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spk04: Good day, everyone, and thank you for standing by. Welcome to the Sparrow Therapeutics Second Quarter 2021 earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Ted Jenkins, Vice President, Head of Investor Relations at Sparrow Therapeutics. Mr. Jenkins, please go ahead, sir.
spk10: Thank you, Operator, and thank you all for participating in today's conference call. Earlier today, Sparrow Therapeutics released financial results and provided a pipeline update for the second quarter of 2021. Our press release is available on the investor's page of the Sparrow Therapy's website. Before we begin, I'd like to remind you that some of the information contained in the news release and on this conference call contain forward-looking statements based on our current expectations, including statements about the initiation, timing, and submission to the FDA of an NDA for tebupenem HBR and the potential approval of tebupenem HBR by the FDA. Future commercialization, the potential number of patients who could be treated by tebupenem HBR, and market demand for tebupenem HBR generally. Expected broad access across payer channels for Teddy Penham HBR. The expected pricing of Teddy Penham HBR and the anticipated shift in treating patients from intravenous to oral administration. The plans for the company's ongoing development of SBR 720. Statements about the future development and commercialization of SBR 206 and the potential receipt of milestone payments as well as royalties on potential future sales of SBR 206. The design, initiation, timing, progress, and results of the company's preclinical studies and clinical trials and its research and development programs. Management's assessment of the results of such preclinical studies and clinical trials. The impact of the COVID-19 pandemic on the company's business and operations. The company's cash forecasts and anticipated expenses, the sufficiency of its cash resources, and the availability of additional non-dilutive funding from governmental agencies beyond any initial funded awards. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in Sparrow Therapeutics' filings with the SEC, included in the Risk Factors section of our quarterly report on 410Q filed today. These forward-looking statements speak only as of the date of this conference call, and the company undertakes no obligation to publicly update any forward-looking statements or supply new information. regarding the company after the date of today's release and call. Participating in today's call are Dr. Ankit Mahadevia, Chief Executive Officer, Dr. David Melnick, Chief Medical Officer, Christina Larkin, Chief Operating Officer, and our Chief Financial Officer, Seth Shukla. With that, I'd like to turn the call over to Dr. Ankit Mahadevia. Please go ahead, Ankit.
spk13: Thank you, Ted, and thanks to all for joining us today to discuss our financial results and corporate highlights. As we continue to progress through the back half of 2021, we remain focused on preparing for the upcoming Tevipedem HBR NDA filing and executing on our corporate strategy as we work to transition to a commercial organization. I'm pleased to say that our efforts around these interrelated goals have continued to advance on track. On our last call, we shared that we had accumulated all of the data necessary for our NDA submission for TepiPenem. Since then, we have been performing all of the required analyses and drafting sections of the NDA, both at the study and summary levels. We've seen sustained progress on these fronts, and we're confident that we'll submit the NDA in the fourth quarter. This is in line with the guidance provided on our last earnings call for an expected NDA submission during the second half of this year. Our efforts around tebupenem HBR are supported both by our strong clinical data and our positive regulatory interactions with FDA. The positive Phase III ADAPT-PO trial results reported late last year showed that the trial's primary endpoint was met, with data demonstrating that an all-oral regimen of tebupenem HBR is non-inferior to an all-IV regimen of ertapenem for the treatment of complicated urinary tract infection, or CUTI, and acute pyelonephritis, or APN. Now, our previous FDA interactions and written communication indicate that positive results from a single well-controlled pivotal trial, such as ADAPTO, could be sufficient to support the approval of an NDA for TAB-dependent HBR in the treatment of CUTI and AP. Additionally, through feedback we received from our pre-NDA meeting, the FDA endorsed the structure and form of our planned NDA submission and indicated that the data set and CMC plan that we intend to submit in the NDA package meet their standards. We are confident that our tebupenem HBR program will continue to advance as planned as we move through the second half of 2021 and into 2022. Based on our positive clinical data and ADAPT-PO's rigorous design, we believe that, if approved, tebupenem HBR will be an important physician treatment option for possibly over 2 million CUTI and AP patients in the U.S. alone who are resistant to currently available oral therapies. ADAPT-PO was designed as the first head-to-head comparison of an all-oral, versus an all-IV regimen in CUTI specifically to provide a robust result that would give physicians confidence to prescribe tebupenem HBR to CUTI and AP patients who would otherwise be required to receive IV therapy. We believe we have done just that as our data show that tebupenem HBR can provide the convenience of an oral therapy without any compromises on clinical response, safety, or tolerability. If approved, tebupenem HBR would become the only oral carbapenem available for the treatment of CUTI and AP. Its ability to effectively