-P1, as we prepare for a clinical study of that vaccine later this year. I will now turn the presentation over to Scott Harris to discuss our clinical efforts. Scott?

Thank you, Scott. We're encouraged by the progress we have made in our phase one COVID clinical trial and our comprehensive plans for a global phase two development program. Let me begin with a brief review of our phase one clinical design and the outcomes we anticipate reporting in June. Please refer to slide eight of the earnings call deck. As Vipin noted, we amended our COVID phase one protocol due to the challenges of recruitment in placebo-controlled studies in the U.S. as a result of the widespread availability of authorized vaccines. We have adjusted our enrollment in this study to approximately 80 subjects, randomized five to one to receive one or two doses of ADCOVID or placebo administered in three dose groups. Immunogenicity readouts will include neutralizing antibodies, anti-spike IgG, and anti-spike IgA as an indicator of mucosal immunogenicity measured 28 days apart after the first and second doses. Top-line results on antibody responses are expected in June, with T-cell readouts expected to follow approximately four to six weeks thereafter. As Vipin noted, the size of the trial is similar to the phase one studies of the authorized COVID-19 vaccines, and more than sufficient to demonstrate a clear vaccine effect and establish the tolerability profile of ADCOVID. Moving on, we have developed a robust slate of Phase II clinical trials to support our anticipated ADCOVID target product profile, which is shown in slide 9. As you can see from this slide, the planned Phase II studies are meant to directly support the key elements of our differentiated target product profile, or TPP, to evaluate whether ADCOVID will boost the natural immune responses to wild-type and variant viruses, we plan to conduct a study of naive and previously infected but unvaccinated individuals in low-access countries. To confirm our belief that ADCOVID will boost the immune response to wild-type and variant viruses in previously vaccinated individuals, we plan to conduct a revaccination study with parental and variant vaccines in a country with good vaccine access, such as the U.S. This study will also confirm the ability of ADCOVID to provide mucosal immunity to individuals previously vaccinated with a parental COVID-19 vaccine. To confirm that ADCOVID will be well tolerated and immunogenic in children down to two years of age, we plan to conduct an age-based de-escalation study in young children and adolescents. And finally, we believe the safety of ADCOVID in pregnant and breastfeeding women can be established by conducting a maternal immunization study to demonstrate that ADCOVID is safe for use in pregnant and breastfeeding women. Switching gears now and moving to slide 11 and our ALT801 program, we anticipate a top line data of our phase one clinical trial next month. The ALT801 phase one clinical trial is evaluating single ascending doses and six and 12 week multiple ascending doses of ALT801 and overweight and obese subjects. At this time, we've completed enrollment in the single ascending dose and three planned cohorts in the multiple ascending dose phase of the trial. Looking ahead, we anticipate reporting 12-week data in the third quarter of 2021. If the data from this trial are positive, we plan to transition to a 52-week phase two biopsy-based trial in NASH patients in early 2022. We also anticipate filing an IND in the second half of the year to initiate a separate NASH study in the United States. But there may be more to the ALT801 study. As noted now on slide 12, Novinordisk and Lilly have executed successful Phase III programs that have de-risked the obesity space previously occupied by safe and ineffective drugs. However, GI intolerability has been the Achilles heel of GLP-1-based treatments with side effects leading to treatment discontinuation. If the impressive weight loss and safety of ALT801 in preclinical studies are translated to the clinical setting, ALT801 could become a best-in-class treatment for this multibillion-dollar indication. The filing of an IND in obesity is being evaluated with the final decision based on the upcoming Phase 1 data readout. I will now turn it over to Will to give an update to our first quarter financial results. Will?

