Evelo Biosciences, Inc.

Welcome to Avello Biosciences conference call to discuss the fourth quarter and full year 2020 financial results and business highlights. At this time, all participants are in listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn the call over to Jessica Catrone of Avello. Please proceed.

Thank you. This morning, we issued a press release that outlines the topics we plan to discuss today. This release is available at www.avelobio.com under the Investors tab. Today on our call, Simba Gill, Chief Executive Officer, Mark Bodmer, President of R&D and Chief Scientific Officer, and Jonathan Zung, Chief Development Officer, will review our fourth quarter and full year 2020 financial results and recent business highlights. Before we begin, I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact including statements about our objective and anticipated clinical milestones, the impact of any of our product candidates, and the timing and results of any clinical studies should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual results could differ materially from those indicated by the forward-looking statements due to the impact of many factors. Participants are directed to the risk factors set forth in Avello's annual report on Form 10-K for the fiscal year ended December 31, 2020, and the company's other filings with the Securities and Exchange Commission. Any forward-looking statements made today speak only to Avello's operations as of today. Avello disclaims any duty to provide updates to its forward-looking statements even if subsequent events cause the company's views to change. It is now my pleasure to pass the call over to Simba.

Thank you, Jessica. Good morning, everyone, and thanks for joining. Over the last four years, we've generated clear preclinical and clinical data that showed the effects of our small intestinal axis or syntax medicines, investigational medicines designed to work within the small intestine to change inflammation and immunity throughout the body. Syntax medicines have the potential to be not only effective, but easy to take, safe and well tolerated, and with the ability to be manufactured at large scale and low cost. And over the last 18 months, we have reported a series of clinical successes with EDP 1815, our lead anti-inflammatory medicine candidate. EDP 1815 has shown clinical effects on Th1, Th2, and Th17-driven biology, the three major drivers of inflammatory disease, supporting the potential of EDP 1815 as a broadly acting, well-tolerated oral medicine that may resolve inflammation without immunosuppression. Most recently, in December and January, we presented positive results from a cohort of patients with atopic dermatitis in our Phase 1B clinical trial. And today, we are reporting a fifth set of positive clinical data with EDP 1815. Today's announcement relates to a human clinical experimental model of inflammation that evaluated a new, more concentrated formulation of EDP 1815. These new data suggest an ability to enhance the efficacy of EDP 1815. Mark will tell you the details of this in a moment. This is the time of great growth and progress for Avello as we execute on a series of clinical studies over the next year in preparation for phase three trials. Jonathan will tell you more about our clinical studies and plans later in the call. Importantly, EDP 1815 and our other inflammation programs EDP 1867 and EDP 2939 go far beyond dermatology in their potential, and we intend to expand into broader areas of inflammation, including the arthritis, asthma, and inflammatory bowel diseases. Beyond inflammation, we continue to develop our oncology program. Data from a preclinical study of EDP1908, a bacterial extracellular vesicle, was published at CITSE in November. EDP1908 has the potential to be a foundational immuno-oncology treatment in cancer. In building the company, we have expanded our leadership, hiring Jonathan Zung as Chief Development Officer to lead execution of our clinical development programs and the recent appointment of John Honaker to our board of directors. Both Jonathan and John had deep and highly successful track records in drug development, regulatory approval, and commercial launches across inflammation and oncology. We have also strengthened our balance sheet and have the capital to fund the company past the next wave of clinical milestones and into the third quarter of 2022. Our main objectives are, first, to complete a phase two trial of EDP1815 in psoriasis, to also initiate a phase two trial of EDP1815 in atopic dermatitis, and to begin preparations for phase three trials of EDP1815. The second objective is to continue to progress our current clinical pipeline beyond EDP1815 including EDP 1867, where we're looking to generate clinical results with a separate anti-inflammatory medicine. The third objective is to complete preclinical and manufacturing development of our inflammation and oncology extracellular vesicle drug candidates to be ready for clinical trials in 2022. I'd like to turn the call over to Mark, who will talk to you about data on EDP 1815, in a human experimental model of inflammation, and to Jonathan, who will then summarize our clinical plans. Mark, over to you.

