Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal First Quarter Ended December 31, 2022 Financial Results Conference Call. At this time all participants are in a listen only mode. [Operator Instructions] Please be advised that today’s conference is being recorded. I’d now like to hand the conference 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 first quarter 2023 financial results was issued this afternoon and is available on our website. On the call today are 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 with 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-K 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. At Enanta, our mission continues to be to leverage our expertise in small molecule drugs to discover and develop groundbreaking medicines. Our fiscal first quarter of 2023 set up a strong data-rich year, positioning us to potentially drive value for our company as we advance our expanding pipeline. Today, I will start by detailing recent advances in our COVID-19 program and then comment on our broad respiratory syncytial virus, or RSV, program as well as touch base on the rest of our pipeline. Beginning with our COVID-19 program, our lead asset is EDP-235, the clinical stage, once-daily, orally dosed inhibitor of the coronavirus 3CL protease, which is currently being evaluated in an ongoing Phase 2 study known as SPRINT. We are pleased to announce that the study has completed enrollment beyond the initial target. As a reminder, SPRINT is a randomized, double-blind, placebo-controlled Phase 2 clinical trial of EDP-235, and approximately, 200 non-hospitalized symptomatic adults with mild or moderate COVID-19, who were treated orally with 200 milligrams or 400 milligrams or placebo once daily for five days. SPRINT was designed to select a dose to move forward in development by evaluating the primary endpoint of safety and tolerability and key secondary objectives, including virologic endpoints and pharmacokinetics. Clinical symptoms and other clinical outcomes such as rebound will also be evaluated in more of an exploratory manner. We anticipate reporting top-line data from this study in May. Based on the study design and previous clinical data demonstrated in our Phase 1 study for EDP-235, we aim to achieve good safety, tolerability and pharmacokinetics to support once-daily dosing. While this study is not powered on any virologic measurement, we will be looking for trends in antiviral activity as well. As COVID-19 persists and variants that…

Thank you, Jay. For the quarter, total revenue was $23.6 million and consisted primarily of $22.6 million of royalty revenue earned on AbbVie’s global MAVYRET net product sales. This compares to total revenue of $27.6 million for the same period in 2021. The decline is primarily a result of continued lower treated patient volumes due to the COVID pandemic. Royalty revenue was calculated on 50% of MAVYRET sales at a royalty rate for the quarter of 12% after adjustments for certain contractual discounts, which are now approximately 2% of AbbVie’s total reported HCV product sales. You can review our royalty schedule in our 2022 Form 10-K. Moving on to our expenses. For the three months ended December 31, 2022, research and development expenses totaled $40.9 million compared to $48.5 million for the same period in 2021. The decrease was primarily due to the timing of drug supply manufacturing and preclinical studies in the company’s virology program year-over-year. General and administrative expense for the quarter was $12.7 million compared to $9.5 million for the same period in 2021. This increase was primarily due to an increase in headcount and related stock-based compensation expense. Net loss for the three months ended December 31, 2022, was $29 million or a loss of $1.39 per diluted common share compared to a net loss of $30.1 million or a loss of $1.48 per diluted common share for the corresponding period of 2021. Enanta ended the quarter with approximately $241.4 million in cash and marketable securities. We expect that our current cash, cash equivalents and 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 into the fourth fiscal quarter of 2024. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q when filed. I’d now like to turn the call back to the operator and open up the lines for questions. Operator?

Thank you sir. I show our first question comes from the line of Joe Kim from RBC. Please go ahead.

Hi. This is Joe on for Brian. Thank you for taking my question. I just wanted to quickly ask you on your latest view on the COVID outlook? And what sort of evolving market opportunity you’re seeing in COVID? Yes, that’s my question. Thank you.

Sure. Thank you. This is Jay. So regarding the outlook, it’s been certainly a rough few years in terms of the pandemic. And I think there’s a migration to the endemic phase of this. But we see it as a tremendous opportunity that will probably ultimately settle down to be something more than flu. And obviously, there’s several different angles you can think about playing with a product like EDP-235 over the longer term. You can think about high risk patient populations. You can think about standard risk patient populations. You can also think about possibilities and long COVID and also from a post-exposure prophylaxis perspective. And so all of these are potential avenues to build over time and to grow. But we don’t see this virus going away anytime soon if ever, and that it’s likely to persist in a very meaningful way in a public health perspective. So…

Thank you.

You’re welcome.

And I show our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Hi, this is Emma on for Yas. Thanks for taking our questions. We are wondering that based on your market research, how cumbersome is the return of your boost for paxlovid and what is the appetite among physicians for EDP-235 adoption? Thank you.

Well, I think, ritonavir is definitely not a desirable, ultimately it adds complexity. You’re trying to treat a respiratory virus with a respiratory viral drug, a protease inhibitor, and you’re adding an HIV protease inhibitor just to boost the drug levels in the case of paxlovid. So it’s really the boosting agent that leads to many drug-drug interactions as it relates to ritonavir. Ritonavir also has a taste problem and we – paxlovid as it’s currently being administered is three pills in the morning, three pills in the later part of the day, and then four or five days. So it’s a 30 pills in total. The doses that we’re selecting in our SPRINT study for evaluation either of those we believe can ultimately be formulated into single tablet, which could be one pill once a day based on the pharmacokinetics that we’ve observed in Phase 1 healthy clinical trials. So, if we can achieve one pill once a day with a very potent and effective drug and not have a boosting agent that leads to lots of drug-drug interactions and complexities for physicians that’s an attractive product profile everywhere we’ve checked.

Yes. We compile our next question. And I show next question comes from the line of Brian Skorney from Baird. Please go ahead.

Hi, this is Luke on for Brian. Since SPRINT excludes elevated risk patients, would you have to do any additional safety work before going into a pivotal in a higher risk setting?

Not necessarily. I think, certainly Pfizer went from Phase 1 healthies into high risk. I recognize that was at an earlier time. But we’re currently in discussions with regulatory agencies. But at this time, there’s no reason to suspect a different safety profile of the drug in that patient population.

Next question?

Thank you. And I show next question comes from the line of Roanna Ruiz from SVB Securities. Please go ahead.

Hi. Thanks for taking the question. So maybe tagging on to some of the COVID questions. I was curious about your new PLpro mechanism antiviral. How do you expect that to fit into the treatment landscape in the future, especially when it’s possible there could be multiple 3CL protease inhibitors available assuming they get approved?

Sure. Thanks, Roanna. So I think, Enanta when we go after a virus, we usually don’t sit tight with one mechanism, especially when it’s a new virus that no one has approved drugs for. So when we started working early on in the pandemic, we went after multiple mechanisms including 3CLpro, and PLpro. 3CLpro gave rise to our first candidate sooner than PLpro. But at the end of the day, no one’s really had the opportunity to study a PLpro in clinical trials. So whereas there may be multiple 3CLpros across the line, ultimately, again, we think the best product profile will win longer term. But we also wonder out loud, could a PLpro have other advantages over a 3CLpro. We know that PLpro, like 3CLpro is a critical enzyme and viral replication. So either protease inhibitors should be able to knock down the replication part of it. But PLpro also has a role in blunting the innate immune response of the host. And we wonder if there couldn’t be some extra impact that you could have in a treatment by having an PLpro inhibitor that not only shuts down replication, but may also block the suppression of that innate immune response. So in this sort of a situation, more drug choices are better than fewer. We don’t believe at this time that there’s any reason to believe that combination on top of a 3CLpro is necessary, but that might not always be the case. And also there may be special patient populations where you’ll want to have two drugs to try to help the person rather than just one. So for all these reasons and especially where we are and fully understanding this virus. It’s good to have multiple shots on goal and we think the PLpro is really interesting. We’ve got some great chemical matter and we’re pushing as hard as we can to bring that forward as a candidate.

Thank you. And I show next question comes from the line of Akash Tewari from Jefferies. Please go ahead.

Hi, this is Amy on Akash. Thanks so much for taking our question. On the SPRINT trial, I know you indicated that it’s not powered to show viral load reduction, but would love to kind of hear any sort of color on what it is powered to show in terms of symptom benefit or any other endpoints that you think is relevant? And what are you specifically looking for in the data in order to move forward? And additionally, what are the big inflection points in your view where you’re looking to partner out the program ideally? Thanks so much.

Yes. So I think all this sort of hangs together. The primary endpoint as we’ve disclosed previously is safety and tolerability. It was not powered on these other parameters. It certainly wasn’t powered on a symptomatic readout. But nonetheless, these are things that you look at as secondary endpoints to gather as much information as you can in terms of what factors – what symptoms might have been modulated the most in – with this current variant that the drug was tested against. So this is all important information to capture as you’re planning Phase 3. We’ll also be looking for trends and viral loads to help us select a dose. Typically with these protease inhibitors, you see – maybe about a log, you don’t see profound viral load drops the way these things are measured in these studies. But nonetheless with the trial that’s roughly around 200 patients we did over enroll the study. But I think hopefully it’s set up to give us what we need to know about safety and tolerability between doses, look for trends in the virology between the doses and anything else we can get out of this study is gravy, so to speak, as we’re planning Phase 3 studies. So this data is obviously what we’re trying to achieve in the SPRINT data and you indicated questions about what’s appropriate for a partner. Partners always have what they want to see, but suffice it to say, the data package that we’re putting together continues to build into something that’s very interesting and perhaps best in class.

Thank you. And I show our next question comes from the line of Matthew Hershenhorn from Oppenheimer. Please go ahead.

Hey, this is Matt on for Jay Olson as well. Thank you so much for taking our questions. So we were wondering for the hMPV/RSV dual-inhibitors, could you just talk about the potential utilization in the real world? How common, for example, is it for patients to have a co-infection and also how will the dual inhibitor impact EDP-938 and EDP-323 development? Really appreciate it. Thank you.

Sure. Thanks for the question. So the dual inhibitor, to be clear, we’re not looking for co-infected patients, although they could exist. I think that would be a relatively rare thing. It might be more common to be infected with COVID in RSV or COVID in human metapneumo. But even that co-infection in these specific instances is probably rather rare. And so instead, the way we’re thinking about it is more of a broad spectrum antiviral one that we could use to treat either infections so that regardless of whether it was RSV or human metapneumo in the diagnosis, you could just use one drug to take care of both of them. RSV also a virus that most pediatricians can tell an RSV infection just based on bronchiolitis and other sorts of symptoms. And so, someday it might even be used to treat patients presumptively for those infections. And having the comfort that you could treat either RSV or human metapneumo would be a great advantage. I’ll kind of go back to my earlier point. When we get into an area, we don’t usually just pick on one mechanism for a drug or one drug class. We like coming forward really understanding especially in an area like RSV and human metapneumo, where there are no approved drugs. We want to have as many different mechanisms in classes that we can bring forward. Ultimately, there will be comparative data that we’ll have. We may elect to select them into different patient populations. And in some instances, there may be reasons to do combinations. You didn’t ask about our health protein inhibitor for RSV 323, but that’s another mechanism that we have in addition to 938. So we have a lot of optionality going forward.

Thank you. And I show our next question comes from the line of Ed Arce from H.C. Wainwright & Co. Please go ahead.

Hi, Jay. Thanks for taking our questions. Really just one on EDP-323 in RSV with data in second quarter, as you mentioned. Just wondering this study is obviously in human volunteers. So there’s really no opportunity yet for virological data. But I’m just wondering what kind of – what criteria are you looking at? How should we judge this early safety and PK study results? How would you judge it to move forward? And as you think about next steps, when do you think we could get initial efficacy data? Thanks.

Thanks, Ed. Yes, so 323 data in Q2, it’s a standard Phase 1 in healthy trial. But the good news is, when it comes to virals, that tells you an awful lot and can, in fact, do a lot of de-risking of the asset, as you know. So, we’ll be looking at safety, PK, especially PK. Not that safety is not important, but PK is where you really dial in your dose selection for future studies. And there, we always aim for a once-daily dosing, that’s always our target. So, we hope to achieve once daily dosing that gives adequate trough level concentrations at the 24-hour time point to deliver good pressure on the virus in terms of multiples of the EC90. So if we can do all of that, that’s certainly what we’ve done with our other antivirals and our preclinical modeling suggests that we’ve picked doses to achieve that in this study. So, we’ll soon enough know the answer to that. And then assuming that the data are good, you can think about – probably, the quickest way to get any viral data would be to do a challenge study, which you can also use to check antiviral effect, you can look at symptoms, and you can also further would find any dose decisions that you might be wanting to make for other more advanced studies. So, I think that’s the broad layout for the year.

Thank you. [Operator Instructions] And I show our next question comes from the line of Eric Joseph from JPMorgan. Please go ahead.

Good evening. Thanks for taking the questions. Just a couple on 235 in COVID. I’m wondering if there’s a clear sense of the types of endpoints that would be needed to support registration for COVID antiviral. Just given where we are with the vaccine exposure and prior virus exposure, has there been any shift, I guess, from the precedent set by Paxlovid and Lagevrio? And then secondly, assuming compelling data from SPRINT, I just want to get a sense of the sequencing event of events from here between partnering and launching the Phase 3 study? And I guess specifically, whether your cash guidance through fourth quarter next year anticipates full execution of the Phase 3 trial, whether you could do it alone? Thanks for taking the questions.

Yes. So, I think we’re setting ourselves up to collect SPRINT data, assuming it’s as expected, having discussions with the regulators to design that Phase 3 study. There’s lots of different possibilities in terms of how you could think about that in terms of end points. Maybe I’ll let Tara Kieffer here elaborate on that a little bit further, but with regards to partnering, will – that timing will be that timing. And I’m not going to co-mingle that with SPRINT Phase 3 start or data collection. So, we’ll give updates on each of those tracks as updates are relevant. From a cash perspective, we would position ourselves to be able to do that ourselves. Obviously, it depends a lot on what Phase 3 development plan you choose and how those Phase 3 designs are ultimately implemented in terms of trial size, et cetera. But right now, I think we feel reasonably good about that. So maybe I’ll turn the call off to Dr. Tara Kieffer here. She’s our Senior Vice President of New Product Strategy Development. We’ve been thinking a lot about Phase 3 stuff along with our clinical team about possible endpoints and so forth. Again, we will ultimately select it after discussions with the agency. So nothing that we’re going to declare today, but there’s different possibilities. Tara?

Sure. Thanks, Jay. Hi Eric, thanks for the question. This is Tara. So, I think if you think about Phase 3 trials for COVID, there’s a number of different strategies that one could think about, including different patient populations. So a high-risk patient population, standard risk population. There are currently Phase 3 studies going on in both of those populations, also ones that have mixed populations. In terms of endpoints, there are studies looking at hospitalization and death. Obviously, the rates are lower than what they were at the peak of the pandemic with different variants coming along now. However, some of the strategies being used would include high-risk patients that really focus in on those – a subset that have a higher risk and really elevating that event rate. Other endpoints that are being used are looking at symptoms. So [indiscernible] has an ongoing Phase 3 trial now that’s looking at a symptom endpoint, and they had shown data from their other Phase 3 trials being run in Asia where they did see a significant effect on symptoms looking at a subset of five symptoms that were shown in their Phase 2b study to be more correlated with an effect. So, I think there’s a number of different strategies one can use. We’re obviously thinking about all of those, among others, and having discussions with regulatory agencies as we move forward to our next phase.

Thank you. And I show our next question comes from the line of Roy Buchanan from JMP Securities. Please go ahead.