Thank you, Scott, and good morning, everyone. For today's call, I will be providing a brief update on our first quarter 2021 financial More comprehensive information can be found in our 10Q filed with the SEC today. Altamune ended the first quarter with a robust balance sheet, including cash and short-term investments totaling approximately 227 million as compared to 216 million at the end of 2020. The increase in our net cash during the current period is attributable to 34.2 million of net receipts during the quarter, primarily due to our utilization of the at-the-market or ATM offering program, partially offset by approximately $20 million of cash used for operating activities. With these additional cash receipts, we remain solidly capitalized to advance our pipeline candidates through potentially value-generating inflection points in 2021 and beyond. Turning to the income statement, revenue in the first quarter of 21 was $800,000. compared to $2.2 million in the first quarter of 2020. The change in revenue between the periods was primarily due to a decrease of $2 million in barter revenue due to the timing of clinical trials and development activities for Nasashield, which was partially offset by $500,000 in revenue attributable to the TCOVID program. R&D expenses were approximately $12 million in the first quarter compared to $7.2 million in the first quarter of 2020, which represents an increase of 4.7 million. The change is primarily the result of an increase of 5.4 million related to development activities for our COVID programs, partially offset by a decrease of 1.5 million in charges related to the contingent consideration liability in connection with the acquisition of Alt-801. G&A expenses were 3.8 million in the first quarter of 21 compared to 2.3 million in the prior period, primarily due to increased stock comp expense and additional labor related costs. Net loss for the three months ended March 31, 2021 was 14.9 million or 38 cents net loss per share compared to 3.9 million or 26 cents net loss per share for the first quarter of 2020. The difference in net loss is primarily attributable to higher research and development and general administrative expenses. I will now turn it back over to Vipin for his closing remarks. Vipin.

Thank you, Will, and Scott Roberts and Scott Harris for joining me today and sharing your perspective. And thank you, those of you on the call today or listening to the replay, for your continued support and interest in our programs. We have several promising and important shots on goal this year. As you have heard, we are eagerly awaiting the data readouts from both the ADCOVID and ALT801 programs. We believe there is tremendous opportunity to create value for our stockholders if either or both programs advance. I'm confident in the clinical development strategy we have laid out to further the development of our ADCOVID and ALT801 candidates and look forward to sharing the initial top line data and our continuous progress with you. Operator, that concludes my formal remarks. Could you please instruct the audience on the question and answer procedure?

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Seamus Fernandez with Guggenheim Partners. Please proceed with your question.

Oh, great. Thanks for the question. So, just wanted to ask a few here. First, on the AdCOVID program, has the agency approached your team with any questions with regard to the possibility of coagulation safety issues and being able to disprove that pre-clinically. I know this is very challenging and perhaps not possible, but just wanted to get a better sense of that from your perspective. And then in terms of the change from 180 patients and reducing that number down to 80, Can you just give us the reasons for that? Is it just confidence in the data that you see upcoming in the phase one clinical data set, and then that will be obviously expanded and borne out in the full phase three? And was that agreed upon with FDA in terms of just the size of the required clinical study? And then if I may, just two additional questions. As we think about the data that you are anticipating to be able to move forward with conviction in the phase two clinical studies, what's the threshold for neutralizing, IgG neutralizing antibodies that you believe is necessary to move forward with a single dose of ad-COVID?

Thanks. Yeah, good morning, Seamus. Maybe what we can do is divide and conquer. So Scott Roberts, do you want to take the first part of the question and then turn it over to Scott Harris and perhaps come back for the third part of the question?

Sure, happy to. And good morning, Seamus. Thanks for the questions. So with respect to the FDA and the, you know, TTS, no, there has been no communication about that. The FDA is clearly aware of our GLP toxicology studies where we were able to demonstrate that there was no systemic dissemination of the vector following intranasal delivery. And while there's more questions than answers about the mechanism of this effect, one thing that does seem to be more likely than not, I would say, is that systemic exposure of the vector and vector components may have the catalytic effects on the PF4. So in the absence of that, I think we're in good stead. As you said, trying to prove a negative there would be very difficult, especially given the rarity of this, but no formal communication or informal from the FDA on that point. And Scott, do you want to go ahead and handle the clinical question?

