Entasis Therapeutics Holdings Inc.

Good day and welcome to the Entisys Therapeutics Third Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I will turn the call over to Bruce, Managing Director with LiveSci Advisors. Please go ahead, sir.

Thank you, Operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties, It could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements. Information presented on this call is contained in the press release we issued this morning, which may be accessed from the investor's page of the Entesys website. Joining me on today's call from Entesys are Manos Peros, President and Chief Executive Officer, and Mike Gutsch, Chief Financial Officer. Manos will provide a brief summary of highlights of the quarter and recent weeks before turning it over to Mike for a review of the financial results. Following their prepared remarks, David Alterac, Chief Medical Officer, and Ana Diaz-Triola, Chief Commercial Officer, will join Manos and Mike for our question and answer session. I will now turn the call over to Manos.

Thank you, Bruce, and good morning, everyone. Thank you for joining us on today's call. We will cover what has been a really exciting quarter parenthesis with compelling data from our lead program, Soldor, and the prospect of a safe and effective life-saving treatment were seriously ill, as in intubated patients. This morning, we issued a press release of LNVs and other highlights for the period, as well as our third quarter financial results. I'll spend a few moments summarizing some of the most significant pipelines and corporate developments before turning the call over to Mike for a review of our financials. Then we will be happy to take your questions. The major news for the period was, of course, the positive top-line data from the ATT&CK Phase III trial that evaluated Solbactam, Dulobactam, or Soldor for the treatment of aceticobacter infections. In this landmark study, Soldor demonstrated efficacy in 28-day all-cause mortality, with all analysis assessed to date unequivocally favoring Soldor. In addition, there was a statistically significant difference in clinical cure rates at the end of treatment and at test of cure, also favoring Soldor. Soldor was also generally well-tolerated with fewer drug-related adverse events compared to standard of care and a statistically significant reduction in nephrotoxicity with a p-value of 0.0002. This endpoint is particularly meaningful for patients who are already vulnerable and may suffer from multiple comorbidities, which current standard of care options frequently exacerbate. Soldor is the first investigational agent to demonstrate efficacy in a well-controlled trial in patients with acinetobacter. Rarely seen combination of efficacy and safety in seriously ill patients suffering from drug-resistant gram-negative infections. Our data is unequivocal and compelling, as I know many of you have found in antibacterial field where in recent years we have seen mostly incremental improvements. This is not by chance. First of all, SOLDER was designed and developed to treat Acinetobacter from the drawing boards of our labs forward. Then with ATT&CK, we studied Soldor in critically ill patients with few treatment options. These are the patients who would most benefit from Soldor if approved. ATT&CK was designed to be the single pivotal study which will underlie filings to regulatory agencies in the US, Europe, and China. This may be a first new antibacterial field, but the idea of delivering a clinical study to provide clear efficacy and safety in the appropriate patient population is not new. The scientific and medical landscape, as well as our own work over the past six years, enabled an antibacterial personalized medicine approach that ensures the right drug in the right patient at the right time. This is an approach that has already made a difference in many other therapeutic areas, like oncology and rare diseases. In our R&D strategy, we adopt some of the same principles that underlie the success in those areas. Careful characterization of the medical need, selection of the right molecular target and modality, and the diagnostic to select the patients who will benefit most from our new treatments. It is this unique effort at Entesys over the past six years which led to the successful outcome of the ATT&CK trial, with a strong top-line result that we disclosed we have high confidence in the data package that we are assembling for regulatory submissions, as well as a highly innovative, focused, and streamlined commercialization approach. Speaking of which, the data that we disclosed this past week is not only compelling proof of the validity of our scientific approach, it also provides evidence which is becoming the foundation of our commercial strategy. Here's a few numbers from the ATT&CK trial that really bring this message home. of yasinitobacter patients enrolled in ATT&CK had a carbapenem-resistant infection. Over 30% of those patients had spent more than 14 days in an intensive care unit before they were even enrolled and were treated with today's standard of care. 32% sadly died within 28 days, and that despite being enrolled in a well-controlled clinical trial and randomized to the best care one can receive today for an yasinitobacter infection. It is not surprising that real-world mortality numbers for these patients often exceed 40%, leading the World Health Organization to recognize Acimetobacter as a research and development priority, and the Centers for Disease Control as an urgent antibiotic-resistant threat. Acimetobacter is truly a global medical need which today's treatment options simply are not able to address. Beyond the undeniable impact on patients and their families, Acinetobacter puts a significant burden on the healthcare system. Treating this insidious pathogen also costs time and costs money. Acinetobacter costs