ENTA - NASDAQ

Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Fourth Quarter and Year-end 2021 Financial Results Conference Call. [Operator Instructions] Please be advised that this call is being recorded. I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.

Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal fourth quarter and year-end financial results was issued this afternoon and is available on our website. On the call today is Dr. Jay Luly, President and Chief Executive Officer; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team. Before we begin our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Dr. Jay Luly, President and CEO. Jay?

Thank you, Jennifer, and good afternoon, everyone. Reflecting on our fiscal 2021 year, I am proud of the exceptional advancements we've made across our entire portfolio. By leveraging our years of drug discovery experience and knowledge, we have developed a robust pipeline of small molecule clinical candidates that have the potential to bring new treatment options to patients. Our accomplishments this past year, advancing this pipeline puts us in a strong position to help patients and create long-term sustainable value for our shareholders. I continue to be extremely proud and grateful to my colleagues for their collective efforts and dedication to progress our pipeline. We ended our fiscal year strong with continued advancements across our clinical virology portfolio this quarter. Starting with hepatitis B, we are furthering our clinical program with the vision of developing a combination regimen to deliver a functional cure for chronic HBV patients. EDP-514, our HBV core inhibitor has been evaluated in 2 Phase I studies in different chronic HBV patient populations. Those who have a viral high viral load, whom we refer to as viremic patients and those who are on treatment with a nucleoside reverse transcriptase inhibitor, whom we refer to as nuc-suppressed patients. Recently, we announced final clinical data from both of these trials in conjunction with the Liver Meeting hosted by AASLD, where we received a presidential poster of distinction for our viremic study. Overall, final data from both studies showed that the 200-milligram, 400-milligram and 800-milligram doses were safe and well tolerated through 28 days and displayed pharmacokinetics supportive of once-daily dosing. In viremic patients, treatment with EDP-514 resulted in mean HBV DNA reductions of 2.9, 3.3 and 3.5 logs at 28 days for the 200-, 400- and 800-milligram cohorts, respectively, compared to 0.2 log reduction than the placebo group. Mean HBV RNA reduction in each of the 3 viremic treatment cohorts was at least 2 logs compared to a 0.02 log reduction in the placebo group. Taken together, these results demonstrate that EDP-514 has clear clinical evidence of a strong safety profile alone and in combination with a NUC and displays significant antiviral activity over 28 days with a pharmacokinetic profile consistently supportive of once-daily oral dosing. As recently announced, we discontinued development of EDP-721, an oral HBV RNA destabilizer based on a recent emerging safety observations than the single ascending dose part of the Phase I study. Patient safety is our top priority. And so we decided to discontinue further development of this compound. We are grateful to our principal investigator and his study team and the participants in the Phase I study for their commitment to HBV research as well as our team at Enanta for all their efforts in supporting the discovery, development and clinical evaluation of EDP-721. We remain committed to developing a functional cure for chronic hepatitis B patients. And we also believe that EDP-514 will be an important component of a successful combination regimen. We look forward to advance our HBV program with additional mechanisms from internal discovery efforts, external opportunities or both. I would now like to turn to our respiratory virology programs where we continue to build a leading oral antiviral treatment portfolio. Our lead RSV program includes our N protein inhibitor, EDP-938, currently in multiple Phase II studies, and our preclinical work developing a compound targeting the RSV L-protein. As a reminder, RSV is a severe respiratory infection associated with significant morbidity and mortality that has no treatments or vaccines available. The virus can cause serious disease in children, the elderly and the immune compromised. Our lead molecule EDP-938 targets the replication of both RSV A and RSV B. It has shown robust clinical data in a Phase IIa challenge study where it was safe and well tolerated and had significant effects on viral load and reduced symptoms of infection. Currently, EDP-938 is being evaluated in 3 clinical studies, including RSVP, a Phase IIb study in adults with community-acquired RSV infection; RSVTx, the Phase IIb study in adult hematopoietic cell transplant recipients; and RSVP, a Phase II study in pediatric RSV patients. While RSV like influenza was significantly suppressed while there were strong mitigation measures in place to control COVID-19, there has been recent increased RSV activity in various regions of the world, including parts of the United States and Europe. Given this activity, we expect that enrollment in the RSVP study will be complete during the Northern Hemisphere winter season, but there is no further significant increase in COVID-19 or mitigation measures in these regions. Assuming this enrollment occurs, we will have data in the first half of 2022. As for RSVTx and RSVP, which were initiated during the pandemic, enrollment is expected to require more than one global RSV season, subject to the uncertainties of the continuing pandemic. Additionally, in RSV, our discovery initiatives are advancing as we work to develop an RSV L-inhibitor. L inhibitors are another drug class that block viral replication. It could potentially be used alone or in combination with other agents such as EDP-938 to broaden the treatment window for addressable patient population. Our L inhibitor program has continued to progress extremely well this year we are confident that we will select an optimal development candidate in this RSV mechanism by year-end. A new L inhibitor candidate, along with EDP-235, would achieve our stated goal of identifying 2 new clinical candidates among our respiratory discovery programs in 2021. We also continue to pursue our third respiratory discovery program in human metapneumovirus, or HMPV, which was first identified 20 years ago and has worldwide circulation with nearly universal infection by age 5. Like with RSV, there are other vulnerable populations, including the elderly adults with underlying pulmonary disease and those who are immune compromised. We are nearing completion of lead optimization of potent nanomolar hMPV inhibitors and hope to select another clinical candidate in the coming months. Our SARS-CoV-2 program continues to progress as we develop EDP-235, our oral 3CL protease inhibitor, specifically designed for the treatment of COVID-19. This quarter, we were excited to present the first preclinical data for EDP-235 at the International Society for Influenza and Other Respiratory Virus Diseases, and World Health Organization virtual conference. These data showed that EDP-235 demonstrated highly potent antiviral activity against SARS-CoV-2 with pharmacokinetic properties supporting a once-daily oral dosing regimen. In a biochemical assay, EDP-235 inhibited the SARS-CoV-2 protease with an IC50 of 5.8 nanomolar and maintained this activity against proteases from SARS-CoV-2 variance. Additionally, EDP-235 potently block the replication of SARS-CoV-2 in multiple cellular models, including primary human airway epithelial cells where an EC90 of 33 nanomolar was observed positioning EDP-235 among the most potent direct-acting antivirals currently in development for SARS-CoV-2. The EDP-235 was also shown to have potent activity across a range of areas as well as other human coronaviruses. Importantly, data demonstrated that EDP-235 has good oral bioavailability without ritonavir boosting and favorable distribution into lung cells as well as other key target tissues. EDP-235 is projected to have a long half-life of 16 hours with an efficacious dose of 100 to 500 milligrams once daily in humans. In summary, the preclinical profile of EDP-235 advocates its potential to be a best-in-class once-daily oral therapy for the treatment and prevention of COVID-19. While the pandemic may be far from over, we see COVID-19 eventually progressing from the current situation toward a more endemic disease where effective therapeutics will continue to play a significant role. We've completed the IND-enabling preclinical studies of EDP-235 and are eager to advance the candidate into the clinic in early 2022. Lastly, this quarter, we announced the decision to prioritize combination approaches for both of our NASH FXR agonist EDP-305 and EDP-297 through an out-licensing strategy. NASH is a complex disease that we believe will likely require a combination of multiple mechanisms to provide an optimal treatment regimen. Therefore, we do not plan to continue development of either program internally but instead, we'll seek external opportunities to pursue these programs in a combination approach. Before moving to our financials, I'd like to wrap up by reiterating our upcoming milestones. We expect to select the clinical development candidate for our RSV L-inhibitor program by year-end. Looking ahead to 2022, we expect multiple milestones, including the initiation of a Phase I study of our oral 3CL protease inhibitor, EDP-235 in the early part of the year. We also expect, given the reemergence of RSV in the U.S. and Europe, that enrollment in the RSVP study will be complete during the Northern Hemisphere winter season, if there is no further significant increase in COVID-19 in those regions. Accordingly, we plan to report data from our RSVP study also in the first half of 2022. With that, I'll stop here and turn the call over to Paul to discuss our financials. Paul?