replace IV therapy for these patients could prevent and shorten unnecessary hospitalizations, delivering value to the patient and economics benefits to the healthcare providers and payers. This has led payers to express their willingness to cover a tebupenem HBR, which bodes well as we work towards potential launch. I would now like to provide some updates on the SPR720 clinical program. As a reminder, SPR720 advanced into a phase two clinical trial in patients with non-tuberculous mycobacterial disease, or NTM, at the end of last year. The initiation of this trial was supported by positive data from phase one, single and multiple ascending dose trials, as well as non-clinical toxicology studies in non-human primates and rodents. Within these studies, Multiple subjects were dosed, and no severe or serious adverse events were observed. As the Phase IIa trial was being conducted, however, we also simultaneously engaged in an additional, longer-term toxicology study in nine human primates. Surprisingly, and in contrast to the positive Phase I, sad, mad human experience, unexplained NHP mortalities were observed. This led us to prudently pause the Phase IIa clinical trial and promptly notify the FDA of this important dynamic. We then subsequently received a clinical hold letter in which the FDA requested additional information from the non-human primate study, including a study report. As we discussed in our last call, we have since completed the non-human primate study and continue to analyze the data. We expect to complete the requested study report in the third quarter as planned. With this information in hand, we will continue to engage the FDA on a full response to their clinical hold letter in early Q4. We will give an update on these discussions following FDA's written comment and direction as to our specific findings from the non-human primate study. Until then, I will reiterate the data we have seen to date that support the hypothesis that the observed mortalities were not drug-related, but rather dosing and species-specific. This gives us confidence that there is a path forward for the SPR720 clinical program, but of course, we must complete our interactions with FDA before a final determination can be made. I would also now like to briefly highlight the recent exciting developments that occurred around SPR-206, our next generation polymix and product candidate. And then David can speak in more detail about the program. We were thrilled to announce that we entered into a licensing agreement with Pfizer around this asset, pursuant to which Pfizer receives the rights to develop, manufacture, and commercial SPR-206 in ex-US and ex-Asia territories. In exchange for these rights, Sparrow is eligible to receive up to $80 million in development and sales milestones with high single-digit to low double-digit royalties on net sales. In tandem with the licensing agreement, Pfizer also made a $40 million equity investment in Sparrow as part of the Pfizer Breakthrough Growth Initiative, a program focused on funding innovative science to meet patient needs. This investment, which was made at a premium to market, provides important capital, which we intend to use in preparation for the potential approval of and launch of TepiPen and HBR, as well as to support ongoing clinical development of SPR 720 and SPR 206. The equity investment and licensing agreement provide important external validation from an industry leader and support our broader corporate strategy and pipeline development of anti-infectants for patients with unmet need. Further, the prize of transaction speaks to our ability to execute on our business development objectives. It is also representative of a recent uptick in interest and investment activity around product candidates with the potential to address the rising rate of antimicrobial resistance, or AMR. For instance, Pfizer, along with more than 20 leading pharmaceutical companies, contributed to the formation of the AMR Action Fund, which aims to invest over a billion dollars in antibiotic development by 2030. Pfizer has also already committed $100 million to this fund and recently acquired Amflix Pharmaceuticals and Ericsson Pharmaceuticals, both of which have been focused on anti-infectives. This activity, along with the efforts of other major pharmaceutical companies, government agencies, and policymakers, is increasing the dynamism of the antimicrobial development ecosystem. Sparrow continues to remain active in the collaborative efforts of this ecosystem, as shown by our recent deal with Pfizer and our relationships with other corporate partners and private foundations, and our partnerships with several government agencies, including BARDA, the U.S. Department of Defense, the Defense Threat Reduction Agency, and the National Institutes of Allergies and Infectious Disease. Before handing the call off to David, I'd like to reiterate Sparrow remains well-equipped to continue executing on our objectives, even amongst the ever-evolving circumstances of the COVID-19 pandemic. While our business has not been materially impacted by COVID-19 in 2021, the pandemic is highlighting the value of replacing IV therapies that are often administered in the hospital setting with an at-home oral option. We believe that Tevipenem HBR, if approved, could provide such an option and enable a shift in care to the outpatient setting. This would provide value to patients, healthcare providers, and payers alike as it would reduce patient exposure to COVID-19 and other secondary infections. Further, Hospital would also see a financial benefit and free up capacity for seriously ill patients with no viable alternatives to hospitalization. I will now hand it over to David to provide a more detailed update on our clinical progress and our pipeline.
