Good afternoon, and welcome to the Synthetic Biologics' 2020 Year End Investor Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. At this time, I would like to turn the call over to Vincent Perrone, Director, Corporate Communication at Synthetic Biologics. Please go ahead.

Thanks, Gary and good afternoon, everyone. Welcome to Synthetic Biologics 2020 year end investor conference call. Today, I'm joined remotely by Steven Shallcross, Chief Executive and Financial Officer; Dr. Michael Kaleko, Senior Vice President Research and Development; and Dr. Vince Wacher, Head of Product and Corporate Development. Synthetic Biologics issued a press release this afternoon, which provided operational highlights and reported our financial results for the year ending December 31, 2020. The release can be found on the Investor Relations section of our website. During our call today, we'll provide an operational update on our GI and microbiome-focused clinical programs and summarize our financial results. We'll take questions after prepared remarks. In addition to the phone line, this call will be streamed live via webcast and will be archived on our website www.syntheticbiologics.com for 90 days. During this call, we will be making forward-looking statements regarding Synthetic Biologics' current expectations and projections about future events. Generally, the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions. These statements are based upon current beliefs, expectations and assumptions and are subject to a number of risks and uncertainties, including those set forth in Synthetic Biologics' filings with the SEC, many of which are difficult to predict. No forward-looking statement can be guaranteed and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call and Synthetic Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events or otherwise, except as required by law. With that, I'd like to turn the call over to Steve. Steve?

Thanks, Vincent. Good afternoon, everyone and thank you for joining our 2020 year end investor conference call. I hope everyone is staying safe and healthy, as we continue to navigate the global health crisis sparked by the COVID-19 pandemic. It was a busy year and the start of the New Year for the SYN team. I'm very excited to be with you this afternoon to share our operational highlights and financial results. I'd like to start our call by saying that, we're more encouraged than ever by the outlook for our business. We've made important progress this year by advancing and demonstrating the significant of our pipeline of GI and microbiome-focused clinical programs and as we look ahead in 2021 and 2022. There are more reasons than ever to be excited about our company's future prospects. Before I give you an update on our two lead clinical programs. I'd like to provide a brief recap of several operational milestones which have unquestionably allowed us to strengthen our balance sheet and position our company for what I believe will be significant long-term growth as well as the delivery of multiple short and long-term clinical milestones. Starting in January, favorable market conditions triggered the exercise or the cash exercise of approximately 65% of the warrants associate with our 2018 public financing and allowed us to efficiently utilize our aftermarket facility. In addition, the conversion of all of our outstanding shares of Series A and Series B convertible preferred stock into common stock have not only further helped streamline our capital structure and balance sheet. But allowed us to position the company to meet the conditions to fully regain NYSE listing compliance. As a result of these activities, we're pleased to announce that our current cash balance is approximately $72.6 million, the strongest…

Thanks Steve. I welcome this opportunity to discuss the SYN-020 program and to outline the anticipated clinical program in our selective indications. We're about to reach an important milestone with the first clinical trial scheduled to begin next month. SYN-020 is a high specific activity form of intestinal alkaline phosphatase which I'll refer to as IAP, produced recombinantly [ph] [indiscernible] cells and delivered orally. It's formulated to be protected in the stomach and released in the upper small intestine. SYN-020 is resistant to digestion and it is anticipated to remain in the GI tract and eventually emerge in the stool inactive form. IAP is an endogenous enzyme produced by the cells that line the small intestine and it has multiple functions. Three in particular, first it removes the phosphate from inflammatory mediators such as endotoxin to diminish local inflammation GI tract. Second, IAP acts directly on the cells that line the GI tract to improve barrier function and diminish so called leaky gut and third, IAP serves to maintain a healthy microbiome. The combination of these three functions suggests that in addition to its role in diminishing GI inflammation IAP may also diminish the low-grade systemic inflammation that has been associated with metabolic diseases and with ageing. The therapeutic potential of IAP supplementation has been verified in many animal studies. Oral administration of IAP to rodent has been efficacious in virtually every model of colitis as well as models of metabolic syndrome and liver disease. Interestingly, a recent publication from our collaboration Dr. Richard Holton at Massachusetts General Hospital, show that long-term supplementation of IAP in mice diminish the inflammatory and metabolic changes that occur with normal ageing and prolonged the mouse lifespan. Why then haven't other companies developed oral IAP products? The answer would seem to be, that it's…

Thanks Mike. Our SYN-020 platform technology has a remarkable opportunity to help address a considerable unmet need for innovative new therapies targeting GI disorders stemming from immune and inflammatory responses including celiac disease. Currently, there are no FDA approved therapies to treat celiac disease and disease management predominantly relies on lifestyle modifications and adherence to a strict gluten free diet. Across the six major markets, the total prevalent cases of celiac disease are expected to increase from 5.8 million cases in 2013 to an expected 8.1 million cases in 2023 representing an annual growth of approximately 4%. During the same period prevalent cases in the US are expected to increase from 2.8 million in 2013 to an expected 4.3 million in 2023 representing a significant market opportunity. Non-alcoholic fatty liver disease is also an indication with high unmet need. It is estimated that the worldwide prevalence of non-alcoholic fatty liver disease is anywhere from 6% to 33%. In the US, non-alcoholic fatty liver is highly prevalent with an estimated prevalence of approximately 30% in the general population. Non-alcoholic fatty liver disease is also strongly associated with metabolic syndrome and like celiac disease no approved pharmaceutical therapies are available to treat this illness and disease management is dependent on lifestyle modification. I hope we've conveyed our excitement for this [indiscernible] program and its potential to become a platform therapeutic for our company. We believe SYN-020 will play a major role in delivering long-term value to our shareholders while targeting large underserved markets including celiac disease. With that backdrop, I'll review our financial results for the year ended December 31, 2020. Throughout 2020, we operated very efficiently. We remained focused on prudent cash management and continued to identify areas to further reduce non-essential operating expenses. We ended the year with approximately $6…

Gary, we'd like to open the phone line to questions. Can you please describe the procedure to ask questions for our listeners?

[Operator Instructions] our first question is from Jim Molloy with Alliance Global Partners. Please go ahead.

Thanks for taking my questions, assuming a lot going on as change from previous calls. As you've been cashing in and it looks like you've an exciting 2021 siding up here. I'd love to go through some of the NAFLD. I think at right at the end you were talking about the Phase for the NALFD and because we're wondering on the Phase 1 you're currently running for celiac [indiscernible] is going to separate Phase 1 for that and what's kind of timing on that?

Thanks for the questions, Jim. I'm going to let Mike take that question and walk you through the Phase 1 programs and as you'll see from his discussion. The data that we gather from Phase 1 study will allow us to advance the program in multiple indications for Phase 2. But I'll let Mike walk you through that again.

Okay, thanks. So the initial Phase 1 studies will be a Single Ascending Dose and a Multiple Ascending Dose study. Those should both, Single Ascending Dose study will be completed this year. The Multiple Ascending Dose study will start this year and will be completed early next year. Both of those are in normal healthy volunteers. They're designed to demonstrate safety tolerability and bio distribution. We would like to show the SYN-020 phase in the GI tract which it should and not moving to systemic circulation. Once those safety studies are completed then we go into a Phase 1b/2a study in celiac disease. That's the challenge study and that should start in the middle of next year and that will be followed by a Phase 2b study in celiac patients shortly thereafter. Now as a separate indication there's non-alcoholic fatty liver disease. Okay that will start as a Phase 1b study in patients with mild elevations of liver enzymes and we expect that during that study, where we hope to see the liver enzymes diminish and will also be following other metabolic parameters towards heart [ph] validations in those patients. Now those two patient studies celiac and non-alcoholic fatty liver disease are independent. They're both supported by the Phase 1 SAD and MAD studies in normal healthy volunteers. But the patient studies are independent. At the moment we plan to start the celiac study very shortly after the MAD study in normal healthy volunteers is finished and then somewhere along the way. We would move into non-alcoholic fatty liver disease and the timing for that is not yet determined. But it can potentially be run in parallel to celiac. It is not dependent upon celiac. Does that clarify things?

That does very much clarify things. Thank you very much. To get a lot of trials around it. So the starting - thank you for laying that out.

Yes, it's pretty cool.

What we anticipate for spend for 2021 with these various trials you guys burned through about $10.1 million, $10.2 million in 2020 down from obviously again as you - down from $15.6 million last 2019. Do we get back to 15 levels with the cash on hand and trials ramping up or we stay sort of somewhere between 10.15? Any guidance on that?

Yes, I would expect our fixed burn to stay in the $400,000 to $500,000 a month. That might start to increase a little bit more next year. The Phase 1 study that will be conducted starting this next month. The SAD study it's probably around $1 million study. The second one, the MAD study you could probably think about it in terms of $1.5 million. The ongoing trial is about to get underway Wash U. as we previously disclosed that's about $3.6 million trial, about $700,000 has already been spent on that. So that's under $3 million or so that would be spread over the next 12 to 18 months. The Phase 2 programs, we haven't finalized our cost on that yet. So when we have a little bit more clarity on that. We'll share that. Does that help you out?

Very helpful. Thank you and then just my last question, you have a couple other programs obviously didn't work out and as the nature of drug development. SYN-010 and sort of the thoughts on C. diff program, what should we anticipate you guys want to do with this compound? Is there something that - any interest from potential partners or these are just pretty much going to be shelved for the future?

So the SYN-010 program, we've discontinued our license with Cedar Sinai, it was a mutual termination. So we're not spending any more money on that program and we've moved on from it. I'd let Vince Wacher, talk about our long-term strategy as it relates to SYN-004 or ribaxamase. And where we're beginning and ultimately how we could get to a broader C. diff indication? Vince, you want to take that?

Thanks, Steve. The C. diff compounds and the bone marrow, the allo HCT compound are one and the same. Exactly the same product. We're pursuing the bone marrow indication because it enables us two events. The product more effectively and for in a smaller number patients in smaller clinical trials and ideally, with a greater number of endpoints that we can evaluate to help move that program forward. The mechanism is exactly the same for both indications the bone marrow transplant and the C. diff. and in fact, preventing C. diff is an anticipated outcome in bone marrow transplant patients in addition to reducing aGVHD. So this one of the ways to think about the overall development plan is that we start with the bone marrow transplant patients looking at aGVHD, looking VRE colonization, and also looking at C. difficile and other opportunistic infections that data can be leveraged to move into broader populations stated references to sort organ transplant population. We know that they have issues with opportunistic infections in those immunosuppressed patients so that's an indication where we expanded would be more focused on the opportunistic infections like C. diff. and then ultimately using the data to accumulate as we move through these increasing indications to get back to the broader use in C. diff which as we've explained before required a massive Phase 3 trial that was beyond us at the time and so we're pursuing this more focused approach to get the product forward and generate that data.

Thanks and thank you for taking the question.

Your next question is from Jason McCarthy with Maxim Group. Please go ahead.

This is Michael Okunewitch on for Jason. Thanks for taking my question and congratulations on the progress. It seems like things like are really moving forward now. I'd like to ask regarding the trial design for SYN-004, if you could give a bit more than that. Like the overall timeline for the study and which antibiotics from the three cohorts. And which of the cohorts is the one you're expecting to readout by year end?

Why don't you go ahead Vince and that take one as well?

No problem. So the three cohort study and each cohort uses a different antibiotic and the way that they're staged is to minimize risk to the patients based on the potential effects of SYN-004. So to quickly recap SYN-004 degraded penicillin and cephalosporins in antibiotics that penem antibiotics. So what we want to do is that start with a carbapenem antibiotics in our first cohort and measure the potential for absorption of SYN-040 and what would be considered the cohort of lowest risk, if there was any absorption because our product doesn't degree carbapenem's. even if it got it - now we don't believe, it will, even if antibody [ph] to affect the antibiotic because it's a carbapenem. If that cohort proves to give us the results that made if we have a successful completion of that cohort, that's the one that will initially readout and the data we will get from that will be safety and tolerability to add SYN-040 in the target population, will also get a read on whether or not SYN-040 is absorbed into the circulation of patients within impaired vary assumptions. Those are two key questions that the FDA had for the program in general. So with that data in hand, we will be able to proceed to the next cohort which will be to pursuing beta-lactam which is a cohort where the pursuant can be degraded by SYN-004 was present in the circulation but as beta-lactam stops it from doing that. So these patients have a mind, they have a body guide for their antibiotic that would, if our product absorbed would prevent it from degrading. So that's the next risk level. That's again a cohort that would readout subsequent to the first one and give us another set of PK data and other set of antibiotic data and safety data. And the final cohort is [indiscernible] born antibiotic and that antibiotic is exposed, it has no, it could be degraded by our product and it is also got nothing to protect it. So it is a product that, that's the final cohort that we would run because that's the one way, if that our drug got into circulation it would be highest risk degrading the antibiotic.

