Good afternoon and welcome to Enanta Pharmaceutical's First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of the prepared remarks. Please be advised that this call is being recorded. I would now like to turn the conference over to Jennifer Viera Investor Relations. Please go ahead.

Thank you, operator and thank you to everyone for joining us this afternoon. The news release with our fiscal first quarter financial results was issued this afternoon and is available on our website. On the call today is 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-Q 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. Our fiscal first quarter was an exciting and productive time for Enanta as we continue to advance our robust wholly-owned pipeline. We currently have six ongoing clinical trials; two in respiratory syncytial virus; two in hepatitis B; and two in non-alcoholic steatohepatitis; as well as three respiratory virus discovery initiatives including our recently announced RSV L inhibitor to complement our hMPV and COVID-19 programs. We also recently introduced a new selective oral HBV RNA destabilizer that is advancing toward the clinic mid-year. I'd like to take a moment and acknowledge the commitment and dedication of our employees who continue to go above and beyond contributing to the significant pipeline progress we have made across our business. We continue to build out our team with talented individuals and just this quarter made three significant new hires who will contribute to the company's growth. We look forward to their contributions over the coming months as we approach several significant milestones. In December, Dr. Tara Kieffer joined us from Vertex as Senior Vice President of New Product Strategy and Development. Tara brings over 20 years of scientific expertise in infectious diseases and product development. In January, we announced Dr. John DeVincenzo one of the most highly regarded investigators in respiratory syncytial virus who will be joining the Enanta team. For the past 30 years, John has played a significant role in many of the major RSV clinical trials. Most recently we were pleased to announce Brendan Luu as our Senior Vice President of Business Development, a role to which he brings over 20 years of diversified business development and sales and marketing experience in the pharmaceutical and technology industries most recently at Merck KGaA. Turning to our pipeline, I'm excited to review the progress of the past quarter in more detail and share our plans for multiple catalysts throughout 2021. I'll start with RSV where we are advancing a robust clinical development program consisting of two ongoing studies and one planned study of EDP-938, the only RSV N inhibitor in clinical development today. RSV is a severe respiratory infection associated with significant morbidity and mortality in infants, the elderly, and immune-compromised adults, a condition for which there is currently no safe and effective therapy. Globally, there are an estimated 33 million cases of RSV annually in children less than five years of age with about three million hospitalized and approximately 118,000 dying each year from complications associated with the infection. The first of our ongoing studies is RSVP, a Phase IIb double-blind placebo-controlled study of EDP-938 designed to enroll approximately 70 subjects who are randomized to receive either EDP-938 or placebo for five days. Currently, the RSV season in the Northern Hemisphere has not begun due to the continuing COVID-19 mitigation measures. We believe that when these measures subside, RSV will reemerge and recent modeling is even predicting large future outbreaks of respiratory viruses especially influenza and RSV. In fact this has already occurred in New South Wales, Australia's most populated state where a recent government surveillance report showed a steep increase in RSV rates that experts believe was due to relaxed social distancing measures. Further, the RSV rates were even higher than the usual average peak in the last five years despite being delayed by several months and this peak occurred in Australia's summer season when these cases are usually low. Also the scarcity of RSV cases during the pandemic is breaking a chain of immunity in children who normally get repeated exposures to RSV and build resistance in the first few years of life. This has allowed for a larger vulnerable patient population which experts believe may result in higher than average levels of RSV when the virus reemerges. That said, we believe RSV will reemerge and our strategy is to be ready across the globe with clinical trial sites ready to go when the hotspots emerge. For example, we are setting up trial operations for RSVP not only in North America, but also in Europe, the Pan-Asia territory, and the Southern Hemisphere aiming to more than double the number of sites globally. We'll provide updated guidance on RSVP timelines as RSV becomes prevalent again. Turning to our other RSV clinical trials, in December, we initiated RSVTx, a global multicenter Phase IIb randomized double-blind placebo-controlled study evaluating the efficacy and safety of EDP-938 in adult hematopoietic cell transplant recipients with acute RSV infection of the upper respiratory tract. The study is designed to enroll approximately 200 adult subjects with the primary objective of evaluating the effect of EDP-938 on the development of lower respiratory tract complications in these transplant patients who will receive EDP-938 or placebo for 21 days and then be followed for 28 days. We are also currently planning to initiate our third RSV Phase 2 study, RSVPEDs later this quarter. This is a global multi-center Phase 2 double-blind placebo-controlled dose-ranging study of EDP-938 in children aged 28 days to 24 months. It is designed to enroll approximately 90 hospitalized or non-hospitalized infants and children with RSV. The study will have two parts. In Part 1, the primary objective is to evaluate the safety and pharmacokinetics of EDP-938 and multiple ascending doses in four age cohorts, oldest to youngest, while the objective in Part 2 is to assess the antiviral effects