Good morning, ladies and gentlemen, and welcome to Axcella’s Third Quarter 2020 Conference Call. Please be advised that today's conference is being recorded. All participants will be in listen-only mode until the question-and-answer session. After today's presentation, there will be an opportunity to ask questions.

[Operator Instructions] And now for opening remarks, I would now like to hand the call over to Jason Fredette, Vice President of Investor Relations and Corporate Communications at Axcella. Please go ahead, sir..

Thank you, Operator, and thanks to everyone, who's tuning in this morning. We would like to advise that certain remarks we will make on today's conference call such as those relating to our planned IND submissions and clinical trials include forward-looking statements that are subject to various risks and uncertainties.

These risks and uncertainties are detailed in our Form 10-Q for the most recent quarter and our other SEC filings, which can be accessed on our website axcellahealth.com or on the SEC's website.

All forward looking statements represent our views as of today, November 12, 2020, and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to update these forward-looking statements.

Please also note that the data we will reference on today's call stem from non-IND clinical studies that were designed to evaluate product candidates for safety, tolerability and effects on normal biological structures and functions. These studies were not designed or intended to evaluate the ability to treat or prevent diseases.

Our next clinical trials of AXA1125 and AXA1665 will be aimed at this call. On the call with me today are Axcella’s President and CEO, Bill Hinshaw; our Chief Financial Officer, Laurent Chardonnet, and Chief Medical Officer, Dr. Manu Chakravarthy. I'll now turn the call over to Bill to kick off our discussion.

Bill?.

the effects we have seen in just 16 weeks and a meaningful percentage of subjects, its favorable safety and tolerability to-date, the benign lipid profile and lack of effect on weight, it's oral route of administration, and it's modality that works with the body system.

These same attributes also make 1125 an appealing candidate to consider utilizing in combination with other agents when needed. And we believe it is also very well-suited for early investigation in the burgeoning pediatric NASH population.

Now let's move on to another important liver disease and AXA1665, Axcella's product candidate for the prevention of recurrent OHE. OHE is a manifestation of cirrhosis in which patients are severely cognitively impaired, to the point, where they're unable to care for themselves and may ultimately become comatose.

It's estimated about a third of cirrhotic patients experienced at least one OHE event during the course of their disease. And many of these patients experienced repeated events, even while on today's approved medicine, namely lactulose and rifaximin.

We believe that this is because these agents focus on only one of the disease drivers, namely elevated ammonia. And also because tolerability is a challenge and thus compliance is limited. The reality is that OHE involves vicious cycle in which amino acids become imbalance.

Ammonia levels increase and muscle stress to process the ammonia, but it does it poorly. This then exacerbates muscle wasting and ammonia elevations. The cycle ultimately leads to neurocognitive impairment and OHE events. 1665 owes the potential to improve the standard of care by addressing this disease more comprehensively.

In August, results from our initial clinical investigation of 1665 were published in clinical and translational gastroenterology. And that same month, we were excited to share the topline data from our latest clinical study, AXA1665-002.

This placebo controlled study enrolled 60 subjects, and baseline characteristics were consistent with a population with mild hepatic insufficiency, and subjects were mostly non-sarcopenic. 1665 was again, safe and very well-tolerated. Encouragingly, we also saw dose dependent activity across all measures of amino acid balance and neurocognition.

In fact, for the high dose versus placebo, we saw sustained and statistically significant improvement in the Fischer ratio, which is a measure of branched chain amino acids over aromatic amino acids has been shown to correlate with outcomes.

And we saw statistically significant improvement in the PHES, which is considered the gold standard for diagnosing minimal hepatic encephalopathy. In fact, even in this population, with mostly mild hepatic insufficiency, a majority of subjects receiving the high dose of 1665, achieved a placebo adjusted two point improvement in the PHES score.

This is a clinically relevant change that is in the range of other approved therapies in the HE field. Plasma ammonia also tended to decline in subjects with minimal hepatic encephalopathy.

And finally, a greater proportion of subjects in the active arms versus placebo, tended to show an improvement in muscle function as measured by the liver frailty index.