Thank you, Jay. I would like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our fourth quarter and fiscal year ended September 30, 2021. For the quarter, total revenue was $23.6 million and consisted of royalty revenue earned on AbbVie's global net HCV product sales. This compares to total revenue of $23.6 million for the same period in 2020. As reported by AbbVie, treated patient volumes remain suppressed versus pre-COVID levels. AbbVie now expects total HCV sales of approximately $1.7 billion for the calendar year 2021. As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties in our fiscal first quarter ending December 31 will be calculated at the highest royalty rate for the year and royalties for our fiscal quarter ending March 31 will be calculated at 10%, our lowest royalty rate tier in our fiscal year. You can review our royalty tier schedule in our 2020 Form 10-K. Moving on to expenses. For the 3 months ended September 30, 2021, research and development expenses totaled $48.9 million compared to $36.7 million for the same period in 2020. The increase was due to timing and expansion of our clinical trials in our virology programs. General and administrative expense for the quarter was $8.4 million compared to $6.7 million for the same period in 2020. The increase was due to increased headcount and related compensation expense in support of additional research and development activities. Enanta recorded an income tax benefit of $8.8 million for the 3 months ended September 30, 2021, compared to an income tax expense of $10.7 million for the same period in 2020. For the 12 months ended September 30, 2021, Enanta recorded an income tax benefit of $28.6 million compared to an income tax expense of $1.1 million for the 12 months ended September 30, 2020. The income tax expense in 2020 was due to a tax valuation allowance charge of $18.3 million recorded against the company's deferred tax assets in the 3 months ended September 30, 2020. The income tax benefit in 2021 consists of net loss carrybacks against taxes paid in prior years, which have given rise to a $38 million tax receivable on our balance sheet at September 30, 2021, the final period in which such carrybacks can be made under the 2020 CARES Act. Net loss for the 3 months ended September 30, 2021, was $24.6 million or a loss of $1.22 per diluted common share compared to a net loss of $29.3 million or a loss of $1.46 per diluted common share for the corresponding period in 2020. Enanta ended the quarter with approximately $352.4 million in cash and marketable securities. We expect that our current cash, cash equivalents in short-term and long-term marketable securities as well as our ongoing royalty revenue will continue to be sufficient to meet the anticipated cash requirements of our existing business and development programs for at least the next 2 years. Regarding guidance of fiscal 2022, we expect our research and development expense to be between $150 million to $170 million, and our general and administrative expense to be between $35 million to $41 million. Further financial details are available in our press release and will be available in our annual report on Form 10-K when filed. I'd now like to turn the call back to the operator and open up the lines for questions. Operator?

