Q2 2022 Evelo Biosciences Inc Earnings Call
[music].
Good morning, and welcome to the El Bellow Biosciences conference call to discuss its second quarter 2020 to business highlights.
Operator: Good morning, and welcome to the Alvelo Biosciences conference call to discuss its second quarter 2022 business highlights.
Operator: At this time, all participants are in a listen only mode.
At this time all participants are in a listen only mode.
Following the formal remarks, we will open up the call for your questions.
Yeah.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question again press the star and the number one on your telephone keypad.
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 Kindred Sweeney.
Operator: Following the formal remarks, we will open up the call for your questions.
At that low please proceed.
Thank you. This morning, we issued two press releases one announcement that includes a summary of our recent business highlights and second quarter financial results and another regarding the succession plan for C. E O Simba Gill these releases and a recording of the call are available at Www dot of Velo bio dot com under the investors.
Tab.
Speaking on the call today will be Simba, Gill CEO and Lord Ara Darzi chair of the <unk> Board of directors.
Operator: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
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 objectives 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.
Operator: If you would like to withdraw your question, again, press the star and the number one on your telephone keypad.
<unk> and 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.
Operator: Please be advised that this call is being recorded at the company's request.
Participants are directed to the risk factors set forth in <unk> quarterly report on Form 10-Q for the period ended June 32022, and the company's other filings with the Securities and Exchange Commission.
Any forward looking statements made today speak only to <unk> operations as of today.
<unk> disclaims any duty to provide updates to its forward looking statements even if subsequent events cause the company's views to change.
Operator: At this time, I'd like to turn the call over to Kendra Sweeney of Avelo.
It is now my pleasure to pass the call over to Simba.
To review our progress during the second quarter.
Operator: Please proceed.
It's a very exciting time as <unk> with a number of important clinical catalysts expected over the next six to 12 months.
Kendra Sweeney: Thank you.
Based on positive phase two data in psoriasis, we are in discussions with health authorities on a waiting on guidance for advancing ETP 18, 15 into registration trials, which we anticipate hearing that guidance by year end.
We also are expecting to phase two readouts for ETP 18, 15 in atopic dermatitis in the first and second quarters of next year.
We also anticipate phase two psoriasis data for Edp 29, 39, a first microbial extra cellular vehicle product candidate in the second half of next year.
We know our platform has broad applicability based on positive preclinical and clinical data showing inflammation resolving effects across the major types of inflammation th one th two on th 17.
This creates a significant potential opportunity for VAALCO to expand beyond dermatological conditions to the ostrich these inflammatory bowel disease asthma and many other inflammatory diseases.
Oh.
Given the integrated profile of Edp, 18, 15, which is not just effective but also has placebo like safety and tolerability oral delivery and affordable pricing, we anticipate broad usage as a foundational therapy across all stages of psoriasis atopic dermatitis and all the insight.
Treat diseases.
This includes the treatment holds a significant population of patients with mild to moderate disease and maintenance therapy for more severe patients.
Yeah.
Safety and Tolerability, all critical parameters for both adults and children with diseases, such as psoriasis, and atopic dermatitis and for the clinicians and nurse practitioners, who treat them.
Our product candidates are being tested in hundreds of patients and have been shown to have a safety and tolerability comparable to placebo.
GDP 18, 15 resolve inflammation without suppressing immunity.
Is a unique profile.
Switching topics to people in order to achieve our goals, we need to have the right team in place.
I'm pleased that we continue to attract tremendous pallet to available.
We recently announced the appointment of Marella Tourelle Isabella as Chief Financial Officer effective September one.
Marella is an accomplished financial and operations leader.
Her experience will be extremely valuable as we move towards late stage clinical development and commercialization of our products.
Thanks.
On a scale unbilled.
Kendra Sweeney: This morning, we issued two press releases, one announcement that includes a summary of our recent business highlights and second quarter financial results, and another regarding the succession plan for CEO Simba Gill.
Lastly, as you may have read we announced my succession plan. This morning.
We started about seven years ago, and I'm very proud of the remarkable discoveries platform and clinical development progress that we have made.
Kendra Sweeney: These releases and a recording of the call are available at www.
Kendra Sweeney: AveloBio.com under the Investors tab.
And at that time, our team has done what most thought impossible.
Firstly, we have uncovered the biology of the small intestinal axis and opened up a new field of medicine, but we are confident we'll be at least as important as the antibodies have become.
Secondly, our team has discovered a new type of medicine orally delivered single strains of microbes and microbial extracellular vehicles that are restricted.
Yes resolve inflammation throughout the body.
The first of these product candidates ADP <unk> is moving towards registration trials in psoriasis and is in phase two in atopic dermatitis we.
We expect that it will be used broadly to treat inflammation and has the potential to be one of the most important drugs and global health care.
And third a team is creating a completely disruptive volume driven business model focused on treating previously overload patient populations those with mild to moderate disease with an effective.
Safe well tolerated oral therapy that is also affordable.
<unk> is in a strong position a position with a bright future and the time is right for me to step into the role of chats undefined and support a great CEO for the next phase of our growth.
Ara and the rest of the board with what find his successor and I will work with them to ensure a seamless transition with the rest of our leadership team.
