Good morning. My name is Sonia, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Entera Bio Third Quarter 2019 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-an-answer session.

Adam Gridley, you may begin the conference call..

Good morning. Thank you and we welcome you to the call. Joining me today on the call are; Philip Schwartz, our President of R&D; Arth Santora, our Chief Medical Officer; and Dana Yaacov-Garbeli, our Interim CFO. A press release announcing Entera's financial and operating results for the third quarter of 2019 was issued this morning.

For those of you who have not yet seen it, you'll find it posted in the Investor section of our website at www.enterabio.com, and it is also available at the SEC's website. On our call this morning, we will share with you a business update and our financial results, which will be followed by question-and-answer session.

During today's call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements that address future operating, financial, or business performance or our strategies or expectations.

Forward-looking statements are based on management's current expectations and belief, and involve significant risks and uncertainties that could cause actual results, developments, and business decisions to differ materially from those contemplated by those statements.

Those risks and uncertainties include, but are not limited to; the timing and conduct of our clinical trials, the clinical utility of our product candidates, the timing or likelihood of regulatory filing and approvals, our intellectual property position, and our financial position, as well as those described in the risk factors section and our Annual Report on the Form 20-F and in future filings with the Securities and Exchange Commission.

We encourage all investors to read our SEC filings. All information we provide on this conference call is provided only as of today, November 21, 2019, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise.

Finally, please be advised that today's call is being recorded and webcast. So let's move on to our business updates. Since I've joined the company as the CEO in early August, I've had the opportunity to meet and speak with many of our key stakeholders.

I met with each of our physician investigators in Israel conducting our oral parathyroid hormone, or PTH Phase 2 study in osteoporosis. I've met and spoken with many of our recent and long-term supporters and investors.

In addition, I've had a number of excellent discussions with a variety of potential partners for our novel oral technology platform and internal drug candidates. Above all, I've gotten to know many of our talented employees, board members and other affiliates.

I come out of these meetings more impressed than I had anticipated when I first took this role a few months ago. First, by the unique technological advances our technology affords, where we believe we are able to reliably develop oral tablets for a variety of macro molecules and biologics.

We can do so in a way that achieves adequate bioavailability and variability, a combination that has eluded many drug developers over the last several decades.

Secondly, we have a near-term opportunity in osteoporosis, with what we believe is a highly de-risked Phase 2 Oral PTH candidate and relatively well-defined Phase 3 clinical trial design based on strong positive feedback from FDA received in late 2018.

I firmly believe this company has near-term visibility to a multi-billion dollar osteoporosis market, coupled with the ability to extend the utility of our tunable technology outside of PTH to protect and enhance absorption of certain biologics and macro molecules.

Hard data and success stories have been limited, and what some scientists and clinicians have described as the holy grail of oral drug delivery for Biologics. If we are successful on any of these initiatives, we will create considerable value for our shareholders by giving patients the new solution to what has been an age-old challenge.

90 days in, my commitment to our investors is a myopic focus on execution of our lead programs, rapid development of new candidates in large markets, and targeted business development efforts coupled with a street-facing investor-focused management team.

And our most advanced program of EB613, the unmet need in osteoporosis demonstrable, but the small percentage of patients with this disease, who are actually treated due to cost, convenience and compliance challenges.

We will simply transform the treatment paradigm by introducing a less expensive, once-daily oral tablet and will grow the market by giving patients an easy to take anabolic drugs, as an alternative to currently available, yet expensive and inconvenient injectable anabolic drugs.

We intend to compete directly with leading anabolic injectables, which are bone building agents. However, the real opportunity is to instead grow the market by tapping the 90-plus percent of osteoporotic patients who are not treating their disease state or related symptoms due to lack of satisfactory options.

Beyond the U.S., the osteoporosis market in select regions such as China is growing rapidly due to aging populations, calcium and vitamin D deficiencies, and economic gains that have made many more drugs affordable.

We are in active discussions with a variety of leading pharmaceutical companies regarding EB613 licensing opportunities, or broader technology platform collaborations.

