Q4 2020 Axcella Health Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to <unk> fourth quarter and full year 'twenty 'twenty conference call.
Please be advised that today's conference is being recorded and that all participants will be in a listen only mode until the question and answer session.
After todays presentation, there will be an opportunity to ask questions.
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And now for opening remarks.
I would now like to hand, the call over to Jason Fredette, Vice President of Investor Relations and corporate communications at <unk>. Please.
Please go ahead Sir.
Thank you operator, and thanks to everyone who is tuning in this morning, we would like to advise that certain remarks, we will make on today's conference call such as those relating to our planned IND submissions in clinical trials include forward looking statements that are subject to various risks and uncertainties. These risks and uncertainties are detailed in our most recent form 10-Q.
And our other SEC filings, which can be accessed on our website next telehealth dot com or on the SEC's website.
All forward looking statements represent our views as of today March 17th 2021 and should not be relied upon as representing our views as of any subsequent date, we undertake no obligation to update these forward looking statements.
Please also note that all of our clinical investigations to date.
Had been non I N D. Clinical studies that were designed to evaluate product candidates for safety Tolerability and effects on normal biological structures and function. These studies were not designed or intended to evaluate the ability to treat or prevent the disease.
Our upcoming clinical trials of access 60, and 65 and 11 25 will be conducted under Ian DS and will be aimed at this goal.
And now I'd like to turn the call over to our President and CEO Bill Hinshaw to begin the discussion bill.
Thank you, Jason and good morning, everyone. Thanks for joining us we're happy to have the opportunity to reflect on 2020, which was a period of tremendous excitement execution accomplishment and validation for <unk>. We're also pleased to highlight more recent updates, including the clearance of our first I.
N D that position us well for key milestones ahead as we enter late stage clinical trials.
Now a year ago at this time excel. It was looking forward to a milestone rich 2020, as we're executing multiple studies and approaching important readouts and we and the rest of the world. We're just starting to grapple with COVID-19.
Thanks to the proactive work of our team and clinical sites excel at and navigated through this challenging period and delivered positive data on or ahead of our original plans.
Most recent was the readout from the second study of access 16, 65 are multi targeted oral product candidate for the reduction in risk of recurrent overt hepatic encephalopathy.
As many of you know OE Chi is an all too common complication of cirrhosis, and which patients are severely impaired to the point, where they're unable to care for themselves. This state can lead to a coma and ultimately death.
It's estimated that about $7 billion is spent each year on OE Chi hospitalizations alone.
But the burden on the patients and caregivers is truly a measurable.
With $60 65, a proprietary composition of eight amino acids were initially striving to improve on today's standard of care. We also believe the opportunity exists to eventually become the standard of care.
Why.
Well there are a few reasons for one today's standards of care latch low center Rifaximin have limited mechanisms that focus on ammonia reduction of downstream driver of OE Chi.
Secondly, despite being on these medications many patients continue to experience OAG events.
And finally, there are widely recognized tolerability and adherence challenges associated with today's frontline agent latched close this.
This product removes toxic ammonia from the gut via four or more loose stools per day. This is not only unpleasant, but it can lead to a number of other complications including dehydration.
Now acts of 16, 65 has been safe and very well tolerated to date and it has the potential to address the needs of patients much more comprehensively.
It seeks to enhance nitrogen and ammonia handling while also overcoming the dysregulation and amino acids and decline in muscle function that are hallmarks of cirrhosis.
So we reported encouraging data in each of these areas in our zero zero to study this past August best.
First of all we also demonstrated how this comprehensive intervention may also improve cognitive function in cirrhotic subjects, we saw positive dose dependent improvements in all three of the neuro cognitive measures included in the 002 study, including statistical significance in the gold standard test.
For diagnosing a chi the Phe S test.
With this data in hand, our team began preparing for a comprehensive I M. D submission for <unk> 65, we were pleased to report clearance of the <unk> in January and now we're headed straight into a phase two trial.
Just four years after completing this candidates design.
This of course is a key milestone for $60 65.
It is also important to note it validates how we gather a significant amount of clinical data and our non <unk> setting and then leapfrog into later stage development.
We believe this bodes well for our other lead program <unk> 11, 25, as well as we prepare for a second IND clearance with the same division of the F. D. A more on that soon.