Right, and then I'll turn it back over to you, Scott, for the final question. So, shameless, we have a lot of confidence in the size of the study. The readouts are clearly comparable to the size of the Phase I studies of the authorized U.S. vaccines. I think that gives us additional confidence and also based on the readouts of our prior studies. And, you know, we've had no... a specific indication that this would be unacceptable to the agency, especially in view of what I've just mentioned. Scott, do you want to answer the third question?

Sure. And that question related to, you know, our expectations for neutralizing antibody in order to continue the program forward, especially as a single dose vaccine. you know, to begin with, Altamune will still refrain from numerical expectations because of the variability in the assays and the way that they're done. And so as far as a titer, I don't think that it's productive to go down that road. I think most people are comfortable with the relationship to convalescence there. And of course, the serovarian, they need to be characterized and understood the components that made up that convalescence there. So we certainly expect to be in the range of convalescent serum. I think one of the things that we've learned from the studies that have been conducted so far is that really surprisingly low levels of neutralizing antibody are associated with protection. And we've learned that primarily from the inactivated vaccines, which really have, you know, what I would consider to be astonishing low neutralizing antibody titers. And so when we think about that and when we think about the other immunogenicities that we are bringing to the table, the mucosal immunity especially, and the strong T-cell responses, we feel that a neutralizing antibody response on par with convalescent sera is a home run for us.

Great. Thanks, guys. Appreciate it.

Thank you. Our next question comes from the line of Yasmeen Rahimi with Piper Sandler.

Please proceed with your question. My team, thank you for the great updates. I also have a number of questions. I'll just go and ask them one by one. Maybe the first question for you is, can you comment on whether we would be seeing in June data on both the single and the dual shot, or just for one? And if you could just help us, I know, fine-tune a little bit more granularly when in June we should be expecting this data is that early June, mid June and June to the extent you can comment on. And then the third question that I think is really important on top of the minds of many of our clients that we speak with is what are the steps forward beyond that? Can you maybe highlight what would be the size of the phase two, phase three, the timelines around that? That would be really helpful.

Absolutely. Scott Harris, do you want to take the first question?

Right, Yasmeen. Thank you for your questions. Yes, we will have data on both the single and the double doses in the June timeframe. And right now, we are confident that we will be announcing in June. We haven't provided you know, specifics and exactly when that will occur in June. Regarding the future programs, as you can see, there is a robust list of studies that will support the Phase II program and build the target product profile. Obviously, these studies are in different sizes because they have different objectives. so that in all the Phase II program will be large. And there are many different Phase II studies to compare against, but we have a multitude of Phase II studies. So as an approximation, I would say that the Phase II program is large and will be executed between the readout in June and toward the end of the year.

Thank you for the color. Maybe if I could just have a follow up on that same question. We understand there are quite a number of debates, depending on the geography, whether a placebo would be needed in future phase two, phase three, and whether orthogonal vaccine approaches. If you could just comment on those types of discussions where maybe regulators stand on, that could be helpful. And then I have one Nash question.

Right. Well, as you know, because of the availability of authorized vaccines in the U.S., it's been increasingly difficult for any sponsor to do a placebo-controlled trial. That paradigm will change as we move to the variant vaccines and revaccination where there would be some latitude to do that. Clearly, as one goes around the world, there are many opportunities to study the vaccine in unvaccinated populations where a placebo control would be very acceptable. And that has been the basis of the strategy of moving some of the Phase II programs, at least one of the studies, to a low-access country.

Thank you, Scott. Yeah, go ahead, sorry.

I would say that the regulators have not been very specific about the question of placebo control. Clearly, the FDA is quite interested in placebo-controlled studies more so than comparator-controlled studies. They're more robust, but the specific requirements have not been announced by the agency.

Thank you, Scott. Maybe this is another question for you in relation to the announcement to file an IND for the obesity indication. Just if you could highlight to us the thoughts behind that and then why this is a focus for the second half. And maybe how different is the regulatory path for obesity versus the NASH? That could be very helpful for us.

