Good morning, and welcome to Entera Bio's Conference Call to discuss the financial and operating results for the first quarter ended March 31, 2021. [Operator Instructions].

I would now like to turn the call over to Ramesh Ratan, the U.S. CFO of Entera. Please go ahead. .

Good morning, and welcome to the call. Joining me today on today's call are Spiros Jamas, our CEO; Arthur Santora, our CMO; and Phillip Schwartz, our President of R&D. .

Our press release announcing Entera's financial and operating results for the first quarter, ended March 31, 2021, was issued earlier today. For those of you who have not yet seen it, it's available on the Investors section of our website, www.enterabio.com. .

On our call this morning, we will share with you a business update and review of our financial results, which will be followed by the question-and-answer session. .

Before we begin our prepared remarks, I would like to remind you that various statements we make during this call about the company's future results of operations and financial position, our interpretation of interim data from the ongoing Phase II clinical trial of EB613, including the biomarker data we released in the first quarter of 2021, the expected timing of data readouts on the ongoing Phase II clinical trial of EB613, our business strategy and plans and objectives for our future operations are considered forward-looking statements within the meaning of the federal securities law.

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Our forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties.

Specifically, developments related to the COVID-19 pandemic continue to evolve and the extent to which the pandemic will impact us in the future will depend on the duration and magnitude of such impact, and on numerous factors that we may not be able to accurately predict. .

These risks are described more fully in our SEC filings and are available on the SEC's EDGAR system and on our website. We encourage all investors to read our SEC filings. All the information we provide on this conference call is provided only as of today.

And we undertake no obligation to update any forward-looking statements that you may make on this call on account of new information, future events or otherwise. Please be advised that today's call is being recorded and webcast. .

I will now turn the call over to Spiros Jamas. .

Thank you, Ramesh, and thanks to everyone for joining the call this morning. I joined Entera in January 2021 based on the company's validated technology platform that enables the oral delivery of protein therapeutics and the talented and dedicated team.

We have hit several key milestones that have generated value for our shareholders and confirm my confidence in our team and technology, and believe we are on the path to creating more value. We have data showing that our platform works on 8 molecules of broad characteristics and size.

I believe these data are supporting our business development efforts and will generate future value through strategic collaborations and partnerships. .

In addition, we have strengthened our balance sheet, and I'm pleased to say that our current cash resources will fund the company into the second quarter of 2022.

The significant potential of Entera's technology platform to give patients a much needed oral alternative to treatments currently delivered via injection is supported by data from multiple clinical trials, including the recently announced positive 3-month bone biomarker data from the ongoing Phase II clinical trial of EB613 in osteoporosis patients and the data from our Phase IIa study of EB612 in hypoparathyroidism patients that Was recently published in the Journal of Bone and Mineral Research.

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We are focused on leveraging the platform technology to create additional value, either through proprietary compounds such as EB613 and EB612 that can be developed either by Entera alone on collaboration with a partner or applying our technology to another company's compound, such as what we're doing in our collaboration with Amgen. .

In addition to our expanding internal pipeline as part of our business of open efforts, we have signed material transfer agreements with 3 companies to demonstrate the feasibility of Entera's platform for oral delivery of various proprietary target compounds.

These options potentially enable multiple partnering opportunities that can generate funding, news flow and allow the company to share in the future value of multiple derisked assets. .

While Art and Phillip will go into greater detail on the clinical programs and platform, I would like to take a few minutes to provide an overview of the programs and some of our recent accomplishments. .

First, on EB613, our hourly-delivered human parathyroid hormone 1-34, or PTH, positioned to be the first oral bone building or osteoanabolic treatment for osteoporosis patients. We recently announced that the Phase II trial in women with osteoporosis, or low bone mass, met its primary endpoint. .

The complete 3-month results showed a significant increase in the P1NP biomarker in the 2.5 milligram dose group after 3 months of treatment, with a p-value less than 0.04 compared to placebo. P1NP is a biomarker that indicates the rate of new bone formation. .

As a reminder, this Phase II clinical trial is a double-blind, dose ranging, placebo-controlled study in post menopausal female subjects with osteoporosis or low bone mineral density or BMD. This trial is being conducted at 4 leading medical centers in Israel and has completed enrollment of 161 subjects. .

We are on track to report the final results from this trial, including the 6-month BMD data in the second quarter of 2021. The completion of enrollment is a major milestone, given the extraordinary challenges related to the COVID-19 pandemic.