And I asked for the upcoming phase two this will be a global randomized double blind trial in which we'll compare just one active dose of acts of $60 65 to placebo over 24 weeks with a four week safety follow up this highly streamlined design is again, a testament to the power of our approach.
And the thorough dose ranging we've completed in past studies.
Approximately 150 patients will be enrolled across more than 70 clinical sites. All patients must have experienced at least one O. A T event from the prior six months and they must demonstrate neuro cognitive dysfunction at the time of screening.
These criteria are expected to enrich the population with the patients who are most likely to experience another O H E. A M.
$6 65 will be provided on top of latch low sandow, our rifaximin and will stratify the arms on Rifaximin use.
This is both patient and enrollment friendly and we believe it will enable us to demonstrate 16 60 five's affect clearly.
The primary endpoint will be the proportion of patients who achieved at least a two point improvement in the phe S from baseline to week 24.
Key secondary endpoints will include the number of O H events timed events, including hospitalization, we expect to see a separation of these events in the active arm versus placebo over a six month treatment period.
Ultimately OAG events are expected to be the registration endpoints. So these will be important data for our end of phase II discussion with regulatory agencies.
Other secondary endpoints agreed to with the FDA, we will focus on changes in physical function and patient reported outcomes.
Now in planning for this trial, we have reviewed a number of key factors, including previous study execution. The fact that this was our first experience enrolling patients with overt Eh Chi, which is a relatively rare condition and the potential impact of the ongoing COVID-19 pandemic based.
Based on these considerations. Our initial estimate is we'll be in a position to report topline data from this trial in the first quarter of 2023.
Of course, we'll be closely monitoring enrollment dynamics once the trial is underway and we'll provide updates as appropriate we have received a good amount of inbound interest on this trial from physicians. Our team has made great progress in engaging clinical sites and we expect screening to begin over the next several weeks.
Meanwhile, <unk> 11, 25 are multi targeted oral product candidate for adult and pediatric Nash is progressing in tandem was 16 65.
In May of 2020, we reported topline data from our 003 study showing that 11 twenty-five generated meaningful reductions in key noninvasive tests versus placebo. These included MRI P. D. F F insulin resistance a L T and fibrotic Biomarkers like proceed three.
Duction was most pronounced among subjects with type two diabetes, which is notable since these are difficult to treat patients that represent nearly half of the Nash population.
Similar to 16, 65, 11, 25 has been safe and very well tolerated to date.
We followed up our presentations about the 003 study of diesel and a S. L. D last year with additional presentations just last week at Nash Tag 2021.
Included among them were new insights into 11 twenty-five differentiated and multi targeted mechanism of action.
This poster presentation is now available on our website.
On the regulatory front, we participated in a type b pre IMD meeting with the FDA in the fourth quarter and we're able to affirm that there are no barriers to opening and I N D, including no gating toxicology or drug drug interaction work.
Most importantly, however, we were encouraged by the agency to proceed directly into a phase two be paired biopsy clinical trial.
This trial is expected to include a 48 week dosing period, two active arms versus placebo and standard histological and noninvasive endpoints, we will enroll patients with F. Two and F. Three Nash across approximately 70 global sites and will be stratify patients based on type two diabetic status.
To inform our future development plans.
Trial will include an interim analysis and it is expected to get underway in quarter two.
We look forward to sharing the final details once our India's cleared so stay tuned.
Based on our data and the commentary we've received from treating physicians and key opinion leaders. We believe 11 25 is well positioned to be a potential first line Nash treatment.
And we're eager to investigate it not only in adults, but also in adolescence.
<unk> estimates that up to 10% of our children already have Nash theres virtually no clinical development aimed at this population today.
Given this unmet medical need.
Our modality using amino acids with a well established safety, we're seeking to be a first mover in the field.
We plan to Reengage with the FDA regarding potential development steps once we have the phase to be underway.
Finally, I am excited to welcome Dr. Alison Schecter to the <unk> team.
Given the integrated nature of our research and clinical development model, our upcoming <unk> enabled clinical trials and the exciting work we have ongoing to expand our pipeline. This isn't the ideal time for her to join us as our president of research and development.
