Axcella Health Inc.

Good morning, ladies and gentlemen, and welcome to Excella's second quarter 2022 conference call. Please be advised that today's call is being recorded and that all participants will be in a listen-only mode until the question and answer session. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. If you require operator assistance, please press star then zero. And now for opening remarks, I would now like to hand the call over to Bob Crane, Chief Financial Officer at Accelop. Please go ahead, sir.

Thank you very much, operator. And good morning, everyone. We would like to advise that certain remarks we will make on today's call, such as those relating to our cash runway and our ongoing clinical trials of AXA 1125, include forward-looking statements that are subject to various risks and uncertainties. These risks and uncertainties are detailed in our SEC filings, including our most recent Form 10-Q, which we plan to file later today. These filings can be assessed on our website, accelatx.com, or on the SEC's website. All forward-looking statements represent our views as of today, August 12, 2022, and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update these forward-looking statements. With that, Let me turn the call over to our President and CEO, Bill Hinshaw, to begin the discussion. Bill?

Thank you, Bob, and good morning, everyone. It's a pleasure to be speaking with you again. Today, I plan to briefly review the progress we've made during the past quarter. Following my opening remarks, Bob will then update you on the financials before we open the call to your questions. On August 2nd, we reported powerful results from our Phase 2A trial of AXA-1125 in the treatment of long COVID. As you may know, long COVID, also known as post-acute sequela of SARS-CoV-2 infection, or PASC, is a condition in which patients experience a broad range of symptoms for weeks, months, or years after their infection with COVID. Most of the people that contract viruses recover naturally, and return to their regular lives quickly. What is distinct about COVID is the proportion of number of patients who have persistent symptoms like fatigue post-infection. In general, while there's some variation in the numbers, estimates suggest that 20 to 30% of patients who contract COVID go on to experience at least some long COVID symptoms. If you simply apply these numbers to all the confirmed cases to date, this equates to a long COVID population as high as 23 million people in the U.S. alone. We are now a few months into the timeframe when a portion of the large number of people who contracted Omicron will be considered to have long COVID, 12 weeks post-infection. And at present, there are no therapeutics for long COVID. People with long COVID suffer from numerous symptoms, but by far the most common is fatigue. In fact, most long COVID patients suffer from chronic fatigue. The condition is so severe and debilitating that people with long COVID often find themselves unable to work, perform tasks of daily living, or effectively care for their children. The condition can truly wreck people's lives. And this is happening at an enormous and growing scale. with an estimated 1 million Americans out of work already due to long COVID. The subjects who received AXA 1125 during our Phase 2A study experienced improvements in measures of mental and physical fatigue that were both highly statistically significant and clinically relevant compared to those who received placebo. Mean changes in total physical and mental scores in the CFQ-11 versus placebo or minus 4.3 for a p-value of .0039, minus 2.94 for a p-value of .0097, and minus 1.32 for a p-value of .0097, respectively. We also saw clinically meaningful shifts in the severity of physical and mental fatigue that were also noted in a notable majority of subjects, who received AXA 1125 compared to those who received placebo. There was a statistically significant correlation of improvement in fatigue score and greater distance achieved in the six-minute walk time with a strong p-value of .0027, an objective measure of physical ability, a result that was only observed in the patients who received AXA 1125. Now, the findings of our Phase IIa study occurred over a short 28-day period. This is the first and only blinded placebo-controlled trial to report positive outcomes in long COVID to date. In addition, the findings also confirmed the hypothesis that motivated our development of AXA-1125, that long COVID patients suffer from significant mitochondrial dysfunction. And our preclinical and clinical work suggests that AXA-1125 may have its effects by essentially recharging the mitochondria and positively modulating other pathways such as inflammation and endothelial function that are dysregulated in long COVID. Now, long COVID is a persistent and growing part of the ongoing pandemic. Research has shown that long COVID can be experienced regardless of vaccination status, variant type, or severity of the acute viral infection. no one is immune, and cases continue to rise. So going forward, there will be a large and sustained market for long COVID treatments. The knowledge that long COVID is serious and growing as a problem has led to interest in addressing the needs of the patients at the federal level. In April, the Biden administration issued a memorandum to federal agencies instructing them to take steps to combat long COVID. On August 3rd, the administration released two reports on long COVID. The first, the National Research Action Plan on Long COVID, outlines a U.S. government-wide national research agenda focused on advancing prevention, diagnosis, and treatment for individuals and families experiencing long COVID. And the second, the Services Report on Long COVID, set out federal services available to the American public to address longer-term effects of COVID-19. Over the past months, we've engaged with leadership in Congress regarding the needs for treatment for long COVID. And we are in the process of preparing our data package for the end of phase two meeting with the FDA later in the year to discuss our plans to move as rapidly as possible towards registration. Trial design will be confirmed following these regulatory discussions, and the trial size is expected to be consistent with a disease, not a vaccine, meaning a much smaller sample size will be necessary. We believe that the success of our long COVID trial also puts in us a position to explore opportunities to address a range of other diseases, and as we expect to make announcements regarding these indications early next year. Accela is proud to be playing a leading role in the efforts to address the needs of patients with fatigue, the most common symptom of long COVID patients. Our research and positive trial results, along with our EMM platform, have put us in a leading position in the sector with an attractive and differentiated profile to make progress towards understanding the underlying biology of and treating the complex condition that is long COVID. In the coming months, we will continue to pursue a focused strategy to achieve our goals of tackling a range of complex diseases by capitalizing on the therapeutic potential of our endogenous metabolic modulator platform. We expect to report interim data from our NASH trial, another large and underserved patient population, where our multi-targeted mechanism of action and attractive profile offers a differentiated approach. This data will be reported toward the end of this quarter. We're also intent on broadening our pipeline by leveraging key insights we have gained from the trial and the emerging science.