Right. Thanks for the question, Yasmeen. Well, as you know, when we announced our program in 2019, the regulatory space in NASH and obesity were quite different. And as you can see, since this time, there's been somewhat more uncertainty about the acceptability of surrogate endpoints in NASH, but much more confidence in programs like the NOVA Nordisk and the Lilly programs to move ahead. As you know, we previously had ineffective and unsafe drugs in this space, and now we have the prospect of two approvals in the near future, both on GLP-1-based compounds. in obesity with robust efficacy, but really very concerning tolerability with lots of discontinuations. You know, we believe that we can beat that. We think that's a low hurdle, and we think based on our preclinical studies that we can achieve excellent, if not better, weight loss with better tolerability in the prospect of even not needing dose titration. and obviously we'll speak to that with our study results. So NASH and obesity are both billion dollar indications and it behooves us to take on both because we not only will have a drug for NASH and obesity and remember that more than 80%, if not more than 90% of patients with NASH are obese. So consequently, if you're treating obesity and you do get an indication of obesity, you're naturally capturing most of the entire NASH space, and not just the people who have NASH, but also NAFLD. So it's an opportunity that we're strongly considering. It's much going to be based on our readouts and the amount of weight loss that we see in our Phase I study, and consequently, the decision to file that IND and develop a program will be data-driven.

Yeah, and I would just add, yes, that the We're not de-emphasizing NASH. We just think that there's a parallel opportunity here in obesity that became very clear to us as we go and talk to KOLs, we talk to potential strategic partners. Everybody wants to know, what about obesity? It looks like you have a drug for obesity as well. So it became clear, and our preclinical data clearly shows that. And if we see similar weight loss in our human trials, then by all means, it makes sense to proceed with obesity in parallel with NASH.

Thank you, team, for taking our question.

Thank you. Our next question comes from the line of Koichi Chikuri with Jefferies. Please proceed with your question.

Yes, good morning, and congrats on all the progress you've made over the quarter. Just a few questions from me here. You mentioned you would like to see neutralized antibody titers on par with convalescent serum. I'm hoping you can provide a little bit more details around that convalescent serum. Is that sera compared or mostly for mildly infected individuals, hospitalized patients? Any color there would be greatly appreciated. And I guess also, just related to another question I was asked earlier, I'm hoping you can provide a little bit more details around your latest thoughts on the data set that you think you'll need to generate to support a regulatory filing? Is it just immunogenicity data? Is it efficacy data? Any color there would be helpful. And I guess just, and is that something you think you can generate on your own, or do you anticipate needing a partner for that? Thank you.

Scott Roberts, I, thank you, Chekori, Kelechi, sorry. Scott Roberts, do you want to take the first question?

Sure. All I can say at this point is we'll be providing the description and composition of the convalescent sera as we release the data so that those data can be interpreted at that time.

Okay. Thank you for the second question. As you know, the landscape is rapidly changing. I think there's scientific evidence consensus of a correlative protection, being neutralizing antibodies, but the regulators have to accept that. If the regulators do accept a correlative protection, we could get authorization or approval based on an immunogenicity readout, and that may come with a later obligation of doing an outcomes-type trial. But if the approval or authorization is based only on the correlative protection that is immunogenicity. The obligation to do trials, the size of the trials is much smaller. It's probably a safety database of approximately 3,000 subjects. And as you know, it's much larger for outcomes trials. So clearly we could do a trial of that magnitude. A much larger trial is something we would anticipate doing with a partner because of the expense. of the trial and the landscape is rapidly changing and we need to remain flexible and we are.

Yeah, and Kelechi, I would just add that with regards to, you know, future development and funding, we continue to talk to multiple sources. We think our phase one data, the quality of that data is going to be critical in advancing those discussions. So both we are in discussions with potential corporate partners as well as with the government sources of funding to develop our vaccine. And we'll continue to do that. It's really going to be data-driven, mainly this Phase 1 data that we are expecting here soon.

Thank you.

Thank you. Our next question comes from the line of John Welbin with J&P Securities. Please proceed with your question.