These results and our past interactions with the FDA regarding 1665, provide us with confidence and excitement as we prepare our IND submission and design our planned Phase 2 clinical trial. We are now able to share some initial details of the trial.

Our Phase 2 is expected to be a placebo controlled six month trial that enrolls cirrhotic patients, who have experienced at least one prior OHE event. And since we already have investigated four doses of 1665 in prior clinical studies, we believe it may be more streamlined in terms of the number of arms. Similar to 1125.

We plan to share further details once our IND is accepted, and then get the Phase 2 underway in the first-half of 2021. Now that we've covered our liver programs, let's shift to another clinical stage product candidate 4010 in the hematology space.

4010 is currently being investigated in an initial non-IND clinical study, enrolling subjects with sickle cell disease. This candidate was designed to target multiple pathways involved in red blood cell metabolism, vascular function and inflammation.

The basing design of our 001 study enables us to efficiently investigate a first cohort of subjects to determine if 4010 is safe and well-tolerated, and if it appears to be influencing the targeted biologies. We completed enrollment of this first cohort a few months ago, and will receive data on these subjects in December.

If we see results consistent with impact on biologies and appropriate safety, we will proceed with the enrollment of two additional cohorts, one in adults and the other in adolescents with sickle cell disease. We expect to report back to you on our decision to enroll additional subjects by early 2021.

We certainly have a great deal of work in front of us and our excitement continues to build as we approach important milestones for Axcella and for its shareholders. Now let me turn the call over to our CFO, Laurent Chardonnet, to review our financials for the third quarter.

Laurent?.

Thank you, Bill, and good morning, everyone. As Bill mentioned, these past few months we were very productive with multiple areas and the FDAs affirmation that we can proceed into Phase 2 clinical trials under IND. This morning, I will start overview by discussing our cash position.

We ended the third quarter with $170 million in cash and marketable securities, as compared to $92 million at the end of 2019. The increase is primarily the result of net proceeds from a full on stock offering that was completed this past May in a thoughtful management of expenses.

Our cash balance as of September 30, was sufficient to meet our operating needs well into 2022. We plan to provide more explicit cash flow guidance, following the completion of our trial designs, and acceptance of IND in early 2021. Now turning to our research and development expenses.

With a steady advancement of our portfolio, we will continue to invest actively in our drug development program. Our research and development expenses were $7.5 million and $26.4 million for the three and nine months ended September 30, 2020. This is down from $12.2 million and $29.1 million for the same period of 2019.

The decrease primarily due to the completion of our 1125-003 clinical study, and the wind down of cost for our 1665-002 clinical study. We are expecting that R&D costs will begin to increase again in the coming quarters, as we prepare to enter later stage clinical trials.

General expenses were $4.2 million and $12.9 million for the three and nine months ended September 30, 2020. This is roughly flat with $4.8 million and $13 million for the same period of 2019. We expect that expenses to remain unchanged in the near-term. Axcella's net loss for the third quarter 2020 was $12.4 million or $0.34 per share.

And a net loss to the nine months ended September 30, was $41.3 million or $1.39 per share. Included in this net losses were $1.4 million and $4.9 million, respectively, and non-cash expense related to stock based compensation. So, with $170 million on cash in hand, we are very well-positioned to continue to advance our pipeline.

With that operator, will you please open the line for questions?.

Thank you. We will now begin the question-and-answer session. [Operator instructions] And the first question will be from Yasmeen Rahimi with Piper Sandler. Please go ahead..

Hi, team. Congrats on continued progress you're making. Number of questions, but one related to 1125 and 1665. So, maybe let's get started on 1125. So, the first question for you is directed on, can you give us a little bit color on what you're going to be powering in terms of the histological endpoints.

You see benefits both in NASH evolution and potentially fibrosis, if you could shed light on the histological endpoint would be important. Secondly, you've pointed out that there will be an interim analysis that will be conducted.

