Earnings Call Transcript
ENANTA PHARMACEUTICALS INC (ENTA)
Earnings Call Transcript - ENTA Q2 2023
Operator, Operator
Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Second Quarter Ended March 31, 2022 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 prepared remarks. Please be advised that these call is being recorded. I would now like to turn the conference 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 second quarter 2023 financial results was issued this afternoon and is available on our website. A news release with top line data from our SPRINT clinical trial was also issued this afternoon and can be found on our website as well. Slides from today's webcast will be available on our website after the call ends. On the call today are Dr. Jay Luly, our President and Chief Executive Officer; Dr. Scott Rottinghaus, our Chief Medical Officer; Paul Mellett, our Chief Financial Officer; and Dr. Tara Kieffer, our Senior Vice President of New Product Strategy and Development. Before we begin with our formal remarks, we do want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-K and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Dr. Jay Luly, Jay?
Jay Luly, CEO
Thank you, Jennifer, and good afternoon, everyone. At Enanta our goal has always been to develop curative therapies for patients in need. That effort continues today with our announcement of the top line data from our Phase 2 SPRINT study of EDP-235, our 3CL protease inhibitor in development as an oral once-daily treatment for COVID-19. I'll let Dr. Scott Rottinghaus, our Chief Medical Officer, present the data in a minute, but I will highlight a few key points, which support our belief that EDP-235 could play an important role in the treatment of COVID-19. First, the trial met its primary endpoint, demonstrating a favorable safety and tolerability profile. In addition, we are excited that the SPRINT data show that EDP-235 had an impact on clinically meaningful endpoints. Scott's presentation will go through this in detail. With that, I'll turn the call over to Scott. Scott?
Scott Rottinghaus, Chief Medical Officer
Thank you, Jay. As Jay stated, EDP-235 met the primary endpoint and was generally safe and well tolerated. We saw a dose dependent symptom improvement with EDP-235 treatment compared to placebo. However, we did not see an effect on virologic endpoints likely because of the rapid viral decline in the placebo arm of this immunologically experienced standard risk population. As a reminder, this slide shows the study design of SPRINT, which was a randomized, double-blind, placebo-controlled Phase 2 clinical trial of EDP-235 in approximately 200 adults with mild or moderate COVID-19, who did not have risk factors for progression to severe disease. Patients were treated with EDP-235 at doses of 200 milligrams, 400 milligrams or placebo once daily for five days. We randomized 231 patients in a one to one to one fashion. The safety population included all patients randomized. We followed the patients out to day 33. And as you can see, 95% to 97% of the patients completed the study. The ITTC population of 190 patients is a modified intention to treat population that constitutes our primary efficacy analysis population. It includes all patients who are confirmed to have a positive PCR for SARS-CoV-2 at baseline. Demographics and based on characteristics were well balanced between the arms. We had a young patient population with a median age of about 40 years. Most patients were white and Hispanic. Three quarters were enrolled within three days of symptom onset. Baseline viral load was about five logs across arms. The majority of patients had vaccinated against COVID and about 95% were seropositive, indicating a high degree of baseline immunity against COVID. This is consistent with recent estimates from the CDC showing a high degree of seropositivity in the US population. The next slide summarizes the adverse events that we saw in the study. Among our 231 patients, only 10 adverse events were reported. While there were numerically more adverse events reported on 400 milligrams, on the other arms, the frequency was still low at 6.4% compared to placebo at 2.6%. There were no serious adverse events or discontinuations due to adverse events. Most adverse events were mild in severity. The adverse event that was graded as severe in this table was a fall and resulting arthralgia that was judged by the investigator not to be related to study drug. This slide shows the specific adverse events. As you can see, no specific pattern of adverse events was identified. The two toxicities were asymptomatic, transient elevations of transaminases. The one in 200 milligrams with a mild grade 1 elevation and the other in 400 milligrams, I'll discuss more on the next slide... ...Laboratory values were generally unremarkable, but there are two specific call-outs. The patient I just mentioned, who is receiving EDP-235 at the 400-milligram dose reported concomitant use of alcohol and acetaminophen. He had ALT at the upper limit of normal at baseline and experienced asymptomatic ALT elevation up to 12 times the upper limit of normal on study day six. His AST was five times the upper limit of normal. GTT was elevated at baseline and increased further to four times the upper limit of normal. Bilirubin and alkaline phosphatase were normal. The patient remained asymptomatic and all labs returned to normal and follow-up, except for GGT, which remained mildly elevated, but consistent with baseline. The second laboratory observation is a transient and dose-dependent elevation in total cholesterol and triglycerides with EDP-235. Both total cholesterol and triglycerides then trended toward normal after treatment. Wrapping up safety, there was a low frequency of adverse events and most were mild in severity. There were no serious adverse events or discontinuations due to adverse events. Laboratory values were generally unremarkable apart from the patient with transaminase elevations and the lipid trends that I just discussed. Moving to PK. EDP-235 achieved target exposures, and the results were consistent with what we saw in Phase I. Plasma drug levels were seven and 12 times higher than the EC90 of Omicron for the 200-milligram and 400-milligram dosing levels. Mean and median pre-dose concentrations of EDP-235 on day five are shown in