Hey, good morning, and thanks for taking the questions. Just a follow-up on Alt-801 and the obesity indication. I was hoping you could give us a little more context on what you'd want to see to differentiate with just moving forward in NASH versus adding on the obesity indication. What kind of magnitude of change do you want to see, I guess, in body weight and then also with the GI tolerability profile? What would make it interesting to compel you to move forward in obesity?

Scott Hess. Yeah, Jonathan, thank you for the question. So what I'd rather do is relate or bring in outside opinions, and these have been stated, and refer to Juan Pablo Frias, who is an expert in this space, and he's publicly stated that anything greater than 2% at six weeks, he thinks, would be a success. Could you please refresh me on the second part of your question?

So my question is, when you're making the decision to move forward in obesity, what magnitude of difference do you need to see in between just moving forward in NASH or adding on obesity? Just trying to kind of understand when we see this data, are you going to at the same time say this is worthwhile in obesity or is it going to be a decision later on?

Well, it's really the same decision because if we get that kind of weight loss that we're anticipating, we're going to have a successful NASH drug because weight loss is the most potent mechanism for treating NASH. And we think that all of the beneficial effects of weight loss are going to convey to NASH. So we believe that the decision point would be the same on both programs.

That's helpful. Thank you.

Thank you. Our next question comes from the line of Lisa Baker with Evercore ISI. Please proceed with your question.

Hi, good morning, and thanks for taking the question. I'm just looking at slide five where you're discussing the sterilizing immunity in mice, and so what is actually the definition of sterilizing immunity, and what's the difference between, you know, how do you think about the replicating viral RNA versus the infectious virus and maybe you can discuss a little bit of the differences in between those and what actually is sterilizing.

Scott Roberts?

Sure, happy to answer. So let's start with sterilizing. I think a consensus definition of that would be no infectious virus. The inability of the virus to replicate in the host, and that means also to spread. And that's what we demonstrate in the lungs, that no infectious virus could be found. Now, when we looked at the RNA, you know, the total RNA, which includes both the input dose, the dose that was given to challenge the animals with the SARS-CoV-2, and any replication that occurs, That RNA is certainly representative of the virus being present, but it's not equal to infectious virus. And the reasons for that are numbers. The neutralization may happen a little bit later. But more importantly, not all of that RNA is necessarily encapsulated in a virus particle that represents an infectious unit. You've got lice cells. that release the RNA. So there's a lot of RNA signal that may or may not be associated with virus particles. And then those virus particles may or may not be neutralized by mucosal antibody, for example. So that's the disconnect between the RNA and the infectious virus. But I will note that on that slide, if you look at the infectious, the replicating virus, you can see that two of the animals had you know, no detectable replicating RNA either. And so we are really driving down the ability of the virus to replicate and to the extent that we cannot find in a very, very sensitive assay any infectious virus present in the lungs of those animals.

Okay, that's helpful. Thank you. And then I guess the amount you're exposing, the amount of virus you're exposing the animals to, is that Consistent with what you'd see if you came, you know, I mean, I'm just trying to understand how that relates to real world. Probably much higher.

Okay. Yeah, much higher. I mean, and that's typically how the challenge studies typically use, you know, around 10,000 infectious units, and that's in the range of what we're using here. It varies by experiment, but certainly around that. That's probably a lot more than you're getting from somebody's sneeze or something like that.

Okay, very helpful. Thank you. And then as you kind of think about what's going on, where we are with the pandemic, and in terms of our availability of vaccines, is it emergency use authorization? Sorry, always hard to say that. EUA, is that still, you know, something that you think is you know, available to sort of the next generation of vaccines? Or do you think full approval is going to be in the cards? How are you thinking about the regulatory strategy?

Scott Heddis, you want to take that?