Until my successor is announced I will continue as CEO and president.
The other was my baby and I Love This company and the team that has created it.
I'm a strong believer in our science and look forward.
Continuing in the next chapter as I move into the chair role.
Once we have found a new CEO . In addition to my churro develop I will be returning to flagship pioneering to help launch grow and guide several translational platform companies.
It is exciting for me to be able to work with the next generation of biotech companies and to work closely with the next generation of biotech leaders.
With that I'm going to turn the call over to Ara to give some brief remarks about the CEO search.
Kendra Sweeney: Speaking on the call today will be Simba Gill, CEO, and Lord Ara Darzi, Chair of the Avelo Board of Directors.
Okay.
Thank you Simba.
Pleasure to be here today.
On behalf of the board of directors I want to thank Simba.
Kendra Sweeney: 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 objectives 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.
Kendra Sweeney: Participants are directed to the risk factors set forth in Avelo's quarterly report on Form 10-Q for the period ended June 30, 2022, and the company's other filings with the Securities and Exchange Commission.
Kendra Sweeney: Any forward-looking statements made today speak only to Avelo's operations as of today.
Functional leadership, he has shown and building and growing below since 2015.
The company is well positioned.
Future his hard work on also.
As he mentioned Simba will continue to see you soon.
We have found a successor and thereafter, it's true.
We have agreed we have engaged with the executive search firm Spencer Stuart.
To help with the search and.
And it would work closely with them to ensure the successor has all the bead should characteristics to be successful as a C E O.
I look forward to continuing to work with simple.
And the leadership team of the furlough.
The company is.
Pricing stage.
And having.
Our recent financing is well positioned.
Kendra Sweeney: Avelo disclaims any duty to provide updates to its forward-looking statements, even if subsequent events cause the company's views to change.
To execute on a series of critical clinical barstool.
With that I will turn the call back over to Simba.
Kendra Sweeney: It is now my pleasure to pass the call over to Simba.
Thank you Oliver.
To wrap up let me summarize the upcoming key catalysts and milestones.
Including by year end.
While we expect feedback with health authorities with respect to moving ETP 18, 15 in psoriasis indirect illustration trials.
We also anticipate initiation of dosing of Edp 2939 offer.
First clinical microbial extracellular physical candidate.
In the first quarter of 2023, we expect data from the first three cohorts in the phase two trial of ADP <unk> in atopic dermatitis.
Simba Gill: To review our progress during the second quarter.
In the second quarter of 2023, we expect data from the false cohort with.
With the capsule with the foster release profile in the phase II trial.
Simba Gill: It's a very exciting time at Avelo, with a number of important clinical catalysts expected over the next 6 to 12 months.
<unk> in atopic dermatitis.
Simba Gill: Based on positive Phase 2 data in psoriasis, we are in discussions with health authorities and are waiting on guidance for advancing EDP1815 into registration trials, which we anticipate hearing that guidance by year end.
In the second half of 2023, we expect phase one and phase two data for Edp 29, 39 in psoriasis.
Simba Gill: We're also expecting two Phase 2 readouts for EDP1815 in atopic dermatitis in the first and second quarters of next year.
Simba Gill: We also anticipate Phase 2 psoriasis data for EDP2939, our first microbial extracellular vesicle product candidate, in the second half of next year.
Our data proves that we can harness syntax to open up a new field and type of medicine that goes far beyond existing biotech and pharma products and opens up the treatment of all stages of inflammation with potential medicines that are orally delivered convenient effective safe and well tolerated.
Simba Gill: We know our platform has broad applicability based on positive preclinical and clinical data showing, inflammation resolving effects across the major types of inflammation, Th1, Th2, and Th17. This creates a significant potential opportunity for Avelo to expand beyond dermatological conditions to the arthritis, inflammatory bowel disease, asthma, and many other inflammatory diseases. Given the integrated profile of EDP1815, which is not just effective, but also has placebo-like safety and tolerability, oral delivery, and affordable pricing, we anticipate broad usage as a foundational therapy across all stages of psoriasis, atopic dermatitis, and other inflammatory diseases.
Simba Gill: This includes the treatment of the significant population of patients with mild and moderate disease, and maintenance therapy for more severe patients. Safety and tolerability are critical parameters for both adults and children with diseases such as psoriasis and atopic dermatitis, and for the clinicians and nurse practitioners who treat them. Our product candidates have been tested in hundreds of patients and have been shown to have safety and tolerability, comparable to placebo.
Simba Gill: EDP1815 resolves inflammation without suppressing immunity. This is a unique profile.
Simba Gill: Switching topics to people.
This puts the future of Edp, <unk> and syntax medicines into a strong position and most importantly brings us even closer to realizing our vision.
Simba Gill: In order to achieve our goals, we need to have the right team in place.
None of this would've been possible without the hard work and dedication of the Ballard team and our partners.
Simba Gill: We are pleased that we continue to attract tremendous talent to Avello. We recently announced the appointment of Mirella Terrell as Avello's Chief Financial Officer, effective September 1. Mirella is an accomplished financial and operations leader. Her experience will be extremely valuable as we move towards late-stage clinical development and commercialization of our products, and scale and build Avello.