And I want to thank the patients, investigators, consultants and the entire Entera team for their hard work and persistence to rigorously executing this clinical study. .

Assuming we continue to see positive BMD data for the EB613 Phase II trial and subject to a successful post end of Phase II meeting with FDA, we believe the Phase III trial could begin in 2022. .

We believe the value proposition of EB613 is very strong due to the fact that only a small percentage of patients with osteoporosis are actually treated with subcutaneous PTH or other injected bone-building drugs due to cost, convenience and compliance challenges.

The market research we conducted and reported last year points to a significant unmet need for an oral therapy that builds bone on a multibillion-dollar osteoporosis market. .

Turning to EB612 for hypoparathyroidism or HypoPT. Data from a 2015 study were recently published in the Journal of Bone Mineral Research, or JBMR, showed that when EB612 was added to standard of care led to a statistically significant decline in supplemental calcium usage, which is a key endpoint in HypoPT trials. .

We have also continued to support preclinical work in our collaboration with Amgen, are pleased with the progress made to date and look forward to continuing to support the collaboration in accordance with Amgen's project plan and objectives. .

From a business development perspective, we have increased our efforts to leverage our technology platform and have ongoing dialogue with several companies that are interested in exploring the use of our oral delivery platform with their injectable product candidates. .

Operationally, we have monitored our expenses judiciously and raised cash through the use of our ATM program. I am pleased to say that our current cash on hand is sufficient to support our planned operations into the second quarter of 2022. I would like now to turn the call over to Dr.

Art Santora, our Chief Medical Officer, to discuss the Phase II trial of EB613. .

Thanks, Spiros. As a reminder, the Phase II osteoporosis trial was designed to evaluate the impact of different doses of EB613 on serum biomarkers of bone activity after 3 and 6 months of treatment and on BMD after 6 months of treatment. Bone biomarkers evaluated include P1NP, osteocalcin and CTX. .

P1NP is a biomarker that indicates the rate of new bone formation. Similar to P1NP, osteocalcin is a biomarker for bone formation by osteoblasts, the cells that build new bone. CTX is a biomarker that indicates the rate of bone resorption by osteoclasts, the cells that remove old bone.

An osteoanabolic, or bone-building effect, is based on the difference in bone formation and bone resorption. An increase in P1NP or osteocalcin, for example, associated with a smaller increase or a decrease in CTX and usually indicates an increase in bone mass. .

In the Phase II trial, subjects were initially randomized to receive either a placebo or 1 of 3 doses of EB613, 0.5 milligram, 0.1 milligram or 1.5 milligram. After the evaluation of the interim, 3-month limited biomarker data in the first 80 subjects randomized.

We amended the protocol to discontinue additional enrollment in the 0.5 and 1.0 milligram dose groups and added a new higher 2.5 milligram dose group with the final 60 subjects randomized to receive either placebo 1.5-milligram or 2.5 milligram of EB613. .

We are very pleased to report that our study has completed, and subjects have completed all of their study visits. Based on our recent analysis of the complete 3 month bone biomarker data, study medication, EB613 or placebo, was generally well tolerated through the treatment period.

Common adverse events resemble those known to be associated with teriparatide by subcutaneous injection. There were no adverse events that were severe in intensity in any treatment group and no serious drug-related adverse events.

A complete safety evaluation of the fully unwinded data will be conducted with the full 6-month data analysis expected in the second quarter 2021. .

Finally, demographics of the subjects in this trial are generally consistent with other previously-reported osteoporosis trials in postmenopausal women. .

As Spiros mentioned earlier, the trial met its primary endpoint with 2.5 milligram dose group showing a significant increase in the P1NP biomarker after 3 months of treatment, p less than 0.04 versus placebo. .

Similar to the increase in P1NP, a significant increase in osteocalcin, another bone formation marker was also observed in the 2.5 milligram group after 3 months, p less than 0.01. .

And in addition, a significant decrease in CTX was observed after 3 months of treatment, p less than 0.015. The decrease in CTX, taken together with the increase in P1NP osteocalcin, would indicate a potential positive impact on BMD. We look forward to sharing the final BMD data from the trial in the second quarter of 2021.

As a reminder, we reported interim BMD data limited to the first 80 randomized subjects in the third quarter of 2020. .

Based on the interim 6-month BMD data, EB613 generated a mean placebo-adjusted increase in lumbar spine BMD of 2.15%, p equals 0.08 for the 14 subjects in the 1.5 milligram treatment arm as compared to the 16 subjects in the placebo arm. .