Can you tell us the interim analysis would be the typical MRI-PDFF or other non-invasive biomarkers? And what the side of the interim analysis would include? And then in regards to 1665, we would be very much interested in and understanding what the primary endpoint of that study would be. And thank you again for taking our questions..

Great. Thanks, Yaz, great to speak with you. This is Bill. And yes, we're very excited about the progress we've made here.

In terms of your specific questions, what I'll share with you is this, we plan to communicate specifics and I'll say detailed specifics on both of the protocols and trials, post-IND acceptance, which we expect in the first-half of '21, and then carrying forward into the study.

What I can tell you on the two trials are some pretty detailed information. So, let me start with 1125. The type of patients will be biopsy confirmed NASH, and we're very excited that the agency with the data that we generated supported going into a 48 week dosing period in that paired biopsy study.

The endpoints, they're going to be standard NASH histological endpoints and non-invasive markers that you're used to see in a Phase 2 study. We're going to have the two active arms and a placebo. We are going to be looking likely in the low hundreds of patients in the trial that will be finalized in the near-term.

And we expect to run the trial globally and we'll share again additional details about that following IND acceptance, which is similar on the interim analysis. I know you guys would want all the details right now, we'll share that once the IND is accepted.

We plan to look at interim analysis to help provide information for ourselves as well as a public update. And then in terms of 1665, we're in a position there where again, we'll share the details beyond this at the acceptance of IND.

Types of patients, they're going to be at least one prior OHE event, so these are going to be patients who have more advanced liver disease. They'll be coming in on co-medications of lactulose or lactulose plus rifaximin, we're looking at a six month dosing period there.

In terms of your question on endpoints, we expect those to include elements around PHES score, OHE events and other outcomes, where we'll finalize and communicate those post-IND acceptance. Here we're excited to submit and then follow-up because on the number of arms, as you're familiar we've already dosed four different dose regimens here.

And we expect this to be a little more streamlined than typical in a Phase 2 trial. And then the number of patients similarly, we plan to be in the low hundreds to be finalized, similar approach on site selection and number of sites globally.

And then additionally, on the interim, we're examining an interim and/or futility approach that's optimal for this patient population. And we will communicate again all the details upcoming in the first-half, when we both have the IND acceptance, which we're very excited about and confident and then move forward with the trials..

Thank you, Bill. Thanks for the color..

And the next question will come from Michael Morabito with Chardan Capital Markets. Please go ahead..

Hi, team. Thanks for taking the questions.

Can you please give us a little bit more color on what you plan to announce for each trial in the first-half of next year, between when you officially file the IND versus when FDA accepts your IND, versus when you begin initiating enrollments of those trials? What do you think that you might plan to announce for us? And secondly, on both trials, how many clinical sites do you anticipate enrolling in for each trial? And of those how many do you expect have been previously used for your clinical studies?.

Thanks, Michael, for your interest and your questions here. In terms of the approach on the announcement, we will certainly announce the acceptance of the IND, which is a fairly standard practice.

In our case as you're familiar our IND opening is not typical, we're not going into an initial first in human study, we're going into a Phase 2 and Phase 2b study.

So I outlined that because we will definitely communicate the acceptance, and then we'll have the initiation of the trial, when patients are enrolled will take longer than a typical IND opening setting, because we have all of the normal screening process et cetera. And we'll be communicating that appropriately with you all.

In terms of how many sites, again, we'll finalize that and communicate with that post the IND acceptance. We are planning on working with a number of the sites that we have collaborated with before. And we're very confident on our ability to continue a strong execution on that piece. And one of them, of course, that you're familiar with is Dr.

Harrison and the summit network in 1125, who we continue to collaborate with in this setting. So we're very excited, as are the opinion leaders, both with NASH, because they see the profile of this agent as a potential differentiated program in terms of the patient population, as well as the profile.

The profile itself, with its unique multi target and mechanisms working with the body systems, with the safety and tolerability we've demonstrated to-date, with the lack of impact on lipids and on weight and the oral convenient dosing profile.