Thank you. As Simba said, we've tested EDP-1815 in humans at a higher concentration. Not a higher dose, a higher concentration of the drug in each capsule. The data show that a higher concentration formulation had a greater effect than the same dose in a less concentrated formulation. This is a key advance in our understanding of how to get more effect from syntax medicines. Over the last year and a half, we've reported a consistently positive series of four clinical results with EDP-1815. These trials have used EDP-1815 as a freeze dried powder in enteric coated capsules, which protect the drug from the acidity of the stomach and release the drug when the capsules get into the small intestine. We now have a fifth positive clinical reading in a human clinical experimental model of inflammation that showed this increase in the concentration of drug in the capsule resulted in enhanced effect for the same overall dose and also allowed fewer capsules to deliver that same overall dose. Increased concentration of drug results from improvements made in the commercial scale manufacturing process. It's the same active drug at four times the concentration. We call this A2. The EDP1815, which has repeatedly demonstrated positive effects on clinical scores in psoriasis and atopic dermatitis, is A prime. A prime is currently being tested in the Phase II psoriasis trial. Now, preclinical experiments, if we increase the concentration of drug, we observe superior effects, a classic dose response. So far, though, the only option we've had in the clinic to increase the dose is to ask people to ingest more capsules. This increases the total dose that the patient follows, but does not necessarily alter the drug concentration needed for activity in the small intestine. This is because of gradual emptying from the stomach. We've suspected for some time that there is more to dose response in humans than simply giving more capsules. If you recall the results in the low and high dose cohorts of patients with psoriasis in our phase 1b trial, Both doses result in similar clinical responses, even though one group took two capsules a day and the other took 10. So learning from preclinical results, we compared two strengths of EDP1815 capsules head to head in the human clinical inflammation model. Volunteers were immunized with the same antigen we used in preclinical inflammation experiments. After 28 days of oral treatment with EDP1815 or placebo, Subjects were given a skin challenge with the same antigen, which causes measurable skin inflammation a day later. 12 subjects were given 10 capsules of the A-prime EDP-1815. Another 12 subjects were given the same total dose of drug using the higher concentration A2 EDP-1815 in fewer capsules. And there were eight subjects who received placebo divided between the two treatment groups. both A prime and A2 were effective. New today is that the higher A2 concentration, given in fewer capsules, resulted in numerically superior reductions across the full range of skin inflammation scores. Five measures of inflammation, including basal blood flow by laser speckle contrast imaging, and four other readings of swelling, flare, redness, and skin color, all show an improved effect of A2 over A prime EVP1815. In the press release accompanying this conference call, we include a figure showing the data that compare A prime and A2. You will clearly see the differences, which we expect to translate into even better clinical scores in patients. To repeat what I said earlier, this is a key advance in our understanding of how to get ever more from syntax medicines. Capsule and tablet formulations with this quadruple concentrated drug will be used in future clinical trials of EVP1815. And what we're learning with EDP 1815, we expect to be able to apply to other product candidates in our pipeline. I'd now like to turn the call over to Jonathan to tell you about clinical plans over the next 18 months. Jonathan.