[Operator Instructions] Our first question comes from Brian Abrahams with RBC Capital Markets.

I guess my first question is on 235. It sounds like a lot of great progress there. I was wondering if you could talk a little bit more about the IND-enabling tox work that you've done in preparation for this moving into the clinic. And I guess, how you're thinking about the potential therapeutic window where you -- at the doses that look like they could potentially be effective, I guess where you'd be at either end of that 100 mg to 500 mg range with respect to the cushion in the therapeutic window? And then I have a follow-up.

This is Jay, Brian. Thanks for the question. So with 235, we've completed multi-week GLP talks and drove the drug levels to very substantial exposures, ones in which we think, based on our predicted clinical dose and all the allometric scaling that we did that we should have a very comfortable safety margin.

Great. And do you have plans to explore the potential to test 235 in combination with any other classes? I guess, how important do you think that will be? Is there any preclinical work around that, that you've done or are planning and any expectations for any sort of drug-drug interactions based on what's known so far about the metabolism?

So that's a really good question. I mean I guess it sort of all depends on how the pandemic twists and turns and where the ultimate variance of interest and concern might evolve over time. Right now, we feel that we've got a very strong virologic profile going after all the major variance of concern today. And that at least in the model systems that we've looked at in terms of resistance to 235, it looks to have a pretty good profile overall. So given the acute nature of the clinical study being just a few days of treatment, we're not anticipating resistance, which is one of the reasons why you might envision combinations. But certainly, combinations couldn't be ruled out, and there's nothing that we've seen in the profile yet today that would preclude them from any DDI or things along those lines. People have wondered if molnupiravir is approved and Pfizer's protease inhibitor might they be combined. The answer is in those instances with those drugs, I'd have to look at all the data to see if DDIs would -- I think it's really going to be driven based on how the virus moves. If one drug is enough, that's what will be used. If we feel as the virology changes over time, if multidrugs are desirable then combinations can certainly be built.