And then the opportunity population was not only to be a first line agent, but potentially be differentiated in Type 2 diabetics, as well as pediatrics. And then of course, where there's a need in this very large marketplace header generic place for combinations, we believe our profile is well-suited there..

Great. Thank you..

Thanks for your question..

And our next question is from Julian Harrison with BTIG. Please go ahead..

Hi, good morning. Thank you for taking my questions.

In your discussions on the path forward for 1125, I'm curious if for cirrhotic [ph] have come up at all? Is this a subset that might make sense in the future to explore as a cohort? Or is it safe to say you're focused on earlier stages in NASH for now?.

Hi Julian, this is Manu Chakravarthy. Thanks for the question. So our first Phase 2b is, of course, going to be focused on further guidance in non-cirrhotic NASH using the guidance that the FDA has on this one. So it'll be, as Bill alluded to earlier, standard histological criteria, F2, F3, NASH 114 [ph].

Your question about potentially considering other things, of course, that's all on our minds. We believe our platform is applicable widely across this disease spectrum. And as you know, we already have a program in 1665, with the more advanced liver disease patients..

Okay, great. Thanks. That's helpful. And then on your presentations at AASLD, sorry, if I missed it.

But should we be expecting any incremental data or new analysis of prior data? Is that something you could possibly comment on now?.

So as you know, we have two poster presentations, both focusing on the overall population from the 003, and as well as very excited to talk about the subgroup of Type 2 diabetic, we've had a differential impact and consistent impact on all of our key markers. So those are the two key ones that we'll be presenting there..

And so the diabetic population gives you a little bit of additional color and depth versus what you've seen previously, Julian, in specific..

Great. Thank you..

And the next question is from Jessica Fye with JPMorgan. Please go ahead..

Hey, there. Good morning. Thanks for taking my question.

I was wondering if you could share a little bit more about the pre-IND meeting for 1125? What were some of the kind of suggestions that the FDA had, that you're able to incorporate into your study plan?.

Hi Jess. So we spoke by phone as well as written correspondence, obviously, we cannot share with you all of the fine details on this. But I think what we can share is the fact that the paths that Bill had outlined before, which is that we can go into a straight biopsy study.

So serial biopsy study that is focused on histological endpoints, 48 week duration in the standard population. Again, F2/F3 [ph] typically with not greater than four standard criteria. So that streamlining was really helpful.

Their acceptance of our proposal suggest to us that the package that we have so far generated from our 002 and 003 studies, which were all characterizing non-invasive markers, certainly seems to be deficient to get us through this very streamlined path..

And Jess, this is Bill. Good morning. Thanks for the question. I would just pull it back up even from 1125 for a minute. And so between 1125 and 1665, we've now had a series of interactions with both the FDA and other regulatory agencies.

And I just want to rest on the fact that, there have been questions about how can we proceed, what's the best path, and what can we do. And what I can tell you is, consistently we have been able to move inside of design to Phase 2 and Phase 2b inside of four years, which is quite remarkable when you step back and think about it.

Additionally, we are very clear that we don't have to do gating toxicology work, we don't have to worry about a number of aspects related to how we formulate, how we placebo, how we execute our programs, whether in the non-IND or again now going into the IND setting, that the safety is well-understood and characterized, and that the FDA is supporting us moving forward into a biopsy confirmed trial, in this case at a Phase 2b level.

So we're extremely excited about this in terms of what it validates for our platform and our approach. And the fact that it puts us in a position to be well-informed in a highly efficient way, and this also bodes well for our future programs..

Okay, great.

And then just on 1665, I know you're advancing indices 290, but what's your thinking on cirrhotic sarcopenia opportunity with that asset?.

Yes. So we'll continue to believe that both hepatic and muscular metabolism are important aspects related to this program and are opportunities to differentiate. We will be continuing to measure in the more advanced patient population muscle function and structural measures as well.

Our core focus, of course, is on the existing regulatory endpoint prevention of recurrent OHE. We will be measuring these and see whether there are in addition to the differentiated mechanism that allows us to support additional claims, and then potentially in the future additional populations.