Similarly, we have much to establish our presence with public company investors, ensuring our stakeholders appreciate the broad tunability of our technology to a wide variety of biologics and large multi-billion dollar markets. And 2020 is anticipated to have a number of key milestones for our lead osteoporosis Phase 2 program.

We have established our U.S. headquarters in Boston, Massachusetts, and announced today that we have hired Jon Lieber, as our new U.S.-based CFO, and will be seeking to build out future business development and regulatory teams in the Boston area.

During today's call, you'll hear from our talented team that we’ll provide an overview of our development programs, upcoming milestones, and clinical trial strategies. We’ll then cover our product and business development efforts.

We’ll briefly review our current financial operations, and following concluding remarks, we’ll open up the call for a question-and-answer session. Let me turn it to Dr. Arth Santora, our Chief Medical Officer for a clinical update.

Arth?.

Thanks, Adam. In 2019, we initiated enrollment in a six months Phase 2 double-blind, placebo controlled dose-ranging study evaluating three different EB613 doses in 160 patients. This study is being conducted at four leading centers in Israel, is supported by a U.S.-based medical monitoring and operations team.

And we are targeting post-menopausal women, who have low bone mineral density or BMD, either in the low osteopenic or osteoporotic range. We will evaluate those safety and determine the optimal doses of our EB613 oral PTH tablets, we’ll then advanced into a Phase 3 pivotal study.

Trial will last six months with effects on biochemical markers of bone formation evaluated. In this case, P1NP, after three months and then BMD and safety endpoints evaluated over six months.

Assuming a favorable outcome of this proof-of-concept study, we would then conduct a single, larger Phase 3, multi-center head-to-head, non-inferiority BMD endpoint study comparing Entera Bio's, EB613 oral PTH with Forteo injectable PTH over a six to 12 months treatment period.

The active form of parathyroid hormone in Entera Bio's PTH EB613 tablets is Teriparatide. The same human PTH 1-34 peptide in injectable Forteo the well-tested pioneer, osteoanabolic drug, shown to reduce the risk of spine and non-spine fractures and utilized in over 1.5 million Osteo product women worldwide.

Short-term bone marker data and BMD data have historically been very predictive of the anti-fracture efficacy of parathyroid hormone and similar osteoanabolic drugs and subsequent large fracture endpoint trials.

Thus we believe the upcoming data readouts from the Phase 2 study in 2020 will be very meaningful and greatly increase the probability of success in Phase 3. The key milestones for this trial start first with projected patient enrollment completion in the first half of 2020.

And we expect to see the interim and full three months biochemical marker readouts in the second and third quarters of 2020 respectively, with the final topline six-month BMD data, in the fourth quarter of 2020.

As the lead-in to our planned Phase 3 trial, we intend to file an IND with FDA in the first half of 2020 anticipating that we are then finalizing the Phase 3 design in 2020 for a potential Phase 3 trial in 2021, pending funding and status of potential collaborators.

Phillip will comment further on some of the underlying technology work on the CMC and preclinical side that we will have to ensure a robust, cGMP [ph] process to support these clinical trials. Moving on to our secondary proprietary program with oral PTH EB612 for the treatment of the orphan disease hypoparathyroidism.

In September, we reported positive results from a Phase 2 pharmacodynamic-pharmacokinetics study confirming that oral PTH is effectively delivered into the bloodstream and activates PTH-dependent biological pathways that are inadequately activated in patients with hypoparathyroidism.

Oral PTH, taken four times per day, increased low levels of serum calcium mainly by increasing active vitamin D blood levels. EB612 also reduce urine calcium loss as demonstrated by an almost 25% decrease in 24-hour urinary calcium excretion. Oral PTH treatment also decreased high levels of serum phosphate by increasing urine phosphate excretion.

This one-day Phase 2 study helps determine the design of a definitive long-term Phase 3 study of oral PTH in patients with hypoparathyroidism in which dose frequency would be titrated with -- to control hypocalcemia, normalize serum phosphate, and reduce renal calcium excretion.

We also will be able to determine the formulations and target patient populations before moving into another Phase 2 or Phase 3 study, recall these would be small studies. Natpara, the leading injectable PTH product was approved on the basis of a single 120 patient Phase 3 trial. I'll now turn to Dr.