Thank you, Mark, and good morning, everyone. I'm Jonathan Zung, Chief Development Officer at Avello. I'm excited to join Avello as we move to later stage drug development and closer to bringing a new and potentially transformative modality of medicine to patients around the world. Over the last decade, I've had the privilege to lead the clinical operations organizations at Bristol-Myers Squibb, UCB, and Covance. Through these roles, I've worked across various disease areas and all stages of development. As Mark and Simba mentioned, we have a catalyst-rich 18 months ahead of us. For EDP 1815, our focus is on setting the stage for the Phase III programs in psoriasis and atopic dermatitis. This means ensuring we have identified the appropriate formulation and doses that will be used in the registrational studies. Let me first discuss EDP 1815 in psoriasis. Our phase two dose ranging trial in psoriasis has completed enrollment ahead of schedule. This is quite remarkable given the COVID challenges. Given the speed of recruitment, we will forego the interim readout and report top line data for the full cohort of patients in the third quarter of this year. As a reminder, this is a 16-week trial evaluating three doses of the A-prime EDP-1815 in capsules versus placebo in approximately 225 patients with mild to moderate psoriasis. The primary endpoint is the mean percentage change in PASI score at 16 weeks. Secondary endpoints include a range of scores of clinical efficacy in psoriasis, both physician and patient reported outcomes. We'll also be evaluating tablet and capsule formulations using the higher concentration A2-EDP1815 in three cohorts of patients with mild to moderate psoriasis in an extension of our Phase 1B trial. The purpose of these three cohorts is to select the most appropriate formulation, either tablets or capsules, for the Phase 3 program. The data will also allow us to further characterize the effect of the more concentrated A2 and to determine any potential benefits of using tablet versus a capsule formulation. Each cohort will have 24 participants, 16 on EDP-1815 and 8 on placebo. Dose will be once daily for 56 days, followed by a 14-day follow-up. The first cohort is evaluating the efficacy of EDP1815A2 in a tablet formulation with four tablets, the so-called 8X dose. Dosing has begun and we anticipate data in the third quarter of this year. The second cohort will evaluate the efficacy of EDP1815A2 in a capsule formulation. This will be a single daily capsule comprising a 2X dose. The final cohort will evaluate the efficacy of EDP1815A2 in a tablet formulation, but the EDP1815 subjects will be dosed with one tablet rather than the four tablets in the first cohort, another 2X dose. We anticipate initiation of the second and third cohorts in the second quarter of this year. Initial results from these three cohorts will be available in Q3, along with data from the Phase II psoriasis study. Together, this information will position us to go forward into Phase III trials with an optimized dose and formulation of EDP-1815. Moving on to EDP-1815 and atopic dermatitis. We announced positive confirmatory Phase Ib data in January. All physician-reported measures of disease activity, EZ, IgA times BSA, and SCORAD, showed a greater than 50% improvement in treatment with EDP1815 versus placebo. We also saw improvements in patient-reported outcomes, including the important areas of sleep and itch. EDP1815 was well-tolerated in this cohort with no treatment-related adverse events of moderate or severe intensity and no serious adverse events. We are on track to initiate the Phase II atopic dermatitis trial in the third quarter of this year. This will be a double-blind, placebo-controlled, multiple cohort, adaptive design trial in participants with mild, moderate, and severe atopic dermatitis. It will use EDP1815A2. We will provide more details on this phase two trial next quarter. During the first quarter of this year, we also initiated a phase 1B trial of EDP1867, That will evaluate safety and efficacy in healthy volunteers and patients with mild atopic dermatitis. The study design includes the option to include cohorts of patients with mild psoriasis and or mild asthma. Up to five cohorts will be studied in this phase one trial. Cohorts one and two of the EDP 1867 trial will be healthy volunteers. Cohort three will be patients with moderate atopic dermatitis. It will include a 56-day treatment period followed by a 14-day follow-up at the end of the treatment period. Just a reminder that EDP1867 is from a different genus to EDP1815 and has been rendered non-live by gamma irradiation. EDP1867 has demonstrated robust anti-inflammatory effects in preclinical models of Th2 biology. By testing it in patients with atopic dermatitis, we will learn about its potential in treating TH2-mediated diseases. All our other clinical programs are on track, as you can read in the press release we distributed today. I look forward to updating you on our programs during future calls. Now, I'll hand it back to Simba for closing remarks. Thanks, Jonathan.

I wanted to conclude by reminding everyone that Syntax is not just another biotech platform. and EDP1815 is not just another biotech product candidate. We believe that syntax-based medicines have the potential to completely transform medicine globally, and that EDP1815 has the potential to be one of the world's most important medicines. We've already shown that EDP1815 has the efficacy and profile to become a major medicine for unmet needs of patients with atopic dermatitis and psoriasis. Our expectations for psoriasis phase 2 study based on the phase 1b data are unchanged, and we remain on course to start the phase 3 program in 2022 with an optimized dose and formulation of EDP1815. Today's results elevate its potential efficacy even further. This will apply both to skin diseases and much more broadly in inflammation. To reinforce what Mark told you, the strides we are making with EDP 1815 will apply to the whole Ibello platform across our wide portfolio and range of clinical applications. And we continue to expand our portfolio with the new anti-inflammatory EDP 1867 and with our bacterial extracellular vesicle programs, EDP 1908 for oncology, and EDP 2939 for inflammation. What we've highlighted today is possible because of the exceptional work of the team at Avello and our external partners. Thanks to all of you. We have a data-rich 18 months ahead of us and look forward to updating you as our programs progress during the year. We'll now open the call to take questions.