the table. Now for efficacy. Let's start with the total symptom score in the full efficacy analysis population, the ITTC. As a reminder, the total symptom score comprises all 14 symptoms as defined by the FDA for evaluating drugs to treat COVID. They're listed on the right-hand side of the slide. You can see here that there is a dose-dependent trend favoring EDP-235 with statistical significance being achieved at multiple time points as indicated by the asterisks, with a p-value of less than 0.05. Statistical significance was observed as early as the first time point evaluated, which was one day after the first dose. While the baseline total symptom score of the 400-milligram dose was slightly higher than the others, a rapid, early and sustained improvement in symptoms was observed compared to placebo... ...For contextualization, this slide shows our EDP-235 data that I just showed you, next to data from another protease inhibitor in citrovir. We've chosen citrovir for contextualization because it's the only antiviral with a sufficiently robust data set in the public domain. Our Phase II study looked at the 14 symptoms I just discussed in 190 patients, and the change from baseline in total symptom score is graphed here out to 10 days. And citrovir's Phase IIb study of 341 patients looked at the same symptoms, except for taste and smell, and these data are graphed out to day six. As you can see, dose-dependent trends and symptomatic improvement were observed for both antivirals. As you may remember, the protocol stratified patients at randomization into two groups: those with less than three days of symptoms and those with greater than three days of symptoms. We pre-specified an analysis of the patients who were randomized within three days of symptom onset. You'll recall from the demographic slide that this population includes about three quarters of the patients in the study. In this population, EDP-235 at 400 milligrams showed statistically significant reductions in total symptom score compared to baseline at all time points after treatment. We interrogated our data set with the goal of identifying a subset of the FDA-specified 14 symptoms that better reflect the clinical manifestations at current COVID-19 variants and the treatment effect on these symptoms. Shionogi performed a similar analysis identifying five symptoms from their Phase IIb study, which were subsequently used as a primary endpoint in their Phase III. As shown here, we identified a subset of six symptoms, including shortness of breath, sore throat, stuffy runny nose, chills or shivering, feeling hotter feverish and headache. This figure shows an analysis of these six symptoms in the pre-specified population of patients enrolled within three days of symptom onset. EDP-235 at the 400-milligram dose demonstrated an even greater improvement in symptom score at all time points... ...Now, let's move to looking at time to symptom improvement. While our prespecified endpoint of time to improvement for all 14 symptoms did not show a difference between the active and placebo arms analysis of the six symptoms from the last slide showed a statistically significant difference in the ITT population. Furthermore, as shown on this slide, this difference was even greater among patients who were enrolled within three days of symptom onset. You can see that the hazard ratio for the difference of EDP-235 at the 400-milligram dose versus placebo is 1.9 with a p-value of 0.006. Median time to improvement for these six symptoms was shortened by two days. Specifically, patients receiving placebo improved in five days, while patients receiving 400 milligrams of EDP-235 improved in three days. Moving to virologic endpoints. This graph shows change from baseline in viral RNA as measured by nasopharyngeal swabs. No difference was demonstrated between patients treated with EDP-235 and placebo likely due to the rapid viral decline observed in the placebo arm. The mean baseline viral load in this study population was approximately five logs and a precipitous decrease in viral RNA was observed in all study arms, indicating that this highly immune population rapidly cleared virus from the nose. To understand this further, we performed an additional analysis of patients with a baseline viral load greater than five logs, and this represented about half of the study population. We saw a viral load decline of 0.4 logs at day three in both EDP-235 treatment groups compared to placebo. This 0.4 log decline was sustained at day five in the 400-milligram arm. For more contextualization, this slide compares the viral RNA change from baseline in the placebo arms of other direct-acting antiviral COVID studies. You can see here that the decline seen in the placebo arm of the SPRINT study was more rapid than in any other study. This may not be surprising given a highly immune population in which this study was conducted, as evidenced by recent CDC data from a nationwide seroprevalence study showing the high prevalence of natural and hybrid immunity, which continues to grow over time. Details of these data can be found in the appendix of the slides posted to our website. In summary, EDP-235 was generally safe and well tolerated. There was a low frequency of adverse events, and most were mild in severity. There were no serious adverse events or discontinuations due to adverse events. EDP-235 showed a dose-dependent improvement in total symptom score. Among patients enrolled within three days of symptom onset, there was a statistically significant improvement in the total symptom score for EDP-235 at 400 milligrams at all time points, starting at one day after dosing. There was no difference between treatment arms and placebo for viral RNA decline in this highly immune population that was able to rapidly clear SARS-CoV-2 from the nose. However, an additional analysis of patients with a baseline viral load greater than five logs showed a viral RNA decline of 0.4 logs at day three in both EDP-235 treatment groups compared to placebo. In conclusion, we're excited to see the EDP-235 at the 400-milligram dose had a significant effect on symptoms in the SPRINT study, suggesting that we have the potential to affect clinically meaningful endpoints moving forward in development. That concludes my presentation of the data. With that, I'll turn the call back to Jay. Jay?