Phil Schwartz, our President of R&D, who will provide an update on our product development efforts and pipeline..

Thank you very much, Arth. Good morning, everyone. I'd like to provide you an update in two areas; first, our collaboration with Amgen for the development of an anti-inflammatory agent has progressed well, since we kicked-off this program in early 2019.

In less than eight months, a number of studies have been conducted with what we believe are very positive results. Both teams are targeting, moving these old formulations into the next level of development and testing.

Critical to the rapid development of this drug is Entera's ability to rapidly customize the formulation to meet the particular PK and pathology to be treated.

In Amgen situation, Entera has been compelled to develop a very different formulation and new technological innovations in order to develop a drug with the appropriate PK/PD characteristics and targeted as required by Amgen. Second, we continue to evaluate new API's where technology platforms may have significant utility.

Our Research and Development group has developed refined methods to rapidly determine a go/no go response to each API drug tested with the underlying tunable technology platform. Using a newly developed set of in vitro assays, the Entera R&D team is now able to cut the initial evaluation time in almost half.

To-date, Entera has blocked more than seven different API's into preclinical animal testing. Preliminary proof of concept data supports working with large molecule biologic drugs from small 3 to 4 amino acid peptides to the humans, biological proteins with more than 100 amino acids.

As we gain more experience and knowledge, we are better able to evaluate the applicability of the technology. So, it's also saving time by knowing, if a particular molecule or target class is not feasible. While we have to set a target to identify at least one most promising API target in 2019.

In 2020, we tend to expand and screen a variety of high profile outsize compliance patient administration challenge and large market opportunities. Our goal is to identify new API's for drugs which would be very well served by conversion to an oral tablet.

This work not only allows us to expand our internal pipeline as desired, but also may greatly enhance our ability to execute external collaborative deals with other companies, targets or API's.

By developing strong proof of concept data for a large variety and range of existing API's, we believe, we may be able to show, how we can synergistically tune our technology to enable to the delivery of another company's novel molecule of a similar size or characteristics.

As Adam noted in our IND preparation for osteoporosis and in conjunction with the exploratory product development efforts, I just covered, we have expanded and also refined our GMP capabilities to support the clinical trials and future scaling requirements for commercial launch.

These efforts extend to our substantial non-clinical package and support of this upcoming IND submission. We anticipate that many of the assays and methods we have developed today will be applicable to all of our current critical technology platform excipients.

With thoughtful quality by design and methods development efforts, we believe that such assays and methods may then be applicable to new excipients utilized in the future for other drug formulations.

For long history of our initial development efforts, formulation enhancements and development challenges we've worked through now allow us to more rapidly and confidently assemble regulatory packages for the next product candidate.

Lastly, we believe the last few years' efforts to move our processes to GMP and GLP for the CMC or chemistry manufacturing and controls, helps derisk our regulatory submissions, but has also facilitated greater efficiency in production, higher yields, decrease time, and a substantial decrease in the cost of goods for both excipients and ultimately, the final drug tablet.

We expect that these cost advantages will be among the critical parts of our ability to offer patients less costly and more convenient alternatives, which we believe will grow the market substantially. I'll now turn it back to Adam to cover some of our business development opportunities that are arising from our new R&D data and discoveries..

Thanks, Phillip. Besides our Amgen collaboration, we continue to explore a variety of co-development opportunities and are currently seeking a new Head of Business Development to partner with Phillip and myself, help lead the various collaboration opportunities before us. As outlined last quarter, we are currently focusing in three main areas.

Our first priority is to work with companies seeking to leverage our development and delivery capabilities to work with their internally developed compounds and/or injectables perhaps in a structure similar to the Amgen collaboration.

The recent approval of Novo Nordisk oral GLP-1 agonist, which utilizes the same absorption enhancer that Entera uses, has stimulated great interest in our oral large molecule delivery systems.

The approval of Novo’s drug not only validates our use of this particular absorption enhancement molecule and other indications, but also proves that it is possible to get an oral biological drug approved by FDA.

Additionally, the Novo approval has the potential to ease our regulatory processes and has resulted in a substantial increase in the number of detailed discussions with several additional companies seeking to co-develop their molecules or APIs as oral therapies.

