Enanta Pharmaceuticals, Inc.

Good afternoon and welcome to Enanto Pharmaceuticals Fiscal Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of the prepared remarks. Please be advised that this call is being recorded. I would now like to turn the call over to Jennifer Viera, Senior Director, Investor Relations. Thank you. Please go ahead.

Thank you, Operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal second quarter financial results was issued this afternoon and is available on our website. On the call today is Dr. Jay Luly, President and Chief Executive Officer, Paul Mellett, our Chief Financial Officer, and other members of Enanta's Senior Management Team. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements. which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from these statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Ananta does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Dr. Jay Luly, President and CEO. Jay?

Thank you, Jennifer. Good afternoon, everyone. I'd like to take a moment to acknowledge the extraordinary times we are experiencing during the COVID-19 pandemic. Our thoughts are with those who are directly affected. We are grateful for the heroic efforts of caregivers, first responders, and many others who are making great sacrifices for the common good as we navigate through the worst weeks of this crisis. The safety and well-being of our employees is paramount, and we will continue to prioritize it as we move forward. I want to thank our employees for their unwavering dedication to our mission during these last several weeks. In a period of great upheaval and uncertainty, their commitment has allowed us to maintain continuous business operations and momentum that will enable us to execute on our business plans and milestone goals to the best possible extent, given the circumstances. This global healthcare crisis has strengthened our resolve to advance novel therapies for unmet needs, and our core expertise in both virology and respiratory diseases positions Enanta to be part of the solution for COVID-19. and other emerging viral threats. To that end, I'll start by highlighting the newest disease program in our respiratory virus pipeline, namely COVID-19. As you know, in mid-March, we announced that we initiated a program to discover direct-acting antiviral drug candidates for the treatment of patients infected with COVID-19. Based on our proven track record in virology and our capabilities in respiratory diseases, We believe we can leverage our core competencies to discover a potential treatment for COVID-19. That said, we are leveraging our experience and taking a two-pronged approach for our COVID-19 discovery efforts. Not only are we testing compounds from our antiviral compound library for potential activity against the virus, we are using our background and expertise in antiviral mechanisms to discover new candidates to treat COVID-19. We've mobilized our virologists and chemists to begin this discovery program, which involves finding leads and ultimately candidates. Among other mechanisms of interest, an initial focus for us are SARS-CoV-2 protease inhibitors. These are direct-acting antivirals. Not a simple endeavor, but this is what Enanta does and what it does well. We'll continue to update our COVID-19 efforts in the coming quarters. We'll now turn to our lead respiratory virus program, EDP938, for respiratory syncytial virus, or RSV. To remind everyone, RSV is a severe respiratory infection associated with significant morbidity and mortality in infants, the elderly, and immune-compromised adults, and a condition for which there is currently no safe and effective therapy. Each year in the United States, approximately 57,000 children below age 5 and 177,000 older adults are hospitalized for RSV and about 14,000 die from this respiratory infection. We've completed the RSV season in the United States and are on track with plans to move our Phase 2b study, known as RSVP, to the Southern Hemisphere. Given uncertainties created by the spread of COVID-19 in that region, We're also keeping our North American sites ready for reactivation in the fall and winter RSV season, and we're planning to add a substantial number of sites in Europe. If we can complete enrollment for the study in the Northern Hemisphere next winter, we would expect to have data in the third calendar quarter of 2021. As a reminder, RSVP is a randomized, double-blind, placebo-controlled study of EDP938, designed to enroll approximately 70 subjects up to the age of 75 years, randomized to receive either 80 milligrams of EDP-938 or placebo for five days. The primary objective of this study is to evaluate the effect of EDP-938 on the progression of RSV infection by assessment of clinical symptoms measured over the course of the 14-day study observation period. Antiviral efficacy will be evaluated as a secondary endpoint. Obviously, COVID-19 pandemic currently has an impact on any respiratory disease study. In RSVP, we are in the process of modifying our protocol to do testing to exclude the presence of COVID-19 in any potentially eligible patient with RSV. We continue to collaborate with Cepheid, to use its real-time PCR machines, which can now test for RSV, flu A, flu B, and COVID-19. These are the machines that we've used at our North American testing sites. We're in the process of getting additional machines set up in the southern hemisphere sites. We're also on track to initiate two additional phase two studies, one in pediatric patients and one in adult transplant patients by the end of this year concurrent with the RSVP study. Fortunately today, it appears the