Simba Gill: Lastly, as you may have read, we announced my succession plan this morning.
Thanks to them and thank you and we will now open the call for questions.
Simba Gill: We started Avello seven years ago, and I'm very proud of the remarkable discoveries, platform, and clinical development, progress that we have made. In that time, our team has done what most thought impossible.
Simba Gill: Firstly, we have uncovered the biology of the small intestinal axis and opened up a new field of medicine that we are, confident will be at least as important as antibodies have become.
Yeah.
Okay.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Simba Gill: Secondly, our team has discovered a new type of medicine, orally delivered, single strains of microbes and microbial, extracellular vesicles that are gut-restricted yet resolve inflammation throughout the body.
Yeah.
Yes.
Yeah.
Well pause for a moment chicken Powell the Q&A roster.
Simba Gill: The first of these product candidates, EDP1815, is moving towards registration trials in psoriasis and is in Phase 2, in atopic dermatitis.
Simba Gill: We expect that it will be used broadly to treat inflammation and has the potential to be one of the most important, drugs in global healthcare.
Okay.
Yeah.
Uh huh.
Yeah.
Simba Gill: And third, our team is creating a completely disruptive, volume-driven business model focused on treating, previously overlooked patient populations, those with mild or moderate disease, with an effective, Until my successor is announced, I will continue as CEO and president.
Your first question comes from Chris Howerton from Jefferies. Your line is open.
Hi, Hey, good morning. Thank you so much for taking the questions and obviously a pretty exciting time for the company. So I guess two questions for me one would be.
Simba Gill: Evelo is my baby and I love this company and the team that has created it.
Simba Gill: I'm a strong believer in our science and look forward, to continuing in the next chapter as I move into the chair role.
Simba Gill: Once we have found a new CEO, in addition to my chair role at Evelo, I will be returning, to flagship pioneering to help launch, grow, and guide several translational platform companies.
Given the kind of stage of your company and the cash runway that you have.
What types of activities might we expect in terms of capital preservation or certain kind of cost saving measures moving forward.
Any.
Then the second question that I would ask would be.
With respect to the feedback that you're expecting from the health authorities towards the end of this year.
Is there any kind of go no go decision moving into pivotal trials or is it simply just designing features in terms of understanding what the appropriate path forward. Thank.
Thank you.
Hi, Chris It sounds like you're young travelers with CLO.
Simba Gill: It is exciting for me to be able to work with the next generation of biotech companies, and to work closely with the next generation of biotech leaders.
Simba Gill: With that, I'm going to turn the call over to Ara to give some brief remarks about the CEO search.
Thanks for the questions, Chris So on cost control, obviously, given the current financial environment, It's something we're very focused on.
Ara Darzi: Thank you, Simba.
Ara Darzi: It is a pleasure to be here today.
Ara Darzi: On behalf of the board of directors, I want to thank Simba for the exceptional leadership he has shown in building and growing, Evelo since 2015.
Ara Darzi: The company is well positioned due to his hard work and also his commitment.
Ara Darzi: As he mentioned, Simba will continue as CEO and president until we have found a successor, and thereafter a chair.
Ara Darzi: We have agreed, we have engaged with the executive search firm, Spencer Stewart, to help with this search and will work closely with them to ensure the successor, has all the leadership characteristics to be successful as a CEO of Evelo.
Ara Darzi: I look forward to continuing to work with Simba, the board, and the leadership team of Evelo.
We always are and we always have been we went through a very intense exercise in Q4 of last year.
In which we looked at critical areas.
Investment defined our priorities and right now the company is very much focused on investing only in those core priorities, we already cut back in a number of areas in.
The spirit of making sure we have the cash to get us through the critical clinical milestones that I described whilst continuing to invest at a reasonable level in the platform. So we've already taken.
Ara Darzi: The company is at an exciting stage and having completed a recent financing, is well positioned, to execute on a series of critical clinical milestones.
Ara Darzi: With that, I will turn the call
A very strong look at costs I have already taken a number of measures to bring.
Cost under control in a very disciplined manner.
With respect to feedback from household <unk>.
Essentially the critical parameters, we're looking for guidance and support from regulators and health authorities owner is confirmation of phase III clinical design, making sure health authorities are comfortable with all of the tech ops and analytics around the manufacturing side.
We don't anticipate there'll be any.
Settlement of issues, so it should be relatively straightforward Chris.
And.
We expect based on that feedback, we will be moving towards registration sometime risk.
Registration trials sometime next year.
Okay, Alright, very good I appreciate that and I'm, sorry about the background noise none of us Keith.
Okay.
Simba Gill: back over to Simba.
Okay.
Your next question comes from Joseph Thome from Cowen Your line is open.
Simba Gill: Thank you, Ara.
Hi, there good morning, and thank you for taking my questions maybe in terms of the phase III trial design for psoriasis based on what you know about 18 15, right now, maybe what formulation and what kind of dosing profile and frequency.
Simba Gill: To wrap up, let me summarize the upcoming key catalysts and milestones, including by year end where we expect feedback with health authorities with respect to moving EDP1815 in psoriasis into registration trials. We also anticipate initiation of dosing of EDP2939, our first clinical microbial extracellular vesicle candidate.