Allison Who's on the call today is overseeing all of our research product candidate design clinical and regulatory efforts. She brings tremendous experience within both biotech and big pharma.
Across the full drug development lifecycle from research and translational science clinical execution and commercialization.
Our team's execution has been excellent and we're well positioned for our next trials and I am confident this track record will continue under Allison's leadership.
So in summary, we're excited to have enhanced our tools and knowledge successfully completed multiple studies reached important regulatory milestones and work aggressively towards a number of milestones ahead.
These will include updates later in 2021 about our work to develop our next generation of E. M M compositions.
Yeah, Mems has the potential to impact a substantial number of other complex diseases and conditions and excel Ah is intent on extending its lee.
Now, let me turn the call over to our CFO Lora Chardonnay to review our financials low wrong.
Thank you Bill and good morning, everyone 2020 was a tremendous year for like sit out.
And with our most recent 90 clearance we've proven how wrapping inefficient memorial day.
This morning, I'll share a high level summary of our results for the fourth quarter and the full year 2020.
Starting with our balance sheet.
We ended 2020 with $107 million in cash and marketable securities.
<unk> 217 million the law as of September 30th 2020.
This change reflects the solid cash management and the wind down of our clinical studies.
We expect that our cash balance will be sufficient to meet our operating needs into the third quarter of 2022.
Turning to the P&L and now research and development expenses.
We continue to prepare for our upcoming phase two and phase two b. While also investing now on next generation of E M candidates.
R&D expenses were $10 $6 million and $37 million for the three and 12 months ended December 31.
2020.
This compared with 10, eight and $41 $7 million for the same periods of 2019.
The year over year decrease is mainly due to the completion of our most recent clinical studies of access $6 65, and you live in 'twenty five.
We expect R&D costs to begin increasing again in the quarters ahead as we enter our later stage development.
G&A expenses were $3 $9 million and $16 8 million for the three and 12 months ended December 31 2020.
This compares with $4 six and $15 $8 million for the same periods of 2019.
The year over year increase is mainly due to additional cost as we became a publicly traded company in 2019.
We expect G&A cost to remain roughly flat in the near term.
Yeah.
Excellent net loss for the fourth quarter of 2020 was $15 $2 million or <unk> 40 per share and our net loss for the full year 2020 was 56 four point find me and all or dollars 78 per share.
This includes $1, four and $6 $3 million, respectively in noncash stock based compensation.
Our net loss for the.
For the three and 12 months ended December 31, 2019 was $15 7 million or 68 cents per share and $59 million or $3 55 per share respectively.
So in summary, we are very excited by all the progress we've made and we're in a very strong financial position and we're looking forward to an eventful year ahead now operator will you. Please open the line for questions.
We will now begin the question and answer session.
Ask a question you May press Star then one on your telephone keypad.
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At this time, we will pause momentarily to assemble our roster.
The first question comes from Jasmine, Ronnie with Piper Sandler. Please go ahead.
Okay.
Thank you and good morning, Hey, guys hear.
Okay.
Yes.
This is jesse on for yes.
Two questions and thank you for taking them Oh can I ask about the broker that I'm sorry, do you want me to go on at that time.
Both at the same time, we will take notes. Thank you okay cool.
The first one is can you comment on why it's logical endpoint such as Nash resolution, one point improvement of fibrosis or both of them.
Glenn on powering for the Phase II B study.
Yeah.
And the second one is will there be any overlap between the two studies.
And can you comment on which one you expect to enroll faster and why thank you.
Great Jessica Good morning. This is bill so thanks for the questions first on your first question about the endpoints that we should be measuring in the phase II b. So.
So first what we had a great a type b pre IMD meeting with the FDA. We are aligned on the outlines that we shared with you that that will be a histological set of endpoints 48 week dosing period, and you will see the standard measures that you're used to in that field will give the exact details once the IND is cleared which we will.
We're very much on track to initiate the trial next quarter and we look forward to sharing those final and very specific details with you upon the IND clearance. Because then we're in a position to be final and that's why we're waiting for that next step in the near term in terms of overlap and the sites. The sites are distinct for each trial. There is of course in some.
Cases, the opportunity within major institutions, where there may be overlap and again, we're still we've had excellent inbound interest for both studies are well prepared to execute but again, we'll be in a position to communicate that more distinctly once the phase II B is underway for 11 25.