Thank you. Ladies and gentlemen, as a reminder to ask the question, you will need to press star then one on your telephone. To withdraw your question, press the pound key. Again, that's star one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Chris Howerton with Jefferies. Your line is open.

Excellent. Good morning and thanks so much for taking the questions. and congratulations on the very broad progress.

Thanks, Chris. Appreciate that.

Of course. Yeah, so I guess, you know, the first one perhaps is a question for Mark. With respect to the skin inflammation experimentation that you've done, I think, as I recall correctly, or if I recall correctly, excuse me, this was a model that your team had developed as this, ever been published, and I guess I'm particularly interested in any kind of human exposure to this experimental design, if that's been published at all. And a second question that I would have is that with respect to the drug product and formulation work that you're doing recently in terms of the higher concentration and the different levels of efficacy that you're observing, You know, how is it that you're thinking about these learnings more broadly in terms of, you know, what is that target product profile with respect to formulation? Is it a bacterial cell? Is it an extracellular vesicle? Is it, you know, a gamma irradiated organism? You know, what is kind of the ideal form factor that you're aiming for? And I think that's probably good. I'll stop there.

Mark, do you want to take the first question, and I'll take the second?

Okay, yeah, very good. So the human DTH skin model was developed at the Center for Human Drug Research in Leiden in the Netherlands, where our collaborators are doing these experiments, and they have used a number of other agents in them. There have been publications in posters, and there's the old thing if you dig around on websites, but there hasn't been a a formal publication of this, and we will be publishing with them on this, and they may well be publishing with some of the other partners that they've worked on it. But the late-type hypersensitivity in humans, of course, is not new. This particular protocol with keyhole-linked hemocyanin is one that they developed precisely to do this kind of experimental medicine testing.

Okay, let me take the first question, Chris. So the most important thing is that we have with EDP 1815, with the current formulation, something that we're very confident in as a product we'll take forward. So as we said, we're going full speed ahead with intention to move into the phase three side of things next year. We'll get the phase two data and psoriasis very soon now on the full study. And we're feeling very confident in that lead product. Today's announcement obviously gives them the ability to very easily further improve the activity and efficacy beyond the great results we've seen already without meaningfully impacting Phase III results. So the core point there, Chris, is we see 1815 in its current form as a very exciting product, and we intend to move that forward. From a longer-term perspective, what we've always said is, is that this is very similar to the experience Mark and I have had since the beginning of antibodies. As you know, Mark and I were both involved 35 plus years ago, we often scratch our heads about that, in the beginning of the monoclonal antibody world. And we're both so old that when we started working together, we were working on mouse antibodies, which was kind of cutting edge. Mark's team at Celltech was one of the first groups in the world to come up with chimeric antibodies, and then we moved to CDR grafted antibodies, and we moved to fat fragments. Again, Mark's seen a lot of that work. And it continues, as you know, Chris. So we have uncovered, with the small intestinal axis, a fundamental area of biology as a whole new target for medicines that's never existed before. So there's going to be continual evolution and innovation and improvement. And what we said when we started the company was, was that we wanted to go far beyond Genentech. So getting to $100 billion valuation, if you want to use those crude terms, is good. But actually, as the first company in the world to open up the small intestinal access, we want to make sure we're always the leaders and we capture the breadth of the opportunity. So in that context, we're going to continue to invest, Chris. We expect that there is a possibility, whether it's from EVs or other things, that we can get antibody-like efficacy ultimately, and that would obviously... be a pretty remarkable result that goes far above and beyond what we need to do to have a very important product in 1815. And we'll certainly work towards that as an ultimate goal, which would be an oral, very safe, well-polarated, highly effective drug that was affordable. And that's always been our goal to get to that point, Chris. That'll take a bit of time, but in the interim, we've got a great product in 1815. Okay. Okay.

All right, well, that's very fair, and I'll hop back in the queue. Thanks so much. Thank you.

Our next question comes from the line of Matthew Lucchini with VMO Capital. Your line is open.