Would you like to use in the phase III that you think could optimize that and then.
Maybe you're looking forward to the atopic dermatitis data next year.
Simba Gill: In the first quarter of 2023, we expect data from the first three cohorts in the phase, two trial of EDP1815 in atopic dermatitis. In the second quarter of 2023, we expect data from the fourth cohort with the capsule, with, the faster release profile in the Phase II trial of EDP1815 in atopic dermatitis.
Is there a specific proportion of patients meeting easy 50 that would give you the confidence to move into a pivotal program there as well. Thank you.
Joe It didn't quite get the second question ill, let me answer the first and then if you don't mind repeating the second question on I'd appreciate that but with respect to dosing and formulation for $18 15 in psoriasis as you know Joe the phase two data we have was positive and I'm works.
Cited about with that formulation in that dosing, which is once a day.
With what we call our original formulation moving into phase III trials.
That's our anticipation.
Having said that as you can.
No. We recently announced data on a faster release capsule, which has the potential to show significant improvement above and beyond what we've seen already.
<unk> data in atopic dermatitis on that foster release formulation in the second quarter of next year.
Is that a.
Shows as it may well significant improvement in activity in atopic dermatitis, we'll pretty definitely use that.
In psoriasis the results should translate.
From a D into psoriasis in that context, and Theres no meaningful risk that there'll be any any loss of activity or any safety or tolerability issues. So that's basically how we're looking at it. The base plan is to go forward with the original formulation and dosing if we see a substantive improvement in the phase two.
Cohort four and atopic dermatitis, then we'll use that in the phase III in psoriasis and it doesn't impact timelines or planning or anything like that for the phase III psoriasis trial.
So hopefully thats helpful. On that question, Joe and then sorry, if you don't mind repeating the second question I didn't quite get it.
Yep. Thank you of course, the second one was just on the phase III atopic dermatitis read out is there a certain bar for easy 50 that youre looking for to move forward into.
Into a pivotal program that means safety has been so solid.
So I assume that's going to be the same here, but it's easy 50 is not the key efficacy endpoint that youre looking at would be maybe what would you what else are you looking at yeah. No easy 50 is the key endpoint absolutely as you know atopic dermatitis has even more unmet need in the mild and moderate population.
Van Psoriasis does is very little available others.
Topical switch patients don't like as you know and are forced to use because they don't have good alternatives. So we are looking at easy 50, plus or minus if we saw a 20% separation in patients on drug with easy 50 versus placebo that would be a clear win a gray zone would be.
15% to 20% anything at 20% or above would be a big and very clear window.
And the key is separation from placebo.
Proportion response in easy 50, as you know the big issue with atopic dermatitis trials.
Is placebo response patients do.
To respond on the placebo arms and so you have to look within a study at separation between easy 52 patients on drug and patients on placebo and as I said, a 20% or greater separation in terms of percentage of responders.
Would be a very strong win 15% to 20% would be a <unk>.
Perfect. Thank you very much I appreciate it.
Thanks sure.
Your next question comes from Zika.
Vikram <unk> from Morgan Stanley Your line is open.
Simba Gill: And in the second half of 2023, we expect Phase I and Phase II data for EDP2939 in psoriasis.
Simba Gill: Our data prove that we can harness Syntax to open up a new field and type of medicine that goes far beyond existing, biotech and pharma products and opens up the treatment of all stages of inflammation with potential medicines that are orally delivered, convenient, effective, safe, and well-tolerated. This puts the future of EDP1815 and Syntax medicines into a strong position and, most importantly, brings us even, closer to realizing our vision.
Simba Gill: None of this would have been possible without the hard work and dedication of the Avelo team and our partners.
Great. Good morning, Thanks for taking our question. So we had one on 29 39.
So for this extra cellular vehicle product candidate.
Psoriasis, what sort of differential.
It could impact are you, hoping to see here versus what you've been able to demonstrate with 18 15 and.
Do you eventually envision these two product candidates be used for different segments of the cirrhosis patient population or could there be some overlap here.
Simba Gill: Thanks to them and thank you, and we will now open the call for questions.
Operator: At this time, I would like to remind everyone in order to ask a question, press star and the number 1 on your telephone keypad.
Hi, there.
In preclinical models.
Operator: We'll pause for a moment to compile the Q&A roster.
What we see actually with both.
$18 15, and 2939 is efficacy that is gold standard consistently across all preclinical in vivo models, meaning at least as good as best in class antibodies.
<unk> equivalent small molecules even steroids without.
The side effects Tolerability and safety issues, we have not seen that was $18 15 and patients. We haven't seen attracted positive results to the previous questions are asked.
Operator: Your first question comes from Chris Howerton from Jeffries.
Operator: Your line is open.
But clearly support go into phase III.
Chris Howerton: Hi.
In the mild to moderate population. The scientific question. We've got is why are we not seeing in human subjects.
Chris Howerton: Hey, good morning.
Subjects patients the same level of very high potency.
Chris Howerton: Thank you so much for taking the questions and obviously a pretty exciting time for the company.
Chris Howerton: So I guess two questions for me.
<unk> consistently.