against RSV. In each part, subjects will be dosed for five days and then followed for 23 days. Beyond these three trials, we are excited about the expansion of our RSV program with the introduction of RSV L-protein inhibitor discovery initiative that includes potent nanomolar leads against both RSV-A and RSV-B. Similar to 938, we are focusing on replication inhibitors as this non-fusion approach directly targets viral replication as opposed to viral entry. RSV L-inhibitors are not expected to have cross-resistance to other classes of inhibitors, and therefore can potentially be used alone or in combination with agents targeting different RSV mechanisms such as EDP-938 to possibly broaden the treatment window or the eligible patient population. Our respiratory virology discovery efforts are also urgently focused on developing targeted antiviral therapeutics for SARS-CoV-2. Recently, several new variants of the original virus have been identified, initially emerging in the UK, South Africa, and Brazil, which may have some impact on the activity of current monoclonal antibodies and vaccines. These variants have mutations in the spike protein that potentially allow the virus to spread more readily or evade the immune system. Our antiviral discovery program targets conserved regions in enzymes essential for viral replication, so mutations in a spike protein are not expected to affect the activity of our inhibitors. We expect the emerging variants to retain full sensitivity to our inhibitors and are currently in the process of confirming this pre-clinically. Among our respiratory virology discovery programs, which include RSV L-Protein, SARS-CoV-2, and human metapneumovirus, we have nanomolar inhibitors undergoing lead optimization in each and our plan is to nominate clinical candidates in two of these three programs in 2021. Let's move on to our hepatitis B program where we are evaluating EDP-514, our lead core inhibitor in chronic HBV patients treated with a nucleoside reverse transcriptase inhibitor referred to as NUC-suppressed patients as well as in chronic HBV infected patients with high viral loads not currently on treatment, which we refer to as viremic patients. Each trial is a randomized double-blind placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics, and antiviral activity of one of three orally administered multiple ascending doses of EDP-514 compared to placebo over a 28-day period in up to 24 randomized patients. We plan to have preliminary data from both trials next quarter. Last month, we were excited to announce the expansion of our EDP program to include our newest clinical candidate EDP-721, a potent and selective oral HBV RNA destabilizer that has the potential to reduce production of multiple HBV proteins, which we believe could be a key component in achieving a functional cure for chronic HBV. We recognize this may take a multi-drug approach involving mechanisms to stop viral replication and inhibit surface antigen also referred to as S-antigen. NUCs are the current standard of care and they are reasonably effective at suppressing HBV replication. EDP-514, our core inhibitor affects several stages of HBV replication from uncoating and nuclear import of the virus to capsid assembly and recycling. And our new oral agent EDP-721 that can destabilize HBV RNAs leads to a reduction in viral proteins including S-antigen. Last month, we shared compelling data demonstrating a three log reduction in S-antigen levels with EDP-721 in a mouse model, which demonstrated equal or superior efficacy to siRNA-based and antisense oligo-based agents tested in the same model. With EDP-721 now in our portfolio, we see the opportunity for an all-oral functional cure and we look forward to initiating a Phase 1 clinical study of this exciting new candidate by mid-year. Moving on to our work in non-alcoholic steatohepatitis, or NASH, our first FXR agonist EDP-305 is in an ongoing ARGON-2 Phase 2b randomized double-blind placebo-controlled 72-week study in approximately 340 subjects with biopsy-proven NASH with fibrosis. The primary endpoint of ARGON-2 is improvement of fibrosis without worsening of NASH and/or NASH resolution without worsening of fibrosis. While good target engagement and tolerability were observed with the one-milligram dose in ARGON-1, with ARGON-2 we are exploring doses of 1.5 and 2.0 milligrams to determine what additional dose or doses may also favorably balance target engagement with tolerability. In mid-2021, we will have an internal interim analysis of 12 weeks of treatment in a subset of patients, at which point we expect to have more information to determine what dose or doses we move forward for potential combinations through partnering. We are also developing EDP-297, our oral follow-on FXR agonist for NASH with potentially best-in-class potency and tissue-targeted effects. It's currently being studied in a Phase 1 randomized double-blind placebo-controlled first-in-human trial designed to assess the safety, tolerability, and pharmacokinetics in approximately 74 healthy adult subjects. We look forward to reporting clinical data in mid-2021. So in mid-2021, we expect to have important insights for both EDP-305 and EDP-297 and we will be positioned to prioritize these assets and define the optimal go-forward strategy. I'd like to conclude my remarks by emphasizing a key few points. It's been an especially active time for Enanta, as we continue to progress and expand our wholly-owned pipeline. Over 2021, we look forward to several catalysts including the initiation of a Phase 1 clinical study of EDP-721, our HBV RNA destabilizer by mid-2021 and preliminary data for both Phase 1 study of EDP-514 in HBV patients in the second quarter of 2021. Further, when looking toward our respiratory virology discovery efforts, we anticipate nominating two new clinical candidates this year among our hMPV, SARS-CoV-2, and RSV programs. Finally, in NASH with the ARGON-2 trial of EDP-305 and the Phase 1 study of EDP-297, we look forward to having valuable insights mid-year to inform next steps. I'll stop here and turn the call over to Paul to discuss our financials for the quarter. Paul?