time. The patient's length of stay in the hospital is measured in weeks instead of days. Acinetobacter also costs money. The cost for patients can exceed $75,000 in the US. While Acinetobacter is a rare pathogen, It is found in a variety of sites of care, including large urban hospital ICUs and outpatient specialty centers such as transplant, cancer, and burn centers. In addition to diverse settings of care, Acinetobacteria is also found on a variety of body sites, including the lung, the bloodstream, the urinary tract, and wounds. Today, many patients survive cancer or live long and active lives after organ transplantation. These patients are amongst the ones most vulnerable to drug-resistant bacterial infections acquired in the hospital. These tremendous medical advances and the significant resources dedicated to treating these patients should not be undermined by opportunistic infections, such as Acinetobacter, which used to be and could still be treatable with the right antibiotics. In this tough-to-treat patient population, the robust data in both safety and efficacy make a compelling case for the adoption of Soldor, if approved, as a life-saving medicine. As we complete the analysis of the ATT&CK trial data and prepare for submission of a new drug application in mid-2022, we continue to develop and refine our commercialization approach for Soldor. This will be a targeted commercial approach best suited to maximize the value of Soldor by focusing on sites of care where simetobacter patients can benefit the most from a potential life-saving option. Given the unmet medical needs and the strength of our Phase III clinical data, we believe that if approved, we can create a different commercial go-to-market strategy that will be pathogen-focused and result in a more streamlined effort. The next steps are focused on building physician awareness, site of care identification and virtualization, patient identification, and payer engagement. These initiatives will enable us to focus our commercialization efforts on the select areas where the burden of Acinetobacter is higher with a goal of supporting early uptake of solder. Equally important, these efforts will highlight this public health concern that is associated with increased morbidity and mortality due to the limited therapeutic options. Finally, we will continue to solicit physician and payer feedback on the top-line results that will further inform our commercialization strategy and support the value proposition of SOLDR. These elements are foundational to creating a differentiated commercial approach that is based on the successes and lessons learned in this space and from other product launches focused on rare, life-threatening diseases. To lead this rapidly developing effort and now transition to a commercial stage company, in the past quarter we welcomed Ana D'Astriola as our new Chief Commercial Officer. Anna comes to us from Summit Therapeutics, where she was instrumental in developing the commercial strategy for the company's first product. With a track record of commercializing products across multiple therapeutic areas, including chronic, rare, and non-infective products, we are delighted to have her spearheading our effort to build the commercialization capabilities needed to bring solder to market and to complement our R&D platform. Before turning the call over to Mike, I'd like to say a few more words about the progress we made in the rest of the pipeline. With regard to Zoliflodasyn, we are pleased with the improvement in enrollment in the past quarter. In partnership with GARP, we are continuing enrollment in the global phase three trial in patients with gonorrhea, with clinical trial sites in the US, Europe, Asia, and Africa enrolling actively. In addition, we are continuing development of our earlier pipeline products, with support from our partners, CARB-X and the NIH. For these efforts, I would like to highlight the introduction of a new first-in-class candidate, ETX0462. This is a novel, there's a baclocyl-co-octane with antibacterial activity against multiple gram-negative pathogens, including Pseudomonas aeruginosa, as well as several high-priority biopsy pathogens. The discovery story of ETX0462 and the many scientific advances that underlie our rational design of novel antibiotics were recently published in the prestigious journal Nature. This is a significant recognition of the work of our scientists and external validation of the quality of our R&D platform. With that, I'll turn it over to Mike for a review of all of our financial results. Mike?

Thank you, Manos. During our third quarter, we reported a net loss of $12.4 million compared to a net loss of $11.1 million for the same period of the prior year. The increase in net loss was primarily related to an increase in general and administrative expenses as the company initiated select pre-commercialization activities. Research and development expenses for the third quarter were $9.3 million compared to $9.4 million in the same period of the prior year. The decrease of $0.1 million was primarily due to a decrease of $0.5 million in expenses related to Soldor and a decrease of $0.2 million in expenses related to our ETX0462 program, partially offset by an increase of $0.6 million in personnel expenses. General and administrative expenses were $4.3 million for the third quarter compared to $3.2 million during the same period of the prior year. The increase of $1.1 million was driven primarily by increases of $0.3 million in legal costs, $0.3 million in personnel costs, $0.2 million in consulting costs, and $0.1 million in insurance-related costs. As of September 30, 2021, cash and cash equivalents were $44.1 million compared to $53.2 million as of December 30, 2020. Based on our current operating plan, We believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the second quarter of 2022.