Hi, good morning. Thanks for the questions. So I guess also on the formulation, you know, the model data that you presented today certainly looks compelling. And I guess I'd just like to understand how we should think about the relative, what your expectations are for the relative benefit that you'd expect to see in man, such that you would advance A2 over A prime. In other words, what would cause you to not advance A2 over A prime? And then secondarily, Just curious, on the atopic dermatitis, less than mistaken, the inclusion of severe patients is something new for Velo, where the focus has previously been on more mild to moderate patients in both inflammatory diseases. So I just wanted to get a little sense as to what the thinking is there, why sort of move into this new patient population where there's certainly a good amount of entrenched competition. Thank you.

Thanks, Matt. Mark, if you want to take the first question, and then Jonathan... But you can take a second.

Yeah, I will. So, Matt, yeah, that's a very important question. It's the same drug, active drug material in the concentrated form. We're moving forward with the A2 material. It's very clear that's the right thing to do. And as I said in the comments in the full part of the call, This concentration resulted from improvements in process as we scaled up to phase three in commercial scale as a result of reducing the ratio of active drug to excipient, sorry, excipient to active drug in the capsules. So it's absolutely clear that we're going to move forward with this and actually the studies that Jonathan was telling you about that we're doing in the future to look at capsules and tablets and then going into the phase two atopic dermatitis study will all be done with the A2 material.

Thanks, Mark. And Jonathan, do you want to talk about Matt's question on moving into the more severe atopic dermatitis patient segment?

Sure. Sure. So, Matt, for the logic behind exploring that in the Phase 2 study is in the Phase 1 study, we looked at mild to moderate participants. Obviously, we saw good efficacy in that population. In the Phase II trial, we're really going to be exploring primarily moderate patients, but we want to have also exposure to those more severe patients so we can understand the true potential of 18-15. So we'll likely look at, you know, 15-20% of the patients in the Phase II study will be severe. We'll look at some on the mild side, but most of those participants will be moderate patients, and it's really to better understand the profile of 18-15. Okay.

Okay, fair enough. Thank you, and congrats on the product.

Thanks a lot, Matt.

Thank you. Our next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is open.

Great. Good morning. Thanks for taking the questions. I guess two parts for me. One, Simba, could you just clarify a comment that you made earlier? It sounds like which of these – different, I guess, formulations, are you going to move ahead with psoriasis? It sounds like you're going to just continue to move ahead with A-prime and not A2. So maybe you could just clarify that for me. I was unclear on the comment you made. And then I guess the second question, which is similar to the last question, was just about now that you have a higher potency formulation, Are there other diseases that you might think about now that you maybe previously didn't in terms of indications? Thanks.

Thanks, Matt. Let me take them in reverse order, Matthew. So what we started the company on in terms of looking at the inflammatory space was the idea that we might, through the small intestinal axis, open up a completely new profile of medicine in which we had something that was pleiotropic with polypharmacology, so something that acted on multiple different cytokine pathways to drive inflammation resolution without shutting down immunity. And from that, given that we had something that was oral, something that we believed would be very safe and well-tolerated, and something that could be developed and manufactured on a very affordable basis. Our goal was always to see if we could capture the breadth of inflammatory disease in a stage manner. We started in dermatology because of the rapid readouts, the rapid path to approval, and the fact, as you know, Matthew, there's an enormous unmet need, particularly in the moderate and milder forms of those diseases. But our goal has always been to go broad across all of inflammation. the new data obviously gives us even more confidence that we have something with the desired profile that's even better than what we've seen already. And so it actually doesn't change our plans, Matthew. I think it gives us even more confidence that we have something that should be a very attractive, broad inflammation-resolving agent. So we'd anticipate that in due course we'll look to expand into the arthritides, obviously similar biology and cardiology, Stepwise, we'd anticipate, for example, psoriatic arthritis, then rheumatoid arthritis, Axbar. On that part of the axis, we're already planning to look at asthma in terms of atopic disease. And then we'll continue to expand to that full breadth of information. But definitely, today's result gives us that next level of confidence that we've got something consistent with the profile we've come to see, Matthew. I think on the first question, so We expect we will move forward with the A2 manufacturing process. That's what Mark said, just given today's result. And we'll see what results we get in Q3 with tablet versus capsule. So in Q3, we'll get a next wave of data, which Jonathan's driving forward, in addition to the phase two study in psoriasis, which we'll get data on for that full study in Q3. We'll also get additional data on tablets versus capsules in psoriasis patients, and then we'll make the decision, date-driven, as to which exact formulation we take forward into the Phase III studies, and we'll get all of that relevant data in Q3. We certainly see a possibility to get even further improvements with the tablet formulation. We don't have that data yet, Matthew, so we'll see what the data reveals, and we're in a position to take whichever formulation looks best into the phase three studies as we go forward. Anything helpful, Matthew? Thanks. That's perfect. Thanks, Simba. Great. Thanks a lot.

