ENTA
#Thank, <UNK>.
Afternoon everyone and thank you for joining us today.
I'm pleased to report on Enanta's financial results and to update you on our R&D progress.
Enanta remains in a very strong position to advance our pipeline.
Our cash position of approximately $245 million and a recurring revenue stream from our successful HCV collaboration with AbbVie, allow us to fund our business operations and R&D initiatives for the foreseeable future.
Revenues from AbbVie's initial HCV regimens that contain our protease inhibitor paritaprevir continue to continue to provide substantial royalty cash flow to Enanta.
Enanta has earned approximately $45 million in royalties for the first nine months of our FY16.
AbbVie is also developing a pangenotypic next-generation regimen containing our second protease inhibitor ABT-493 and ABT-530 which is AbbVie's second NS5A inhibitor.
This regimen currently in phase 3 trials has demonstrated very high cure rates and earlier HCV trials, often with as little as eight weeks of treatment.
AbbVie has guided the data from the trials will be reading outs later this year and that marketing approval is expected in the US in 2017.
As a reminder, commercialization regulatory approval in major markets would make Enanta eligible for up to $80 million in milestone payments as well as additional tiered double-digit royalties from 50% of the net sales of this two DAA product.
Given our strong financial position we have grown our internal R&D efforts.
Our most advanced wholly-owned asset is EDP-494.
This cyclophilin inhibitor is now in a proof of concept study in GT1 and GT3 HCV patients measuring viral load reduction.
We recognize that the current HCV market is very competitive and the next generation of regimens and development is demonstrating very high cure rates.
However, we believe there still exists an unmet medical need for those HCV patients who have failed or will fail therapies or for those tough to treat patients with specific resistance mutations.
To address this small but important part of the HCV population we are developing EDP-494 which is a host targeted approach.
Earlier this year, and most recently at EASL in April, we presented excellent preclinical data demonstrating pangenotypic activity and uniform activity of EDP-494 against many of the non-resistance associated variants, or RAVs, across all the DAA classes, namely NS5A, NS5B, both nuc and non-nuc, and NS3 protease RAVs.
As of today we've completed the SAT and MAT portions of the first in human study.
Among 72 healthy volunteers dosed, there were no safety concerns at any dose administered following up to 14 days of dosing.
Next our proof of concept study of EDP-494 is ongoing in patients with HCV genotype one which is the largest HCV patient population and genotype three, considering the hardest to treat HCV genotype.
If this study demonstrates good results we would expect to study EDP-494 in combination with one or more DAAs in a pangenotypic once daily treatment to target RAVs, DAA failures, and other hard to treat HCV patient populations.
We also have research programs in three other high valued disease areas HBV, RSV, and nonalcoholic steatohepatitis also known as NASH.
Of these programs the most advanced is for NASH.
Our first NASH candidate EDP-305.
Preclinical data demonstrate the EDP-305 is a highly selective FXR agonist.
It shows more potent activity in a variety of in vitro and in vivo NASH models compared to Intercept's OCA which is the most advanced NASH candidate in development today.
We expect to share more comparative preclinical data regarding fibrosis next quarter at AASLD.
Recall that fibrosis is been shown to be the key predictor of clinical outcomes in NASH patients.
This and other data give us the confidence to move ahead with EDP-305 and we remain on track to initiate clinical development in the coming months.
We're also advancing additional series of FXR agonist and have generated several other promising FXR agonist leads.
Both bile acid and non-bile acid-based and we expect to have further information on these later this year.
Some of these leads are over 10,000 times more potent than OCA.
In addition our work is resulted in an emerging intellectual property estate of over a dozen patent applications related to FXR agonist.
We'd now like to shift to RSV and HPV.
We've made significant progress in discovering, characterizing, and seeking patent protection for new core inhibitors for HPV and for new non-fusion inhibitors for RSV.
We expect to have some initial preclinical data later this year consistent with our plan to initiate phase 1 clinical development in at least one of these new programs in 2017.
In summary, we believe the best way to create value for shareholders is to use our strong balance sheet and our strong drug discovery expertise to focus on therapeutic areas with high unmet medical need.
This approach is already been proven with our success in HCV and we aim to duplicate this success with our earlier pipeline programs which continue to advance as expected.
We remain on track to initiate a phase 1 study in the coming months with EDP-305, our FXR agonist for NASH and PBC.
Next quarter we expect to announce clinical data in our cyclophilin inhibitor program as well as data from AbbVie's phase 3 trials of it's next-generation HCV regimen containing our second protease inhibitor, ABT-493.
Looking ahead to 2017, as several leads advance within our HBV and RSV programs, we anticipate a phase 1 start in at least one of these programs and also in 2017 we look forward to US regulatory approval of AbbVie's pan-genotypic next gen HCV regimen containing ABT-493.