That's really helpful. One more quick one, if I could squeeze it in. Just curious how you're thinking now about the potential to achieve functional cure in hepatitis B with 514-based regimens, if you think that will require additional novel classes? Or if you're still pursuing other destabilizers? Or is that class something you're not going to continue to pursue? And just curious, as you kind of think about internal versus external, where you see 514 being paired up optimally to potentially achieve that?

So another good question. So I think probably a core inhibitor plus a NUC would benefit from an additional agent or agents. I mean that was our thesis along the way. I think assembly and looked at a core inhibitor plus a NUC and ran it out for a year or more. It might not have been the best core inhibitor that they use in that study, but it was still, I think, an interesting study. And so even if you could do something with a new kind of core over a longer period of time, and that certainly remains to be a possibility, I guess. I think we'd rather add another agent or agents to bring those cure numbers higher and the treatment time to the shortest possible treatment that you could imagine. So to that end, we're looking at things internally. We'll widen our view in terms of looking at external opportunities for combinations as well. And then -- and then out of that, I think we'll hopefully be able to recast the combination in a good way.

Our next question comes from Akash Tewari with Jefferies.

Two on RSV and one on COVID. So in the Gilead presatovir Phase II study amongst transplant patients, it was interesting, you saw a signal of efficacy at least in one of their trials with patients with low lymphocyte counts. When you think about your transplant study, do you plan on stratifying patients based on lymphocyte counts given that signal we've seen. Number two, how do you -- how are you going to control for your RSVP study for patients who simply lie about when they actually have symptoms? Would you be able to stratify patients based on viral load at time of dose? And if so, what do you expect viral load to be on average if you're dosing patients within 2 days of symptoms? And then lastly, on COVID, for EDP-235, what is the percent of drug that binds to plasma protein? And how do you think it compares versus the other protease inhibitors in development, both for Pfizer and [ parties ]?

So I may dish a couple of these over 2 Nathalie with regards to the transplant. I'm not sure that, that sort of stratification was performed in the RSVTx study, but I'll defer to Nathalie on that. We can't stratify the RSVP based on liers and non-liers. What was your question with regards to that again, if you could repeat that?

Yes. I mean it would be interesting if you could. I guess -- look, but can you stratify patients based on kind of viral load at time of dose, right? Correct me if I'm wrong, but you should have -- if it's within 2 days of symptoms, viral log should be somewhere between 2 to 3. And so you could identify patients who are likely in within 2 days of symptoms if you're just looking at viral load. So if a situation happens where you get a bunch of patients who actually got treatment within 4 days of symptoms, would the FDA allow you to stratify patients based on viral load at time of dose instead?

Yes. Well, I'll defer that one to Nathalie right now, and then I'll pick up on the last one about 235.

This is Nathalie. So let me maybe just touch quickly on the transplant question, and then I'll try to address your question about the RSVP. So obviously, that's a good question referring to the Gilead transplant study. We did pay attention to the results. And as you mentioned, we did notice specific response when we were looking at lower lymphocyte number. And that's how we design our study. If you look at our inclusion criteria, we decided to look at subjects with less than 500 cells for the HCT recipient. And there will be obviously possibility as to look at subgroup analysis to try to understand our drug in that context, too. Now as far RSVP, that's an interesting question about lying. I think you could argue that you can be in that same situation in any clinical studies. And I would not know exactly why a patient coming in would lie about the symptoms. But as you remember, our RSVP study is [ unrolling ] the subject who present signs and symptoms within 48 hours. And obviously, there is viral load that has been taken at multiple time points, including screening and baseline. And we will be certainly able and that's already the plan to look at different type of analysis, including viral load threshold. Have I addressed the question you had on the RSVP?

Yes. That's super helpful. And just on COVID, on the -- for 235, what is the percent of drug, which is free versus that is bound to plasma protein?

I think I lost you Akash. I do remember the question.

Yes. Can you hear me?