Humans, so there's room to do even better than we've done right now.
We see the extracellular vehicles because of their small size and all of the science, both theoretical as well as practical supports the thesis that they should get to the surface of the small intestinal wall worthy immune fencing is occurring much more effectively than whole microbes. So we see the potential for <unk>.
<unk> improvement.
In both level of efficacy as well as propulsion of responders. Obviously the trial is set up to confirm that type of result.
Chris Howerton: One would be, you know, given the kind of stage of your company and the cash runway that you have, what types of activities, might we expect in terms of capital preservation or certain kind of cost-saving measures moving forward, if any?
Best case, we could get antibody like efficacy.
Chris Howerton: And then the second question that I would ask would be with respect to the feedback that you're expecting from the, health authorities towards the end of this year, is there any kind of go, no-go decision moving into pivotal trials, or is it simply just design features in terms of understanding the appropriate path forward?
With the microbial extracellular vehicles in the majority of patients obviously that would be an enormous win.
Chris Howerton: Thank you.
Simba Gill: Hi, Chris.
Which would revolutionize the whole industry, if we saw that.
Sure.
The preclinical data supports that as a possibility.
If we were to get that level of efficacy, we've got a very nice.
Problem on our hands. So it goes to your second question, which is how do we think about segmenting the market.
And there's lots of different ways to do that when we haven't made that decision yet you could imagine a scenario, where we have one product that goes head to head with antibodies for example for the more severe patients we keep $18 15 for the mild or moderate.
We have to look at the data to make that.
That judgment call. So that's that's how we're looking at it.
So, yes eagerly awaiting that data in the second half of next year.
Got it thank you.
Simba Gill: Sounds like your young child is with you, so say hello.
Your next question comes from Kristen <unk> from Cantor Fitzgerald. Your line is open.
Simba Gill: Thanks for the questions, Chris.
Hi, good morning, and best wishes to you. During this transition I know how much you believe in syntax and know that Youll remain close to the story. So the first question I had for you is what work are you integrating into your current and also upcoming studies to better understand some of the durable.
<unk> and deepening responses that you've observed in the past.
Thanks, Chris I'd say, let me just comment on the on your on your Gracious words about me Kristen. Thank you. Thank you for that vessel.
Simba Gill: So on cost control, obviously given the current financial environment, it's something we're very focused on.
Simba Gill: We always are and we always have been.
And I just wanted to underscore what you said, yes.
Simba Gill: We went through a very intense exercise in Q4 of last year in which we looked at critical areas of investment, defined our, priorities, and right now the company is very much focused on investing only in those core priorities.
Simba Gill: We already cut back in a number of areas in the spirit of making sure we have the cash to get us through the critical, clinical milestones that I described, whilst continuing to invest at a reasonable level in the platform. So we've already taken a very strong look at cost and have already taken a number of measures to bring cost under control, in a very disciplined manner.
That in my prepared remarks of Ela is very much my baby I care deeply about this company and its potential to revolutionize medicine, so I'm going to stay very involved supporting.
Simba Gill: With respect to feedback from health authorities, we essentially the critical, parameters we're looking for guidance and support from regulators and health authorities on is confirmation of phase 3 clinical design, making sure health authorities are comfortable with all of the tech ops and analytics around the manufacturing side.
Chris Howerton: Okay, all right, very good.
Simba Gill: We don't anticipate there'll be any substantive issues so it should be relatively straightforward, Chris, and you know we expect based on that feedback we'll be moving towards registration sometime, registration trials sometime next year.
The new CEO and the leadership team and the board.
When that person comes in and do whatever I can to make sure the new CEO and the leadership team.
Generally successful in supporting federal but thank you for your comment on the question around durability and maintenance just a recap maybe for other listeners as well.
One of the results that we're very intrigued.
From the clinical studies.
Is the fact that even after we stopped dosing we're seeing.
Maintenance of effect for up to 24 weeks in the phase II psoriasis study after we stopped dosing and in a significant proportion of patients. We're seeing a deepening of response, that's very unusual compared to other therapies, where.
Often when patients come off therapy, not only did they returned to their original disease state. They often get flatter and rebounded can become worse, so very unique to have maintenance without drug.
And to have the deepening of responses to your question I know you answer that question, but I just wanted to ground everybody else.
<unk> things, we're doing obviously pre clinically we're continuing to look at mechanism of action and how.
How this is working we have very clear evidence at this stage that the effects are driven by conditioning specific T cell subpopulations, which circulate throughout the body and are exerting an effect on a sustained basis, that's very exciting and that really what we're able to do with syntax is too.
Modulate.
Inflammation resolving T cells.
Through a new area of biology, and which we have got restricted drugs that drive that type of effect.
You might remember Kristen that many decades ago led corporate development and strategy at the wells first stem cell and cell therapy company Systemix.
I will maintain my view that I had is a very young men. When I was leading strategy that that cell therapy will always be limited because of the complexity of manufacturing administration and safety issues around all of that so what we've always wanted is something that modulates essentially immune cells, but.
And an easy safe, obviously, largely reproducible and then it looks like we've got that it's really really exciting thing and we will continue to your question to look at pre clinically what is going on but we already know we're modulating T cells there.