Given the very tunable nature of our technology, many companies have approached us to help solve their particular drug delivery problems. Our second priority are the initial efforts and potential commercial and licensing arrangements around our lead EB613 oral PTH program in osteoporosis.

Given the rather short development pathway to a Phase 3 study as identified with the FDA, we're starting to engage today with potential commercial partners who may have an interest in working with us on the Phase 3 program.

For evaluating our opportunities to complete the global registration trial on osteoporosis on our own, or whether we choose to license this prior to a Phase 3, where leading pharmaceutical companies may be interested to conduct the trial on their own with their own key opinion leaders or KOLs.

Given the relatively small 600 to 700 patient trial for osteoporosis, commercial partners may see the Phase 3 study as an optimal opportunity to build awareness with leading physicians from their network. With our bone marker and bone density data readouts coming in mid 2020, we are engaging with those parties today.

Thirdly, our efforts in China and Japan are progressing nicely with strong interest in both regions regarding potential collaboration opportunities. As a reminder, due to recent changes with both the FDA and global registration pathways, we've started to leverage our vast development in clinical experience into global registration programs.

The osteoporosis market in China, for example, is growing rapidly due to ageing populations, low calcium and vitamin D intake and the presence of a number of leading pharmaceutical companies with experienced and injectable PTH and these markets.

We are conducting diligence with a number of parties in China, following meetings to discuss our lead programs and potentially new compounds. In addition, we presented at the Sofinnova Japan Partnering Conference earlier this week in Tokyo, where we held a number of meetings with potential collaborators.

And in the case of Japan, we believe there is a strong interest in certain rare endocrine and renal diseases. While, we are at early stages in each of these discussions and there's no guarantee that we will be able to enter into any of these arrangements or on terms acceptable to us.

We do believe selective global partnerships will bring visibility to our elite programs. We expect to retain the material portion of future rights where we participate in both the benefits of near-term regulatory approval, but also on a milestone and royalty basis for financial remuneration.

In summary, we have found that our unique technology offerings, novel delivery of well established API is currently administered by injection, in a manner that it protects and enhances absorption, yet doesn't modify these API's, may afford a rapid regulatory pathway for leading biotech and pharma partners.

Coupled with our deep knowhow and rapid development process supported by our nine plus years of investment into our formulations and CMC programs, we can also offer a tablet that could be made for a fraction of the cost of injectables.

Finally, our strong intellectual property position provides an attractive, cost effective, yet sustainable product portfolio for potential partners on a worldwide basis. At this point, I'll turn the call over to Dana, our Interim CFO to cover the financials..

Thank you, Adam. Revenues for the nine months ended September 30, 2019 were $134,000 from services provided to Amgen under their licensing agreement. The cost of revenues includes direct salaries and related expenses. Total operating expenses, all of this for the nine months ended September 30, 2019 was $7.9 million.

Research and development expenses for the nine months ended September 30, 2019 were $5.2 million largely comprised of salary and related expenses, materials, clinical manufacturing and clinical trials expenses.

General and Administrative expenses for the nine months ended September 30, 2019 were $2.8 million largely comprised of salary and related expenses including share-based compensation and legal and DNO insurance expenses. Total cash as of September 30, 2019 was the $5.9 million, which we believe will fund our operation into the first quarter of 2020.

I will now turn the call back to Adam for concluding remarks before we go to Q&A.

Adam?.

Thanks, Dana. We thank our patients, physicians and investors for their support of our efforts to bring an oral delivery technology and PTH to the market and to expand the utility of this novel platform.

The recent research and interest in the off described Holy Grail target of oral large molecule drug delivery is resulting in a new focus for our Teams internally and partners externally.

We believe 2020 will be an important year for us and a considerable inflection point for the company, where we expect the fruits of many years of efforts start to result in meaningful data readouts in our Phase 2 osteoporosis program. And our collaborations with Amgen may start to take us into potential preclinical and eventual clinical programs.

We are making the requisite investments in our teams in both Jerusalem and in our new headquarters in Boston. And we'll build out our team responsibly and expand our pipeline in large markets with significant unmet needs.