Yes. Okay. There you are. With regards to -- I don't recall the plasma protein numbers, but one of the ways that we look at this which we think is a good way because with any plasma protein binding numbers, it's always an -- with equilibrium. And then when you look at intracellular activity, many of the parameters in that equilibrium become really important on-rate and off-rate and so on. So what we do is we look in a cellular assay, we look at the antiviral activity shift when plasma protein is added and basically, you get serum adjustment factor that then you build into your calculations when you do the allometric scaling. So we do the scaling across multiple species. We look at the serum adjustment to the potency, factor all of that in when we come up with our human predicted doses. And so that's all embedded in that 100 to 500 milligrams, taking all of that into effect. One thing that we've talked about at the ISIRV conference, too, there's a number of other wild cards that you have to consider when coming up with human dose predictions. And one of them that we're not taking into account that could be very favorable for us is the fact that we see tremendously good partitioning of EDP-235 into lung alveolar macrophages. And not only might into an alveolar macrophage sort of be a Trojan horse with regards to trafficking virus. But in this instance, we would also be trafficking active drugs to the lung. So that's one of the things that we used to study back in our days of looking at community-acquired pneumonia antibiotics, looking at how drugs were taken up by and potentially trafficked by immune cells. And so we like that profile too. We didn't really even bake that into our dosing projection assumptions, but it does represent upside in the calculations that we've done today. Is that helpful?

Our next question comes from Yasmeen Rahimi with Piper Sandler.

This is Jesse on for Yas and I had one question on the COVID-19 asset. I wanted to know that if there is a potential to partner this asset, what data would Enanta be looking to generate before seeking partnerships?

This is Jay. Thanks for the question. I mean, a partnership on a drug like this probably is inevitable at some time when you think about it. It's a global pandemic right now, and it's presumably will become more epidemic and then endemic than pandemic. But no matter it's very much a global disease infection that we're talking about here. So I think it's not a question of if, but a question of when. We haven't set any particular win for when that might be. We're just focused on doing what urgently needs to be done with the drug, which is to get it into healthy volunteers as soon as possible early next year and then to move it into Phase II and III studies also next year. And then any discussions that would come on the continuum between today and some point down the line would happen, then we would assess them as they were appropriate.

Our next question comes from Brian Skorney with Baird.

I was hoping to your thoughts on the clinical development of EDP-235. It seems reasonable to think that Pfizer's protease inhabitor and Merck's NUC are going to get EUA in the near future. How should we be thinking about development of your PI and strategies to be able to recruit studies here? Do you think placebo-controlled studies will be feasible in some subgroups? Or would you expect to do head-to-head studies? Is there a population you think -- a subgroup that would be feasible to placebo controlled? And how many days will you be looking at in multiple ascending dose study and any early thoughts on where you might target in terms of the number of treatment days for?

Okay. Is anyone else having difficulty with the audio?

Yes.

Seems like speaker lines or the investor line is...

We couldn't hear anything.

Yes. Sorry, Brian. I think...

Sure. Can you hear me now?

We can, yes. Now we can. It keeps swinging in and out. Sorry about that.

No problem. So I just wanted to get your thoughts on recruitment of clinical studies for 235 and whether or not you think availability of Pfizer and Merck's drugs would prohibit the running of a placebo-controlled study? Do you think you need to do head-to-head studies, which is sort of the fastest way? And the other question was just on how many days you're looking at in the multiple ascending dose study should the SAD be okay? And any thoughts early on, on how many days you would target in terms of treatment?

Yes. So the treatment days would presumably be 5 days, it is what we would be aiming for. With regards to the clinical trial design, it's not clear yet that drugs with EUA, emergency use authorization would need to be baked into a trial given that they're not fully approved. But maybe I'll let Nathalie comment on that.

Yes. Can you hear me. Brian. So I think your question was about potential study design and emerging of new treatment and how we will position ourselves as far as designing our study and recruitment. Is that the question?

It was just on the feasibility of placebo-controlled studies versus non-inferiority studies.

Yes. Well, I mean, I think as probably many other people who are developing nowadays drug...

We are having audio technical difficulty.

Closely monitoring possibilities of steady design alteration as we are getting into a phase where we will have more treatment available. I think it's going to depend which kind of patient population you target for your registration study. And obviously, as you go with higher risk, it might be just unethical not to suggest to have some standard of care rather than a placebo. And in that case, I think there's a higher chance obviously, that we will have to do a non-inferiority study design.

Nathalie, volume cut out, I think or...

Or it's getting out, sure?

I'm not sure, now it's fine. I'm not sure. Now it's fine. I'm not sure what's going on with the sound.

Oh, I'm sorry.

Yes. No, it -- you cut out when you commented it may not be ethical.