health effects of COVID-19 in children have not been as severe in adults, and we anticipate parents will continue to take ill children to the doctor even if the pandemic continues into the winter RSV season in the Northern Hemisphere. And given their immune-suppressed condition, we would hope that transplant patients will be on high alert for respiratory illness and be willing to participate in a clinical study. However, we recognize there are potentially more challenges for the transplant study, depending upon how the pandemic moves later in the fall. Regarding the third respiratory virus in our portfolio, we introduced our discovery program for human metapneumovirus, also known as HMPV, at the beginning of the year. HMPV is a pathogen that causes upper and lower respiratory tract infections in young children and the elderly, as well as in COPD, asthma, and immune compromised patients. In fact, it's the second most common cause of lower airway infection in children less than five years of age behind RSV. It accounts for more than 20,000 hospitalizations in this age group each year. HMPV also presents a significant health challenge in the elderly and immunocompromised individuals with more than 100,000 hospitalizations annually. We continue to perform optimization of our current nanomolar HMPV inhibitor leads as we work toward identifying our first clinical candidate for this indication. I'll now move to our portfolio of products focused on the treatment of liver-related conditions. First, let me update you on our clinical stage hepatitis B program with EDP514, our novel class 2 HBV core inhibitor. Last month, we announced that we are pausing further recruitment in Part 2 of our Phase 1A-1B study of EDP514 in nuke-suppressed HPV patients in North America, which initiated earlier this quarter. Nuke-suppressed refers to patients with chronic HPV infection that is being suppressed with nucleoside reverse transcriptase treatment, the current standard of care. We plan to enroll a total of 24 subjects among three escalating dose cohorts with study drug dosed for 28 days. We're regularly evaluating the circumstances around this study and are hoping to resume enrollment within the next couple of months, depending upon whether enough of our clinical sites are able to open. Given FDA guidance on the conduct of clinical trials during the COVID-19 pandemic, and its emphasis regarding the safety of trial participants and integrity of clinical trial data, conducting short-term trials in patients with chronic disease during the pandemic is not practicable nor recommended. As such, we'll continue to follow regulatory guidance to determine when it is safe to resume the study. We're also pleased to be on track to initiate our Phase 1b study this quarter in HPV patients who are not on therapy and who have high levels of the virus in their blood, who are also referred to as viremic. We're optimistic about this study moving forward in viremic patients, given that our sites are in Hong Kong and Taiwan, both areas where COVID-19 appears to be under better control than in Western countries and where there is a large unmet need for HPV treatment. As a reminder, this study will assess the impact of BDP514 on viral load in patients Not on other HPV therapies. We are excited about this study because we expect it will produce our next clinical data readout, which we are targeting for around year-end. I'll now move to EDP305, our pharnasoid X receptor, or FXR agonist, in development for both PBC and non-alcoholic steatohepatitis, or NASH. But first, let me focus on our efforts in primary biliary cholangitis. Earlier today, we announced data from our Phase IIa Intrepid study. Intrepid was a 12-week, randomized, double-blind, placebo-controlled study evaluating the safety, tolerability, pharmacokinetics, and efficacy of ADP305 in subjects with PBC with or without an inadequate response to ursodeoxycholic acid. The primary endpoint of the study was to evaluate the proportion of subjects with at least 20% reduction in ALP from pretreatment value or normalization of ALP at week 12. In the intent to treat, or ITT analysis, treatment with one and two and a half milligrams of EDP305 resulted in 45% and 46% ALP responses, respectively. compared to 11% in placebo. These response rates, while numerically higher than placebo, were not statistically significant. However, in an analysis of the subjects who completed study treatment with no missing value at week 12, the proportions of ALP responders in the 1 milligram and 2.5 milligram arms showed statistically significant response rates of 50% and 62% respectively compared to 11% in placebo. Key secondary objectives were to evaluate the safety and tolerability of EDP305, as well as changes from baseline in the liver enzymes ALT, AST, or GGT. Data from the full ITT population showed statistically significant reductions in absolute amounts of these key biomarkers compared to placebo at 1 milligram and 2.5 milligrams of EDP305. A statistically significant difference in the percent changes from baseline of these key biomarkers at week 12 was also observed in both EDP305 arms compared to placebo. In terms of safety, EDP305 was generally well tolerated in subjects with PBC, with the majority of treatment emergent adverse events, or TEAEs, being mild to moderate. The most common TEAEs included pruritus, Gastrointestinal-related symptoms, headache, and insomnia. These TEAEs are consistent with the safety profile observed across more than 400 subjects exposed to EDP-305 for up to 12 weeks. The incidence of treatment discontinuation due to pruritus intrepid was approximately 3% for