I will say you know the the interest in our mechanism the breadth of it are the multi targeted nature of it the profile that it presents have put us in great position with both audiences and set up well for a nice differentiated trial that we're getting ready to execute in both cases, starting next quarter. So thanks for the questions.
Thank you.
The next question comes from Michael Morabito of Chardan capital markets. Please go ahead.
Hi, Jean Thanks for taking the questions.
Two quick questions for you.
One for $11 65.
You gave some details on the call I think please correct me if I I think you said 70 sites overall, but I was just wondering like how many sites total net number isn't correct and what you expect your split to be between U S and ex U S and how do you expect that to.
Change or be potentially impacted by Covid is and what mitigation strategies are you employing.
On that front and.
And the second is since both 11 25, and 665 will not have data.
Until 2023 once these trials are launched.
You know what can we expect from the company.
It was wise for the rest of this year and going into next year.
Okay, great. Thank you Michael Good morning, So first on $60 65, yes, it's a 150 patients over a little over 70 sites is the plan and that gives us we have a very enrolment and patient friendly protocol, we have strong inbound interest from the physicians, we're well set up to start.
The sites in the next few weeks and initiative.
Standpoint, we've got a split between Europe and U S site wise of roughly 40% in the U S in terms of sites.
Reaching nine countries across Europe, we've worked with an excellent CRO, which has experienced in this field and so we're anticipating excellent uptake across the field now in terms of Covid as you're familiar with we were able to execute our studies last year in the heart of the pandemic and deliver on time or.
We're ahead of time.
We are in a situation now where we have of course worked with the sites and the crows about the COVID-19 mitigation circumstances, how they're progressing.
Were favorable and of course this point.
Moving to another flagship founded company modernity, and many others are bringing vaccinations at a good pace and level and when we looked at the engagement and enrollment curves we very much plan.
To be in good shape that way, Okay. Now, we'll obviously monitor it will pay attention to it and we will look at mitigation actions. In addition, if necessary I'll remind you that last year, we were able through proactive steps like home health other visits et cetera to deliver and many of the sites and other groups are now very familiar with.
Those technologies and techniques in order to deliver against clinical trials now in terms of your second question on data I would say we were in a position for several data readouts. This year our events. This year and data is not necessarily going to come in 'twenty three okay first with 11 25, when we upped.
Date, you once the IND is cleared and share with you the intention around the interim analysis on that trial, you'll be able to have a better sense. Once we get an initial enrollment to share when that will be.
So I would suggest that you stay tuned on that don't anticipate data will necessarily be in 'twenty. Three the second piece is one of the reasons why we're very excited about this stage is not only do we have these two late stage programs and important diseases that matter is we have learned a significant amount through our data generation.
Our platform advances and we're in a position where we will be announcing later this year additional opportunities that we'll be pursuing now these will both be in areas of adjacency I E. The liver metabolic inflammatory information we've already demonstrated there's also the potential be.
And that and so we will give you an update on the areas that we're looking at the experiments that will be conducting and thus the types of data readouts that we'll be looking forward to continue at fastest platform. We also have the news of course of the events with the IND and then the trial initiation and how we're doing on that so I think we will.
Have a good news flow of events will be set up to tell you where the next expansion of the pipeline is and will be in a position to share with you. The time relative to 11 25 and that important analysis there.
Excellent thanks for the clarity.
Yes, Thank you Sir.
Yeah.
Sure.
The next question comes from Paul Choi of Goldman Sachs. Please go ahead.
Hi, Thanks, Good morning, Bill and team and congratulations on all the progress in 2020.
I wanted to follow up with a few more questions on 16, 65, if I could and.
Bill just with regard to the enrolment timeline is the it is the primary factor in terms of the sort of wide range out to 2023 that you've given.
Laurent driven by conservatism around Covid or.
Or is the assumption that across the 70 plus sites, especially the international lines. It just might take a little.
Site activation might be just a little bit on the slower side.
Yeah. So first I think you know Paul as I alluded to in the call.
Section. This is our initial estimate now first and foremost a couple of things number one we know <unk> is a relatively rare condition. This is our first experience recruiting directly into the more advanced overt hepatic encephalopathy patients as you know we're enriching those patients to have an event to be precluded to.