Yes. I was -- maybe I should that just saying that it might not be ethical depending on patient population you are targeting for your first study being registered. If you go after high-risk patient there's probably a need to add the standard of care. And obviously, that will probably lead us to have a non-inferiority study design. And I think clinical development plan is going to be a very dynamic effort right now as we will have to adjust to new data emerging to pandemic, the way it's going to evolve, the patient population, availability, obviously, speaking of vaccination versus the non-vaccinated. So I think there's a lot of questions up in the air, and we will have to adjust the best with our program.

Our next question comes from Roy Buchanan with JMP Securities.

The first one I have is on R&D guidance, it looks like you guys are guiding likely down for spending next year, but you're still ramping RSV, you're going into SARS-CoV-2 clinical trial, human metaneumavirus. It seems like R&D should possibly be going up. It's just the drop-off in NASH or the delay in the hepatitis B unless resulting in the lower spending expenses. And then to kind of dig in a little bit on the 235 partnering question, I guess. Have you guys considered maybe monetizing MAVYRET or getting a partner to bring the agent to the market faster? You can get these stocking orders, Pfizer is $2.3 billion, Merck's got over $1 billion? Or is this something where more money is not going to help you get to market faster?

I heard the question. I'm not sure. Just had someone text me who's listening in and said that they're hearing both sides of the conversations very well better than some of the participants are.

I can hear everything fine.

Yes. On the guidance, I think I'll let Paul chime in. I think it's about -- I mean, R&D guidance for spend is just -- I think it's actually -- the midpoint is maybe $5 million ahead of last year. It's also -- but it does -- you're correct, it factors into the fact that we made decisions around NASH in terms of externalizing that cost that we would have otherwise been doing there's a bit of a factor from the 721 decision. But apart from that, it's allowing us to fire all the shots that we need to on our various programs as we've outlined. So I think it's fairly well studied. That's a good number for now. With regards to MAVYRET, as you know, MAVYRET is COVID impacted over the last years of the pandemic, last couple of years. AbbVie has seen that. Gilead has seen that in their pipeline. And so royalties -- royalty revenue is down over years where it was pre-pandemic. But that said, I think we see the opportunity for that to come back once things normalize a bit more. Hep C patients are not spontaneously curing and not that many of them are dying over this time period. So I think it might be prudent to watch and see how MAVYRET progresses as the pandemic sort of winds its way out. But certainly, at this time, I wouldn't find it necessarily the best time to try to monetize those royalties. And what was your last question?

Yes. I was -- I mean, I guess the question is really about spending more money on 235 to get it to market faster. You see these large stocking deals for Pfizer and Merck. And those drugs have issues, as you pointed out, Merck's combination has a black box warning for DDIs. Molnupiravir is probably not the greatest drug. You said it yourself, you're sitting on this extremely potent specific drug possibly best-in-class, seems like getting it to market as fast as possible would be the best -- the ideal situation. But is -- if you partner with a big pharma, is that going to get the drug to market faster or not, I guess?

It possibly could at the right stage, right? So right now, it's not a resource constrained pathway that we're in right now. So I think, again, as I mentioned, at some point down the line, opening up wider supply channels and negotiations of the types of things that you're talking about, which usually, by the way, come once you've gotten certain amounts of data, will -- it will make sense at some point. But right now, we're not cash constrained.

Our next question comes from Eric Joseph with JPMorgan.

Just a couple on HBV from us. First, I'm wondering if you could put a little bit more context around the nature of the adverse safety with 721. And why it might have been missed in [indiscernible]. I'm also curious to know whether there's perhaps a path forward against the target or even with 721 with an alternative [indiscernible]. Could it be administered perhaps [indiscernible] safely? And then maybe finally, just curious to kind of get some of your additional thoughts on what other HBV targets are of interest as part of the company's strategy with 514 that might also be amenable to oral administration?