the 1-milligram EDP-305 treatment group, 18% for the 2.5-milligram treatment group, and 0% for the placebo treatment group. While we did not meet the primary endpoint for PBC in the ITT analysis, we plan to use these data to help inform our development of EDP305 for NASH. Specifically, we are encouraged that the lower dose of one milligram achieve better tolerability in terms of pruritus without significantly reducing the number of ALP responders and while still having statistically significant effects on key biomarkers of target engagement. We see this as helpful information for the intermediate doses of 1.5 milligrams and 2 milligrams that we plan to use in our Argon-2 study in NASH patients. We believe the dose of 1.5 milligrams or 2 milligrams in NASH could potentially achieve an efficacy and tolerability profile comparable to that of the 1.0 milligram dose in PBC. For more information on the Intrepid Study, please see the slide deck that we will post on our website after this call. Rather than conducting further dose selection studies with EDP-305 and PBC, a disease for which there is already an approved second-line FXR agonist therapy and for which generic fibrates are showing benefit in some studies, we intend to focus our future efforts with EDP-305 on NASH. We see NASH as a disease where FXR agonists like EDP305 have the potential to be important components of drug combinations designed to give maximum benefit to patients. In our NASH program, we remain focused on evaluating EDP305 and Argon-2, a Phase IIb randomized, double-blind, placebo-controlled, 72-week study in approximately 340 subjects with biopsy-proven NASH. While we were ready to begin dosing Argon-2 on schedule in March, we decided to pause recruitment and dosing in the study due to the ongoing COVID-19 pandemic. We did this having in mind the safety of our clinical trial participants as well as the resource constraints of clinical trial sites. As a reminder, the primary endpoint of Argon-2 will be improvement of fibrosis without worsening of NASH, and or NASH resolution without worsening fibrosis. We plan to use doses of 1.5 milligrams and 2 milligrams, which we selected to provide strong target engagement and a balanced profile in terms of efficacy and tolerability. Argon-2 will include a 12-week interim analysis to generate dose information more quickly for potential combinations with other mechanisms in NASH. We're hopeful that we'll be able to resume this trial within the next couple of months, depending upon whether enough of our clinical trial sites for this study are able to open up in the context of the COVID-19 pandemic. Also in our NASH program, we are developing EDP297, our follow-on FXR candidate. We're excited about the compelling preclinical data we have previously shared that demonstrate the high potency and tissue targeting characteristics of EDP297 compared to other FXR agonists in development. Subject to a determination that it is safe to initiate the healthy volunteer study at the trial site in Europe in the context of the COVID-19, we now plan to initiate a phase one study of EDP-297 later in the third quarter, which would likely produce a readout in the second quarter of 2021. Beyond our pipeline, I'd like to take a moment to comment on Maverick, our treatment for hepatitis C developed in collaboration with AbbVie. AbbVie recently announced that it is experiencing lower new patient volumes of hospital-based treatments in several international markets where hospitals are limiting access to non-emergency, non-COVID-19 patients. If the COVID-19 pandemic continues for a prolonged period, who expect this to adversely affect AbbVie's Maverick sales during that period. However, we also expect that those sales will likely shift to subsequent periods since there is no expectation that existing infections will decline materially other than by eventual treatment. We also note that AbbVie has now guided that it expects its calendar 2020 HCV sales to approximately 2.3 billion. Also worth noting that the CDC guidelines issued in April 2020 now recommend that all adults ages 18 to 75 be tested for hepatitis C virus. In closing, I'd like to point to a few key takeaways. Despite a challenging backdrop of COVID-19, which could have effects we don't currently expect, An answer remains well positioned to execute on our business plans and advance our growing pipeline of novel therapies for respiratory viruses and liver diseases. The unusual combination of our strong balance sheet and ongoing royalty revenue allows us to capitalize on the opportunities ahead and to advance our wholly owned pipeline independent of capital market conditions. We are on track with several milestones. First, our Phase 1b study of EDP514 and viremic hepatitis B patients is slated to begin this quarter. Second, we are planning to initiate our first in-human study of EDP297 for NASH next quarter. Regarding our RSV program, our two Phase 2 studies in pediatric patients and adult transplant patients are still on track to begin in the fourth quarter. Finally, we are advancing our RSVP study in the Southern Hemisphere while also keeping our Northern American sites ready for reactivation for the upcoming fall and winter RSVP season. And later this year, we're planning to add a substantial number of sites in Europe. Assuming we can complete the study in the next Northern Hemisphere season, we would expect to have RSVP top line data in the third calendar quarter of 2021. Overall, we are in a very solid position with several opportunities in place. With that, I will now turn the call over to Paul to discuss our financials for the quarter. Paul?