Thank you. Our next question comes from the line of Peyton Bonsack with Cohen. The line is open.

Hi guys, this is Peyton on for Joe. Thanks for taking my question and congratulations on a really successful quarter. So I was wondering if you could elaborate a little more on the decision not to show interim data and also what change in PASI score you're targeting in the phase two EDP 1815 study. And then the second question is kind of more on the topic dermatitis program. Since you're involving more severe patients, do you really plan to see any change in endpoint or like what endpoint you're evaluating? like what percent change you'd like to see? Thank you.

Hi, Peyton. Thanks for the question. So on the first question on PASI, what we've said historically is still consistent with the way we look at the current situation. So first target for us is that moderate and milder population in psoriasis, where, as you know, the only available oral therapy is a TESLA, which is doing quite well from a commercial perspective. And what we will target is to be similar from a PASI perspective to a Tesla in terms of difference in PASI scores versus placebo. That's the critical thing to look at. And the other factor is obviously safety tolerability, where to date we have a remarkably... attractive profile on the safety and tolerability side of things. We're not seeing any differences from placebo at all so far, which is not the case for a Tesla, which I'm sure you know has significant tolerability issues and a significant percentage of patients. So within the broad range of a Tesla efficacy with the safety profile we have, then we have something that we'd be very happy with. So that broadly translates to something around a 20% to 30% improvement in PASI versus placebo after 16 weeks of treatment, something in that range. And we'd be very happy. And obviously anything better than that, whatever is better than happy or very happy is the state we'd be in, basically. And then on your question on the interim, it's really straightforward. So just a reminder that, you know, we kicked off these studies in the midst of the pandemic. in terms of the phase two study, at the beginning of the pandemic, we, like everybody, were very concerned about impact on recruitment. We were eager for both internal reasons as well as in terms of giving Wall Street guidance to make sure we could get data as early as possible. And so as a hedge, if you want, we basically put in place a potential interim readout, which would have been 12 weeks, 50% of the patients, because it wasn't clear to us that we would be able to recruit on plan in the midst of COVID. It turns out, as Jonathan said, quite remarkably, and credit to Jonathan, Duncan, and the clinical teams, we've recruited ahead of plan. And so given that, we can have the full data in Q3, which is obviously a fantastic place to be. So given that, it was an easy decision. Let's get the full study data. It's coming up soon in Q3, and no need for the interim. That was the logic, quite simply.

Okay, cool. And on the atopic dermatitis program, do we see any differences in the baseline?

Yeah, apologies, Peyton. So actually, no changes. As Jonathan said, we want to have a look at what we're doing in the severe population, but the core initial target remains in atopic dermatitis, also the moderate and mild space. And that is even more wide open in atopic dermatitis than one of the psoriasis situations. Um, so as you know, Peyton, it's an enormous market in terms of number of patients. Uh, the majority of them have to take topicals because there are no effective oral agents in that space. It's one of the things that we talk about a lot, but, uh, patients, uh, don't want topicals. They take them because they have to take them. Uh, they often require a lot of time to apply to the body. Uh, they often have, you know, unpleasant sticky side effects. Some of them can be stinging. Um, and so, uh, what everybody has been looking for in the atopic dermatitis is an effective, safe, well-tolerated oral medicine. And that's what we have. And there's nothing else with that type of profile in that huge atopic dermatitis moderate and mild spec. So, you know, the nearest comparator into the things that have recently been approved would be something like Crisabarol. You know, we had efficacy that was similar to something like Crisabarol or better, which is what we would expect. Again, given... In fact, we have something that's oral, very well tolerated and safe. We have, again, something that we see as having great potential. So we are confident we're going to get that type of effect. And if you look at our atopic dermatitis data that we released in January and December, it's looking extremely encouraging, as you know, from that perspective. So I think it is likely, based on the data right now, that we're above that target profile. And again, there is no competition in terms of oral, and taken well-tolerated inflammation-resolving drugs for the atopic dermatitis, moderate and mild space. So it's a wide-open space, which we're very happy about.