spk09: Thank you, Ankit, and good afternoon, everybody. It's my pleasure to share our pipeline updates with you today. I'll begin by speaking briefly about our lead candidate, tebupenem HBR, an oral carbapenem that is advancing toward an NDA filing expected for the fourth quarter. To provide a recap of what has brought us to this point, we reported top-line data showing that our Phase III ADAPT-PO trial met its primary endpoint in September. We also continued to work to complete the back-end activities for our suite of phase one studies, which are designed to support the NDA. These activities included locking the study databases, analyzing these data sets, and finalizing the clinical study reports. As we previously disclosed in December 2020, these phase one activities were delayed slightly due to the pandemic, though we were able to quickly adapt and have not seen any further delays during 2021. We have since completed all of these activities, and we are now focused on performing the required integrated analyses and drafting sections for the NDA submission. Given the straightforward nature of these activities, we are fully on track to submit the NDA in the fourth quarter. In parallel with our efforts regarding the NDA, we also continue to work with our partners to ramp up her CMC capabilities ahead of Tebby Penham's expected launch during 2022. I should remind everyone that one of our partners is Meiji Seika, whose experience manufacturing a granular formulation of Tebby Penham over the past decade will be invaluable as we move toward commercialization. Before I move on to speak about 720 and SPR-206, I'd like to take a moment to talk about our strong clinical data supporting tepipenem-HVR and what we believe it means from a physician's perspective. The increasing prevalence of resistance to existing oral therapies for complicated UTIs, as well as safety concerns related to some of the existing oral therapies, such as the fluoroquinolones, currently leaves millions of patients with no choice but to receive intravenous antibiotic therapy which often requires hospitalization for IV access. ADAPT-PO's rigorous design allowed us to show that physicians treating CUTI and AP patients could replace hospital IV therapies with oral tebupenem HBR without making any compromise on clinical response, safety, or tolerability. By doing this, we believe we have positioned ourselves to see high uptake of tebupenem HBR after approval. Beyond CUTI, the ADAPT-PO data have also generated strong external interest from key opinion leaders on the use of tebupenem HBR to treat other infections, providing potential opportunities to explore new indications. One example of this external interest is embodied by the MERINO-4 trial that I mentioned at the time of our last call. This is being sponsored by the National Institute of Allergy and Infectious Diseases, and is being conducted by the Antibiotic Resistance Leadership Group. As a reminder, Merino-4 is designed to compare the early transition to oral tebupenem HBR with continuation of intravenous carbapenem therapy in patients with bloodstream infections caused by ESBL-positive bacteria. In addition, we have completed data analysis from the BARDA-funded Phase I bronchoalveolar lavage trials which assesses the lung penetration of tebupenem HBR, and we plan to present these data at an upcoming medical meeting. This study will set the stage for subsequent BARDA-funded studies to evaluate the efficacy of orally administered tebupenem HBR for mnemonic indications. This study has strong clinical rationale, as the granular formulation of tebupenem is approved in Japan for several respiratory indications including the treatment of children with pneumonia. Looking forward, we plan on continuing to educate the clinical community about tebupenem HBR through publication of a peer-reviewed manuscript reporting the ADAPT-PO trial results. These results will or have been discussed at five infectious diseases and urology conferences by the end of the year, including the upcoming AUA meeting. At these conferences, we intend to present additional ADAPT-PO data, as well as the in vitro surveillance data assessing the activity of tebupenem HBR against the most important gram-negative pathogens. I'd now like to move on to speak briefly about seven, excuse me, SPR720, our oral drug candidate that we're developing for the treatment of NTM infection, non-tuberculous mycobacterial infections. Ankit recapped the events that led to the program's clinical hold during his portion of the call. So rather than repeat what he said, I'll just emphasize a few additional points. Most importantly, the mortalities observed in the non-human primate study that led to the hold did not correlate with either the dose nor with the duration of SPR720 drug exposure. Further, Adult non-human macaques, the animals in this study, are known to be extremely challenging to dose, which adds a level of complexity to the analysis of the study. Finally, the findings from this non-human primate study are contrary to what we have seen in prior preclinical and clinical studies of SPR720, as Ankit outlined earlier. While we won't be sharing any specific findings from the non-human primate study, Until the FDA has provided us with feedback on the data, I'd like to again emphasize that based on the data we have seen to date, we remain confident that there is a path forward for the SPR720 clinical program. These data continue to support the hypothesis that the observed mortalities were