An analysis of BMD changes in all EB613 treatment groups showed a significant dose-dependent trend and the percentage increase in lumbar spine BMD. .

Increases in maintenance of BMD are widely accepted by clinicians throughout the world as indicators of an overall improvement of osteoporosis during PTH treatment.

The change in lumbar spine BMD is the recommended Phase III study efficacy endpoint for a novel oral H PTH 1-34 formulation intended to treat osteoporosis and developed using the FDA's 505(b)(2) regulatory pathway. .

A fracture endpoint trial is not required because subcutaneous PTH 1-34, generically named teriparatide for injection, has been shown to reduce the risk of fractures. .

I will now turn the call over to Dr. Phillip Schwartz, our President of R&D. .

Good morning, everyone. I would like to provide you with a brief update on EB612, our orally delivered PTH for the treatment of the orphan disease hypoparathyroidism.

We are developing EB612 to be used as a first-line hormone therapy that would be applicable to patients with different levels of disease severity and are very excited by the recent publication of our Phase II data in JBMR, a leading peer-reviewed journal. .

There is a significant unmet need in the treatment of hypoparathyroidism, and we believe that an oral PTH would improve compliance as well as therapeutic impact.

And may offer patients with hypoparathyroidism in much needed alternative to the currently approved parathyroid hormone replacement therapy options, which are administered via a daily injection. We are continuing to conduct additional formulation work on EB612, including the identification of enhancements that we are evaluating in preclinical models.

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Our collaboration with Amgen for the development of an oral anti-inflammatory agent has continued, and we are pleased with the progress we have made to date.

We are continuing to support the collaboration as it enters its third year and Amgen has completed several preclinical studies that have included the evaluation of different formulations of their drug with our platform and which may be developed for further clinical use. .

We also continue to focus on the development of our platform as it relates to the evaluation of new APIs and believe that these efforts have the potential to generate value through either additional validation of our technology platform and/or through potential business development activities. .

We recently announced a new research program for an oral glucagon-like peptide-2 or GLP-2, an analog based using our technology platform.

The only GLP-2 analog currently on the market, tedaglutide, was approved in 2012 as a once-daily injection for the treatment of short bowel syndrome in the United States and Europe, registering global sales of $574 million in 2019. .

In preclinical models, Entera's oral formulation of the GLP-2 analog has shown a comparable pharmacokinetic profile to a subcutaneous injection. .

On April 29, Entera presented results at the 31st Annual European Pharma Congress in London and a poster titled Pharmakinetics of an Oral Human Growth Hormone Formulation in Rats and Mice.

Prescription Human Growth Hormone, a widely used therapeutic molecule is currently only administered via subcutaneous injection for the treatment of growth hormone deficiency as well as other indications. .

Therapeutic Human Growth Hormone was a $3.7 billion market in 2020 and is expected to grow to $8.5 billion by 2027. In a preclinical study, Entera's Human Growth Hormone formulation was administered orally to mice and rats.

plasma samples analyzed showed substantial gastrointestinal absorption of the oral use Human Growth Hormone formulation and significant systemic exposure to the drug. Our proprietary oral delivery platform continues to present expanding therapeutic applications and corresponding market opportunities.

And Oral Human Growth Hormone may offer numerous advantages including greater patient compliance, reduced pain, longer shelf life, no injection site reactions and lower immunogenicity. .

I'll now turn over the call to Ramesh Ratan, our U.S. CFO, to cover the financial results. .

Thank you, Phillip. Revenues for the 3 months ended March 31, 2021, were $157,000 as compared to $42,000 for the 3 months ended March 31, 2020. With revenues in both quarters attributable to the R&D services provided to Amgen. .

The cost of revenues for the 3 months ended March 31, 2021, and March 31, 2020, were $58,000 and $42,000, respectively, and were comprised of salaries and related expense in connection with the R&D services provided to Amgen. .

Total operating expenses for the 3 months ended March 31, 2021, were $2.5 million and included $1.2 million in research and development expenses and $1.3 million in general and administrative expenses.

Research and development expense for the 3 months ended March 31, 2021, consisted primarily of headcount-related costs and external costs related to the conduct of the EB613 Phase II clinical trial. .

General and administrative expense for the 3 months ended March 31, 2021, was primarily made up of salary and related expenses, including share-based compensation, professional fees, D&O insurance expense and legal fees. .