Have that event and so that's those are two factors that we've considered we have considered the pandemic and the fact that that may have an impact on that overall trajectory and it is possible we will be in a position to pull that forward, we're going to do everything we can to do that of course as you know and thank you for your comments on the progress we've made.
We have an excellent track record of execution.
And in that setting the fact that we have in patient and enrollment friendly design, meaning the patients are on standard of care latch list <unk> Rifaximin.
That we have a situation, where 150 sites or excuse me 150 patients across 70 plus sites in a number nine countries, where the need is there there is not a lot of a lot of other activity in this field. Unfortunately for these patients and the inbound interest has been strong. So we're going to do everything we can to pull it forward. This was in.
The initial estimate based on some of the assumptions that I talked through and we look forward to updating you. Once we have the enrollment curves underway, we don't anticipate.
A particularly long site activation or any of those things Paul where in fact in very good shape that way and then we're optimistic we'll be able to continue to.
I'll say under promise and over deliver is something that we strive for in every case and that's what we're hoping to do here as well.
Okay. Okay. Thanks for the context, and maybe Q for Allison a nice to have you on the call as well.
Can you maybe just comment with regard to study O to how the patients with sort of the worst phe S. Baseline scores performed relative to those with more and more moderate scores.
And just given that maybe the relative differential in terms of in terms of the performance and changes given that over half the patients did have more than a two point change.
That's my first question and then second.
Just with regard to the addition of the therapy on top of standard of care, including Lactulose and Rifaximin can you, maybe just walk us through how youre thinking about the incremental differential here on <unk> given that it gives them more severe population and specifically what the statistical powering assumptions are here. Thank you.
Much.
So I'll have Paul Paul I'll jump in here because this is allison's day too okay.
Okay.
So from that standpoint, and you're asking excellent detailed questions that I have all the confidence that she and Margaret will be able to answer in the near term, but a couple of key components first in terms of the more advanced population.
We did show in the ammonia measurement, where you see MH.
Where we saw roughly a 15 point difference between placebo and the MHC arms in the active exit doses. So we did see an impact on that because there are baseline ammonia was elevated in general we have seen a trend both in the 001 and the 002 study where the more advanced patients had a more per.
<unk> effect on the measures. Okay that is there are really several reasons. We're excited to move forward into this more advanced patient population.
Number one is our broader and differentiated mechanism. We think can have the power to really demonstrate benefit here, we're talking about the imbalanced amino acids, the ammonia handling as well as the muscular metabolism. Then of course, the neuro cognitive impact. The other aspect is the fact that we have demonstrated.
As you have noted a statistically significant benefit in ph, yes related to.
The standard placebo arm in this case equaling, what we see with latch, a lowest rifaximin et cetera, and relatively comparable patient settings. So from that standpoint. We also believe because these are more advanced patients who are in rich to add a experience breakthrough.
And in addition, as Youre aware, Paul up to half of the patients on <unk> have broken through and clinical study settings, and a six month period and that is going to clinical study setting not in the real world. We believe we are well set up to show a difference now are powering is consistent with what you see with a phase III study.
And we are set up to see that were stratified by <unk> and Rifaximin in order to show both represent what occurs in the real world is roughly only 30% of the patients out there or on the combination as well as show the difference to what you are asking so we feel we're well set up to show.
An impact even on the backbone of the standard of care, we feel we're in a position to answer. The question of is there a better impact in the double or single monotherapy arms, and we believe that our profile overall as you know very well tolerated, we will set us up here to hopefully improve the standard of care and then eventually.
Become and replace it. So you had a multipart question there so I'll make sure that I paused and see if I captured all of your key points there.
Yeah.
Great. Thanks, Thanks for the additional color and clarification and I'll jump back in queue here.
Okay. Thank you Sir.
The next question comes from Andreas <unk> of.
Wedbush Securities. Please go ahead.
Thank you and good morning.
This is andre centrally on south those thanks for taking your question rigor.
Regarding 11 25 could you provide additional color on the process to achieving R&D clearance and the FDA suggestion to initiate the phase two b prior to your parents. Thank you.
Yeah, Yeah. So thanks Andreas good morning, So first in terms of 11 25, and the process. There are no barriers to initiate an IND and opening this up as I'll remind you we're using our model where we have gathered significant data in the non <unk> setting in order to inform a late <unk>.