specific either to the oral gavage dosing method or to the species of monkeys in the study, rather than related to an off-target pharmacologic effect. Along these lines, I'd also like to reiterate a point that we have made on our last two earning calls, which is that our previously announced decision to discontinue the Phase 2A clinical trial was not, I repeat not, indicative of our opinion regarding the ultimate success of the SPR 720 program. Rather, it was a strategic decision that allowed us to avoid an incurring cost from the trial while it's on hold and that may facilitate potential future adjustments to the clinical trial design as required by FDA. Looking ahead, we expect to complete the study report from the recently completed primate study in the third quarter and to engage the FDA thereafter early in Q4. After we receive feedback from the agency regarding their review of these data, and our full response to the clinical hold letter, we will provide an update on our clinical development plans for 720 moving forward. Switching gears now to discuss SPR206, which is our intravenously administered next-generation polymixin product candidate, which is designed to act directly on gram-negative bacterial infections through the molecule's interactions with the bacterial outer membrane. SPR206 has demonstrated potent broad spectrum activity against gram-negative bacteria, including the extensively drug-resistant variants that have emerged as a major problem in both the hospital and community setting. We believe that SPR206 will offer a safer alternative for patients suffering from serious drug-resistant infections. including drug-resistant acinetobacter, multidrug-resistant pseudomonas, and carbapenemase-producing enterobacterialis, where the greatest unmet need currently exists in the antibiotic formulary. Today, patients suffering from these infections are treated with a drug combination which frequently includes a carbapenem or a BL-BLI antibiotic, usually in combination with polymyxin B or colistin. Treatment with these older polymyxins is associated with nephrotoxicity in many patients. What clearly differentiates SPR206 compared to colistin and the other polymyxin antibiotics is our Phase I SADMAD data showing a lack of nephrotoxicity at or above the predicted therapeutic dose. We thus believe SPR206 could replace colistin and polymyxin B in the currently prescribed antibiotic combination regimens and provide an alternative option for patients while producing a significantly reduced risk of kidney injury. This would address a crucial unmet need as the CDC's 2019 Antibiotic Resistance Threats Report estimates 8,500 drug-resistant Acinetobacter deaths, and 32,600 drug-resistant Pseudomonas infections in the United States per year. We saw significant progress around our SPR206 program in the second quarter, highlighted by two exciting collaborations that provide external validation to the potential SPR206 offers for patients with serious gram-negative infections. First is the investment and licensing agreement with Pfizer that Ankit mentioned earlier. We believe Pfizer and Everest Medicines, who you may recall has rights to develop, manufacture, and commercialize SPR206 in China and other select Asian countries, are ideal partners to ensure patient access to SPR206 globally when approved. Additionally, their teams bring a wealth of expertise in antibacterial drug development and regional-specific experience with foreign regulatory agencies and quality control standards that will be invaluable as we finalize a pivotal clinical development program for SBR206. We were also awarded up to $23 million by the National Institute of Allergy and Infectious Diseases, or NIAID, to support the clinical development of SPR206 in the second quarter. Approximately $2.1 million is initially available from the award, which provides funding for pharmacokinetic pharmacodynamic studies to aid in dose selection, manufacturing process development, clinical microbiology, and support for our initial regulatory interactions. If fully exercised, we would receive an additional $21.3 million over five years, which will provide funding for a broad range of additional activities, including a phase two clinical proof of concept study in patients with the range of target pathogens and target indications. In addition to this funding, the award provides yet another point of external validation for SPR206 from a well-regarded external entity. Looking ahead, we continue to advance SPR206's development with the support of our partners at the Department of Defense, Everest Medicines, and most recently, Pfizer and NIAID. Participant dosing recently commenced in the Phase 1 bronchoalveolar lavage clinical trial, assessing the penetration of SPR206 into the pulmonary compartment, with the data from the trial expected by early next year. Given that many of our target patients for SPR206 suffer from lung infections, we believe that these data could represent a key inflection point for our SPR206 program. We also recently began dosing patients in our renal impairment study of SPR206, which will guide dosing in the many patients with MDR gram-negative infections that have reduced kidney function. Data from this study are also on track to be reported by early 2022. With that, I'll turn the call over to our Chief Operating Officer, Christina Larkin, who will provide you with a review of the market opportunity for our pipeline products and detail our strategy for the launch of Tebby Penham HBR. Thanks.