Cool. Thank you very much, and I'll jump back in the queue. Thank you.

Thank you. Our next question comes from the line of Gobind Singh with JMP. Your line is open.

Hi. Thanks for taking the questions, and good morning to everyone. I guess I wanted to dig in a little bit more on the new results. And am I correct that this is 1 times 10 to the 11th cells in terms of the concentration being used here? And if you could talk a little bit more about where any of these results is significant, how should we be understanding basal flow here as opposed to the previous results that you guys showed? Is there any similarities? Did you guys learn anything new? And there's some new factors here that are shown, like flare and redness. How should we understand these kind of results in the context of atopic dermatitis and psoriasis?

Thank you. Thanks, Ruben. Hi, Gobind. We guessed that you would want some detail, so I appreciate the fact, but... uh, that, uh, that is the level of understanding that you, you try and push, uh, towards gaining. So thanks for that. Mark, do you want to take those questions?

Sure. Yeah. So the cell number was the equivalent to the high dose cell number we used before. It's roughly eight by 10 to the 11th, uh, uh, split amongst the, uh, capsules. Um, and it was in a, uh, smaller number of capsules, uh, with the A2 material because it was more concentrated. Um, and, uh, So I think that's a fairly straightforward answer to that question. It was eight by 10 to the 11th per day in all subjects who took EDP 1815, just a different number of capsules due to the different concentrations. So we reported here a much fuller set of data, this is an ongoing study, Gobind, and so we've been taking data out from the ongoing study. It's probably, we were considering going further cohorts, we probably won't, so we'll probably finish it here, because we've got what we needed from it, which was, first of all, evidence of efficacy of EDP 1815, which we reported previously, and that was with the A-prime version, and now this comparative study, which we did originally just to confirm that the A2 material in the revised process was still active, but with the interest in knowing whether the higher concentration would give more activity, which actually was what we suspected might happen based on preclinical data and some of the things we'd seen clinically as well. So we've reported a broader range of endpoints, essentially all of the endpoints that were measured in the study. basal flow score looks slightly different here because it's a median score rather than a mean score, but it's the same data for the A' material that you saw previously. As I said on the call, what's new is the comparison with the more concentrated A2 material. Does that help?

Yeah, very much. Thank you. And the fuller data with the skin color and average redness, these are that seems to be more different with the A prime and the A2. And I know you guys are talking about the ratio. Is there any other comments you can add to, I don't know, if this ratio difference is resulting in an extracellular vessel functional difference? It just seems like there's a meaningful difference on these other factors.

Yeah, I mean, we should probably have a separate call on this, COVID, if you want to go into it in in detail, there are various interesting things here. So the notion that a higher concentration of drug drives a higher force on the system at the level of target engagement is not new, but there's some particular characteristics of delivering multiple capsules through the pyloric center from the stomach into the small intestine, which have met new thinking in terms of how PK-PD relationships work in this kind of system. And the higher concentration, which normally, if you've got an injected drug, you inject twice as much, you get twice the concentration. Here it doesn't quite work that way because there's a gradual emptying, as I said earlier, from the stomach into the small intestine. So I liken this to, you know, you can do as much work as you like trying to lift an object, but if you don't apply enough force at a particular time, you'll never move it. And so there's a sort of relationship with Newton's second law of our mechanics here, which does it. So it fits with basic principles of PKPB, but our thinking has been adapted to how to work with these particular types of delivery kinetics.

Fair enough. Thank you.

Thank you. I'm not sure on any further questions. I would now like to turn the call back over to Simba for closing remarks.

Thanks very much. So I want to thank everyone for continued interest in Avello. We're in an incredibly exciting period. We obviously began the year with positive data in atopic dermatitis, and we've now added to that and have something that increasingly looks to some of the questions that were asked on the call as if it's going to be a foundational treatment. for broad inflammation with a unique profile of something that's not just efficacious, but also safe, well-tolerated, already delivered. And that's the profile we'd hope to have. So lots of clinical data coming up between now and the end of this year. We didn't talk about COVID data in any detail. That's coming up over the next quarter. And then we have a lot of data in Q3, and that just continues. So look forward to keeping everybody very much updated as we move towards potential Phase III trials in 2022. Thanks very much, everyone.

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