Stage IND going directly into a phase to be let me clarify your second question. We had a good pre IND type B meeting, where we discussed the plans and the potential for IND submission with the FDA in that setting.
Lined on a series of important details such as they encouraged us to go test this directly in a histological fashion.
Paired biopsy study 48 weeks.
And we are going to be doing two active arms were going to be stratified for type two diabetics status, we're going to have an interim analysis as we've shared I wanted to be clear that they did not encourage us to start the study prior to IND clearance nor is that our anticipation.
They we just had a standard meeting with the agency about the next stage of development, we are able to align on important information that we shared with you guys.
Most recent updates and now as we cleared the IND, which we're very much on track to do we feel good about that both because of the interaction we had with the agency as well as the fact that this is the same division that we just moved through was $60 65. So we understand the interactions we're well prepared on some of the <unk>.
Key discussion points and we're anticipating starting that study next quarter I apologize if for some reason we led you to the incorrect conclusion that they encourage us to start beforehand. That's not the case, we had an excellent discussion we're well set up and we are in a good position to start next quarter.
Great. Thanks for the clarity I'll step into the queue congrats on the progress as well.
Thanks Andreas.
Yeah.
Again, if you have a question. Please press Star then one.
The next question comes from Julian Harrison with <unk>. Please go ahead.
Hi, Good morning. Thank you for taking my questions on the pediatric Nash opportunity can you remind us what the key question is still to be discussed with the FDA are and when might you have some clarity on the path forward.
And then is the natural history well understood here for instance, how many typically progressed this year versus Android HTC and maybe over what time horizon.
Yes, good morning, Julien Thanks for this important question because.
As you know, we see $11 25, as a potential first line agent in adult Nash and Thats. The spontaneous reaction of the medical community when they see our profile and our mechanism.
There are other opportunities like type two diabetics and importantly, as you raised in the pediatric population, where unfortunately. It is large is growing and there is very little development here and we believe our profile, meaning our mechanism and our safety offer an excellent opportunity here to move that forward quickly so right.
Now our focus is on getting the phase III adult trial initiated and working through that then we will go back with the agency and discuss.
The next and most effective and efficient steps with the pediatric program. There is no specific question that we have to address with the agency to be clear, we will simply go back and discuss the strategy and the best approach with them in terms of the natural history of the disease. It is emerging and evolving it is.
It is well characterized as adults of course, both because of the.
Stances of the large number of trials that are going on in the adult population. What is well understood is that it is very metabolically driven that there is overall progression of course through cirrhosis. The question is at what timing in their lifecycle and what we have to consider is of course, if they're starting in Nash and often diabetic stat.
<unk> set an adolescent age that this does not bode well for their overall health nor their impact on the health system. So again, we believe that this is a great opportunity for us to demonstrate differentiation for $11 25, and set up for a long term benefit for these patients and the health care system.
Got it very helpful. Thank you.
Thank you Sir.
The next question comes from Matt Young Mom Tony of B Riley FBR. Please go ahead.
Good morning team and thanks for taking my question in day to have that listen onboard so.
Appreciate all the context on the <unk> from a <unk> endpoint standpoint could you maybe also comment on the low.
At the mid two events. So could you just comment on what that does some day.
Because this is the first time, you'll see that on top of standard of care also and how confident do you feel that as we think about the legislation trial.
You could have Etfs as a primary endpoint.
One of your updated thoughts on that would be great.
Follow up on Nash.
Sure. So good morning, Mike. Thanks for the question and welcome for Allison in terms of this this is a really important question. So we wanted to set out and understand the science and set ourselves up for a very efficient well informed phase II that would then inform the phase III so to your point.
Our primary endpoint in this phase two is a change in ph evs over the 24 week period now we are basing that both on our mechanism as well as the fact that we demonstrated that outcome and our 002 study. So we have an excellent opportunity to power this properly understand the impact and move forward in this more advanced.
<unk> population now to your point and it's a really important one for our differentiation and our modality, we R&D measuring timed OAG breakthrough we are measuring time to hospitalization, we are making measuring time to the breakthrough and number of events percentage or proportion of patients now what's important to understand is.
