Earnings Call Transcript - ENTA Q3 2022

Operator, Operator

Good afternoon, and welcome to Enanta Pharmaceuticals' Fiscal Third Quarter 2022 Financial Results Conference Call. Please be advised that this call is being recorded. I would like now to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.

Jennifer Viera, Investor Relations

Thank you, operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal third quarter 2022 financial results was issued this afternoon and is available on our website. On the call today are Dr. Jay Luly, President and Chief Executive Officer; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control, that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-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?

Jay Luly, President and CEO

Thank you, Jennifer, and good afternoon, everyone. Our vision at Enanta is to leverage our expertise in virology and liver disease to discover, develop, and deliver groundbreaking medicines, as we've already done with AbbVie's MAVIRET for hepatitis C virus. This quarter, we made important strides toward achieving another breakthrough medicine. Today, I will start by detailing our recent positive data from the Phase I trial of EDP-235 in healthy volunteers. As a reminder, EDP-235 is our oral antiviral inhibitor of the coronavirus 3CL protease, also known as the main protease or Mpro, which is in clinical development for the treatment of COVID-19. EDP-235 has fast track designation and is designed to be a once-daily oral treatment without the requirement for ritonavir boosting. Our first-in-human, randomized, double-blind, placebo-controlled, Phase I study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics of oral EDP-235 in single and multiple ascending doses for 7 days along with the effect of food. A total of 72 subjects received at least one dose of EDP-235 or placebo. There were 40 subjects in the single ascending dose phase and 32 in the multiple ascending dose phase. All SAD and MAD cohorts enrolled 8 participants, who were randomized to receive EDP-235 or placebo in a 3:1 ratio. To optimize dose selections, the study evaluated a broad range of single and multiple doses in a fasted and fed state. The SAD phase included cohorts with doses of 50 milligrams, 100, 200, 400, and 800 milligrams fasted, and a 200-milligram fed crossover cohort. The MAD phase included cohorts with doses of 200 milligrams and 400 milligrams fasted and 400 milligrams and 800 milligrams fed. Overall, EDP-235 was generally safe and well tolerated in healthy subjects up to 400 milligrams for up to 7 days. Adverse events were infrequent, with headache and gastrointestinal-related symptoms, such as nausea and abdominal discomfort being the most commonly reported AEs during the MAD phase. The majority of AEs were mild, with the exception of 3 that led to study discontinuations. There was one moderate headache in the 400-milligram fasted cohort, one severe headache in the 800-milligram fed cohort, and one Grade 3 ALT, Grade 2 AST elevation in the 800-milligram fed cohort. The single subject with elevated ALT and AST had no other lab abnormalities. Furthermore, all AEs were subsequently resolved. EDP-235 exposure was enhanced with food administration of a standard meal and increased approximately proportionally with ascending single and multiple doses, with a half-life consistently ranging from 13 to 22 hours, resulting in a PK profile suitable for once-daily dosing. Data demonstrated that EDP-235 had strong exposure multiples over the EC90, where EC90 is a measure of potency, namely the concentration of drug that results in 90% inhibition in vitro. Specifically, EDP-235 at 200 milligrams taken once daily with food resulted in mean trough plasma levels at steady state that were threefold and sixfold over the plasma protein adjusted EC90 for the Alpha variant and Delta variant, respectively, while 400 milligrams resulted in levels that were sixfold and twofold over the plasma protein adjusted EC90 for these respective areas. These target exposure multiples were achieved without the need for ritonavir boosting and its associated drug-drug interactions. Additionally, EDP-235 is projected to have 4x higher drug levels in lung tissue compared to plasma, which would be expected to drive the 400-milligram multiples to 24-fold and 48-fold over the EC90 for the Alpha variant and the Delta variant, respectively. This is significant, because in antiviral drugs potency and exposure levels often translate to clinical efficacy. EDP-235's preclinical and clinical profile suggests the potential for a best-in-class antiviral treatment for SARS-CoV-2 infection. We plan to finalize the Phase II protocol in alignment with the FDA and initiate the study during the fourth quarter of this year. Looking at the COVID-19 landscape, there continue to be infections globally due to new variants, and the BA.5 variant reportedly can circumvent much of the immunity arising from prior COVID infection or vaccination. This highlights the urgent need for convenient, easily prescribed antiviral COVID treatments for patients, potentially even beyond high-risk patients. EDP-235 has the potential to fill this need as it is designed to be used once daily without ritonavir boosting and easily prescribed quickly without the need to assess drug-drug interactions associated with ritonavir. We believe a 1-pill, once-a-day antiviral treatment regimen with EDP-235 can enable a true test-to-treat model to facilitate rapid treatment of COVID infections. Beyond COVID-19 and continuing with our industry-leading respiratory virology treatment portfolio, we are also advancing our respiratory syncytial virus or RSV program. RSV is another virus that represents an important unmet need as it can result in severe respiratory infection, associated with significant morbidity and mortality in children, the elderly, and the immune compromised. Further, there are no targeted treatments or vaccines available. Our robust RSV program includes EDP-938, the most advanced N-protein inhibitor in clinical development today, as well as EDP-323, a potent L-protein inhibitor. We are confident in the potential of EDP-938, which has fast track designation from the FDA. We are evaluating EDP-938 in high-risk populations in ongoing and planned clinical studies, including pediatric patients, adult hematopoietic cell transplant recipients, and high-risk adults, all of which have significant unmet need. Last quarter, we announced data from RSVP, a Phase IIb trial in otherwise healthy adults, with community-acquired RSV infection. In this low-risk population, which had mild, self-resolving upper respiratory tract infection, EDP-938 did not meet the primary endpoint of reduction