Hey, Lisa. The, there are differences between authorization and approval. The major difference is the amount of follow-up or time. Typically, with approval, it's six months, but with authorization, it's only two months, and we're seeing that play out right now as the Pfizer vaccine is being filed for approval. It's basically the amount of safety data that you have. It's fairly clear that there's a need for a multitude of vaccines, even in the U.S., especially as the variants come out. And more than likely, the FDA will take a strategy to keep pace, with the emerging need, which is every day, we'll probably continue to issue authorizations. That would be the prospects that we would see, but obviously that's up to the agency.

Okay. And then as you're thinking about phase two as well, how are you thinking about variants versus sort of, I guess, the wild-type variants? And that's my last question. Thank you.

Right. We are in the process of manufacturing variant vaccines. I'll let Scott talk more deeply into that, but we will have that vaccine for study toward the end of this year. And that will be a revaccination study or a study in previously infected individuals. So we've built out the entire variant program. We're manufacturing the vaccine. We will have it available and we will put it into a phase two study to go along with our other phase two studies as outlined in the slides that have been presented.

I can go ahead and add my perspective on that. I think that we can imagine two scenarios. As I indicated in the call, we're very keenly interested in the ability of the prototype COVID vaccine, which is directed against Wuhan isolate, to neutralize in a very effective way variants of concern. And that stems from the fact that our approach is fundamentally different from the majority of vaccines. We're focused on the RBD, and that could bring interesting new antibody repertoire to the table, for example. So we certainly need to understand that. And in the context of variants that are mildly different, and that's how it really characterized the ones that are out there right now. They're mildly different compared to the parental string. We'd have to see. There may be an opportunity to continue using the prototypic one, but we're not resting on that. We can't assume that that's going to be the case, and we can't assume that a variant that is really very different, a different serotype, for example, no longer neutralized on any level or something like that, or has clear enhancement of disease might come along. And so the importance of being able to match a vaccine to the variant is still vitally important. We're prepared for that. And as Scott indicated, we're going to conduct the clinical studies that are required to show that when we make a variant, everything's behaving the same, the safety, the immunogenicity, and that'll pave the way for responding in real time. as necessary for a variant that is really a departure from the prototypic strain of what might be circulating. So I think we've got two plays here, one involving the possibility that the prototypic provides protection, sufficient, and then one where we're clearly engaged on and able to execute where you do have the matched variant vaccine for the variant that is at hand.

Thanks.

Thank you. Our next question comes from the line of Yuan Z with B-Reilly Securities. Please proceed with your question.

Hi, this is Yuan. For my end, thank you for taking our questions. So can you provide some update on your preclinical rodent study you are conducting to study transmissions? And where do you think we are as a society in appreciating the residue unmet needs that remains to be addressed, considering the widespread use or availability of EUA-approved vaccines and the now easing of the mask mandate? And also, can you provide some update on the T-COVID program? And is there any learnings about that platform from that experience? Thank you.

Scott Roberts, do you want to go first?

Sure.

So with respect to the transmission study, those studies are ongoing. We're very much looking forward to those and to having clear data showing the ability of AdCOVID to block transmission. In the greater context, I think that the ability to Effectively, and I should say most effectively, block transmission is still an important aspect of COVID, despite the clear indications that the authorized vaccines are having an effect on shedding and likely an effect on transmissibility. It's not at all clear that that effect is as strong as it could be, and that's something that you'd want in a second-generation vaccine improved vaccine. So when we think about COVID in the context of the EUA vaccines and what we're learning there, we still see the advantages, the improved tolerability and the potential for even better or best in class ability to block transmission. And as you indicate, with the masks off situation that we find ourselves in now, that that is just as relevant now as it ever was. And then I'll let Scott Harris talk about the COVID program.

Yes, and thank you for your question. Obviously, one of the learnings that we've had is the difficulty of trying to conduct these studies. And it's obviously impacted the T-COVID study as well. We're continuing to enroll. We're continuing to assess the readout, which is still scheduled in the second quarter in June. And if there's any change to that based on the shifting dynamics, we'll inform our investors.

Thank you. That's super helpful.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Dr. Garg for any final comments.

Thank you very much for joining us and participating on the call today. We hope You'll join us on our next quarterly earnings call. Have a nice day.

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