That these patients will have had one prior <unk> event.
They will have a ph D S of minus four or greater indicating that they have active MHD and diverse enriched for a 30% to 50% probability of having an <unk> event in that timeframe now that is on top of the background that.
Normal patients in this setting have a breakthrough 40% of the time Unlatch list 22, plus percent of the time in combination even in a clinical trial setting. So we feel we're well positioned to establish an efficient understanding of the impact of our modality gather important information on the <unk>.
Registration endpoint, which we have agreed with the agency, which will be time to breakthrough in risk of recurrence of breakthrough. We also will be of course gathering important information on muscle function.
This is a key mechanistic differentiator for the product. It is also something the agency has agreed could be a key secondary endpoint, allowing us to differentiate not only in mechanism, but in claims and label and potentially population downstream. So we feel that this is a very efficient well informed.
As to that will set us up directly into the right phase III and then potentially also allow us to expand into additional opportunities faster than if we had taken a different development around.
<unk> coupon day, and then on <unk> quickly.
Quickly over the weekend, obviously many of US followed the NASDAQ conference and it was great to see a couple of bullets does highlighted day.
A lot of discussion on non invasive.
I'm sure. This is a big part of building bottom analysis continue sure.
Did to the extent you can how you are thinking about the timelines and the different non invasive that outbid them and again there are different variations of programs that have been run in phase III. So this Q&A.
You can see you.
The latest thinking on that.
Yeah, Yeah. So as you are alluding to obviously noninvasive markers are a critical element of understanding the impact on the disease and then as the field goes to continue to correlate these noninvasive markers to the histological and clinical outcomes. This is something that will help inform all of us.
As I've stated a number of times, we will give you. The final details of the phase II B. Once we have cleared the IMD, which we anticipate in the near term that will include both the histological measures what I can tell you Mike you should expect the standard state of the art things that youre used to seeing in the field and we've demonstrated already.
To date, so you can count on that being clear. We will also update you as to the timeframe of the interim analysis and again, you should expect that to be within the standard parameters that we're used to seeing in the field.
<unk>.
We're excited by the opportunity to have a broader differentiated mechanism.
That we believe the impact of which will compound over time as you know we've demonstrated important thresholds, reaching those thresholds of impact on MRI PDF F on Iot on Cte.
Proceeds free and others that correlate towards outcomes and both in terms of all subjects and then importantly, the type two diabetic population. So it will be stratified for type two diabetes in this and we'll be in a position to share that information with you once we cleared the IND.
And final question for Lauren good quickly on the R&D spend but think about it in the next four Guayabera zone, even like seven quarters has been the run rate.
Does that factor in the study and also some of the non disclosed programs that you may move into the clinic.
Yes. Thank you, yes, so we are very strong financial position with $107 million.
For the year, yes.
Cash flow includes the studies in additional.
Programs like we have in the pipeline coming.
So we have a cash runway well into the third quarter of 2022.
The number of viable here that they'll come in play.
We remain very opportunistic as to when how we are looking at the finish from market and we'll do it in a very appropriate miners.
The company is well funded while minimizing dilution.
And my last.
The last part of your question, we do plan additional programs in that and that cash runway.
We're very excited in order to come back to you guys and share what that will be that's one of the main applications of this design platform that we have we can move very quickly. We can test very quickly and efficiently gather significant information and I'm really proud that we've been able to reach the IND status with phase III phase II b.
Trials inside of four years, you've spent a good time with us. So you know how unusual that is.
Now we're ready to take the next steps and we look forward to sharing that with you and Thats also included in that and what <unk> shared with you.
Great. Thanks, so much for taking my question.
Thanks, Mike.
Once again, if you have a question. Please press Star then one.
The next question comes from Jessica Fye with Jpmorgan. Please go ahead.
Hey, there good morning, Thanks for taking my questions.
I will just flow from Mark with the first one is for Dr. Sector. I was hoping you could talk about what attracted you to <unk> and what in the pipeline you're most excited about.
The next two or an 11 25.
Just curious is there any other learnings from that free A&D meeting that you're able to share with us.
And also hoping you could help us understand the potential mechanism mechanistic rationale if any for a stronger benefit in diabetics. Thank you.
Well. Thank you for the question and thank you for the warm welcome.