Financial expenses net for the 3 months ended March 31, 2021, and 2020 are mainly resulting from the remeasurement of warrants issued in connection with our 2018 initial public offering and our private placement in December 2019, which included a second closing in February 2020.

Increase of $7.1 million in the 3 months ended March 31, 2021, is attributed to the increase of the fair value of the warrants, mainly due to an increase in our market share price. .

Net comprehensive loss for the 3 months ended March 31, 2021, was $9.5 million or $0.43 per ordinary share diluted. And for the 3 months ended March 31, 2020, the net loss was $2.9 million or $0.16 per ordinary share diluted.

The change in net loss is primarily due to the increase in fair value for the bonds due to the increase in the Entera's market share price. .

As of March 31, 2021, Entera had cash and cash equivalents of $16.4 million and in our 6-K that we filed today, we will report approximately $15.1 million in cash and cash equivalents as of May 10, 2021. .

Based on our current operating plans, we expect our 2021 operating losses to be approximately $13 million. This is subject to expected timing of product development programs, including EB613, and subject to any continuing impact of COVID-19 on our operations. .

As a result, we believe our cash position will be sufficient to fund our operations into the second quarter 2022. .

I'll now turn the call back to Spiros for concluding remarks before we go to question and answers. .

Thanks, Ramesh. We are excited about the recently reported biomarker results for EB613. We continue to believe that the market opportunity for each of our programs is substantial. The recently released 3-month bone biomarker results demonstrate a clear dose response using our platform to deliver PTH orally. This is excellent clinical validation. .

In addition, the strength of our platform and our balance sheet have enabled us to generate data for several additional molecules such as GLP-2 and human growth hormone. We have data showing that our platform works on molecules of broad characteristics and size. .

To fuel our business development efforts, we have signed material transfer agreements with 3 companies to demonstrate feasibility of the entire platform for their proprietary molecules. I believe these data will support business development discussions and generate future value through strategic collaborations and partnerships. .

[Operator Instructions] Our first question comes from the line of Nathan Weinstein from Aegis Capital. .

Number one, perhaps we could just discuss the oral hGH opportunity.

Maybe you could give us a little insight into the hGH market? What does it look like? Where are those scripts being written?.

Yes. Thanks, Nathan.

Yes, we see -- I'll Phillip also add to the response we see that there -- most of the actual prescriptions of -- prescription hGH are really limited in achieving because of compliance issues with the target patient populations and the truly oral hCH can really overcome the compliance issues that hGH -- injectable hGH has faced historically so -- in this marketplace.

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And so as we develop our sort of further plans around this asset, we'll be updating sort of the market on this. And I'll turn it over to Phillip to add some additional comments. .

Thanks, Spiros. Yes, in terms of human growth hormone, it's primarily utilized or the largest segment of the market is utilized by children with short stature, mostly between the ages of about 10 to 15-or-so.

And frequently, the compliance with those children or their parents being able to get them to take subcutaneous injections every day is difficult. I don't expect there are children, know who are quite compliant and it becomes a normal part of their life. So I wouldn't expect necessarily that this would take over the market.

But there is a very significant segment, perhaps as much as 25% of the market, which are not compliant with the growth hormone injection paradigm. And for that segment of the market, I think this would be a very, very good opportunity and a good solution for that. .

Great. Okay. That's interesting. And so you also mentioned some -- on another subject, you mentioned some material transfer agreements. I think you said there are 3 of them that you're working on.

Could those develop into revenue in the near-term and sort of the way that the Amgen relationship has?.

Yes. Yes. Thanks, Nathan. Yes, that's exactly what sort of model we're pursuing is sort of very similar to Amgen. The material transfer agreement allows us to generate that data, validating that our platform works would be a different sort of proprietary target molecules that the companies have an interest in.

And that's -- that model has worked very well for us to generating a very nice deal with Amgen, and we expect that we will be able to enter into additional collaborations -- funded collaborations and nondilutive funding to Entera to share in these future programs. .

Okay, great. And maybe just one more for me... .

[indiscernible]... .

Yes?.

Yes, sorry, go ahead, Nathan. .

Just one more question. I was thinking about the safety data for EB613 on the 3 months, it looked really good and everything sounded great.

I'm just curious, was there any gastro issues whatsoever?.

I can take that. .

[indiscernible]... .

Art, go ahead, please. I'm not sure if Art's on mute. .

I have -- for a moment here. .

Kind of -- if you want to... .