All right, thank you and then I'd actually touch on the M&A side of things. You mentioned that business development is a potential and it wouldn't be surprising given, you a fairly stable cash balance at this point. So what sort of compounds we could be looking for? It seems like you guys have expertise in GI microbiome health as well as GI delivery of drugs. So could you help narrow down which disease areas or which type of drugs you might target?

I think it's best that we kind of hold our cards a little tight at the moment. I could tell you this, we've been evaluating many opportunities and some are little bit further along than others in diligence. And I'll just say, when we're ready to talk about those details will get that out and disseminate it accordingly. But we just prefer to keep our cards close to this point.

All right. Then I have one more, I'd just like to touch real quick on some of the existing safety data out there for IAP. I mean obviously you don't have anything for SYN-020 quite yet, but IAP has been out there. Patients radiation enteropathy and severe celiac maybe willing to take on some safety risk for some adverse event. But disease like well controlled celiac and [indiscernible] which is largely asymptomatic maybe this will in take those risks. So how does the safety look like for IAP in general?

Mike, you want to take that?

The IAP as I said is an endogenous enzyme, it's in your intestines all the time, although we're using a bovine version of it because it's got a higher specific activity. The safety profile for IAP is very good. I admit, it would be even more if use of - I don't think that's necessary at this point. For our SYN-020 we saw virtually now adverse events in canine and mouse studies that were six-week long. They're at doses up to 54 the anticipated clinical dose. Now other companies have developed both bovine and human IAP products. Most notably though, who are intravenous use. In the safety studies again there was pretty much fairly remarkable profile, that really don't want to speak completely for other companies because I'm not privy to their data. But for the most part, the intravenous delivery human IAP in patients at doses that increase the outgoing [indiscernible] level, I believe about 500-fold, the background was well tolerated and there's been one oral study, with bovine IAP again very well tolerated that was an also colitis patients. I think that's probably that is, you can consider the safety profile that we anticipate to be quite good. We anticipate a very reasonable risk benefit ratio even for diseases that are not fatal. And I'd finally add that celiac disease yes there are patients who are healthily following on a gluten-free diet. But that's a really unpleasant diet. There are a large percentage of patients who are healthy following on a gluten-free diet and some may have refractory disease. So I don't think we'll have trouble finding or I don't - that you'll trouble finding a patient population to as a home to our SYN-020 and I think you know that among patients with non-alcoholic fatty liver disease maybe 20% of them will go on to get rash, which is associated with fibrosis, cirrhosis and occasionally cellular carcinoma. So again I don't think we'll find difficulty finding a patient population for SYN-020, does that answer your question?

Yes, great answer. Thank you very much.

This concludes our question-and-answer session. I would like to turn the conference back over to Steve Shallcross for any closing remarks.

Thanks Gary. Before we end the call, I'd just like to make a few final comments about our company. First, I'm incredibly proud of our talented team who have just worked countless hours to get us where we are at today. The effort takes into to advance our programs just could not have happened without their dedication and persistent drive to help a patient population that just continues to be underserved. Second, we're in the strongest financial position in the company's history and because of this we're now very, very well positioned to not only fund our clinical programs for the next two years. But to deliver on multiple clinical milestones over the next 12 to 24 months, so the value of these programs and that we've under development can be further supported and potentially the value, potentially fully realized by the markets. And we also have this great, great opportunity finally to go out and acquire or license new technologies to further expand our product portfolio and add additional shareholder value. So in closing, I'd like to thank our long-term shareholders for their ongoing support and also just welcome any new shareholders that have discovered us and are equally excited to be a part of our great company. I promise that 2021 will be an exciting year and we look forward to just keeping you informed and updated on our progress. Have a good weekend and we look forward to talking to you next time. Thank you.

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