<unk>.
The reason I think accelerates I was extremely impressed with not only with client platform, but also the compelling clinical human data and the potential for innovative medical and of course, the very strong team join the <unk>.
Most notably.
These products.
Especially the <unk>.
And Nash.
That truly differentiate.
As well as the top 25 for hitting multiple targets Tacopina, which I know weather.
Therapy.
I think there is such an unmet medical need for this.
This is very appealing.
And time to Joan Thanks, Great. Thanks, Allison and Jess Good morning, good to speak with you in terms of your question on $11 25 in the pre IMD meeting. It was it was a very rich interaction, which was also I'll say enabled and stood on the shoulders of our interactions with $60 65, which you know.
Several so from that standpoint, a couple of key aspects that we gains number one is the FDA looked at our data in our supplemental filing and said, yes, let's go to a phase two b level study 48 weeks histologically paired biopsy so that was <unk>.
That they were very encouraging on we have also in a position in this year are familiar with whether our model no gating tox no gating drug drug interactions steps that usually it takes significant time money and in fact offer risk now. This is because we have the information and we provide the information.
And our submission similar to 16 65.
We also are in a position based on those interactions to say we plan to take the two doses forward and Thats something that is again efficient on our phase II b four or excuse me our phase III for $60 65, we're taking one active dose forward because we've already studied for and we have a really good understanding of that battle.
Laos us to be faster more efficient spend less money being more attractive to the patients and enrollment and we are in a position here as well now to your question on diabetes I think mechanistically.
We have a we're of course, focusing on metabolism inflammation and fibrosis simultaneously in an integrated way metabolism is a core aspect and the hallmark of $11 25 mechanism of action and because there's a strong buy nodal relationship between the two.
Diseases, we have seen as you know the impact on homeowners are insulin resistance overall lippo toxicity very pronounced and we believe that since we're in essence reprogramming and working with the body's natural processes that this is one of the reasons why we've seen these distinct result.
It's in the field to date and replicated from zero zero to <unk> 003. So we're very eager as are the physicians to study. This in the next trial gain an understanding both at the interim and the topline data and have that inform our future development plans. So it's very congruent with the mechanism and we showed some of that at <unk>.
Nash Tag this weekend.
And we look forward to continuing to evaluate this with our experts.
Great. Thank you and.
Thank you. Thank you. The final question will come from Thomas Smith with SBB Leerink. Please go ahead.
Hey, guys. Good morning, Thanks for taking the questions just.
On 16, 65, and the <unk> study I think you've previously talked about implementing an interim analysis into this space too.
Can you just talk about what Youre planning here, what the expected timing would be for this interim how you intend to communicate the results of that analysis to the street.
Yes.
Thank you Tom good to speak with you.
A couple of things as a reminder, these are patients with advanced liver disease. So we wanted to be both efficient as we always are as well as patient sparing. So in alignment with that the plan is to do an interim futility analysis and I want to be clear about that and that'll be that'll occur when about 50% of the subjects have completed the treatment.
Now in that analysis and independent data monitoring committee will receive the safety information, which will include hospitalizations and important factor here, both for safety and activity in this setting along with the ph, yes relative to the placebo arm now they'll communicate the outcome of that assessment to us. So we can confirm that the trial.
Should proceed and we have all the optimism that that will occur and that will continue to move forward on that piece to be explicit we're not planning on sharing data from that analysis. So I want to be clear with you all and in terms of the timing subsequently again, we'll update you post the initial enrollment curves understanding that dynamic so we.
Can give you a more accurate approach. So this is something that will help inform us.
We're very confident based on the mechanism based on the data we've demonstrated to date and the enthusiasm in the field that we will get through that as quickly as we can.
Got it that's helpful. Thanks for the color.
Yeah. Thanks, Tom.
This concludes our question and answer session I would like to turn the conference back over to you Bill in Shaw for any closing remarks.
So thank you operator, thank you everybody for joining this morning and for your continued engagement and interest in <unk> health and our progress we are in a very exciting stage for the company. We look forward to sharing with you in the near term hopefully are positive updates on $11 25, and continuing to make progress on our platform and our pipeline. So thank you very much.
Well, we hopefully we'll see you in person soon and take care. Thank you be well.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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