Our core focus right now is getting the regulatory approval in the core platform.

Manu, is there anything you'd like to add there?.

No, I think that covers it really well, Bill..

Great. Thank you..

Thank you..

The next question is from Thomas Smith with SVB Leerink. Please go ahead..

Hey, guys. Thanks for taking the questions. First, just on the planned Phase 2b trial for 1125 in NASH.

Can you just clarify the patient population you're targeting here? Like are you looking exclusively at the F2, F3 population? Or is there potential that you could enrol some F1 patients with comorbidities as well? And then you also mentioned taking two doses of 1125 into this Phase 2b.

How are you thinking about which doses to take forward here relative to the 003 study?.

Yes. Hi, Tom, this is Manu. So again to reiterate, the population that we're going to focus on for the Phase 2b is the standard accepted guidance from the FDA, which is typically F2, F3 patients which signifies more advanced disease, with a NAFLD Activity score or NAS score that's typically greater than or equal to four.

So, these are pretty standard guidances at this point, so this is certainly a core population that we'll be testing in the Phase 2b trial. The broader question, of course, I think was asked earlier, can we go earlier, can we go later. So, these are all possibilities that we will evaluate.

And certainly our modality allows us to interrogate those earlier population, as well as the more advanced population. So, those are all considerations for us. But in the Phase 2 at this point, and we're -- plan is to do the standard guidance.

But again, once we finalize the protocol, IND is accepted, we can share with you the more precise details of the breakdown. On your second question about the two doses. So again, these are also being discussed, and we do need to wait for the final IND acceptance to share the final details with you.

But I think it's suffice to say, based on 003 and the 002 trials, where we tested if you recall in the 002, 72 grams per day, and then the second one was 48 grams per day, we believe that we have enough information from a dosing perspective that we do think that, up to two to three doses, would be the doses that we would take in the Phase 2b.

And final, of course, decision on what the doses are, we'll have to wait until we actually finalize the protocol and get the IND accepted..

Okay, got it. And then just a quick follow-up on 4010 and sickle cell. You're going to get the initial results here from the first cohort in December, and then something you're going to decide whether or not to open up the subsequent cohorts kind of a Go/No-Go decision on the program.

Can you just talk a little bit or maybe give a little more color around what you need to see from this first data set to guide that decision on whether or not to move forward?.

Sure, Tom. We're excited for this readout coming up, beyond our core liver programs and lead programs there, because as you're familiar with, we're looking at three major biologies there, red blood cell metabolism, vascular function and inflammation. And we're looking, of course, at safety and tolerability. That's to answer your question.

What we're looking for is the right directional impact on the biologies, as well as the appropriate safety and tolerability in which a population that has a number of comorbidities.

This was a Bayesian design, which means you have a relatively small number of subjects, it allows you to make a binary decision and then move forward into additional cohorts. We're optimistic, we'll wait eagerly to see the data. And then we'll communicate our decision.

And then we will be expanding into additional cohorts next year, assuming that that's positive..

Got it. Okay. Thanks for the color and thanks for taking the question..

Of course, thank you..

[Operator Instructions] The next question is from Mayank Mamtani with B. Riley Securities. Please go ahead..

Good morning, team. Thanks for taking our questions. And again, congrats on a productive year so far. So, maybe if I can pick on, this AASLD update next week, and really in the context of your choice of patients for Phase 2b.

Could you may be touch on the Type 2 diabetes cohort? What proportion of that you are thinking about in Phase 2b? And if at all, you're aligned for some background therapies like GLP-1 be included in that study. And then I have a follow-up..

Sure. Mayank, hi, this is Manu again. So very excited about the diabetes subgroup, as you can tell, partly because I'm an endocrinologist, and I'd like to have somebody some therapies here to help these patients who really don't have many options right now.

So, in terms of that diabetes subgroup and what we can share with you is the fact that based on the epidemiology 40% to 60% of the NASH cohort typically ends up being diabetic. And people with diabetes certainly have more advanced liver disease. So this is a well-known bidirectional pathway that has been studied and understood for many years.