Yes. So thanks for the question, Eric -- questions, I guess. So the study is -- dosing has been completed, but the study is still ongoing. So it's still -- as we're still actively monitoring the study, we're not commenting on safety results observed. What does it mean for 721? I don't think 721 is going to go forward. I don't think it's a route of administration question. Is it the mechanism? I guess, right now, as far as defining next steps at this point, we're sort of reviewing all the data in order to fully understand these results before deciding on next steps, whether it's with another destabilizer someday or if it's with other mechanisms that we would pursue. I think independently, I'm -- we're going to focus on other mechanisms that could possibly be added to this because you may never understand what the destabilizer situation was. So I'm not going to bank on that fact. Of course, we'll try to understand it as fully as we can. But I think for -- we were already when we had a core inhibitor plus a NUC out there effectively double, we were already looking for a third mechanism not knowing whether or not we would ever need it. That was the destabilizer. And even once we got that one, we were still thinking about other mechanisms beyond a triple, again, not knowing whether we would ever need them, but to be constantly looking inventing new drugs in-house and also looking for external mechanisms that we might either be able to bring in our license because, again, it's going to be a combination therapy with more than a couple of agents on it. I think that's certainly going to be the case. I mean there are other mechanisms out there that are oral, you can look at some of the immunomodulatory mechanisms that are out there, and that's certainly an approach that we have been looking at and thinking about and considered and there are still other ones. So anyway, we'll be reviewing that over the course of time and revamping that HBV strategy with new combinations. And once we've got that sorted internally, we'll start to talk about it publicly.

Our next question comes from

I just wanted to quickly follow up on Eric's question about the HBV program. Just notably his question about why some of the safety signals may have been missed preclinically. Is this something that could have been determined preclinical? I know you don't want to say what that exact answer, but I was just curious about that.

No, it's -- again, it's really kind of hard to explain. I mean, we -- I mean there were other members of this mechanism that had been studied in the past. I mean, Roche had a molecule, they took it into Phase I and then disappeared from Phase I, but haven't really been any public comment with regards to what happened there. Arbutus had some molecules or a molecule, I guess, that they had worked on and they were in shorter term, safety studies and apparently, I think it looked okay. And then when they got their longer-term safety studies and they ended up finding safety signal and then repeating the study and then seeing another signal and then terminating the molecule. So for us to even move to that next step, the bar in our minds was making it at least past the 13-week safety signal that others had seen at least preclinically. And so we spend a lot of time engineering 721. We took it through safety studies in multiple species, had a very clean profile with regards to safety observations. And so it was just an unusual unexpected finding in a Phase I study. I mean sometimes it happens, it's rare. It's even more rare for Enanta on average, but in this case, it did. So it's about the sum of it.

That was really helpful. And then a follow-up to that. One point you noted will we be interested in the S-antigen. So I was just wondering if you were to go and add another candidate, would it be something again against the S-antigen?

Well, certainly, if we found a desirable target to take that on, that would be -- that's not a bad idea. S-antigen is one of the things that you obviously need to deal with in some form, either by shutting down the source of it's being produced or dealing with it directly or otherwise compensating with an immune approach that can help overcome that. So it's -- S-antigen modifiers would be something to the extent that we could find an appropriate mechanism to target would be on our list.

And I just have 2 more. The first, just thinking about the time line for the HBV program. So I know you have a couple of things in the works in terms of candidates. I was just wondering how far are those from entering the clinic. And then is there anything that you can do to kind of optimize the time line, meaning move forward with the combo as much as you can before adding in the third agent that may be a little bit behind?

I think our priority is going to be focusing on third agents right now. And like I said, we'll be focusing on the internal pipeline as well as external opportunities to do that.

So you're not going to be limited by your internal candidates because you could pull something from another company or something like that. So that's good to know. And then the last one here is just a high-level question for folks that are a little bit apprehensive. Now having 2 programs kind of changed a little bit, meaning the NASH and now the HBV program, I like how you said that this is very rare, at least for the HBV, it's really rare to have something like this happen to Enanta. And so I think it will just be nice to kind of hear your thoughts on the robustness of your preclinical work that you typically do across your pipeline? And I guess, for folks that maybe losing a little bit of confidence, how do you kind of keep folks confident in what it is that you guys are doing at Enanta?

This is nothing unusual in the industry or in biotech or pharma. It happens everyday. I just -- I think what's surprising is it rarely happens to Enanta that's -- but it is part of the business. I mean, you'll find preclinical findings sometimes that never manifest themselves in human test results ever. And occasionally, you'll find the converse. So we pushed 6 programs together with no safety findings that alter our way of doing business, including several that are in the clinic now and have been in lots and lots of patients. So again, this is it's a very unusual sort of one-off finding and people should think about it in that way. That's the nature of the business. We've got a very strong preclinical compound characterization group at Enanta looking at DMPK, safety formulation on and on and on. And I think overall, our track record speaks for itself.

Our next question comes from Roanna Ruiz with SVB Leerink.