spk03: Thank you, David, and good afternoon, everyone. As we move closer to tebipenem-HBR's potential approval, the work that we have done continue to support that this is a specialty-driven launch that will be focused on urologists and IDs, and that the strategy will allow us to still capture a significant portion of the approximately 2 million CUTI patients in the U.S. that we believe are the right target for tebipenem-HBR, if approved. And of the 2 million patients, there is a great opportunity in both the community and the hospital discharge market by providing a great clinical and value story. And in the community setting, tetepenem HBR may prevent or reduce the frequency of hospitalizations for patients who have failed previous oral therapies or who are resistant to current oral CTI therapy. And in the hospital discharge setting, Tebby Penham HBR could give healthcare providers the ability to discharge CTI patients sooner, providing both a clinical and economic advantage as to switching to oral therapy. Now, whether it's the potential of keeping patients out of the hospital or getting them home sooner, Tebby Penham HBR has the opportunity to deliver value to all of the relevant stakeholders, including patients, healthcare providers, and payers. And this is the value that all of our stakeholders continue to share with us. through our advisory boards, market research, and all of our industry interactions. So let's pivot and discuss how we're preparing our go-to-market plans. We continue to take a phased approach to building out our launch teams. Our marketing and our market access and our medical affairs teams have been in place for well over a year, building and executing our go-to-market strategy. Our medical liaison team has been out building some early key opinion advocacy within the antibiotic and CUTI space with a focused effort on infectious disease physicians and neurologists. We've also been engaging payers and building our health economic messaging. And lastly, we've also launched our digital first strategy. And this includes our customer engagement, which combines with personal and non-personal interactions. Our digital personal engagement has been launched via our MSL team and has allowed us to utilize the hybrid approach to engage our customers. And our non-personal, unbranded digital efforts has launched earlier this year and includes an unbranded website called CUTIEvolution.com targeting HCPs or healthcare providers to educate them on the burden of CUTI on the healthcare providers, the patients, and the healthcare system overall. and the need for new oral outpatient therapy. And finally, as it relates to our plans on building our sales organization, we'll look to bring on our sales leadership on first, and then we'll plan to wait until we're closer to our approval to build out our sales team. And as we look ahead, we'll continue to plan for the potential approval and launch, and we remain encouraged by the positive feedback from all of our stakeholders regarding Tebby Penham and its overall value proposition. And with that, I'll turn the call over to Saf, who will provide you with a financial update.
spk07: Thank you, Christina, and good afternoon, everyone.
spk06: I'd now like to turn your attention to our overview of Sparrow's financial results for the quarter ended June 30, 2021. Social revenues for the second quarter of 2021 were $5.1 million, compared with revenues of $1.7 million in the second quarter of 2020. The difference was primarily due to an increase in clients' revenue received from the DOD contract for SPR-206 and the BARDA contract for Chivipenem-HVR and collaboration revenue from our licensing agreements with Pfizer and Everest Medicines. Research and development expenses for the second quarter of 2021 were $14.5 million compared with $15.7 million for the same period in 2020. This year-over-year reduction was primarily due to a decrease in expense driven by completion of significant activities in Phase III clinical trials for terapenem-HVR, partially offset by expenses from Phase I clinical trials to support an anticipated NTA filing for terapenem-HVR and clinical costs incurred for Phase I BAL and RIS clinical trials for SPR206. We expect R&D expenses in 2021 to be consistent relative to 2020, and I will note that some of the R&D expenses we expect to incur this year include costs related to the expected teripenem HBR NDA submission and medical affairs strategy, as well as personnel-related spend to support the pipeline. General and administrative expenses for the second quarter of 2021 of 9.2 million were higher than the 4.5 million reported in the same period in 2020, primarily due to increased professional expenses and personnel costs to support the company's pre-commercial efforts. We expect G&A expenses to increase in 2021 relative to 2020 as we build commercial capabilities and the infrastructure to support the expansion ahead of a potential tebupenem HBR commercial launch in 2022. We reported a net loss for the second quarter ended June 30, 2021 of 18.6 million or 63 cents per common share compared to a net loss of 17.5 million or 85 cents per common share reported for the same period in 2020. As of June 30, 2021, We had cash, cash equivalents, and marketable securities of $99.2 million. This balance does not include the proceeds from the $40 million equity investment made by Pfizer, which were received subsequently to the quarter's end. Including this investment by Pfizer, we believe that our existing cash, cash equivalents, and marketable securities, together with our non-dilutive funding commitments, will be sufficient to fund operations into the fourth quarter of 2022. For further details on the financials, please refer to Act 10-Q filed with the SEC today. We would now like to open the call for questions. Operator?
spk04: Thank you. If you would like to ask a question, please signal by pressing star followed by the one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star 1 to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal for questions. And we'll go first to Ritu Baral with Cowan.
spk02: Hi. Thanks for taking the question. This is Lila on for Ritu, and congrats on the progress. And maybe just on the 720 program. Aside from the completed non-human primate study, can you just remind us if there is any additional preclinical or tox data that were also requested as part of the data package to the FDA? And what is the real gating factor, so to speak, remaining for submitting the study report? Thank you.