Additionally our financial resources will allow us to keep our options open for future business development opportunities and also to find other ongoing programs within our core areas of virology and liver disease.
I'd like to pause here and have <UNK> <UNK> discuss our financials for the quarter.
<UNK>.
Thank you, <UNK>.
I would like to remind everyone that Enanta reports on a fiscal year schedule.
Our fiscal year end is September 30 and today we are reporting results for our third fiscal quarter ended June 30, 2016.
Enanta ended the quarter with approximately $245 million in cash and marketable securities as compared to $209 million in our September 30, 2015 fiscal year-end.
We expect that these cash resources will be sufficient to meet our anticipated cash requirements for the foreseeable future.
Revenue consisted of $14 million of royalty income earned on AbbVie's net sales of its HCV regimens.
Milestone payments, royalties and other payments from collaborators have varied significantly from period to period and we expect that variability to continue and to cause us to have a net loss in some periods such as this quarter.
Moving on to our expenses research and development expenses were $10.8 million and $6.3 million for the third fiscal quarters ended June 30, 2016 and 2015, respectively.
The increase in the recent three-month period was due primarily to increased preclinical and clinical costs associated with our wholly-owned R&D programs.
We expect that our R&D expenses in FY16 will be within our previously stated guidance of $40 million to $50 million as we continue our cyclophilin inhibitor clinical studies, advance our NASH program and expand our R&D capabilities.
General and administrative expense was $4.3 million for the quarter ended June 30, 2016 and $3.6 million for the comparable quarter in 2015.
The increase in G&A in the three-month period is due primarily to higher stock-based compensation expense driven by headcount.
We incurred a net loss for the third quarter of $1.1 million as compared to a net income of $2.4 million in the third quarter of 2015.
Income tax expense for the three months ended June 30, 2016 was $400,000 compared to a benefit of $400,000 for the corresponding period in 2015.
During the three months ended June 30, 2016, Enanta increased its estimate of its annual effective tax rate for FY16 to approximately 33% which resulted in an income tax provision, despite a pretax loss for the quarter.
Further financial details will be available in our Form 10-Q for this fiscal quarter.
I'd now like to turn the call back to the operator and open up the line for the Q&A.
Operator.
Hello there.
Sure.
Well, there's obviously preclinical differentiation, which is about all we can do now.
And then obviously the real differentiation will come in the clinical arena.
We'll actually have more data on 305 coming out later this year at AASLD.
We will have several abstracts at that conference.
And I think you begin to see some of the aspects of the FXR arena that we're capturing.
Obviously we want to be highly selective, highly efficacious, selective not only for traditional FXR receptors that are nuclear receptors.
We don't want cross talk into a whole litany of those receptors, but we also don't want cross talk over into other bio acid receptors, like TGR5.
So I think we've dialed all the selectivity in to 305.
It is ready to go.
We've taken a close look at several other models, trying to glean any other things we can look at pre clinically and markers we could capture with the understanding that we would build this into a full development plan.
We will have more details on the development plan coming up later this year when we roll into clinical studies.
Suffice it to say I think there it will be a lot of things that we'll be able to look at in the early development, including the triggering of the receptor itself and looking at various markers from that.
Obviously those are markers that can give you helpful insights around dose selection, and even some aspects of feel activity vis-a-vis potentially off-target effects that might occur with pruritis.
Again safety and efficacy markers dose ranging, using those markers to the best of our abilities and other kinds of parameters will be things we will the looking for in the early development program.
Good.
Thank you.
Yes we will have data at the liver meeting at AASLD.
Exactly how much data will have an HCV patients remains to be seen.
We just started enrolling a little bit ago, and we're not going to break the blind prematurely on that study.
So at the very least I think you can look forward to SAT and MAT.
If we are able to put some patient data in by then, that would be what we would try to do.
Yes.
Yes so it's a very interesting question <UNK>, and one that we asked here lots and lots of times over the last couple of years, even before it became public that we were working on HEP B.
There is a thread out there any use of cyclophilins inhibitors in Hep B.
Certainly we and others have looked at that.
I think some of the literature data out there is a little bit mixed.
What appears to be that we can say about it, and even 494 that appears to be an entry inhibitor.
But I don't ---+ we don't quite yet know if the activity with cyclophilin and Hep B is quote profound enough for us to pursue it.
I think our Arbutis had a cyclophilin inhibitor in clinical development were ---+ no I'm sorry ---+ it wasn't in clinical development.
But we had a preclinical program and Hep B and they ultimately dropped it because they couldn't convince themselves.
Believe me I would love for it to be true if it were because we would have multiple mechanisms that we could carry forward, but suffice it to say we're looking at that.
We've looked at it reasonably hard.
But so far I'm not ready to say that 494 has an alternative path available to it and ---+ and Hep B.
You're welcome.