That are circulating throughout the body and assessing those inflammation, resulting effects very exciting on the clinical side.
Obviously, we can't do.
Essentially sacrifice humans away, we sacrifice a pure <unk>, which means that the studies that we can do with somewhat more limited.
That said all of our clinical studies will now have longer duration.
All the treatment open label extensions, so there's going to be part of all of our clinical studies and programs that will allow us to look at what happens with extended duration of effect. We will also be looking at follow up and we'll be doing what we can to understand whether or not that biology that I described is translating in how it's translating into humans.
So.
Your question is a really important one because it is very exciting that we are seeing that durability maintenance and even deepening of response and again I think the Cove point is we already know that that is likely caused by the modulation of the T cells, which have extended half life and therefore, we're able to accept that type of activity.
Chris Howerton: I appreciate that and I'm sorry about the background noise.
Simba Gill: No, no, it's cute.
Okay I appreciate that and now that it's been about eight months.
<unk> had the label expansion to include patients across all severity curious if you guys are hearing anything about patients wanting to switch to an oral therapy across the different levels of severities I know in the past you've emphasized how this could potentially help pave the way for your program shut it make it to the market.
Simba Gill: I like it.
Operator: Your next question comes from Joseph Soam from Cowen.
Operator: Your line is open.
Joseph Soam: Hi there,
Joseph Soam: good morning and thank you for taking my questions.
Yes, yes, we have very clear feedback from patients nurse practitioners as well as clinicians.
Joseph Soam: Maybe in terms of the phase 3 trial design for psoriasis, based on what you know about 1815 right now, maybe, what formulation and what kind of dosing profile and frequency would you like to use in the phase 3 that you think could optimize that and then maybe looking forward to the atopic dermatitis data next year, is there a specific proportion of patients meeting EV50 that would give you the confidence to move into a pivotal program there as well?
Joseph Soam: Thank you.
Simba Gill: Joe, I didn't quite get the second question.
That <unk>.
Joseph Soam: I'll cut, let me answer the first and then if you don't mind repeating the second question, I'd appreciate that, but with respect to dosing and formulation for 1815 in psoriasis, as you know Joe, the phase 2 data we have was positive and we're excited about with that formulation and that dosing, which is once a day with what we call our original formulation, moving into phase 3 trials.
Everybody wants oral treatments.
Simba Gill: That's our anticipation.
You see it absolutely was a tesla, which as you know.
Well on track to being a blockbuster drug.
Simba Gill: Having said that, as you know, we recently announced data on a faster release capsule which has the potential to show significant improvement above and beyond what we've seen already.
Simba Gill: We'll get data in atopic dermatitis on that faster release formulation in the second quarter of next year and if that shows, as it may well, significant improvement in activity in atopic dermatitis, we'll pretty definitely use that in psoriasis.
Despite the fact that there are significant tolerability issues with Tesla it causes.
Simba Gill: The results should translate from AD into psoriasis in that context and there's no meaningful risk that there'll be any loss of activity or any safety or tolerability issues.
A significant percentage of patients are meaningful.
Tolerability issues, particularly on the Gi side of things so.
But it is getting picked up.
Despite that obviously the other big issue with the Tesla is it's price it's still priced at a very high level. We made it very clear was we haven't given pricing guidance, we're going to have very reasonable pricing given the many millions of patients in the U S alone who suffer from mild to moderate psoriasis and atopic dermatitis, its the only way theres going to be long.
<unk> picked up in those patient populations.
And so that is a core part of our business strategy always has been as you know Kristin to move to a volume driven model.
Works extremely well given the fact there are so many patients who have inflammatory diseases psoriasis and atopic dermatitis again.
Huge numbers in the U S alone globally.
Enormous numbers.
And I often.
State that we have the potential to help over 1 billion people worldwide. That's a factual statement because there's that many people who have inflammatory disease, you can only do that with reasonable pricing. So I think.
Tesla experienced strongly supports the demand from patients for oral treatment.
I think it's very encouraging as we think about.
The future for our drugs.
Yeah.
Simba Gill: So that's basically how we're looking at it.
Simba Gill: The base plan is to go forward with the original formulation and dosing.
Thank you Simba.
Simba Gill: If we see a substantive improvement in the phase 2 cohort 4 in atopic dermatitis, then we'll use that in the phase 3 in psoriasis and it doesn't impact timelines or planning or anything like that for the phase 3 psoriasis trial.
Joseph Soam: And then, sorry, if you don't mind repeating the second question.
Simba Gill: So hopefully that's helpful on that question, Joe.
Joseph Soam: I didn't quite get it.
Thanks Kristen.
Joseph Soam: Yep, thank you.
Joseph Soam: Of course, the second one was just on the phase 2 atopic dermatitis readout.
Yes.
Yeah.
There are no further questions at this time, Mr. Simba Gill CEO I turn the call back over to you.
Joseph Soam: Is there a certain bar for EZ50 that you're looking for to move forward into a pivotal program?
Joseph Soam: I mean, safety has been so solid, so I assume that's going to be the same here.
Joseph Soam: But if EZ50 is not the key efficacy endpoint that you're looking at, maybe what, would you, what else?