Thank you, Jay. I would like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our first fiscal quarter ended December 31, 2020. For the quarter, total revenue was $31.7 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $481 million. This compares to total revenue of $52.6 million for the same period in 2019. The decrease in royalty revenue quarter-over-quarter was driven by lower HCV product sales as treated patient volumes have remained below pre-COVID levels as reported by AbbVie. Royalty revenue was calculated on 50% of MAVIRET sales at a blended royalty rate for the quarter of 13% and on approximately 30% of VIEKIRA sales at a royalty rate of 10% after adjustments for certain contractual discounts, rebates and set-offs which now are approximately 2.7% of AbbVie's total reported HCV product sales. As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties for our fiscal first quarter ending December 31 will be calculated at the highest royalty rate for the year. And royalties for our fiscal quarter ending March 31 will be calculated at 10%, our lowest royalty rate tier in our fiscal year. You can review our royalty tier schedule in our 2020 Form 10-K. Recently, AbbVie reported that their global HCV sales were $1.83 billion in 2020 and guided to $2 billion for global HCV sales in 2021. Moving on to our expenses. For the three months ended December 31, 2020, research and development expenses totaled $36.7 million compared to $32.8 million for the same period in 2019. The increase was primarily due to the timing and activity of our clinical trials year-over-year. General and administrative expense for the quarter was $7.4 million compared to $6.9 million for the same period in 2019. This increase was primarily due to increased headcount and compensation expense. Enanta recorded an income tax benefit of $3.3 million for the three months ended December 31, 2020, compared to income tax expense of $1.5 million for the same period in 2019. This income tax benefit was due to the company's pretax loss in the period which can be carried back under the CARES Act of 2020. Net loss for the three months ended December 31, 2020, was $8.3 million or a loss of $0.41 per diluted common share compared to net income of $13.4 million or $0.65 per diluted common share for the corresponding period in 2019. Enanta ended the quarter with $404.7 million in cash and marketable securities. Enanta expects that its current cash, cash equivalents and marketable securities as well as its continuing royalty revenue will be sufficient to meet the anticipated cash requirements of its existing businesses and development programs for the foreseeable future. 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?

Your first question is from Roy Buchanan with JMP Securities.

Hi. Great. Nice quarter. Thanks for taking the question. So I guess, I want to start on EDP-721. It kind of struck with the durable activity. I guess two weeks after the end of dosing, you still saw robust reductions in s-antigen. I guess, I'm curious, if you know of any other small molecules that have shown a kind of durable effect in the mouse model? And maybe, if you could give any comments on what maybe explains the durable effect? Is it something to do with drug half-life or the mechanism? And then, I wonder if you could give us any details about how you guys are approaching the potential for off-target activity from this agent potentially on the host transcripts? Thanks.

Hi, this is Jay. Regarding the durability question, it's important to clarify that the treatment wasn't just a single dose followed by monitoring two weeks later. Instead, it involved daily dosing over a two-week period with a small molecule approach, which likely aligns better with the responses we've observed. This was done over a 14-day timeframe and compared to other data from different dosing methods over the same period. In terms of efficacy, our data indicates that 721 performed exceptionally well, showing similar or even greater efficacy compared to many other agents. We are very enthusiastic about the efficacy we've observed so far and look forward to progressing to clinical trials. Extensive preclinical work has been conducted, focusing on virology, mechanisms, and selectivity, and we are pleased with the compound's ability to specifically target HBV RNAs while maintaining a good safety profile. The preclinical package is strong, and we are preparing to enter the clinic by mid-year.

Okay. Great. I will hop back into the queue. Thanks.

Your next question is from Yasmeen Rahimi with Piper Sandler.

This is Rachel on for Yasmeen. And thanks very much for taking our question. So we have one question and then a follow-up. First, can you provide us some color on the process and what you're looking for in the clinical candidate for your L-protein inhibitor? What's the significance of advancing the L-protein inhibitor? And what advantages do they have over N-protein inhibitors? Thank you.

Yes. The process for identifying the drug is familiar to us from our work with various viruses. We focused on the polymerase, specifically the L-protein, and initiated a drug discovery program quite some time ago. We waited until we developed some highly potent compounds that we believed were close to being candidates, which is when we announced the program in January at JPMorgan. Now, we are finalizing the lead optimization by evaluating the various characteristics that define a drug candidate beyond just potency. We are conducting extensive DMPK and virologic studies, and we are getting close. I believe this could be one of the candidates that we might see hit this year. Regarding advantages, I’m not sure if an L inhibitor has benefits over an N inhibitor. We are very pleased with the profile of our N-Protein targeting drug, 938, which has high resistance barriers and shows good activity across various virus types, performing exceptionally well in clinical settings. This is about exploring different and potentially complementary mechanisms to establish a best-in-class position for Enanta in RSV and respiratory viral therapeutics overall. We have conducted preclinical studies of different combinations, and it’s evident that our N inhibitor interacts well with other mechanisms. While we might not need to conduct combination trials to demonstrate sufficient efficacy, we still might pursue that option, which could extend the treatment window. We are working to explore how to extend treatment opportunities for potentially more difficult patient populations. We are excited to have John DeVincenzo join Enanta as he is a world expert in the field, and his expertise will complement our existing accomplished team. This will help us broaden our approach moving forward. I hope that answers your question. Was that the follow-up as well?

Thank you for that helpful information. I want to follow up regarding the COVID-19 program. Could you share which targets you are assessing that you believe will be effective in preventing infection from protein variants? Thank you.

Sure, thank you for the question. We are still in the early stages of this process. We prioritize direct-acting antivirals for many of these situations, especially concerning human respiratory viruses. While entry inhibitors are an option, we are questioning if they will provide sufficient power or flexibility for extended treatment durations. Therefore, we are focusing on replication inhibitors. This approach is not only applicable to RSV but also to SARS-CoV-2. Publicly, we have mentioned that we are considering protease inhibitors and polymerase inhibitors, which aligns with our targeting strategy. We believe these are effective approaches in light of the emerging spike protein variants in the community.

That’s very helpful. Thank you so much and definitely proud of.

Your next question is from Brian Skorney with Baird.

Good afternoon, guys. Thanks for taking the question. Jay, we've talked before about the sort of the almost acetic nature of nucleoside chemistry. And I've kind of always thought that small molecule RNA destabilization seems like an almost equally if not more complex chemistry. So I guess, can you help us think through the way in which you develop a small molecule as opposed to a targeted oligo that can result in specific destabilization of HBV RNA without interrupting RNA that might be critical for normal cellular processes in a person? Like did you actually know the end target or targets of this chemistry now? Or is this primarily been an evolution of high throughput screening for chemicals that wind-up stabilizing S-antigen in primary human hepatocytes? Thanks.

Yes, thanks, Brian. We are aware of the specific molecular targets we are pursuing, which are particular enzymes aimed at stabilizing HBV RNAs. We have developed targeted inhibitors for these enzymes that effectively inhibit them, particularly in the context of hepatitis B infection. This process did not rely on high throughput screening.

Great. Thanks, Jay. That’s really helpful.

You’re welcome.

Your next question is from Brian Abrahams with RBC Capital Markets.

Hey, guys. Thank you for taking my questions and congrats on the progress. I guess, one on NASH and then just a quick follow-up. I'm curious if you could speak to your views following the FDA's recent workshop on NASH drug development in the context of the setbacks for the most advanced FXR. Just wondering how that may shape your plans and what you might be looking for mid-year from the 305 and 297 studies? And then just as a follow-up separately on the SARS-CoV-2 inhibitor. Just wondering if you could talk a little bit more about potential timelines there for both the preclinical variant data and clinical entry? And I guess would it be fair to say that once that gets into the clinic there could be a potential expedited regulatory path? Thanks.

Yes. So starting with the SARS-CoV-2 first the – again, we're working with very, very potent molecules right now that we're sort of apple polishing into candidates. Unfortunately, with that process you sort of can't legislate when you get to the finish line. It's iterative and sometimes its two steps forward, one step back. But I feel confident enough that, when you line up the three programs: the L Inhibitor for RSV, the human metapneumovirus, and also the targets for SARS-CoV-2, they're all contenders for candidates this year. And hopefully, we'll harvest two of them and top of my list would actually be SARS-CoV-2. So depending upon when we get that we'll have to finish certain other IND-enabling studies before we can get it into the clinic. So the sooner that we can make that final candidate selection and nomination probably be three quarters or so before you could go out of the clinic. I think there's every sense that the new administration is looking at – COVID has been more than just a vaccination sort of approach. I think therapeutics are getting highlighted extensively and could there be some very constructive dialogue with regulators? I think the answer could be yes. Obviously, you need to get there and pull the agent forward and get it into the clinic. But I would be very hopeful that you would get a lot of receptivity and interaction with the FDA to help design studies that could get things to patients as soon as possible. With regards to NASH, I think there's no impact sort of on our progress and how we're thinking around our current Phase II – IIb study or study design elements. The FDA highlighted the importance of histology readout as an endpoint until noninvasive biomarkers are further validated. I think that was one of the key points. And safety is also key in chronic treatment. So, therefore, the need for long-term follow-up post-conditional approval sort of thing. But at this point, we don't really feel that there's any modification to our current plan. Our plan is to get key information and data sets in mid-2021 and look at how all the data hangs together prioritize our NASH portfolio. And as we've said all along ideally, identify potential doses expeditiously around 305 that could be utilized in combinations likely through partnerships. So that's still a plan A, and one that we're continuing to execute very well on.

Got it. That's really helpful. Thanks for all the color, Jay.

You’re welcome.

Your next question is from Jay Olson with Oppenheimer.

Hi. Thanks for taking the question. For your SARS-CoV-2 program, once you move that small molecule direct-acting antiviral into the clinic do you plan to seek out a partner to expedite the clinical development and ultimately manufacturing and distribution and commercialization of that drug? Or is that something you envision doing independently? And then, I guess, more broadly on the business development front, now that you've increased your team's capabilities in business development and given your cash position, what do you plan or what do you envision this year in terms of your business development objectives? Thank you.

With regard to SARS-CoV-2, I believe Enanta is in a good position as a small company. This is not our first experience with a respiratory virus. One of our strategies for achieving success with SARS-CoV-2 therapeutics in the long run is to develop a treatment that is very safe and can be taken orally. The idea is to implement something akin to an RSVP study, where healthy patients come to the doctor with respiratory symptoms, ideally not severely advanced, and get tested, often arriving with a positive test result. There may also be asymptomatic individuals who test positive as part of an employee protocol. These individuals would be excellent candidates for receiving a direct-acting antiviral treatment, allowing us to act quickly, reduce the viral load, halt disease progression, and break the chain of transmission. The goal is to help them recover at home swiftly and test negative soon, enabling them to return to work or school. We are experienced in setting up and conducting these kinds of studies, and many of our global sites could participate in such trials. We’ll have valuable insights on how to proceed. If we develop a significant product candidate, we will need to evaluate whether to maximize it independently or seek a partnership, and we will monitor any gaps in vaccination coverage as part of our ongoing assessment. It’s beneficial to integrate this into a broader portfolio that includes various RSV assets and another important one, human metapneumovirus, making our efforts in SARS-CoV-2 a perfect complement to building a comprehensive respiratory virus therapeutics franchise. Initially, our focus will be on advancing our candidate and demonstrating its efficacy. On the business development front, we recently brought on Brendan Luu, and we frequently get inquiries regarding our thoughts on business development related to RSV, HBV, or NASH. We see NASH as a significant opportunity, likely larger than our current capabilities, especially considering the importance of combination therapies. As we've indicated, understanding the 12-week data for ARGON-2 in connection with ARGON-1 is critical for exploring potential combinations. We expect to gather this understanding by mid-year. From ARGON-1, the 1-milligram dose seems promising, while the 2.5-milligram dose presented some side effects. In ARGON-2, we will assess alternative doses to find one that strikes the right balance between effectiveness and tolerability. Nothing has changed regarding our approach to NASH, which we aim to address by seeking partnerships before any Phase III trials, possibly even sooner. For HBV, we are building a promising portfolio of assets, starting with the standard of care therapy, which is becoming cheaper and will soon be generic. Our first combination study, 514, features a NUC, and we’ll provide updates in the next quarter. We believe 721 could be crucial in achieving an all-oral triple therapy by affecting S-antigen alongside agents that target DNA and RNA. The potential to create an all-oral triple combination remains uncertain, and we may look to add additional components. Ultimately, similar to hep C, maximizing HBV treatment to cure millions globally will likely require a global partner, especially since HBV predominantly affects regions outside the U.S. We may consider retaining the option for co-commercialization, as we did previously, though we didn't pursue that option when it made more sense financially. We are currently focused on assembling a strong portfolio of controllable assets that could lead to an effective all-oral cure. In the case of RSV, we do not plan to pursue a global partnership in the near future, possibly ever. This may be an area we can manage ourselves, particularly with single agent 938, which may suffice as a treatment. We have the chance to be a pioneer in this indication, offering the first-ever treatment. I would prioritize our efforts in this order and then begin exploring our opportunities.

Thank you. That’s super helpful. Appreciate the details.

You’re welcome.

Your next question is from Liisa Bayko with Evercore ISI.

Hi. Thank you for answering my question. Can you discuss the preclinical toxicology work that you've done on your RNA destabilizer? I believe it's a fascinating molecule, and I think it could play a significant role in achieving an all-oral functional cure for Hep B. However, we've observed other companies experiencing challenges with their programs, so I hope you've managed to navigate those issues. I'm interested to know about your preclinical toxicology results. Thank you.

Sure. Yeah. So, thanks for the question, Liisa. I mean others have tried to do this and haven't always been able to progress their programs. And so, as we were working on this program actually for years, optimizing the molecules, coming up with ones that were exclusively potent had very, very nice drug-like properties, and importantly safety. I mean we usually don't talk a lot about preclinical safety, because it's an enabler to get you to the real clinical data. But we've done a very extensive workup and have gone through 13-week tox in multiple species. So, the molecule looks incredibly good by every measure that we've looked at it. From a virologic perspective, from a DMPK and also from a safety perspective, it's a very, very nice molecule.

Can you discuss your preclinical toxicity in terms of species and duration? How much progress have you made in moving into clinical development? Can you administer the dose for one month or three months? What is your current coverage?

Well, we have 13 weeks, so we've got three months' coverage with regards to that.

Okay, great. And then…

I mean obviously, we're going to go into shorter term. Phase 1 will be a three-month study in healthy volunteers, but we've got ample tox coverage.

Great, okay. Good. And do you mind saying what species you've done in?

Typically, these are details we don't get into, but you need to align them with your metabolites and ensure that all metabolites are included in your toxicology program. The selections are made by a combination of the DMPK and the safety team to determine the appropriate ones for this molecule to proceed safely into humans.

Okay. And then you're a little vague on expectations for RSVP. Are you still targeting kind of this year? Or do you think that's something that you think it's more likely next year? I'm just trying to set expectations for myself.

No. We're not expecting it this year. As we mentioned a few weeks ago at JPMorgan, you can find articles in the papers frequently. There has been no influenza this year.

I know.

I suppose it's usually a good thing unless you're trying to recruit for a study like RSVP, but I wouldn't wish RSV on anyone. However, if someone does get it, I'm willing to treat them. RSV is currently matching flu trends. If you check the CDC website for flu data, you'll see it's mostly all in the green, with very few exceptions in a couple of states. The case numbers are relatively stable. Despite the pandemic, we were on a positive path with our preparedness. However, we probably won't see that happening, at least not during a typical season. One interesting observation was a report from Australia a few weeks back, where they relaxed their precautions briefly. During their summer, they experienced a significant increase in RSV infections, which was unusual for that time of year. Considering these circumstances, there doesn't seem to be a definitive guideline for what occurs once COVID prevention measures begin to lessen. People are starting to express concern about the potential for high rates of influenza and RSV after the COVID pandemic. This is particularly concerning for young children, who typically build up immunity through exposure during their first few years of life. With many kids under one not experiencing RSV infections last year and this year, and the same for those aged one to two and two to three, this disrupts the natural development of immunity. As a result, we could see unprecedented levels of infections in the future. We will have to wait and see how this all develops, but it might lead to a very different season after some of these factors play out. As we mentioned on today’s call, we will update our guidance when we observe an increase in RSV prevalence.

Okay. But it won't be this year?

It's unlikely to be this year.

All right. Okay. Thanks a lot.

Yes. You’re welcome.

Your next question is from Eric Joseph with JPMorgan.

Hi. Good evening. Thanks for taking the questions. Just a couple on NASH. You alluded a little bit to it earlier, but I'm just wondering if you could clarify which endpoints you'll be reporting at the 12-week interim analysis for ARGON-2. We've been looking at ALT and fat fraction as well as safety, particularly pruritus? And then as we think about the Phase 1 data for 297, we know that safety and healthy volunteers has been a little under informative in the past. Is there a particular data point or a couple of data points that you'd be newly focused on that might better characterize or derisk the safety profile in NASH subjects compared with the 305 experience? Thanks.

Yes, I'll address the first question clearly since it's included in our slide deck and was mentioned at the JPMorgan conference earlier this year. The interim analysis for ARGON-2 will be an internal read-only report. This means it won't be publicly shared; only the Data Safety Monitoring Board and key individuals not involved in the study will access this information. The purpose is to make informed decisions on dose selection for potential combinations and to compare this with ARGON-1 data, without compromising the study's integrity by spending alpha. The analysis will provide insights for prioritizing assets and doses and will help shape our future strategy for NASH at Enanta. For ARGON-2, we will evaluate factors such as target engagement and metrics like C4 and FGF19 fat, similar to what we assessed in ARGON-1. We have clear data for doses of one and 2.5 milligrams, and we aim to understand how those parameters behave in a subset of ARGON-2 patients receiving new doses of 1.5 and two milligrams. On the other hand, the 297 trial involves healthy individuals. Our prior experience with the 305 study allows us to understand this population well. We’ve examined both Single Ascending Dose and Multiple Ascending Dose in healthy volunteers and made adjustments for presumed NAFLD subjects to see if there were differences in patient response. Ultimately, we found that presumed NAFLDs reacted similarly to healthy volunteers. We observed significant target biomarker changes as we increased dosage up to 20 milligrams, where we also noted unexpected pruritus. This allowed us to establish which doses correlated with pruritus and to backtrack to identify effective doses for target engagement. Now, as we integrate data from the 297 study, which includes different design elements compared to 305, this will help us determine whether we achieved something distinctive or if it merely reflects a more potent version of 305. We aim for differentiation based on our study design, but we'll need to analyze the results to understand the overall outcome better. If improvements are present, we will recognize them.

Okay. Thanks a lot for taking my question.

You're welcome.

Your next question is from Zegbeh Jallah with ROTH Capital Partners.

Hi guys. Thanks for taking my question. It looks like you have multiple milestones in 2021. So I just wanted some additional clarity on the HBV data that's going to come in the second quarter of this year. With what we've seen with assembly just kind of wanted to know how are you setting expectations as we head into that?

We are anticipating two data sets. The first will be from 514, which will be added on top of a NUC, and the second will involve 514 in patients who have not undergone NUC therapy. This means they will have higher viral loads, while the first population will have very low viral loads. The study regarding the NUC will focus primarily on safety and tolerability, examining how the two molecules interact over a 28-day period. We do not expect to gather significant information about virology in the first patient population during this timeframe since they are already reasonably suppressed. Given that it's only 28 days, we wouldn't expect to observe much in terms of viral antigens if they were to change. This study is essential as we establish a standard of care. Ultimately, we will turn our attention to the viremic study data, which will provide us with more insight. We should see a solid decline in DNA levels among those subjects over the 28 days, ideally a multi-log drop of more than two logs would be positive. There will also likely be some impact on RNA, although those effects might not be as marked as those on DNA. This information will be crucial for our understanding of pharmacokinetics, pharmacodynamics, safety, and will help us determine dosing for future studies.

Okay. And just a follow-up on that one as well. When you do get the data, do you anticipate it going with the combo going forward, or do you think you'll wait for the triple?

We'll proceed, and the triple will eventually align, if I may say so.

Sounds good. And then the last one here is just about the recent hires. I'm viewing it as very promising for the company. And I was just wondering how these new hires kind of reflect your approach, or strategic approach towards the business? And what can we expect? I think you talked briefly about the business development efforts but just more broadly.

Enanta has a very experienced and well-rounded team. You might remember we previously had someone in the New Product Strategy and Development role who has now retired. I started a search for a replacement, noting that the previous role combined both New Product Strategy and Business Development. As our company has expanded, we have developed a more defined strategy and a standalone Business Development function to match the maturity and complexity of our pipeline. We are excited about the talented new hires we've brought on board from reputable companies. Brendan, for example, has extensive experience at Merck KGaA, where he led oncology business development. Tara Kieffer, who holds a PhD in virology from Johns Hopkins, has a strong background from her time at Vertex in various roles. She played a significant part in the approval of telaprevir and has transitioned from a clinical focus to business development. Both bring valuable expertise to our team.

Thanks, Jay. I’m excited and thanks for the recall. I think it’s really helpful in terms of any expectation for us.

Good, good. Thank you.

Your next question is from Akash Tewari with Wolfe Research.

Thank you for taking my question. I see you're expanding the RSV trial sites for RSVP. How are you ensuring that patients receive the drug within two days of showing symptoms? What measures are you implementing to ensure that the clinical trial runs smoothly as you double the number of sites? Regarding Dr. DeVincenzo's recent hire, how do you anticipate his contribution to trial design? Specifically, what is the path forward for the transition from Phase 2b to Phase 3, and could the Phase 2b trial be pivotal? Lastly, concerning your COVID program, you have a careful approach to what you're introducing into the clinic, mentioning both a polymerase inhibitor and a protease inhibitor. I'm aware of challenges with the Pfizer program being an IV drug and potential safety concerns related to the Ridgeback/Merck program. What are you currently optimizing in relation to these targets? How might your molecule stand out compared to other protease and RNA polymerase inhibitors in development for COVID? Thank you.

Sure. I have several questions to address, and I sense we're nearing the conclusion of the call. Regarding RSV, this is our standard approach for the study. Participants arrive at our sites, and through the investigator questionnaire, we determine when they were symptomatic. This means they either fall within the 48-hour window or they do not. Those outside this window are not considered for the study, which is a critical inclusion criterion. If they are within the window, they are tested on site using RT-PCR machines that provide quick results, allowing for immediate dosing while the subject is still present in the office. We are prepared for this aspect, and I do not anticipate any deviations from our established protocols at other sites. I believe everything should proceed smoothly. Dr. John DeVincenzo, who will be joining us, is an expert in this domain and has been actively involved in many significant RSV studies and therapeutic developments over the years. He has dedicated his career to finding a treatment for the patients he encounters. While it's premature to comment on his influence on future clinical trial designs, it is precisely why we have him on board. Our aim is to create a leading franchise in this sector. We have a skilled team that has extensive experience in the industry, and by integrating that with Dr. DeVincenzo's academic and translational insights—given his background in clinical virology and trial design—we are committed to exploring the best ways to expedite the pathway to commercialization. Regarding COVID, you raised concerns about the challenges linked to polymerase and specifically referred to Pfizer’s program.

Yes.

Their agent is not particularly compelling since it is administered intravenously. We prefer not to go that route. By the time you are giving one of these agents intravenously, the opportunity to enhance usability has been largely lost. Our focus is on oral agents. You take it and you're on your way without needing more complicated administration methods that would require you to be in close proximity to others in healthcare settings or elsewhere. Therefore, our concentration is solely on oral agents. We have some very effective oral agents with good pharmacokinetics, and we are fine-tuning and optimizing them. Regarding polymerase inhibitors, nucleoside analogs have faced challenges in the past. Some are effective, while others are not. We are keeping an open mind. Whenever we explore polymerases, we are not exclusively committed to new polymerases. We will consider all options and won't limit ourselves to nucleoside analogs as the only approach. It’s important to note that any option we evaluate will undergo thorough toxicology assessments, similar to our other programs. Overall, we believe our strategies are solid, particularly when targeting safety and oral administration.

Thanks, so much.

You are welcome.

And there are no further questions in queue at this time. I'll turn the call back over to management for any closing remarks.

Thank you, everyone for joining us today. If you have any additional questions, feel free to contact us directly and have a good evening.

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