in total symptom score compared to placebo or the secondary antiviral endpoints. However, we were pleased to observe a statistically significant difference in the number of subjects achieving undetectable RSV RNA at the end of treatment with EDP-938, making this the only study that has reported a statistically significant antiviral effect in an otherwise healthy adult population with community-acquired RSV. Even though patients were treated within 48 hours of symptom onset, a key observation in this study was that the viral load and symptoms had already peaked and were declining at the time of the first dose, indicating RSV infection results quickly in this otherwise healthy population. Importantly, EDP-938 demonstrated a favorable safety profile in a data set that now includes approximately 500 subjects exposed to the drug. We continue to believe that RSV antiviral treatment, including EDP-938, has the greatest potential to show optimal efficacy in high-risk populations as these patients have reduced RSV immunity, which manifests in higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of EDP-938. Moving forward, our broad clinical development plan is focused on evaluating EDP-938 in populations with the greatest unmet need, namely those who are at high risk for severe disease. Our ongoing studies include RSVPs, a Phase II study in pediatric RSV patients, and RSVTx, the Phase IIb study in adult hematopoietic cell transplant recipients with RSV. Both are expected to recruit beyond 2022, subject to the reemergence of RSV in broader populations at pre-COVID levels. Also in the fourth quarter of this year, we are planning to initiate another Phase IIb study in high-risk adults, including the elderly and those who have asthma, COPD, or congestive heart failure. We believe EDP-938 has the potential to deliver a potent, oral, antiviral treatment for all populations at high risk from RSV infection. Our robust RSV antiviral portfolio also includes EDP-323, a novel oral therapeutic targeting the RSV L-protein RNA polymerase. We believe EDP-323 has the potential to be a stand-alone treatment or it may be used in combination with other agents such as EDP-938 to potentially broaden the treatment window or range of addressable RSV patient populations. EDP-323 is supported by preclinical data that demonstrate strong oral absorption and good plasma exposure across different species. Importantly, EDP-323 has subnanomolar in vitro potency against both major subtypes of RSV, RSV A and RSV B, and is not expected to have cross-resistance to other classes of inhibitors. We plan to initiate a Phase I study of EDP-323 in the fourth quarter of this year. We also continue to pursue our respiratory discovery program in human metapneumovirus, or hMPV, a virus that is similar to RSV, impacting many vulnerable populations, including the elderly, adults with underlying pulmonary disease, and those who are immune compromised. We're continuing lead optimization of potent nanomolar hMPV inhibitors and plan to select a clinical candidate in the first half of 2023. Turning to hepatitis B. We remain committed to developing a combination regimen as a functional cure for chronic HBV patients, as we believe the ultimate care for this infection will involve combination therapy. Our commitment is based on the continued high unmet need for this disease, which is a global public health threat and the world's most common serious liver infection, making it the primary cause of liver cancer, the second leading cause of cancer deaths in the world. Last quarter at EASL, final data from two of our Phase Ib studies of EDP-514 were presented. EDP-514 is our HBV core inhibitor with Fast Track designation, which has shown to be safe and potent in two different chronic HBV patient populations, those who have 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. Based on these data, we remain convinced that EDP-514 has the potential to be a best-in-class core inhibitor for HBV. We believe that a core inhibitor such as EDP-514 will ultimately be an important component of a successful combination regimen. We continue to evaluate internal and external opportunities for additional candidates to develop in combination with EDP-514 and a NUC to create a triple drug regimen. Before moving to the financials, I want to address briefly our ongoing patent litigation in which we are seeking damages for Pfizer's infringement of our issued 953 patent in the manufacture, use, and sale of its COVID-19 antiviral paxlovid. We recognize the importance of paxlovid's availability for patients, and we do not intend to seek an injunction or take other action in this litigation to impede the production, sale, or distribution of paxlovid. And finally, in this lawsuit, we are taking steps to ensure that we will be fairly compensated for our intellectual property. Importantly, our 953 patent is completely separate from the patent estate covering our discovery of EDP-235 and our ongoing antiviral discovery work for coronaviruses. Indeed, we have a growing 3CL protease inhibitor patent estate, including several issued U.S. patents, one of which covers EDP-235. These patents describe compounds built on an independent and distinct chemical scaffold from the one described in the 953 patent and in Pfizer's patents for paxlovid. At this point, I'd also like to take the opportunity to welcome our new Chief Medical Officer, Dr. Scott Rottinghaus, who joins Enanta today. Scott is an infectious disease-trained physician who has more than 20 years of experience in a broad range of therapeutic areas. He joins us from Alexion, now a part of AstraZeneca, where he was Vice President of Clinical Development for Hematology and Nephrology. He's also held positions at Pfizer, where he worked on trials of a DNA vaccine for influenza and on studies of anti-infectives, and continued to practice as an attending physician and assistant clinical professor in infectious diseases at Yale School of Medicine. His experience also includes multiple NDA and MAA submissions and FDA Advisory Committee participation. We're very excited to have Scott join us as we advance our antiviral development programs. Finally, I'd like to wrap up by highlighting our near-term milestones. We are thrilled with our Phase I results of EDP-235 and look forward to advancing the COVID-19 program into a Phase II study in the fourth quarter of this year. We're also on track to begin a new Phase II RSV study in high-risk adults in the fourth quarter of this year, and last, we're excited to initiate a Phase I study for EDP-323, our RSV L inhibitor, in the fourth quarter of this year, as well as nominate a clinical candidate for human metapneumovirus in the first half of 2023.

Paul Mellett, CFO

Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our third quarter ended June 30, 2022. For the quarter, total revenue was $19.5 million and consisted of royalty revenue earned on AbbVie's global MAVYRET net product sales. This compares to total revenue of $21.6 million for the same period in 2021. Royalty revenue was calculated on 50% of MAVIRET sales at a royalty rate for the quarter of 10% after adjustments for certain contractual discounts, rebates, and set-offs, which are now approximately 2% of AbbVie's total reported HCV product sales. You can review our royalty tier schedule in our 2021 Form 10-K. Moving on to our expenses, for the 3 months ended June 30, 2022, research and development expenses totaled $39.1 million compared to $47 million for the same period in 2021. The decrease was primarily due to timing of our clinical trials year-over-year. General and administrative expense for the quarter was $12.9 million, compared to $8.4 million for the same period in 2021. The increase was due to an increase in headcount and compensation expense. Enanta recorded an income tax benefit of $0.4 million for the 3 months ended June 30, 2022, due to the release of the state tax reserve during the period compared to a tax benefit of $9.4 million for the 3 months ended June 30, 2021, when we had the benefit of federal net loss carrybacks available under the CARES Act of 2020. Enanta is still due a refund of $28.7 million, the tax losses carried back in 2021 to offset taxable income in prior years. Net loss for the 3 months ended June 30, 2022, was $31.7 million or a loss of $1.53 per diluted common share, compared to a net loss of $24 million or a loss of $1.19 per diluted common share for the corresponding period in 2021. Enanta ended the quarter with approximately $292.7 million in cash and marketable securities. We expect that our current cash, cash equivalents, and short-term and long-term marketable securities, as well as our ongoing royalty revenue, will continue to be sufficient to meet the anticipated cash requirements of our existing business and development programs for the next 2 years. 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, Operator

Our first question comes from Akash Tewari with Jefferies. Please go ahead.

Unidentified Analyst, Analyst

This is an important quarter. First, we have seen the FDA-approved vaccine in preclinical stages, as well as antibody data from the market based on preclinical research. Can you discuss the potential for a faster approval process for COVID antivirals? Additionally, could you share your insights on study design regarding patient endpoints? Considering the lower event rates we are observing, how do you view the size and enrollment, and when do you anticipate EDP-235 will be available in the market? Can you hear me more clearly now?

Operator, Operator

Yes. Sorry about that. Could you repeat the question?

Unidentified Analyst, Analyst

Yes, definitely. So this is Clarke on for Akash. First, we've seen the FDA-approved vaccines on preclinical data and also pulled Regeneron monoclonal antibody off the market based on preclinical data. Could you talk about the potential for an accelerated path to approval with COVID antivirals? And secondly, can you go over your current thoughts on Phase II design in terms of patient population and endpoints? Given the lower event rates we're seeing with Omicron, how do you think about trial design or trial size and powering and accrual times? When can we expect EDP-235 to enter the market?

Jay Luly, President and CEO

Thanks for the question. This is Jay Luly. I apologize for the connection issues we are experiencing. We are using a cellphone to communicate. I hope everyone can hear us. The vaccines and antibodies differ significantly from the antivirals. When demonstrating a reactivity against the virus, it's straightforward to assess the neutralizing capabilities of a vaccine or antibody. However, antiviral development is a different process, so I don't anticipate a rapid pathway that would expedite this. Concerning the patient population, we are currently refining the entire design and considering the Phase II and III studies. This is a dynamic situation as vaccination states are evolving, with individuals both getting vaccinated and experiencing waning immunity due to short-lived vaccines or booster effectiveness, or because variants are evading the vaccine. We are in the process of designing and interacting with the FDA, aiming to finalize these discussions and initiate a Phase I later this year in the fourth quarter. Please stay tuned for updates on trial design. Once we conclude these interactions and further studies, the goal is to complete Phase II and hopefully advance to Phase III next year. We will need to assess the virus's environment to determine how we schedule and size that trial. I hope you could hear my response to your question.

Operator, Operator

The next question comes with Roy Buchanan with JMP Securities.

Douglas Buchanan, Analyst

I had a few for 235. The 4:1 lung-to-plasma ratio that you guys are talking about for total drug, is that using the total amount of drug that's in the plasma? Or is it just the free nonprotein bound drug? And then in the IS-IRV poster you had last year, there was an EC90 of 33 nanomolar. Was that corrected for serum protein binding?

Jay Luly, President and CEO

Yes. The question about the 4:1 ratio refers to total drug. We assessed total drug in the plasma, blood, and lung in the same manner. Thus, the ratio remains consistent regardless of whether we adjust for plasma or binding in different tissues; the adjustments do not affect the ratio. Now, what was the other question?

Douglas Buchanan, Analyst

Poster from IS-IRV meeting the EC90...

Jay Luly, President and CEO

Yes. It was not adjusted for plasma. I believe it was in human airway epithelial cells at that time. So that was not adjusted.

Douglas Buchanan, Analyst

Okay. I have a question about the headache. Can you describe it? Does it start early? Does it go away or last longer? Or does it occur later during the treatment?

Jay Luly, President and CEO

It resolved. I don't recall exactly when it came on, but any headaches that were observed resolved.

Operator, Operator

The next question comes with Brian Skorney with Baird.

Brian Skorney, Analyst

I know it's reported as a low rate in trials, but it seems like the paxlovid rebound in practice is pretty common currently. Some estimates have seen that as much as 50%. Obviously, we saw out on rebound on it. Just thoughts on what you think this is? Is it a paxlovid PK issue? Do you think they don't have enough 24-hour coverage? Do you think 5 days isn't enough? Could it be a potential resistance issue? And just how do you think the EDP-235 and sort of your program development could focus on ensuring that you mitigate in your program?

Jay Luly, President and CEO

Sure. It seems there isn't a resistance issue with paxlovid treatment, based on our observations. I hypothesize that longer dosing of paxlovid could be beneficial. Paxlovid has a short half-life, despite ritonavir boosting, while our clinical half-life is extended with once-daily dosing. This could enhance the pharmacokinetic characteristics. Additionally, EDP-235 shows good tissue partitioning, potentially targeting virus reservoirs. We believe that with strong pharmacokinetics, extended half-life, and effective tissue targeting, EDP-235 might help locate and address the virus more effectively. Future studies will help us determine the optimal duration of treatment, whether 5 days, 7 days, or longer. While 5 days of paxlovid is manageable, we're exploring the potential for more effective molecules with different properties. I hope that clarifies things.

Brian Skorney, Analyst

Yes, that's very helpful. And then if I could just sort of another quick question there on the ALT elevation you made. So I was just wondering if you've discussed the NOL for EDP-235 as the end organ tox liver here. And just, I know in the protease experiences sort of uncommon ALT elevations that are mechanistically distinct from liver injury. I just wonder if you have any idea.

Jay Luly, President and CEO

No, we haven't typically described our preclinical safety findings, if any, other than with the FDA.

Operator, Operator

The next question comes with Eric Joseph with JPMorgan.

Hannah Adeoye, Analyst

This is Hannah on for Eric. Just a few from us. Just wanted to get a sense if there's any alternative mechanisms in the COVID-19 viral life cycle that you'd be looking to target, like co-target with EDP-235 to have just more of a potency profile upfront? And then for the second question, just what are your current thoughts on the relationship between viral induction, COVID-19? Has there been a consensus reached by the scientific community on this? And is there any utility in your view in using reduction in viral load as a registrational endpoint?

Jay Luly, President and CEO

I'm sorry, I didn’t catch parts of both questions, but I think the first question was whether there are other mechanisms we are considering in COVID besides protease. Was that the question?

Hannah Adeoye, Analyst

Yes. Just any other mechanisms you're interested in. And would you look to maybe look at combination pathways or combination approach upfront just so you have that...

Jay Luly, President and CEO

You cut out right there. So the short answer is that there are other mechanisms we're exploring in-house. We are confident in 235 against the current COVID landscape, but we are also focusing on our strengths in protease and considering future scenarios where the virus might change. This could create a need for combination therapies down the line. There’s no immediate indication that this will be beneficial now, but we are thinking long-term. Since the pandemic began, we have been investigating various mechanisms internally. Regarding your question, I believe you were asking about the possibility of having a virologic endpoint for registration, correct?

Hannah Adeoye, Analyst

Yes. Just what is the utility of a biologic endpoint in COVID currently?

Jay Luly, President and CEO

It's a bit confusing because remdesivir shows promising data regarding the prevention of hospitalization and death in certain patient groups, but it hasn't shown a reduction in viral load. In contrast, other treatments like protease inhibitors have been effective in reducing viral load. Viral load reductions in COVID are often modest, likely due to the limitations of sampling methods like nasal pharyngeal swabs. In terms of endpoints, demonstrating any antiviral effect is important, but that's not always necessary. I would categorize nucleoside analogs, including remdesivir, in that context. Is that clear?

Hannah Adeoye, Analyst

Very helpful. Yes. And just thinking about outside of COVID and outside of respiratory viruses, just wondering if there's any potential for antiviral acute treatment approach in something like monkeypox, considering it does seem to hang around a little bit longer than respiratory infections? Is this something of interest for you guys?

Jay Luly, President and CEO

I'm not sure. I don't know. Hopefully, vaccines will be ultimately very helpful there. But to the extent they're not, we have our eyes on any viruses where vaccines may not be effective. So if there's a need, we would be thinking about it.

Operator, Operator

The next question comes with Brian Abrahams with RBC Capital Markets. Please go ahead.

Unidentified Analyst, Analyst

This is Steve on for Brian. You shared EC90 multiples for the Alpha and Delta strains. And with some difference between those strains, can you comment on your expectation for multiples with the Omicron variant? And maybe whether you expect time to steady state or other PK parameters would be important for current or future strains that might be faster replicating to assess efficacy or predict efficacy there?

Jay Luly, President and CEO

I'm sorry, but part of your question was unclear. Could you please repeat the beginning? Regarding Omicron, we currently have studies in progress, and we expect to have the data later this year. In general, when discussing protease and its mutations across various variants, including sub-variants like BA.2, BA.1.2.3, and others, the protease itself remains highly conserved. Any mutations do not occur close to the active site where our drug functions. This conservation is crucial for the virus's survival, as it does not allow for significant alterations to that critical area. We first conduct biochemical tests for enzymatic inhibition across all tested variants. The data we've gathered is quite robust, and some of this information is available in our slide deck. We are confident that focusing on the protease mechanism will ensure that our drug continues to exhibit strong activity against all variants of concern and upcoming ones. I apologize for missing the start of your question.

Unidentified Analyst, Analyst

I think you covered it there. That was pretty comprehensive.

Operator, Operator

The next question comes with Roanna Ruiz from SVB Securities.

Roanna Ruiz, Analyst

So I was curious if you have any thoughts on whether an EUA filing for EDP-235 is still on the table for the FDA? Or at some point, do you think it will be more strategic to go for a full NDA approval for the product?

Jay Luly, President and CEO

Well, right now, we don't know that an EUA is not available. I think it's going to be, again, as we get closer to that time, it's going to be facts and circumstances on the ground with regards to what the virus is doing. But the FDA, I'm not aware that they've given indication yet that for new drug therapies in the antiviral category that it's not available.

Roanna Ruiz, Analyst

Got it. And a quick one on RSV as well. I was curious, have you heard anything on the ground about the RSV infection rates in the Northern and the Southern Hemisphere? And how are you monitoring enrollment for your ongoing studies there?

Jay Luly, President and CEO

Yes, we are in a transitional period between traditional seasons. The next season is the Northern Hemisphere, which will begin later. It has been quiet in the Northern Hemisphere recently, which is typical for this time of year. As we approach late Q4, we expect activity to pick up again, and that is what we are currently planning for and anticipating.

Operator, Operator

The next question comes with Jay Olson with Oppenheimer.

Unidentified Analyst, Analyst

This is Cheng on the line for Jay. Congrats on the progress. Just maybe a follow-up on a question asked previously. Just can you share a little more color on the discovery programs on COVID-19? And is that more specific or more potent against some emerging variants? And where do you see the need to combine EDP-235 with another mechanism or with another molecule?

Jay Luly, President and CEO

Sure. We see no reason to combine now. Again, there's no signs of resistance as it relates to patients treated with protease inhibitors. It's an acute treatment, acute infection. We're talking about 5 or so days. And so if you put lots of pressure on the drug, which we do, or on the virus, which we do, at a trough, we see great multiples of a very potent drug with a long half-life and good tissue uptake. So I don't see the need for it. But as I said before, if a more serious variant came along, someday, you may want to have as many weapons as you could possibly have. And this is no different, by the way, than any virus we've taken on. When we went after hep C, we went after multiple mechanisms, even though it looked like probably a couple would be enough, but you don't know until you're done, and you're always wondering. Same with hep B, same with RSV. When we get into an area, we're going to mine as many different mechanisms until we know we don't need them. As long as we possibly might in the future, we want to be at the cutting edge with everything that we can. So I would say EDP-235 being sort of the cornerstone at Enanta, we'll continue to do research on this. And maybe someday combinations will be necessary. Hopefully, they won't, and hopefully, 235 is all we'll ever need or anyone will ever need.

Operator, Operator

The next and final question comes with Akash Tewari with Jefferies.

Unidentified Analyst, Analyst

This is Clark again for Akash. First, could you comment on the potential costs for the trials for the EDP-235? And secondly, in your Phase I healthy volunteer study for EDP-235, what percentage of patients reached EC90? And can you comment on the PK variability across patients?

Jay Luly, President and CEO

It seems there was a break in communication at the end of your question, which is frustrating for us. I hope you can hear me clearly. Regarding the costs, we will have to wait and see how we size the trial. It’s difficult to make projections until we determine the scale, which will depend on various design factors that we have yet to finalize with the agency. So please stay tuned for updates. Generally, the Phase II component is expected to be relatively small, which would lead into a larger registrational phase. Ultimately, we plan to partner with a larger company that can assist more effectively with the global launch and distribution of the drug. So, stay tuned for more on that. I apologize for missing the other part of your question.

Unidentified Analyst, Analyst

Sorry. The second part of the question was, in your Phase I healthy volunteer study for EDP-235, what percentage of patients reached EC90? And can you comment on the PK variability across patients?

Tara Kieffer, Analyst

Sure. No problem. Clark, this is Tara Kieffer speaking. So we actually saw pretty low variability in our Phase I study. It was about 15%. And so we would expect down the road, we would have the vast majority, greater than 95% of the patients above that EC90 value.

Operator, Operator

This concludes our question-and-answer session. I would like now to turn the conference back over to Jennifer Viera for any closing remarks. Please go ahead.

Jennifer Viera, Investor Relations

Thank you, everyone, for joining us today. Serious apologies for the technical glitches. If you do have any follow-up questions, feel free to contact us by e-mail or call me at the office. Thanks again, and have a great evening. Goodbye.

Operator, Operator

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.