For our investors and partners, we believe we can both take share from existing blockbuster franchises, and more importantly, grow markets by giving patients a state, convenient, and effective oral administration alternative that may allow them to better treat and modulate their disease states.

The growth of proteins and biologics across many of the newest blockbuster launches provides a strong growth opportunity for us, as we look at our next product target.

These could be in well-established areas, such as growth hormone deficiency with oral growth hormone or osteoporosis with Oral PTH or more broadly into larger macro molecules of biologics.

Our work on our internal programs, Amgen and to a various early research evaluations have given us further confidence regarding the utility of our platform to be extended to other proteins, peptides and biologics, some as large as 150 kilo adults.

As we found, it's not enough to achieve a certain bioavailability, it’s about consistency, or lack of variability and targeted delivery to certain tissues or across certain parts of the GI tract.

Our synergistic combination of absorption enhancers and protease inhibitors to protect and deliver our therapeutic payload, offers a unique solution to certain drug targets. And we intend to build our pipeline further internally and with partners.

In summary, we are rapidly executing on our internal programs, building out our presence with the biotechnology and pharmaceutical community, and laying the groundwork for significant growth and value creation with the investment community. We're in the process of augmenting our new team in the U.S.

with additional investor and public relations capabilities, and our investors, who continue to see a growing presence online and investor conferences, and leading industry partnering events.

Most importantly, our stakeholders will see an enhanced focus on execution and responsible capital allocation to those markets or unmet needs with the highest return on investment. We believe that we are building a team that will be able to deliver on our near-term clinical milestones and drive further innovation in our pipeline.

And we look forward to sharing our future progress in coming quarters. We will now open up the line for any questions.

Operator, please open up the line?.

Thank you. [Operator Instructions] Our first question comes from Jason McCarthy of Maxim Group. Your line is now open..

Hi. Good morning. This is Joanne Lee on for Jason. Thank you for taking the question and congratulations on the progress this quarter. So, I was wondering, with the recall of Takeda’s Natpara.

Could you perhaps share your view on how this would impact the company's EB612 program, especially considering that the recall was mostly related to an inactive ingredient, which is unlikely to happen with an oral product? As such, has there been any shift in focus considering the development in the space?.

Hi, Joanne. This is Adam. Thanks for the question, and thanks for joining the call this morning. Certainly, it's something that we along with the physicians and patients affected by this terrible disease are watching closely. I think what has happened is, that it has created a heightened awareness regarding the need for better therapies.

We've seen, for example, one of the competitors who was looking at an injectable, such as incentive [ph], has been able to better recruit to their clinical trial for this really, really tough disease state.

So, while it's been very unfortunate for patients and physicians, I think it is creating a heightened awareness for both of our programs and some of the others. As we think about how we're going to proceed with this program, this continues to be a very high priority.

Some of the recent data that we’ve generated and reported back in September was quite compelling. And we're looking at our final formulation programs to determine how we potentially take this into a Phase 3 as well..

Thank you. That was helpful. And I'd like to see if you could give us a bit more of an idea on how large of a Phase 3 trial you need to take EB612 to registration in HPT, and would you expect it to be on a similar scale of Natpara’s P3, which was around 124 patients..

Sure. Great question, Joanne. Let me turn that over to Arth Santora, our Chief Medical Officer, and he can comment.

I think you're right along the lines of what we would envision for Phase 3 as well, but Arth, any additional thoughts?.

I just like to confirm what you said, it's an orphan indication, and it's very difficult to find patients with hyperthyroidism. So we would envision a Phase 3 program. It might be a little different and design, would probably include somewhere around 100, 150 patients tops. That's very typical for an orphan indication..

Thanks, Arth..

Great. Thanks again. Sorry. Yeah. That'll be all from me. Thank you..

Excellent. Thanks, Joanne. Appreciate you joining the call..

Thank you. [Operator Instructions] And this does conclude our question-and-answer session. I would now like to turn the call back over to Adam Gridley, for any closing remarks..

Thanks everyone for taking the time this morning to join the call. We look forward to speaking with you in the coming quarters and reporting progress on both our lead program for osteoporosis and also for hyperthyroidism. Have a good day, everyone..

Well, ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect..