Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Fourth Quarter and Year-end 2021 Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call 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 fourth quarter and year-end 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 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. Reflecting on our fiscal 2021 year, I am proud of the exceptional advancements we've made across our entire portfolio. By leveraging our years of drug discovery experience and knowledge, we have developed a robust pipeline of small molecule clinical candidates that have the potential to bring new treatment options to patients. Our accomplishments this past year, advancing this pipeline puts us in a strong position to help patients and create long-term sustainable value for our shareholders. I continue to be extremely proud and grateful to my colleagues for their collective efforts and dedication to progress our pipeline. We ended our fiscal year strong with continued advancements across our clinical virology portfolio this quarter. Starting with hepatitis B, we are furthering our clinical program with the vision of developing a combination regimen to deliver a functional cure for chronic HBV patients. EDP-514, our HBV core inhibitor has been evaluated in two Phase I studies in different chronic HBV patient populations. Those who have a high viral load, whom we refer to as viremic patients and those who are on treatment with a nucleoside reverse transcriptase inhibitor, whom we refer to as nuc-suppressed patients. Recently, we announced final clinical data from both of these trials in conjunction with the Liver Meeting hosted by AASLD, where we received a presidential poster of distinction for our viremic study. Overall, final data from both studies showed that the 200 milligram, 400 milligram, and 800 milligram doses were safe and well tolerated through 28 days and displayed pharmacokinetics supportive of once-daily dosing. In viremic patients, treatment with EDP-514 resulted in mean HBV DNA reductions of 2.9, 3.3, and 3.5 logs at 28 days for the 200, 400, and 800-milligram cohorts, respectively, compared to a 0.2 log reduction in the placebo group. Mean HBV RNA reduction in each of the three viremic treatment cohorts was at least 2 logs compared to a 0.02 log reduction in the placebo group. Taken together, these results demonstrate that EDP-514 has clear clinical evidence of a strong safety profile alone and in combination with a NUC and displays significant antiviral activity over 28 days with a pharmacokinetic profile consistently supportive of once-daily oral dosing. As recently announced, we discontinued development of EDP-721, an oral HBV RNA destabilizer based on recent emerging safety observations from the single ascending dose part of the Phase I study. Patient safety is our top priority. And so we decided to discontinue further development of this compound. We are grateful to our principal investigator and his study team and the participants in the Phase I study for their commitment to HBV research as well as our team at Enanta for all their efforts in supporting the discovery, development and clinical evaluation of EDP-721. We remain committed to developing a functional cure for chronic hepatitis B patients. And we also believe that EDP-514 will be an important component of a successful combination regimen. We look forward to advancing our HBV program with additional mechanisms from internal discovery efforts, external opportunities or both. I would now like to turn to our respiratory virology programs where we continue to build a leading oral antiviral treatment portfolio. Our lead RSV program includes our N protein inhibitor, EDP-938, currently in multiple Phase II studies, and our preclinical work developing a compound targeting the RSV L-protein. As a reminder, RSV is a severe respiratory infection associated with significant morbidity and mortality that has no treatments or vaccines available. The virus can cause serious disease in children, the elderly and the immune-compromised. Our lead molecule EDP-938 targets the replication of both RSV A and RSV B. It has shown robust clinical data in a Phase IIa challenge study where it was safe and well tolerated and had significant effects on viral load and reduced symptoms of infection. Currently, EDP-938 is being evaluated in three clinical studies, including RSVP, which is a Phase IIb study in adults with community-acquired RSV infection; RSVTx, the Phase IIb study in adult hematopoietic cell transplant recipients; and RSVP, a Phase II study in pediatric RSV patients. While RSV, like influenza, was significantly suppressed while there were strong mitigation measures in place to control COVID-19, there has been recent increased RSV activity in various regions of the world, including parts of the United States and Europe. Given this activity, we expect that enrollment in the RSVP study will be complete during the Northern Hemisphere winter season, but there is no further significant increase in COVID-19 or mitigation measures in these regions. Assuming this enrollment occurs, we will have data in the first half of 2022. As for RSVTx and RSVP, which were initiated during the pandemic, enrollment is expected to require more than one global RSV season, subject to the uncertainties of the continuing pandemic. Additionally, in RSV, our discovery initiatives are advancing as we work to develop an RSV L-inhibitor. L inhibitors are another drug class that block viral replication. It could potentially be used alone or in combination with other agents such as EDP-938 to broaden the treatment window for addressable patient populations. Our L inhibitor program has continued to progress extremely well this year and we are confident that we will select an optimal development candidate in this RSV mechanism by year-end. A new L inhibitor candidate, along with EDP-235, would achieve our stated goal of identifying two new clinical candidates among our respiratory discovery programs in 2021. We also continue to pursue our third respiratory discovery program in human metapneumovirus, or HMPV, which was first identified 20 years ago and has worldwide circulation with nearly universal infection by age 5. Like with RSV, there are other vulnerable populations, including the elderly, adults with underlying pulmonary disease and those who are immune compromised. We are nearing completion of lead optimization of potent nanomolar hMPV inhibitors and hope to select another clinical candidate in the coming months. Our SARS-CoV-2 program continues to progress as we develop EDP-235, our oral 3CL protease inhibitor, specifically designed for the treatment of COVID-19. This quarter, we were excited to present the first preclinical data for EDP-235 at the International Society for Influenza and Other Respiratory Virus Diseases and World Health Organization virtual conference. These data showed that EDP-235 demonstrated highly potent antiviral activity against SARS-CoV-2 with pharmacokinetic properties supporting a once-daily oral dosing regimen. In a biochemical assay, EDP-235 inhibited the SARS-CoV-2 protease with an IC50 of 5.8 nanomolar and maintained this activity against proteases from SARS-CoV-2 variants. Additionally, EDP-235 potently blocked the replication of SARS-CoV-2 in multiple cellular models, including primary human airway epithelial cells where an EC90 of 33 nanomolar was observed positioning EDP-235 among the most potent direct-acting antivirals currently in development for SARS-CoV-2. EDP-235 was also shown to have potent activity across a range of areas as well as other human coronaviruses. Importantly, data demonstrated that EDP-235 has good oral bioavailability without ritonavir boosting and favorable distribution into lung cells as well as other key target tissues. EDP-235 is projected to have a long half-life of 16 hours with an efficacious dose of 100 to 500 milligrams once daily in humans. In summary, the preclinical profile of EDP-235 advocates its potential to be a best-in-class once-daily oral therapy for the treatment and prevention of COVID-19. While the pandemic may be far from over, we see COVID-19 eventually progressing from the current situation toward a more endemic disease where effective therapeutics will continue to play a significant role. We've completed the IND-enabling preclinical studies of EDP-235 and are eager to advance the candidate into the clinic in early 2022. Lastly, this quarter, we announced the decision to prioritize combination approaches for both of our NASH FXR agonist EDP-305 and EDP-297 through an out-licensing strategy. NASH is a complex disease that we believe will likely require a combination of multiple mechanisms to provide an optimal treatment regimen. Therefore, we do not plan to continue development of either program internally but instead, we will seek external opportunities to pursue these programs in a combination approach. Before moving to our financials, I'd like to wrap up by reiterating our upcoming milestones. We expect to select the clinical development candidate for our RSV L-inhibitor program by year-end. Looking ahead to 2022, we expect multiple milestones, including the initiation of a Phase I study of our oral 3CL protease inhibitor, EDP-235 in the early part of the year. We also expect, given the reemergence of RSV in the U.S. and Europe, that enrollment in the RSVP study will be complete during the Northern Hemisphere winter season if there is no further significant increase in COVID-19 in those regions. Accordingly, we plan to report data from our RSVP study also in the first half of 2022. With that, I'll stop here and turn the call over to Paul to discuss our financials. 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 fourth quarter and fiscal year ended September 30, 2021. For the quarter, total revenue was $23.6 million and consisted of royalty revenue earned on AbbVie's global net HCV product sales. This compares to total revenue of $23.6 million for the same period in 2020. As reported by AbbVie, treated patient volumes remain suppressed versus pre-COVID levels. AbbVie now expects total HCV sales of approximately $1.7 billion for the calendar year 2021. As a reminder, our royalties are calculated on a calendar year basis. Therefore, royalties in 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. Moving on to expenses. For the three months ended September 30, 2021, research and development expenses totaled $48.9 million compared to $36.7 million for the same period in 2020. The increase was due to timing and expansion of our clinical trials in our virology programs. General and administrative expense for the quarter was $8.4 million compared to $6.7 million for the same period in 2020. The increase was due to increased headcount and related compensation expense in support of additional research and development activities. Enanta recorded an income tax benefit of $8.8 million for the three months ended September 30, 2021, compared to an income tax expense of $10.7 million for the same period in 2020. For the 12 months ended September 30, 2021, Enanta recorded an income tax benefit of $28.6 million compared to an income tax expense of $1.1 million for the 12 months ended September 30, 2020. The income tax expense in 2020 was due to a tax valuation allowance charge of $18.3 million recorded against the company's deferred tax assets in the three months ended September 30, 2020. The income tax benefit in 2021 consists of net loss carrybacks against taxes paid in prior years, which have given rise to a $38 million tax receivable on our balance sheet at September 30, 2021, the final period in which such carrybacks can be made under the 2020 CARES Act. Net loss for the three months ended September 30, 2021, was $24.6 million or a loss of $1.22 per diluted common share compared to a net loss of $29.3 million or a loss of $1.46 per diluted common share for the corresponding period in 2020. Enanta ended the quarter with approximately $352.4 million in cash and marketable securities. We expect that our current cash, cash equivalents in 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 for at least the next two years. Regarding guidance of fiscal 2022, we expect our research and development expense to be between $150 million to $170 million, and our general and administrative expense to be between $35 million to $41 million. Further financial details are available in our press release and will be available in our annual report on Form 10-K when filed. I'd now like to turn the call back to the operator and open up the lines for questions. Operator?

Our first question comes from Brian Abrahams with RBC Capital Markets.

My first question is about 235. It seems like there has been significant progress. Could you elaborate on the IND-enabling toxicity work that you've undertaken in preparation for entering the clinic? Additionally, I would like to know your thoughts on the potential therapeutic window in relation to the effective doses, particularly at both ends of the 100 mg to 500 mg range regarding the margin in the therapeutic window? I have a follow-up after that.

This is Jay, Brian. Thanks for the question. So with 235, we've completed multi-week GLP tox and drove the drug levels to very substantial exposures, ones in which we think, based on our predicted clinical dose and allometric scaling that we did that we should have a very comfortable safety margin.

Great. And do you have plans to explore the potential to test 235 in combination with any other classes? I guess, how important do you think that will be? Is there any preclinical work around that, that you've done or are planning and any expectations for any sort of drug-drug interactions based on what's known so far about the metabolism?

That's a great question. It really depends on how the pandemic evolves and what the future variants of interest may look like. Currently, we believe we have a strong virologic profile addressing the major variants of concern. In the systems we've analyzed regarding resistance to 235, the overall profile appears to be favorable. Since the clinical study involves just a few days of treatment, we aren't expecting resistance, which is one reason to consider combinations. However, combinations are still a possibility, and so far, there’s nothing in the profile that would rule them out regarding drug-drug interactions. There's been interest in whether molnupiravir and Pfizer's protease inhibitor could be used together. In those cases, I would need to review all the data to assess any potential interactions. Ultimately, the decision will depend on how the virus changes. If one drug suffices, we will use that. But if we determine that multiple drugs are preferable over time, then combinations can certainly be developed.

That's really helpful. One more quick one, if I could squeeze it in. Just curious how you're thinking now about the potential to achieve functional cure in hepatitis B with 514-based regimens, if you think that will require additional novel classes? Or if you're still pursuing other destabilizers? Or is that class something you're not going to continue to pursue? And just curious, as you kind of think about internal versus external, where you see 514 being paired up optimally to potentially achieve that?

That's a great question. I believe that a core inhibitor combined with a NUC would benefit from an additional agent or agents. This has been our hypothesis all along. If we examine a core inhibitor with a NUC studied over a year or more, it may not have been the most effective core inhibitor used in that study, but it still presented interesting results. Even the potential of using a new type of core inhibitor over an extended period remains a possibility. However, we would prefer to add another agent or agents to enhance the cure rates and minimize the treatment duration as much as possible. In that regard, we are exploring options internally and will also broaden our search for external combination opportunities. From that, we hope to effectively reshape the combination strategy.

Our next question comes from Akash Tewari with Jefferies.

Two questions on RSV and one on COVID. In the Gilead presatovir Phase II study involving transplant patients, there was an interesting signal of efficacy observed in one of their trials with patients who had low lymphocyte counts. Considering that signal, do you plan to stratify patients in your transplant study based on lymphocyte counts? Additionally, how will you address potential inaccuracies in symptom reporting for your RSV study? Can you stratify patients based on viral load at the time of dosing, and if so, what do you anticipate the average viral load will be if patients are dosed within two days of showing symptoms? Finally, regarding COVID and EDP-235, what percentage of the drug binds to plasma protein, and how does this compare to other protease inhibitors in development by Pfizer and others?

So I may dish a couple of these over to Nathalie with regards to the transplant. I'm not sure that, that sort of stratification was performed in the RSVTx study, but I'll defer to Nathalie on that. We can't stratify the RSVP based on liars and non-liars. What was your question with regards to that again, if you could repeat that?

It would be interesting to see if you can stratify patients based on their viral load at the time of dosage. If I'm correct, within two days of symptoms, the viral load should fall between two to three. This means you could identify patients likely showing symptoms within that timeframe just by examining their viral load. If there is a scenario where many patients receive treatment within four days of experiencing symptoms, would the FDA permit you to classify patients based on their viral load at the time of dosing instead?

Yes. Well, I'll defer that one to Nathalie right now, and then I'll pick up on the last one about 235.

This is Nathalie. So let me maybe just touch quickly on the transplant question, and then I'll try to address your question about the RSVP. So obviously, that's a good question referring to the Gilead transplant study. We did pay attention to the results. And as you mentioned, we did notice specific response when we were looking at lower lymphocyte number. And that's how we design our study. If you look at our inclusion criteria, we decided to look at subjects with less than 500 cells for the HCT recipient. And there will be obviously possibility to look at subgroup analysis to try to understand our drug in that context, too. Now as far RSVP, that's an interesting question about lying. I think you could argue that you can be in that same situation in any clinical studies. And I would not know exactly why a patient coming in would lie about the symptoms. But as you remember, our RSVP study is enrolling subjects who present signs and symptoms within 48 hours. And obviously, there is viral load that has been taken at multiple time points, including screening and baseline. And we will be certainly able, and that's already the plan, to look at different types of analysis, including viral load threshold. Have I addressed the question you had on the RSVP?

Yes, that's very helpful. Regarding COVID, for the drug 235, what percentage binds to plasma protein?

I think I lost you, Akash. I do remember the question.

Yes. Can you hear me?

Yes. With respect to the plasma protein numbers, one of the ways we evaluate this is by understanding that plasma protein binding is always an equilibrium. Additionally, when examining intracellular activity, several parameters in that equilibrium, such as on-rate and off-rate, become critical. We assess the antiviral activity shift in a cellular assay when plasma protein is introduced, which allows us to determine a serum adjustment factor that we integrate into our calculations for allometric scaling across various species. We factor in the serum adjustment to potency when predicting human doses, which is reflected in the range of 100 to 500 milligrams. Furthermore, at the ISIRV conference, we mentioned other variables that could positively impact our human dose predictions. One of these is the significant partitioning of EDP-235 into lung alveolar macrophages. This could allow for not only effective trafficking of the virus but also the transportation of active drugs to the lungs. This profile reminds us of our earlier studies on community-acquired pneumonia antibiotics and their uptake by immune cells. Although we didn't incorporate this aspect into our dosing projections, it adds potential upside to our current calculations. Is that helpful?

Our next question comes from Yasmeen Rahimi with Piper Sandler.

This is Jesse on for Yas and I had one question on the COVID-19 asset. I wanted to know that if there is a potential to partner this asset, what data would Enanta be looking to generate before seeking partnerships?

This is Jay. Thanks for the question. I mean, a partnership on a drug like this probably is inevitable at some time when you think about it. It's a global pandemic right now, and it's presumably will become more epidemic and then endemic than pandemic. But no matter, it's very much a global disease infection that we're talking about here. So I think it's not a question of if, but a question of when. We haven't set any particular when for when that might be. We're just focused on doing what urgently needs to be done with the drug, which is to get it into healthy volunteers as soon as possible early next year and then to move it into Phase II and III studies also next year. And then any discussions that would come on the continuum between today and some point down the line would happen, then we would assess them as they were appropriate.

Our next question comes from Brian Skorney with Baird.

I would like to hear your perspective on the clinical development of EDP-235. Considering that Pfizer's protease inhibitor and Merck's NUC are likely to receive emergency use authorization soon, how should we approach the development of your protease inhibitor and the strategies for recruiting participants for studies? Do you believe that placebo-controlled studies will be practical in certain subgroups, or do you anticipate conducting head-to-head studies? Is there a specific subgroup that you think would be suitable for placebo control? Additionally, how many days are you planning to examine in the multiple ascending dose study, and do you have any preliminary ideas about the number of treatment days you might target?

Okay. Is anyone else having difficulty with the audio?

Yes.

Seems like speaker lines or the investor line is...

We couldn't hear anything.

No problem. So I just wanted to get your thoughts on recruitment of clinical studies for 235 and whether or not you think availability of Pfizer and Merck's drugs would prohibit the running of a placebo-controlled study? Do you think you need to do head-to-head studies, which is sort of the fastest way? And the other question was just on how many days you're looking at in the multiple ascending dose study should the SAD be okay? And any thoughts early on, on how many days you would target in terms of treatment?

Yes. So the treatment days would presumably be five days, it is what we would be aiming for. With regards to the clinical trial design, it's not clear yet that drugs with EUA, emergency use authorization would need to be baked into a trial given that they're not fully approved. But maybe I'll let Nathalie comment on that.

Yes. Can you hear me, Brian? So I think your question was about potential study design and emerging of new treatment and how we will position ourselves as far as designing our study and recruitment. Is that the question?

It was just on the feasibility of placebo-controlled studies versus non-inferiority studies.

Yes. Well, I mean, I think as probably many other people who are developing drugs nowadays, closely monitoring possibilities of study design alteration as we are getting into a phase where we will have more treatment available. I think it's going to depend which kind of patient population you target for your registration study. And obviously, as you go with higher risk, it might be just unethical not to suggest to have some standard of care rather than a placebo. And in that case, I think there's a higher chance obviously, that we will have to do a non-inferiority study design. Jay Luly: Nathalie, volume cut out, I think or...

I'm not sure, now it's fine.

Oh, I'm sorry.

Yes. You cut out when you mentioned it might not be ethical.

Yes, I should note that depending on the patient population targeted for the initial study being registered, it might not be ethical. If we focus on high-risk patients, there may be a necessity to include the standard of care. This would likely lead us to adopt a non-inferiority study design. Our clinical development plan is going to be very dynamic as we need to adapt to new data emerging from the pandemic, how it evolves, the patient demographics, and the availability of vaccinations versus non-vaccinated individuals. There are many uncertainties, and we will need to adjust our program accordingly.

Our next question comes from Roy Buchanan with JMP Securities.

The first one I have is on R&D guidance, it looks like you guys are guiding likely down for spending next year, but you're still ramping RSV, you're going into SARS-CoV-2 clinical trial, human metaneumovirus. It seems like R&D should possibly be going up. It's just the drop-off in NASH or the delay in the hepatitis B unless resulting in the lower spending expenses. And then to kind of dig in a little bit on the 235 partnering question, I guess. Have you guys considered maybe monetizing MAVYRET or getting a partner to bring the agent to the market faster? You can get these stocking orders, Pfizer is $2.3 billion, Merck's got over $1 billion? Or is this something where more money is not going to help you get to market faster?

I heard the question. I'm not sure. Just had someone text me who's listening in and said that they're hearing both sides of the conversations very well better than some of the participants are.

I can hear everything fine.

On the guidance, I think I'll let Paul comment. The R&D spending guidance is approximately $5 million higher than last year. It also reflects the decision we made regarding NASH, where we decided to externalize some costs that we would have otherwise handled ourselves. There’s also a consideration from the 721 decision. However, this guidance allows us to pursue all the needed initiatives for our various programs as we have detailed. So I believe it's a well-considered figure for now. Regarding MAVYRET, as you are aware, MAVYRET has been impacted by COVID over the past couple of years. AbbVie and Gilead have experienced similar effects in their pipelines. Consequently, royalty revenue has declined compared to pre-pandemic levels. Nevertheless, we anticipate that these revenues may recover as things stabilize further. Hep C patients are not spontaneously curing, and there hasn't been a significant increase in deaths during this period. Therefore, it may be wise to observe how MAVYRET develops as the pandemic recedes. At this moment, I wouldn’t suggest trying to monetize those royalties. What was your final question?

Yes, I understand the question is really about whether investing more in 235 will help bring it to market more quickly. We’ve seen significant stocking deals with companies like Pfizer and Merck, but those drugs have their own problems; for instance, Merck's combination has a black box warning regarding drug-drug interactions. Molnupiravir may not be the most effective drug either. You mentioned that we have this highly potent, potentially best-in-class drug, and it seems that getting it to market quickly would be the best outcome. However, will partnering with a major pharmaceutical company expedite the drug's market entry?

It could potentially happen at the right time. Currently, we are not facing any resource constraints. As I mentioned, at some future point, expanding our supply channels and engaging in negotiations related to your inquiries will become relevant, especially once we have gathered sufficient data. However, at this moment, we do not have cash constraints.

Our next question comes from Eric Joseph with JPMorgan.

Just a couple on HBV from us. First, I'm wondering if you could put a little bit more context around the nature of the adverse safety with 721. And why it might have been missed in the preclinical studies. I'm also curious to know whether there's perhaps a path forward against the target or even with 721 with an alternative administration method. Could it be administered perhaps safely? And then maybe finally, just curious to kind of get some of your additional thoughts on what other HBV targets are of interest as part of the company's strategy with 514 that might also be amenable to oral administration?

Thank you for the question, Eric. The dosing for the study has been completed, but it is still ongoing, and we are actively monitoring the study without commenting on the safety results observed. Regarding 721, I don’t foresee it progressing, and I don’t believe it’s a question of the route of administration. As we define next steps, we are reviewing all the data to fully understand the results before making any decisions, whether that involves another destabilizer in the future or exploring other mechanisms. We will independently focus on additional mechanisms that could potentially complement this, as the situation with the destabilizer may never be fully understood. We will try to gain a comprehensive understanding, but I don't want to rely solely on that. Previously, even when we had a core inhibitor plus a NUC, we were already considering a third mechanism without knowing if it would be necessary. That became the destabilizer, and even after acquiring that, we were still exploring additional mechanisms beyond a triple combination, again without certainty about their need. We are continually seeking to develop new drugs internally and looking for external mechanisms that we could potentially acquire or license, given that combination therapy will likely involve more than a couple of agents. There are indeed other mechanisms available, including some oral immunomodulatory approaches that we are considering, along with other options. We will continue to review these over time and update our HBV strategy with new combinations. Once we have that organized internally, we will begin discussing it publicly.

Our next question comes from Zegbeh Jallah with ROTH Capital Partners.

I just wanted to quickly follow up on Eric's question about the HBV program. Just notably his question about why some of the safety signals may have been missed preclinically. Is this something that could have been determined preclinical? I know you don't want to say what that exact answer, but I was just curious about that.

No, it's really difficult to explain. There were other members of this mechanism that had been studied in the past. Roche had a molecule that entered Phase I but then disappeared, without any public comments on what happened. Arbutus had some molecules they worked on, and they conducted shorter-term safety studies that seemed okay. However, during their longer-term safety studies, they identified a safety signal, repeated the study, found another signal, and ultimately discontinued the molecule. For us to progress to the next step, we aimed to at least surpass the 13-week safety signal that others had encountered preclinically. We dedicated significant time to engineering 721, conducting safety studies across multiple species, which resulted in a very clean safety profile. Thus, it was just an unusual and unexpected finding in a Phase I study. Sometimes these occurrences happen, and while it's rare, especially for Enanta, it did happen in this case. That sums it up.

That was really helpful. And then a follow-up to that. One point you noted will we be interested in the S-antigen. So I was just wondering if you were to go and add another candidate, would it be something again against the S-antigen?

Certainly, if we identified a suitable target for that, it would be a good idea. S-antigen is something we need to address in some way, whether by stopping its production, managing it directly, or using an immune approach to help counteract it. Therefore, S-antigen modifiers would be on our agenda if we can find an appropriate mechanism to target.

And I just have two more. The first, just thinking about the time line for the HBV program. So I know you have a couple of things in the works in terms of candidates. I was just wondering how far are those from entering the clinic. And then is there anything that you can do to kind of optimize the time line, meaning move forward with the combo as much as you can before adding in the third agent that may be a little bit behind?

I think our priority is going to be focusing on third agents right now. And like I said, we'll be focusing on the internal pipeline as well as external opportunities to do that.

So you're not going to be limited by your internal candidates because you could pull something from another company or something like that. So that's good to know. And then the last one here is just a high-level question for folks that are a little bit apprehensive. Now having two programs kind of changed a little bit, meaning the NASH and now the HBV program, I like how you said that this is very rare, at least for the HBV, it's really rare to have something like this happen to Enanta. And so I think it will just be nice to kind of hear your thoughts on the robustness of your preclinical work that you typically do across your pipeline? And I guess, for folks that maybe losing a little bit of confidence, how do you kind of keep folks confident in what it is that you guys are doing at Enanta?

This is not uncommon in the industry, particularly in biotech or pharmaceuticals. It occurs frequently. What is surprising is that it rarely happens to Enanta. However, it is part of the business. Sometimes, preclinical findings do not appear in human test results, and occasionally the opposite occurs. We have moved forward with six programs without any safety findings that would change our business approach, including several that are currently in clinical trials and have been tested on many patients. Therefore, this is a very unique, one-off finding and should be viewed as such. It's the nature of the business. Enanta has a strong preclinical compound characterization team that focuses on DMPK, safety, formulation, and more. Overall, our track record is a testament to our capabilities.

Our next question comes from Roanna Ruiz with SVB Leerink.

One question for HBV. I was curious for 514, which dose are you most likely to advance forward into combination trials, considering that we've seen some similar HBV DNA reductions between the 400-milligram and the 800-milligram doses so far?

Yes, all the doses look good. We'll make the final decision when we finalize the study. When examining the 200, 400, and 800 doses, they all showed significant reductions in DNA and RNA in the viremic study. This is largely due to the fact that even at the lowest dose, we achieved around 10 times the adjusted BC90, and at 400 mg, we were at a 20-fold increase. We maintained very high drug concentrations safely over a full month in HBV patients. Any of these doses could likely be appropriate for moving forward. Generally, it's advisable to consider the highest or a robust dose to ensure strong pressure on the virus across a broad patient population. Thus far, even the lowest dose has achieved this. As we approach a specific combination, we will discuss a specific trial design, but all the doses appear promising.

Our next question comes from Liisa Bayko with Evercore.

Just first on hepatitis B 514. In the Liver Meeting data, you seem to have an inverse dose response on RNA. I know DNA was pretty tight actually across all the doses. Is that just some function of small numbers? Or what's the right way to think about that trend there?

Yes, it was a very small dose response even on the DNA because I think we were nailing it even at the low dose and there's probably a little bit of wobble thereafter. But I will let Nathalie comment on that further.

Liisa, thank you for your question. I mean it's true that when you look at the numerical value of the three doses in the viremic patient in particular, it looks like it might be a reverse dose dependent. I think it's important to note that it's a small sample size with variability in the HBV RNA not only at baseline, but also throughout the treatment duration. And the distribution of the patient in the small studies where you have six patients per arm received the active drug depending on when they come into the study with a higher baseline HBV RNA compared to lower HBV RNA that can change a little bit. We look very closely to each individual patient for each cohort. And there's a little bit of difference in the distribution with the 800-milligram where we had more subjects. We had a higher viral load at baseline compared to the other arm. So if you try to normalize and remove those subjects to where maybe, I'm going to say, outlier compared to the other arm, it comes pretty much even. It is just an artifact I think of distribution and variability of the HBV RNA.

Okay. Great. And then just on timing for RSV. I was looking at the trends in the United States that actually it looks like it's coming down at least right now per the CDC. Are you planning that's going to follow patients like globally, Jay, and that's how you complete, I'm assuming that's coming down here is probably rising in other parts of the world. That's the right way to think about it? And then if you're going to get RSVP no data in 2022, peads and RSVTx, if we have an increase in cases, could we maybe count on some data from those as well next year?

I believe it's unlikely for the pediatric study on transplant to yield results from just one global season. We are currently entering the first real season for these studies, assuming this season is indeed a legitimate one. The data shows a slight increase in numbers with the relaxation of mask mandates, though it appears to be declining now. We are just beginning what is typically a full season that usually peaks in January and February in the Northern Hemisphere. We have trial sites globally, including in the U.S., EU, Southern Hemisphere, and Pan-Asia. If we experience a somewhat normal season, we're optimistic about concluding and reporting our findings in the first half of the year.

Okay. Great. Can you tell us how many patients you've enrolled thus far of the total anticipated?

No, we usually don’t provide interim updates because the situation can be inconsistent. There are periods of inactivity followed by active phases. It’s important to view the situation as a whole and rely on our guidance based on our assumptions and the context of the virus. However, we did notice a significant increase recently when case numbers began to rise, which is encouraging. We were able to take advantage of that. Therefore, if we experience a relatively normal season, I believe we should be able to manage it effectively.

And I'm not showing any further questions at this time. I would now like to turn the call back over to Jennifer Viera for any further remarks.

Thank you to everyone for joining us today. If you have any additional questions, please feel free to contact me by e-mail or call my office. Thank you so much. Have a good night. Bye-bye.

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