One question for HBV. I was curious for 514, which dose are you most likely to advance forward into combination trials, considering that we've seen some similar HBV DNA reductions between the 400-milligram and the 800-milligram doses so far?

Yes. The -- all the doses look good, actually. So we'll make the final decision when we're pairing up in the ultimate study. But when you look at 200, 400, 800, they all had very nice log drops in DNA and RNA if you look in the viremic study, I think a lot of that had to do with the fact that at -- even at the lowest of the 3 doses, we were already driving around 10x the adjusted BC90 and at 400, we were a 20-fold above that. And so we drove very high drug exposures very safely over the course of a full month in HBV patients. So any of them could probably be fine doses to go forward with, I think. And in general sense, you try to look at the highest or a very robust dose just to make sure in a broad section of patient population that you're exerting a lot of pressure on the virus. But so far, we've done that even with the lowest dose. So we get closer to a specific combination, we can talk about a specific trial design, but I think they all doses look good.

Our next question comes from Liisa Bayko with Evercore.

Just first on hepatitis B 4 -- 514. In the Liver Meeting data, you seem to have an inverse dose response on RNA. I know DNA was pretty tight actually across all the doses. Is that just some function small numbers? Or what's the right way to think about that trend there?

Yes, it was a very small dose response even on the DNA because I think we were nailing it even at the low dose and there's probably a little bit of wobble thereafter. But I will let Nathalie comment on that further.

Liisa, thank you for your question. I mean it's true that when you look at the numerical value of the 3 doses in the viremic patient in particular, it looks like it might be a reverse dose dependent. I think it's important to note that it's a small sample size with variability in the HBV RNA not only at baseline, but also throughout the treatment duration. And the distribution of the patient in the small studies where you have 6 patients per arm received the active drug depending on when they come into the study with a higher baseline HBV RNA compared to lower HBV RNA that can change a little bit. You mean value at the end per cohort. We look very closely to each individual patient for each cohort. And there's a little bit of difference in the distribution with the 800-milligram where we had more subjects. We had a higher viral load -- not viral load, HBV RNA at baseline compared to the other arm. So if you try to normalize and remove those subjects to where maybe, I'm going to say, outlier compared to the other arm, it comes pretty much even. It is just an artifact I think of distribution and variability of the HBV RNA.

Okay. Great. And then just on timing for RSV. I was looking at the trends in the United States that actually it looks like it's coming down at least right now per the CDC. Are you planning that's going to follow patients like globally, Jay, and that's how you complete, I'm assuming that's coming down here is probably rising in other parts of the world. That's the right way to think about it? And then if you're going to get RSVP no data in 2022, peads and RSVTx, if we have an increase in cases, could we maybe count on some data from those as well next year?

Yes, I would say it's unlikely for RSVP peds, the pediatric study on transplant. I think we'll need more than one global season and or at least more than one. We're heading into one now. And this will be the first -- this will be the first real season that either of those studies have experienced, assuming that it is a real season this time. And I look at the numbers that you're looking at where it spiked a little bit when people started relaxing some of the masks, and it seems to be coming down a little bit. But recall that we're at least heading just now, we're just heading into the beginning of what would normally be a full season that typically peaks in January and February of a given year, at least in the Northern Hemisphere. So we have trial sites all over the world. U.S., EU, Southern Hemisphere, Pan-Asia. And so to the extent that we get into what will hopefully be a fairly normal season, then we're pretty confident we should be able to wrap things up and report out in the first half.

Okay. Great. Can you tell us how many patients you've enrolled thus far of the total anticipated?

No, we typically don't give sort of interim post updates because it is -- it's a splotchy thing. You want -- you'll go through dry spell and then to get hot zones and stuff. So it's really -- what you need to do is just look at it as a whole and rely on our guidance based on assumptions and the backdrop of the virus. But I think we're -- we did see an uptick very much so a little while ago. when the cases were starting to rise. So I think that's, again, very encouraging. We were able to capitalize on that. And so again, to the extent that we have a fairly [ normal ] looking season, I think it should be quite doable.

And I'm not showing any further questions at this time. I would now like to turn the call back over to Jennifer Viera for any further remarks.

Thank you to everyone for joining us today. If you have any additional questions, please feel free to contact me by e-mail or call my office. Thank you so much. Have a good night. Bye-bye.