With that, Manos, back to you for closing remarks. Thank you, Mike. The past quarter has set in motion a series of firsts for emphasis.

We completed the phase three trial of SOLDER, our first further candidate, setting the foundations of our first regulatory submissions for a product that could become the first potential treatment for patients with Acinetobacter. At the same time, our R&D organization continues to produce world-class science. The talented team that I have the privilege to lead is committed to translating our accomplishments into value for our shareholders. And looking beyond the many numbers that we shared with you today, we recognize that our work is ultimately about patients and we are proud to bring these future life-saving treatments to all patients who need them.

Operator, we are ready to take questions. Thank you.

If you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach your equipment. Again, please press star one to ask a question. Our first question comes from Louise Chen from Cantor. Please go ahead.

Hi, good morning, everyone. This is Carvey. We have a couple of questions here. So following the positive top line data for Phase III Sodor reported this quarter, when can we expect a full analysis of the study? Are there subgroups that are most interested in funder study? Second, you have guided mid-2022 for Sodor NDA submission. So just want to get a deeper understanding of the task at hand in preparation for the NDA. and perhaps talk a little bit about some of the contingency factors that might sway your timeline. Thank you so much.

Good morning, Garvin, and thank you for the question. I will turn it over to David to address both your questions. David Aldrich, Chief Medical Officer. But before I do that, just repeat something that we mentioned on our webinar a couple of weeks ago when we announced the data. it is a fairly comprehensive set of top-line data from a phase three trial. While we do expect, as you pointed out, additional cuts of the data and additional analysis, we see the data that we presented from the top-line analysis as pretty definitive when it comes to the key endpoints, which are both relevant for entry approval and, as I mentioned earlier, for the fact that we set the foundations of our commercialization. But David, over to you.

Yeah, thanks, Mano. As Mano just mentioned, when we identified what we would include in the top-line data, it was important to ensure that we effectively communicated the critical endpoints, the critical analyses of this study. And to that end, we reported out, obviously, the 28-day all-cause mortality. The other very important clinical endpoint, which was clinical cure, as well as the critical safety data, including the overall adverse event profile and the nephrotoxicity. And as you've seen, all were highly, highly indicative of an advantage for Soldor compared to the comparator. In terms of when we have additional data, we are in the process of currently evaluating that data. We obviously will report that when we have the opportunity to look at the totality of the data, but we are currently evaluating all of that. And to the specific point of the specific question, there are a couple of questions Other endpoints that we think will be informative but will not meaningfully change our conclusions or everyone's conclusions based on the data that we reported. So we'll be looking at some microbiologic outcomes. We'll be evaluating some pharmacokinetics. There'll be some data around how long patients were treated, compliance to that treatment regimen, Obviously, more specifics on the safety. We reported overall safety, but we'll have more specifics on comparisons between the two treatment groups in the safety database. And then to your specific question around subgroup analyses. We have a bunch of subgroup analyses that we'll be looking at, including breakdown by things such as age, gender, underlying condition, i.e. pneumonia versus bloodstream infection, whether the patient had a monomicrobic infection or polymicrobial infection, the region of care, their underlying condition, condition, as well as a variety of other things. And so we'll be able to report those out, again, after our full analysis.

For the second question, Carvey, which is the timeline of the FDA submission, we should be guided as you pointed out to me, 2022. You have a pre-NPA with the FDA, of course, once we complete the data analysis that may be playing Again, we are pretty confident on the timeline. We're expecting to derail that, but until we have a discussion with the FDA and confirm with them that the package that we have is suitable, we obviously will update with any changes after that.

Got it. Okay. Thank you for taking our questions. Thank you, Garvin.

We'll now take our next question from Jim Malloy from AGP. Please go ahead.

Hey, guys. Good morning. Thank you for taking my questions. I had a quick question on, I think it was fast-track and QIDP designation, the expectations for potentially a priority review. What would you expect to know should you get that and if you'll get that? And then can you talk a little bit about, again, assuming you get a good review and approval, A little more detail potentially on the U.S. sales team, sort of the size, the call points, and the status of bringing them on board.

Good morning, Jim, and thank you for the questions.