Joseph Soam: Yeah, no, EZ-50 is the key endpoint, absolutely.
Simba Gill: As you know, atopic, dermatitis has even more unmet need in the mild and moderate population than psoriasis does.
Joseph Soam: Thank you very much.
Simba Gill: There's very little available other than topicals which patients don't like, as you know, and are forced to use because they don't have good alternatives.
Joseph Soam: I appreciate it.
Thank you.
Simba Gill: So we are looking at EZ-50, plus or minus if we saw a 20% separation in patients on drug with EZ-50 versus placebo, that would be a clear win.
Joseph Soam: Thanks, Joe.
Simba Gill: Grey zone would be, you know, 15 to 20%.
Operator: Your next question comes from Vikram Purohit from Morgan Stanley.
Thanks, very much everyone I appreciate the questions and I appreciate everybody dialing in in the summer I hope everybody enjoys whats left of it and look forward to speaking to you again in the not too distant future. Thank you.
Simba Gill: Anything at 20% or above would be a big and very clear win, Joe.
Operator: Your line
Simba Gill: And the key is separation from placebo proportion response in EZ-50 is, as you know, the big issue with atopic dermatitis trials is placebo response.
Vikram Purohit: is open.
Simba Gill: Patients do tend to respond on the placebo arms, and so you have to look within a study at separation between EZ-50 on patients on drug and patients on placebo.
Vikram Purohit: Great.
Simba Gill: And as I said, a 20% or, greater separation in terms of percentage of responders would be a very strong win.
Vikram Purohit: Good morning.
Simba Gill: 15 to 20% would be a grey zone.
Vikram Purohit: Thanks for taking our question.
Joseph Soam: Perfect.
Vikram Purohit: So we had one on 2939.
Vikram Purohit: So for this extracellular vesicle product candidate in psoriasis, what, sort of differential efficacy impact are you hoping to see here versus what you've been able to demonstrate with 1815?
Vikram Purohit: And do you eventually envision these two product candidates being used for different segments of the psoriasis patient population, or could there be some overlap here?
Simba Gill: Hi, Vikram.
Simba Gill: So in preclinical models, what we see actually with both 1815 and 2939 is efficacy that is gold standard consistently across all preclinical in vivo models, meaning at least as good as best-in-class antibodies or equivalent small molecules, even steroids, without the side effects tolerability and safety issues.
Vikram Purohit: Thank you.
Simba Gill: We have not seen that with 1815 in patients.
Operator: Your next question comes from Kristen Kleska
Simba Gill: We have seen attractive positive results to the previous questions that were asked that clearly support going to phase 3 in the mild and moderate population.
Operator: from Cantor Fitzgerald.
Simba Gill: The scientific question we've got is why are we not seeing in human subjects, patients, the same level of very high potency consistently in humans?
Kristen Kleska: Your line is open.
Operator: This concludes today's conference call. You may now disconnect.
This concludes today's conference call you may now disconnect.
Simba Gill: So there's room to do even better than we've done right now.
Kristen Kleska: Hi.
Simba Gill: We see the extracellular vesicles because of their small size and all the science, both theoretical as well as practical, supports the thesis that they should get to the surface of the small intestinal wall where the immune sensing is occurring much more effectively than whole microbes.
Kristen Kleska: Good morning.
Simba Gill: So we see the potential for significant improvement in both level of efficacy as well as proportion of responders.
Kristen Kleska: And, Simba, best wishes to you, during this transition.
Simba Gill: Obviously the trial is set up to confirm that type of result.
Kristen Kleska: I know how much you believe in syntax and know that you'll remain close to this story.
Yeah.
Simba Gill: Best case, we could get antibody-like efficacy, with the microbial extracellular vesicles in the majority of patients. Obviously, that would be an enormous win, which would revolutionize the whole industry if we saw that. Preclinical data supports that as a possibility.
Kristen Kleska: So the first question I had for you is, what work are you integrating into your current, and also upcoming studies to better understand some of the durable and deepening responses that you've observed in the past?
Simba Gill: If we were to get, that level of efficacy, you know, we've got a very nice problem on our hands.
Simba Gill: Thanks, Kristen.
Yeah.
Simba Gill: So it goes to your second question, which is how do we think about segmenting the market?
Simba Gill: Actually, let me just comment on your gracious, words about me, Kristen.
[music].
Simba Gill: And there's lots of different ways to do that, Vikram.
Simba Gill: Thank you for that, first of all.
Simba Gill: We haven't made that decision, yet.
Simba Gill: And I just wanted to underscore what you said.
Simba Gill: You could imagine a scenario where we have one product that goes head-to-head with antibodies, for example, for the more severe patient.
Simba Gill: Yes, as I said in my prepared remarks, Novello is very much my baby.
Simba Gill: We keep 18-15 for the mild and moderate.
Simba Gill: I care deeply about this company and its potential to revolutionize medicine.
Simba Gill: We have to look at, the data to make that judgment call.
Simba Gill: So I'm going to stay very involved, supporting the new CEO and the leadership team and the board when that person comes in and do whatever I can to make sure the new CEO and the leadership team are brilliantly successful in that supporting chair role.
Simba Gill: So that's how we're looking at it.