I just want to point out that we haven't unblinded the treatment groups. I mean there certainly were gastrointestinal adverse events, study this long with as many patients. But right now, we don't know whether they're more frequent in the placebo-treated patients where there's a dose response relationship to those receiving EB613. .

We'll know that when the full data are completely unblinded and we'll analyze those results in June 2021, a not-too-distant future. .

Okay. Let me just add to that, that the -- let me just add to that, that the frequency of all the gastrointestinal side effects that were reported or no greater as far, as we can tell then, are normally observed in those clinical trials. .

So at present, we don't see that there's a particular signal for any gastrointestinal irritation in the population, although we don't know which population they were in with it, they were in the placebo group or in the treatment group. .

Additionally, all of the adverse events that are related were either mild or moderate and resolved very quickly. .

Our next question will come from the line of [ Paul Sun ] from [ Sun's ] Partners. .

One of the things that I noticed is that the -- we have pre-material transfer agreements, which is very positive. But because I look at the Amgen collaboration, which is now going on what I think, 3 years, I worry about the -- whether you guys have set a time limit on people's ability to work with material before they have to do something. .

With a small company and limited amounts of cash, I worry about people just going on and on and on without any benefit to you.

Have you set any time limits on these gentlemen?.

Yes, Paul. That's a great question. Yes. So the way this model works, and I think it's very attractive because we can regenerate the data typically in an animal preclinical PK study that's well established of the target, the proprietary molecules that these other companies have an interest in delivering orally.

And we can generate that data very quickly within 3 months of an MTA, we typically have PK data and that is shared. And so it's a fairly quick ability to demonstrate where the molecule works. .

And to sort of support then discussions around a potential partnership, that's the similar approach worked with Amgen. And so that's why we feel that these MTAs are very important because we can generate very good data quickly, but then we can share the perspective of our companies. .

So would you expect that we might hear some announcements about whether these material transfer agreements have come to fruition between now and the end of this year. .

Yes. I do expect that, yes. .

Okay.

And moving to the next step, would that include upfront payments? Would that, in some way, obviate the problem with -- or to add to the -- to your cash position?.

Yes. I mean, in terms of any any collaboration or sort of licensing deal, we project -- we'll have an upfront component, research funding, if there's joint research funding as with the Amgen deal and then milestone payments and royalties. .

And I think as we're getting into -- our platform is being better validated now is the -- it's the different weighting of the upfront will be different, hopefully it'll make a real impact in our funding needs. .

Paul, just as an example right now is that once the Amgen project started, I think now Amgen has been funding the ongoing work at Entera Bio, so there is no negative cash flow impact on that program. .

And as Spiros is pointing out that once these current preclinical work is done for about 3 months period, that's the investment that we make. Beyond that, I think it has no negative effect on our cash flow because the partners will be funding the R&D effort at Entera Bio. .

In terms of the -- looking at the cash and because the Amgen agreement was recently extended.

Is there any expectation that we might see Amgen move to the next level between now and the end of the year? Or is that something that you can't comment on?.

Yes. Actually, we can't comment on the time line of that. I mean we can't comment that the Amgen collaboration is making forward progress and progressing in the development stages. .

And so that -- and as soon as they hit the next milestone, obviously, that will be evident in our -- because there are milestones associated with those payments. .

I also want to make -- sorry, comment on the -- an additional sort of comment on the MTAs. While we haven't disclosed the amount of sort of specific money, we -- generally, we get payments from these third-party companies. They are paying for these material transfer agreements.

So there is a -- there is some base funding resourcing with the MTAs to cover our costs of these preclinical studies. .

And while we're not disclosing the exact amount, it's, again -- it's geared around covering our costs. And as Ramesh said, this really is no -- absolutely no negative cash impact on how we're evaluating these different opportunities. .

I was going to address your first question, which is -- yes, with the Amgen agreement and with other agreements, there is an option by Entera by the company to suspend the agreement after short amount of time.

So it doesn't go on indefinitely if we feel, for whatever reason, the partner is not pursuing their objectives appropriately and then we can terminate the agreement. .

[Operator Instructions].

I'm not showing any further questions in the queue at this time. .

Thank you, everybody. So just some final comments here. We are continuing with significant momentum in 2021 and have executed on our plans during this first quarter. We're entering some very exciting times and big catalysts of Entera. .

Thanks for taking the time this morning to join our call and look forward to providing you with regular updates on our progress. Have a good day. .

Thank you, everybody. .

This concludes today's conference call. Thank you for participating. You may now disconnect..