I will take the first question, and then I'll be able to answer to give you an outline of our forward-looking thoughts on commercial builds. In terms of the product and submission review timeline, you're absolutely correct. We are a QIDP product. We have fast track review. We do expect, as you know, I think the clock is six months plus two months for review. We're not guiding on approval or on launch, but you can find your own numbers. And after that, as you pointed out, we're looking to launch the product as close as possible to approval. We've been making the necessary investments both on the manufacturing side and then with Anna joining us last quarter, we're starting to prepare for the commercial launch. So Anna, do you want to give Jim a little bit of an overview of how you see things develop over the next few months?

Sure, yes, good morning, happy to. So with the top line results really supporting the commercial strategy, I think we can now begin to reimagine a new go-to-market approach. So our strategy will focus on this rare pathogen and on healthcare organizations where we know Acinetobacter is a problem today and where solder can potentially save lives as we see in the top line data. Based on our current analysis, there are approximately 500 healthcare organizations where asthmatobacter is a problem. So this is great because it allows us to really focus on these sites of care that have limited treatment options and, as a result, see the unintended consequences of increased hospital length of stay, increased cost per patient, and increased mortality rates. Furthermore, I think this also allows us to be very focused and streamlined in building the commercial team. The Salesforce ramp will be informed by the NDA submission and the anticipated approval date of SILDR thereafter. But by focusing on this rare pathogen, we believe that you do not need a very large Salesforce to address this opportunity. So our intention is to build a leaner commercial footprint with associated infrastructure that allows us to really maximize the value of Sildur. And we think a company like ours can be very successful in addressing the unmet need of treating patients with athymetobacter. Manos, I'll turn it back over to you.

Thanks, Anna. And Jim, hopefully we've answered your questions.

Yes, thank you. I was hoping you might have an idea of a number on the sales force. But then also, Could you talk a little bit about the EU timeline? I know you've publicly stated you're anticipating a partner in the EU and thinking on the timeline for EU filing and potential approval there vis-a-vis the US and potential partner signing timeline, please.

Absolutely. I'll turn to Mahat to speak about partner strategy. As you pointed out, we were looking for a partner for the European launch. And we do have a partner in Asia Pacific with Xilab. As you know, we've done the study in China as part of a global trial, which should lead to a relatively short timeline for Chinese regulatory submissions. This, of course, is the responsibility of our partners, Xilab. And our priority as a company is, of course, the US. This is a company of size. It can make the biggest difference. And for Europe, Mike, can you give Jim a little bit of an outline of the strategy there?

Yeah, happy to do that. Thanks for the question, Jim. This is Mike. So, I think as we've discussed previously, and as you're aware, right, multi-drug resistant Acinetobacter, it's a global health issue, and there are significant patients in need, not only in Europe, as you've mentioned, but also in Russia, the Middle East, and Israel, and South America. So, our objective is to try to make sure that we provide access to Soldor to all of these patients in need to maximize the value of Soldor. So, not only are we in discussions to try to find a partner for Hira, but ideally we would like to find a partner, a global partner, outside the U.S. to bring Soldor to all of these patients in need. Obviously, I can't comment on any ongoing discussions at this time, but we'll certainly update when appropriate.

Great, thank you guys for taking the questions.

Our next question comes from Ed from AHC, Wayne Wright. Please go ahead.

Hi, good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. First, congratulations again on the positive attack data. Perhaps kind of switching focus to earlier programs. First question for 064. Can you tell us when she would expect a first clinical study for the program and perhaps some initial thoughts on what a first in human study would look like?

Good morning, Thomas, and thank you for your kind words. We're obviously very pleased with the ATT&CK top line data, and we're very excited about ETX0462. As I mentioned earlier, this is a candidate we just introduced. We had the publication in Nature, which pretty much summarizes the status of the program where it stands today. So it's super clinical. We still have the INC enabling work to perform. And when we have a better idea of the exact timeline of the completion and the clinical strategy, we will certainly guide to that. But we're unable to do so at this point. However, to give you a flavor of what the first clinical study might look like, you can look back at what we've done with our existing programs, Soldor and Zolifordasin. And for both of these, we had a very thorough evaluation of the program preclinically and then in phase one to establish both pharmacokinetic-pharmacodynamic relationships and exposures at the right body size before proceeding to a patient study. And it is likely that we will follow a similar approach with ETX0462. We believe that that methodical approach is best able to provide data for regular submission and review and to inform the design and the conduct of the phase two and phase three trials.