So what the exact proportion, we obviously cannot say what it is, but I think it's suffice to say 40% to 60% based on the epidemiology. And as I think Bill already outlined the trial design, we are stratifying people on diabetes. So this is the same thing that we did in the 003 study, we expect to do the same.

In terms of the question around the background meds, again, these are fine details that we'll have to wait until we finalize the protocol. But certainly, standard of care therapies are something that we're very familiar with.

And again, you will recall from 003, we had a very similar patient population, similar management and we anticipate the same here as well..

Mike, this is Bill. I would just add that this next Phase 2b as an opportunity to follow-up our two studies that included Type 2 diabetics, both 002 and 003, where we replicated the findings, and really determined that a greater degree that potential differentiated a benefit for this important population.

And we will also have the data on the broad population without Type 2 diabetes, so this sets us up very well to understand and then guide our next steps in development post that..

That's very helpful color. So my follow-up in context of also your IND discussion is, and thinking about the platform broadly, so what kind of -- I'm just curious that drug-drug interaction earlier stage clinical work, you have to do. And I'm also thinking about the OHE study, they are background probably.

So can you just walk us through some learnings you might have had in this Type 2b meeting and maybe you'll have another Type 2b meeting for OHE.

What are those considerations on the talk side or on the earlier stage Phase 1 that you are effectively moving fast very quickly to get to Phase 2b study across different indication?.

Yes. So I'll start Mike and then hand it to Manu for the second part of the answer here. So I'll reinforce something that you brought up here that I'm very excited about, which is, we now have two consecutive program interactions with the agency, where there are no gating toxicology studies or work that's required.

And that's because not just the modality of our studies, but the amount of data and information we're able to provide in our submissions and dossiers. So that is something we feel very confident about on a go forward basis for our platform.

Additionally, we have other steps whether it's DMPK-related, whether it's related to our compositions, et cetera, that we again can move faster and more efficiently than traditional models. In terms of drug-drug interactions there are some aspects -- sorry, we got a call there. There are some aspects in any case that the agency requires you to do.

The question is, in what context, and so we feel very good about our potential to not have significant drug-drug interactions based on our overall mechanism, and I'll have my new quickly expand on that. And then what you should know is there are no gating aspects related to DDIs in work that's necessary prior to starting these studies.

So, Manu?.

Yes. So just to build on that Mayank, so the modality is endogenous metabolic modulators. So amino acid biology in general do not share the same clearance pathways enzymes, transporter mechanisms as xenobiotics. So this is a unique distinguishing feature of our platform.

We've obviously showcase that and then this is the reflection of what we've got from the agency feedback wise, many of the usual things that are gating like tox, CMC, DMPK-related things are not factors here. So, I think that should be a testament to the intrinsic safety of the modality.

The other is, since the very beginning, from the 002 trial study, the 003 studies, we've allowed the CONMEDs, which are typical of the comorbidities these patients have, people typically have hypertension, hyperlipidemia, diabetes. These are all polypharmacy diseases that have many concomitant meds.

And so we have clinical experience already under our belt on these meds. So, going into the one-on-one study, we do feel quite confident that again, because we've already done these studies to some extent, where, essentially following the same principles, the same management guidelines, and so we feel confident that these are not going to be issues.

But again, I would emphasize that we would have to wait until we've formalized all of our protocols, and have the IND acceptance in order to share with you the fine details. I think your second question was, potential interactions with the agency on 1665, if I recall correctly.

So, I would just remind everybody that with 1665, we've actually had several agency interactions, including both U.S. and ex-U.S. We had very productive meetings with them over the course of the last year, as well as this year, along with ex-U.S. agencies, where we've been able to come to a fairly good understanding of what the protocol looks like.

So, we're not anticipating any further interactions. We are going to submit the IND and anticipate its approval in the first-half of '21 to initiate the Phase 2, also in the first-half of '21.

Hope that answers your question?.

Yes. I appreciate the comprehensive color.