spk13: Hi, Lila. Thanks for the question. No, the primary focus point for the FDA discussion is the toxicology data we've referenced in prior earnings calls. And so the cadence Hereafter, as we mentioned, we are analyzing the data and preparing the report for submission with FDA. And really the cadence after that is to engage in the discussion with them, have the discussion, and then receive the requisite minutes of the discussion. And we plan to do that as expeditiously as possible.
spk02: Got it. Thank you. And then just maybe as a quick follow-up, What's kind of the timeline for announcing those updates? Will you announce to the street when you've submitted the data package, or do you plan to just wait until you have maybe the minutes in hand? Thank you.
spk13: Yeah, thanks. As David mentioned, we'll plan to have the discussion and get the minutes so we can give everybody the appropriate context, and so we'll wait until the minutes are back.
spk08: Thanks for the helpful call. We'll go next to Louise Chen with Kantor.
spk05: Hi, thanks for taking my questions here. So my first question to you is what gives you confidence in a strong launch and uptake for Tebby Penham HBR? I know you went through a lot of details on the call, but maybe if you could address how you'll be different from some of the other companies that have launched antibiotics in the space. And then secondly, what are your thoughts on the Pasture Act and other initiatives to improve reimbursement for antibiotics Do these only help hospital drugs or could they be a benefit to you as well? And then just last question here on OPEX for third and fourth quarter versus what you spend in second quarter. Just trying to get a sense of how OPEX will look throughout the remainder of the year. Thank you.
spk13: Thanks, Louise, for the questions. I will start with your question on Pasteur. Then I'll hand it to Christina to talk about how our launch will be differentiated based on the differentiation of Tevipenem. And then I'll hand it to Saf to talk about OPEX. So as it relates to Pasteur, you know, as we mentioned, the antimicrobial ecosystem has really started to percolate in a very interesting way, both with partnering activity, including with us, as well as activity on the policy front, as well as on the public financing front, including with us. We are, you know, as we look holistically at the field, we believe that our pipeline, because we've chosen it in a way that – treats the maximal patient unmet need, and also gives us the maximal chance at commercial viability. We do not need incentives to be able to be successful with medicines like tebupenem. However, we think that acts like Pasteur, which would provide a very large nine-figure payment to companies developing drugs that treat unmet needs in AMR, we think that's great for the field. We think it'd be a shot in the arm for the ecosystem, and we think it's beginning to gain some momentum on the Hill. So very big fans of it, think it's good for the ecosystem, think it's very good for patients, and it could be additive and beneficial to Tevipenem. However, we don't need it in order to be successful, and that's how we've set up the entire pipeline. I think that's a good segue to Christina, who can talk more about why Tevipenem will be successful in the current commercial environment and policy environment.
spk03: Yeah, thanks, Ankit, and I'll just tag on to, I think, one of the comments that you have made, and I think you stated on the reimbursement side, which I think is a really important part. If you remember, you know, too, that many of the current launches that we've seen have been primarily based on the hospital environment, and the DRG payment system is certainly one of the main reasons why many of these drugs have a cap to their success is because of the way that these drugs are reimbursed. Tevipenem, because of the benefit of we've seen both in the community and the hospital switch therapy market, is that this drug will be primarily paid as a pharmacy benefit and not under the hospital DRG system. And that's a key differentiating advantage that we see in the market. I think that's one. The second is that when we looked at the landscape of where Tevipenem will be best suited for is that, you know, what we see is we don't want to compete with generics. And that becomes another key part of the value story. When we talk about where tebupenem will be best suited is that it's really, and that's the way we constructed the trial design, was not to compete with generics. And the real alternative here is when physicians are having to turn to IV treatment. And the fact that we've been able to demonstrate in our phase three trial equivalence to IV or non-inferiority to IV or tebupenem is a real advantage and that's what we've heard through our market research and through our data of the ability to deliver the convenience of an oral, but being able to show non-inferiority to an IV product is one of the key advantages. And to date, we're the only product that has ever been able to deliver that level of evidence, especially at launch, if ever. And so those are two real key differentiators. And then the last one I would mention is that you know, for the primary audience that we're looking to go after, as I mentioned, is not only just infectious disease physicians, but urologists. And that is another key differentiation, I think, in the type of physician that we're looking to target at launch.
spk05: Thank you.
spk07: And Louis, I can answer your question on the ramp for OPEX for the remainder of the year.