Simba Gill: But thank you for your comment.
Vikram Purohit: So, yeah, eagerly awaiting that data in the second half of next year.
Simba Gill: On the question around durability and maintenance, just to recap maybe for other listeners as well, one of the results that we're very intrigued with from the clinical studies is the fact that even after we stop dosing, we're seeing maintenance of effect for up to 24 weeks in the Phase 2 psoriasis study after we've stopped dosing. And in a significant proportion of patients, we're seeing a deepening of response.
Vikram Purohit: Got it.
Simba Gill: That's very unusual compared to other therapies where often when patients come off therapy, not only did they return to their original disease state, they often get flare and rebound and can become worse.
Simba Gill: So very unique to have maintenance without drug, and to have the deepening of response to your question.
Simba Gill: I know you understand that,
Simba Gill: Kristen, but I just wanted to ground everybody else.
Simba Gill: The few things we're doing, obviously preclinically we're continuing to look at mechanism of, action and how this is working.
Simba Gill: We have very clear evidence at this stage that the effects are driven by conditioning specific T cell subpopulations which circulate throughout the body and are exerting an effect on a sustained basis.
Simba Gill: That's very exciting in that really what we're able to do with Syntax is to modulate inflammation-resolving T cells through a new area of biology in which we have gut-restricted drugs that drive that type of effect.
Simba Gill: You might remember, Kristin, that many decades ago I led corporate development and strategy, at the world's first stem cell and cell therapy company, Systemics.
Simba Gill: And I will maintain my view that I had as a very young man when I was leading strategy, there that cell therapy will always be limited because of the complexity of manufacturing administration and safety issues around all of that.
Simba Gill: So what we've always wanted is something that modulates essentially immune cells, but in, an easy, safe, obviously largely reproducible manner.
Simba Gill: It looks like we've got that.
Simba Gill: It's really, really exciting and we'll continue to your question to look at preclinically, what is going on, but we already know we're modulating T cells that are circulating throughout the body and exerting those inflammation-resolving effects.
Simba Gill: Very exciting.
Simba Gill: On the clinical side, obviously we can't do...we can't essentially sacrifice humans away.
Simba Gill: We sacrifice the pure poor mice, which means that the studies that we can do are somewhat, more limited.
Simba Gill: That said, all of our clinical studies will now have longer duration of treatment, open, label extensions, so they're going to be part of all of our clinical studies and programs that will allow us to look at what happens with extended duration of effect.
Simba Gill: We will also be looking at follow-up and we'll be doing what we can to understand whether, or not that biology that I described is translating and how it's translating into humans.
Simba Gill: So your question's a really important one because it is very exciting that we are seeing, that durability, maintenance, and even deepening of response.
Simba Gill: Again, I think the core point is we already know that that is likely caused by the modulation, of the T cells, which have extended half-life and therefore are able to exert that type of activity.
Kristen Kleska: Okay.
Kristen Kleska: I appreciate that.
Kristen Kleska: Now that it's been about eight months since Otesla had the label expansion to include, psoriasis patients across all severities, I'm curious if you guys are hearing anything about patients wanting to switch to an oral therapy across the different levels of severities.
Kristen Kleska: I know in the past you've emphasized how this could potentially help pave the way for your, program should it make it to the market.
Kristen Kleska: Yeah.
Simba Gill: Yes, we have very clear feedback from patients, nurse practitioners, as well as clinicians, that everybody wants oral treatments.
Simba Gill: You see it absolutely with Otesla, which as you know is well on track to being a blockbuster, drug, despite the fact that there are significant tolerability issues with Otesla. It causes in a significant percentage of patients meaningful tolerability issues, particularly, on the GI side of things.
Simba Gill: But it's getting picked up despite that.
Simba Gill: Obviously, the other big issue with the Tesla is its price. It's still priced at a very high level.
Simba Gill: We've made it very clear once we haven't given pricing guidance we're going to have very, reasonable pricing given the many millions of patients in the U.S. alone who suffer from mild and moderate psoriasis and atopic dermatitis.
Simba Gill: It's the only way there's going to be large pickup in those patient populations.
Simba Gill: And so that is a core part of our business strategy.
Simba Gill: Always has been, as you know, Kristin, to move to a volume-driven model works extremely, well given the fact there are so many patients who have inflammatory diseases, psoriasis, Enormous numbers, and I often state that we have the potential to help over a billion people worldwide.
Simba Gill: That's a factual statement because there's that many people who have inflammatory disease.
Simba Gill: You can only do that with reasonable pricing. So I think the Atezla experience strongly supports the demand from patients for oral treatment, and I think it's very encouraging as we think about the future for our drugs.
Simba Gill: Thank you, Simba.
Kristen Kleska: Thanks, Kristen.
Operator: There are no further questions at this time.
Operator: Mr. Simba Gill, CEO, I turn the call back over to you.
Simba Gill: Thank you.
Simba Gill: Thanks very much, everyone.
Yeah.
Simba Gill: I appreciate the questions and I appreciate everybody dialing in in the summer.
Simba Gill: I hope everybody enjoys what's left of it and look forward to speaking to you again in the not-too-distant future.
[music].
Simba Gill: Thank you.