Hey, thanks for taking the question. I guess one on 514. Any changes to your confidence in the capsid inhibitors? Doesn’t sound like it. Maybe more concretely, are you shifting to look more externally or internally versus your prior expectations, I guess, for partnering candidates? I’m just thinking of J&J’s comments around their hepatitis B program. GSK going into Phase 3 with just an ASO, and then any change to your thinking? Thanks.

No change to the thinking. I think our core inhibitors are still an impactful class of HBV drug. I think, ultimately – whereas we’re doing a little bit internally, we’re looking externally at the landscape for other possible options. But I also think it’s important while we’re in sort of this phase to be thinking about other data sets that are going to be ultimately coming from others, which may inform potential other combination ingredients. And so I would say, we’re not in a hurry to push something ahead just to do it. We’re being very thoughtful and disciplined on this front. And until or unless we’ve come up with that solution, we’re not going to just push a dual-acting regimen forward in clinical development and spend that money and manpower on it. So, I think it’s going to be a little bit more watching and analyzing and a little bit of doing.

Thank you. And I show our next question comes from the line of Akash Tewari from Jefferies. Please go ahead.

Hi, this is Amy again. Thanks very much for taking our follow-up. Just wanted to get your thoughts on – so Pfizer recently made some interesting comments that competitor COVID antivirals won’t be on the market until around 2025, and they could show worse efficacy because of the lower event rate. Would love to get your thoughts on these comments.

Well, it’s – anything is possible. I think, Paxlovid today, if you put it in a clinical trial, which show probably a lower event rate as well. But you – again, you can never know how to speculate on that. I think the variance continued to change. I think people will be looking at different things, but at the end of the day, we think you can show clinical significance and important patient populations and with an easier-to-use drug that doesn’t have some of the liabilities I mentioned earlier on the call. So either way, I think there’s going to be room for other drugs out there that are more conveniently dosed.

Thank you. And I show our next question comes from the line of Brian Skorney from Baird. Please go ahead.

Hey, this is Luke again. Just one more for us. On SPRINT criteria, is there any reason to expect meaningfully different antiviral or clinical impact in patients treated after five days of symptoms as opposed to someone who goes and then gets treated on day one? And is that a cross-section you’ll look at when you cut the data?

We’ll have a little bit of a cut in terms of timing on that. I think it’s less than three days versus greater than three days up to five days. So, we’ll see what we see. In general, almost always, the earlier you treat is more optimal. But COVID has been a little bit more forgiving than some other viruses. So we’ll just wait and see. We’ll collect the data and look at it, and again, that will help inform how we progress.

Thank you. And I do show we have another question from Roy Buchanan from JMP Securities. Please go ahead.

Hey, thanks for taking the follow-up. Jay you mentioned some combo trials that you’re tracking, data readouts that are coming up. Can you tell us what those are?

Maybe I’ll turn that over to Tara. You’re talking about an HBV again?

Yes. Thanks.

Sure. Roy, hi it’s Tara. So we’ll certainly be looking at all the combination studies that are going on out there today. So that would include Roche’s larger trial that is looking at combinations that they have with their siRNA and immune modulators. Also [indiscernible] is running a number of trials now with their siRNA as well as looking at therapeutic vaccine. They’re also doing a trial with their monoclonal antibody combination and also one with interferon. And then they’re additionally looking at one with a TLR-8 from – that’s in combination with Gilead. Our Arbutus a couples ongoing. They have an siRNA in combination with interferon. So we’ll be looking at that trial as well. GSK obviously is moving forward with their ASO alone and in combination with Interferon. So we’ll be curious to see readouts for all of these trials.

Thank you. That concludes our Q&A session. I show no further questions at this time. I’d like to call back over to Jennifer Viera for closing remarks.

Thank you, operator, and thanks to everyone for joining us today. If you have additional questions, feel free to contact us by e-mail or call us at the office. Thanks, and have a good night. Bye-bye.

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