spk06: I think, as I mentioned earlier, for R&D, you know, 2H we expect to be roughly even with 1H. Our 1Q R&D numbers were a little higher than 2Q, but on average, I think that's what you can expect, at least for the remainder of the year, sort of trending in the overall first half. And then for GNA and commercial, you'll certainly continue to, as Christina referred, take a phased approach to continue to build out our capabilities. So you'll see a bit of a ramp. Our disclosed cash runway now is into 4Q 2022. If you just did a burn rate from the last couple of quarters, you could tell that the cash runway might be a quarter or so longer than that. And the reason for the 4Q 2022 is that sort of phase ramp on the commercial and GNA OPEX, which for your estimation purposes, you could probably assume will be somewhat linear, maybe a little slower on the start off and then building more into the first half of 2022. So for the cash runway guidance and our burn rates, you can see the trend in what we expect our BLECs to be.
spk08: Okay, thank you. We'll go next to Kevin DeGeneres with Oppenheimer.
spk11: Hey, thanks for taking my question. Maybe one or two or six. Can you just clarify, following the completion of the BAL and the re-enrollment impairment studies, is the expectation you know, to go into, you know, a treatment setting. And as we think about, you know, Acetobacter, you know, market positioning, you know, some sponsors have, you know, looked at a sort of a refractory, you know, polymyxin B colistin population. We do also look to go in patients that, you know, had failed those therapies or were, you know, going a bit earlier in the treatment landscape, make more sense for 206, you know, given the product profile.
spk13: Hi, Kevin. Thanks very much for the question. Your sense is correct that after we've received data from the bowel and the renal impairment studies, we will begin planning for, both in collaboration with NIAID, Pfizer, and Everest, advancing 206 into phase two study in patients. You're also right that given the broad utility of 206 for patients with resistant infections, we do have several options in front of us in terms of how we trial what 206 can do. That is a discussion that, you know, we want to continue to progress both with our partners, but also as we continue to have discussions with both key opinion leaders we collaborate with and ultimately the regulators. So more on that as we get closer to that event, but I think your point is worth emphasizing that 206 has utility not just in Acinetobacter for those patients that have limited options, but also in pseudomonas, which is a larger population of patients in need, as well as enterobacterialis patients who have resistance to existing therapeutic options. Further, I'll note that in typical clinical practice, polymixins are often used in combination with other standard of care therapies because these patients are really in dire straits and need as many options as they can get. So, you know, we do have options in terms of the clinical usage of 206, and we'll make those choices as we get closer to that.
spk11: Great. And then maybe just as a follow-up question or a separate question on, you know, as we think about, you know, the progression of medical education over, you know, the next 12 months or so prior to launch, should we think about, you know, a relative emphasis on, you know, ID week and, you know, traditional infectious disease conferences or, you know, he called out the prepared script, you know, expectation with regard to, you know, presentation at AUA and more urology-centric, you know, meetings, just kind of you know, where do you think in early adoption, you know, the opportunities are most impactful in medical education?
spk13: Yeah, absolutely, Kevin. We have a very robust medical affairs and medical education strategy. And, you know, it's quite worth emphasizing that we are targeting those clinicians we aim to partner with. And so, as David mentioned, as we think about it, there are really three things that we're hoping to, you know, amplify in the medical discourse. Number one is the therapeutic opportunity and unmet need. And we are doing that both with our infectious disease colleagues, but also at meetings like the American Urological Association, because as Christina mentioned, we will be partnering with both types of clinicians as we get Tevipenem to patients. Secondly, both in the medical education realm and otherwise, we're developing data and publishing it that speaks to the value that Tevipenem brings to the healthcare system. And that is both for the clinicians who are very sensitive to these economics, as well as our colleagues in the payer community. And then finally, we will find the right venues to continue to, as David mentioned, generate and share data on the utility of tebipenem, not just in CUTI, but in other settings. The Merino 4 setting that David had mentioned is one example. So we're taking a holistic approach. We're both interacting with our urology colleagues, as well as our ID colleagues, and also keeping an eye to the value arguments that are really resonant as we talk to payers.
spk08: Thanks for taking my questions. Thank you, Kevin.
spk01: We'll go next to Esther Hong with Barenberg. Hi, thanks for taking my question. So regarding potential expansion opportunities of Tebby Penham HBR, and specifically pneumonia, Can you discuss what's been observed with granular tebupenem, which is approved in Japan for pneumonia in children? Thanks.