Okay, thank you. That makes sense.

Can you tell us what are your goals and anticipations for the program and the next coming year, 2022?

Yes, absolutely.

As you know, this is a program that we are developing in partnership with GERDP, and GERDP has deployed the resources and funding to conduct the trial. four continents, and we have sites at each of those locations now enrolling actively. As you recall, this is a product that we developed for Gonorrhea. Gonorrhea is a high medical need due to resistance, and we have a product that works against both drug-sensitive and drug-resistant Gonorrhea. But Gonorrhea is rarely lethal, and so we had slower anticipated enrollment due to COVID, As you may recall, we had suspended enrollment for about a quarter at the start of the pandemic in 2020. And things have been progressing, I would say, more slowly than either our partners GARP or us would hope. As a result of that, we are unable to provide time guidance on who we trial at this point. We will do so when we're closer to completion as we were for Sodor. COVID remains relatively unpredictable, as you know. But we are seeing improved enrollment across a number of geographies, and we are confident that this project will be developed in a relatively short timeline. We'll provide you a better, more time, more accurate guidance once again as soon as we have numbers which we are feeling more confident about given the ongoing pandemic. The hope is, of course, that the results are going to be every bit as exciting as the results from Soldor, and that we can build on those to underlie a commercial launch and take this product to the patients around the globe. And with GARP, we kind of preempted Jim's question on how will we get this registered elsewhere, because GARP has a number of territories in developing world countries that They will take the lead for distribution, and we, of course, have at this point the developed markets, including the U.S.

and Europe.

Understood. Thank you again for taking our questions, and we look forward to Sodor's NDA filing.

Thank you so much.

Thank you. As a reminder, to ask a question, please single by pressing star one. We'll now take our next question from Robert Driscoll from Wedbush Securities. Please go ahead. Thanks.

Good morning, guys. I just wondered if you could expand upon patient identification for Soldar and the work that you might be doing on that from going forward here.

Thanks. Good morning, Robert, and absolutely we will. I will turn it over to Anna, who, as I mentioned, has a background both in infectious diseases but also in rare diseases. Anna, do you want to take Robert's question?

Yes, of course, and good morning, and thank you for the question. So patient identification really is pulling from the rare disease part of the spectrum, right, in terms of really trying to hone target and prioritize sites of care. So currently we're underway, actively preparing for commercialization and patient identification is a key part of understanding where does this pathogen live today? What are the risk factors that we need to be aware of for it to emerge in the future? So patient identification is important in rare diseases as it is here, as we follow the rare pathogen Acinetobacter, And that really blends in with the other initiatives that are also in progress around focusing on physician insight of care identification and prioritization. So, as you know, there is no specific code for Acinetobacter, and we're currently underway with triangulating around the opportunity by considering uptake of other novel branded agents in the past, so a historical reference, as well as understanding sites of care where nosocomial infections are today or have the potential of emerging quickly. And then within that, patients that demonstrate Acinetobacter-like or indeed Acinetobacter infections. Together with physician site identification, prioritization, and patient identification, these are the tools that we will need to be more focused and streamlined when we build the rest of the commercial team to really hone in on areas where Acinetobacter is a problem and where Solder can potentially save lives.

Does that answer your question?

Yes, absolutely.

Thank you.

And as a final reminder, please press Start 1 to ask a question. And with this, if there are no further questions in the queue, I would like to hand the call back over to Manas for any additional or closing remarks.

Thank you, operator. Just a couple of more minutes with a few thoughts on the past quarter and on the quarters to come, because solar attack is now pretty much behind us. We are looking at the last set of data and analyzing the last cohort certifications, but the data from this trial is very much still ahead of us. Really excited to be using it, as Anna pointed out, to understand where we can make the biggest difference for patients and to understand where we can create the greatest value for our shareholders as we boost our commercialization effort in the U.S. A lot of work ahead of us, of course, with the NDA filing and hopefully subsequent approval in a relatively brief timeline, which we're gearing up for, and continuing the excitement for our pipeline, which is also dating, also in phase three, coming in hopefully close behind with more guidance on that in the coming months, and the rest of our pipeline with earlier programs, including EDX0462, now moving towards IND. We're very delighted to be able to share the news with you. We're excited about the future as we transition from an R&D organization with a pipeline to an R&D and commercial organization taking off first product to patients. Thank you all for participating in this morning's call and look forward to reconnecting next week.

Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.