And my final one is just a quick reminder on where you are with the pediatric NASH indication?.

Yes. So, again, this is one of our exciting opportunities, just like the diabetes subgroup is. Unfortunately, pediatric NASH is a significant health burden, a medical burden that is unmet because of the epidemic of obesity and diabetes that is also happening to our kids. We did raise this topic with the FDA.

However, the agency primarily focused their interactions with us on the adult development program, and understandably so since we had a lot to get through. We, of course, plan to reengage them with our pediatric development program, once we have the Phase 2b in adult underway..

Thank you for taking my question. I appreciate it..

Thank you..

[Operator instructions] The next question is from Andreas Argyrides with Wedbush Securities. Please go ahead..

Good morning, team. Thank you for taking our questions and also Liana. Most of our questions have actually been answered. So, I'll just ask two brief ones right now. With regard to the PHES score, I know it's the gold standard for minimal hepatic encephalopathy.

So, how do you plan to use it in the overt population?.

Thank you for your question. So, the PHES is indeed a battery of five different tests, pretty rigorous, to have a pretty comprehensive psychometric evaluation, assessing various cognitive domains from executive function to memory to coordination, visual spatial aspects.

It has been used both from an MHE standpoint, but also to actually prognosticate OHE. So it is, in fact used in that setting of OHE. And we believe that, given our results from the 002, we are able to not only look at, of course, the MHE subgroup or sub population, but also how does that impact future OHE events..

And Manu, maybe speak about the population that MHE predisposes for OHE?.

Exactly. Yes, that's a great point, Bill. So, the risk of future OHE event is really predicated upon two main factors. One is of course, the prior OHE event, which is why our population is going to have that. And the other equally important is a prior MHE.

So, the studies so far have shown that if you have MHE at baseline or a prior MHE episode, which again is best diagnosed with the PHES, those people are going to have five to six fold higher risk of a future OHE event. So very, very pertinent for us, and hence, one of the key assessments in our study..

Okay, great. Thank you for the color on that. And then for the 4010, I know you provide too much color on the previous question, but maybe you could briefly discuss the proposed mechanism based on the composition, just some of the key things to look at. Thank you..

Sorry, can you repeat that question please?.

Yes. So what he asked was basically the proposed mechanism for 4010 in terms of just a little bit more depth on the red blood cell metabolic formation and function and kind of some measures that we look at that are important..

Yes, great. So in terms of the mechanism is very similar to the way that we've approached our aspects in the liver space, so it's multifactorial, given that SCD is indeed a very complex disease. And one of the key aspects there is for us to look at the disease from a more comprehensive standpoint to address it equally.

So specifically focusing on three biologies. One is red blood cell physiology, the other is vascular biology or vascular function, and then the third, of course, is inflammation. Each one of those things contribute ultimately to vaso-occlusive crisis, which are ultimately -- the current thinking and how the drugs are getting approved for SCD.

But certainly from a clinical standpoint and outcome standpoint, vaso-occlusive crisis are indeed a big burden for patients. So we believe in our comprehensive approach of really tackling this in a multifactorial way, similar to all of our other Axcella products here. It's very consistent with them.

So the measures, of course, are also multifactorial and to address each of those biologies. So we have specific markers for each of those for vascular function, RBC physiology, as well as inflammation..

And Andreas, we see a couple of important biology read throughs here. Of course, you're also familiar with GBT's approval on a hematological endpoint and sickle cell disease. But there are also important other health and disease areas where these biologies play an important role.

So we're excited to see this read through and the continued opportunities that we see for our design platform. That's very efficient..

Great. Well, we're looking forward to the update as well. That's all for me. Thanks guys, and congrats on the progress..

Thank you..

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to CEO, Bill Hinshaw, for any closing remarks..

So, thank you all for tuning in with us today, everyone. We are very pleased and proud of the progress that the company has made in 2020. And we're excited about what lies ahead for Axcella. And we look forward to seeing many of you on the virtual circuit in the weeks ahead. So this concludes our call, operator. Thanks, everyone. Be well and be safe..

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..