spk13: Yeah, thanks, Esther, for the question. I'll first zoom out to 100,000 feet as we think about our data generation activities clinically for tebupenem. They come in two flavors. The first flavor is we've had a groundswell of of interest from the clinician community to trial tebupenem in patient populations that matter to them. Merino 4 is a good example where the KOL community came to us and said that you have to try this in bacteremic patients and we're working with them. The second aspect is on a more formal indication basis, we're taking a stepwise strategy. So to your question, We are undertaking the bronchoalveolar lavage work as the first step to understanding how tevipenem can work in patients with lung infection. To your point, the granules that were approved by our partner, Meiji Seika, in Japan 10 years ago have extensive experience in respiratory indications, both upper respiratory as well as in pneumonia. And we've seen that that data suggests that tevipenem can be effective as well as achieves lung penetration. And so we'll be, in coming medical meetings, we'll be excited to share what our tebupenem tablets can do with the prescriber community.
spk08: Got it. Thanks. And we'll go next to Ram Selvaraju with HC Wainwright.
spk12: Thanks very much for taking my questions. Firstly, I was wondering if we could circle back to the utility of tebupenem in bloodstream infections. And if you could just comment on whether the usage paradigm, the dosing regimen, the length of treatment in that specific context might be meaningfully different from the lead label indication that you're seeking approval for.
spk13: Thanks, Ram, for the question. I'll pass that question to David, who can address the utility of tevipenem in bacteremic patients.
spk09: Yeah, the short answer to that question is no. The dosing regimen that we plan to run in Merino 4 will be identical to that in ADAPT-PO. And there are two lines of evidence to support that. First of all, there was a substantial subpopulation of patients with bacteremia included in the ADAPT-PO study population, and those patients did quite well on tebupenem. And remember, this was initial. therapy with tebupenem. There was no need in IV therapy. So that gives us confidence. Second line of evidence is the PKPD. You know, as we've discussed with you in the past, we have chosen a dosing regimen that provides extremely robust coverage and has pharmacodynamic equivalence to intravenously administered carbapenem. So for those two reasons, We don't plan any change in the dosing regimen.
spk12: Okay. And can you just comment on whether you believe that in that specific indication, tebupenem would compete against ceftobiprole, which is currently in late-stage clinical development? Or if you think that effectively, since these are clearly two different classes of antibiotics, that they would essentially complement one another?
spk13: Yeah, Ram, thank you for the question. Yeah, so thanks for the question, Ram. You know, in a sense, tebipenem, we think of the utility of tebipenem as following the utility of other carbapenems, like an ertapenem, for example, which was our comparator in the trial. You know, carbapenem has a unique spectrum, has a lot of gram-negative activity, and that's really the realm in which we think about it, is that, for example, in CUTI and AP, Patients that otherwise are required to take carbapenems like ERDA have TEVI as an oral option, and really that's the frame that we'll think about as we go into studies in patients and other indications. Okay, great.
spk09: Can I just add this? Go ahead, go ahead. Septobotoxin is a cephalosporin that's not active against ESBL-producing organisms and therefore would not work in Mirena 4.
spk12: Well understood. Thank you. A couple of quick questions on the 206 market opportunity. Can you frame for us what you think the likely market opportunity is in terms of a total addressable market size in the Pfizer territories, please?
spk08: I'll pass that question over to Christina.
spk03: Yeah, I think, you know, what we see without giving the exact numbers, but what we do see in terms of resistance rates to the common pathogens for what 206 and David, I think, shared the spectrum of activity, which 206 is quite broad in terms of activity against Acinetobacter, you know, carbapenem-resistant Enterobacteraceae and Pseudomonas. And I think that's what makes this compound very unique is its ability to have coverage against, you know, the three big bugs in terms of the largest problems that we see across institutions, not only here in the United States, but that exist in Europe and the rest of the world. And so without giving you exact numbers, what I would say that those are the three biggest bugs and the three biggest problems that we see in institutions today.
spk12: Thanks. And then just one last point of clarification. What do you anticipate the FDA to classify with respect to the Tebby Penham NDA at this juncture with regard to the assignation of a review period?
spk13: Ron, just to make sure I clarify the thinking, are you asking what we expect the review period to be once submitted? That's correct. Yeah, so Tebby Penham has received Fast Track designation, and Fast Track provides for an overall eight-month review period, which is a six-month review plus two-month validation.
spk08: Thank you very much. Thank you, Ram.
spk04: And that concludes today's question and answer session. I'd like to turn the conference back over to today's presenters for any additional or closing remarks.
spk13: Thank you, operator, and I appreciate everyone for joining us today. We look forward to the continued advancement of our pipeline, and we'll keep everyone updated along the way. Thanks again.
spk04: And that concludes today's conference. Thank you for your participation. You may now disconnect.
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