Jay Luly, CEO
Based on the positive SPRINT data, we are focusing on partnership opportunities for Phase 3 and on the potential for a Phase 2 study in acute or long COVID that could further demonstrate the efficacy of EDP-235. We look forward to providing an update on our plans in the coming months. I also want to note, we continue to progress our research program to develop SARS-CoV-2 papain-like protease or PLpro inhibitors. Beyond COVID-19, our patient-centric approach continues with our industry leading respiratory virology treatment portfolio. With RSV specifically, we are advancing a broad program, which includes EDP-938, the most advanced protein inhibitor in clinical development as well as EDP-323, our novel oral therapeutic targeting RSV protein RNA polymerase. We are monitoring RSV epidemiology to evaluate the impact on trial enrollment and timing for data readouts and our ongoing Phase 2 studies of EDP-938, and we expect enrollment to continue throughout 2023. Meanwhile, we are wrapping up our ongoing Phase 1 study of EDP-323. We look forward to reporting top line data for EDP-323 next month. This quarter, we also announced that the FDA granted fast track designation to EDP-323, underscoring its potential as a once-daily oral therapeutic for the treatment of RSV. As a reminder, the Phase 1 study is a double-blind, placebo-controlled, first-in-human study that will enroll approximately 80 healthy subjects and is evaluating the safety, tolerability, and pharmacokinetics of orally administered single and multiple doses of EDP-323. Beyond our clinical RSV programs, we are particularly excited by the potential of our novel broader spectrum antiviral research program targeting both RSV and human metapneumovirus, or hMPV, with a single agent. Both of these viruses have a severe impact on several vulnerable patient populations, such as children, the elderly adults within cardiopulmonary disease, and those who are immunocompromised. Our preclinical data in support of this program showed that our prototype dual inhibitor demonstrated potent nanomolar activity against multiple genotypes and strains of both viruses in a range of cell types. We're making progress in the optimization of our potent dual inhibitors and aim to select a clinical candidate in the fourth quarter of 2023. Before I turn the call over to Paul to provide an update on our financials, I want to comment on the $200 million royalty sale transaction we closed two weeks ago. The additional non-dilutive funding has increased our financial flexibility and extended our cash runway. With that, I'll turn the call over to Paul.
Paul Mellett, CFO
Thank you, Jay. Before I provide details on our second quarter financial results, I also want to take a moment to comment on our royalty sales transaction, which we announced in April. This transaction involved the sale of 54.5% of our future global royalties we earned on net sales of MAVYRET beginning in July 2023, through June 2032, with total payments capped at 1.42 times the purchase price. In exchange, the purchaser, OMERS, paid us $200 million upfront. We are excited to partner with OMERS, which is one of Canada's largest defined benefit pension plans. This sale not only secures us additional non-dilutive funding but also gives us increased financial flexibility and retained economics. Please note that Enanta retains 45.5% of all royalties until the cap is hit, at which point, 100% of all further royalties revert to Enanta. Now let's turn to our quarterly results. For the quarter, total revenue was $17.8 million and consisted of royalty revenue earned on AbbVie's global MAVYRET net product sales. This compares to total revenue of $18.7 million for the same period in 2022. The decrease was due to lower patient volumes in 2023 compared to 2022. Moving on to our expenses. For the three months ended March 31, 2023, research and development expenses totaled $43.5 million compared to $42.1 million for the same period in 2022. The slight increase was primarily due to the timing of clinical trial expenses in our virology programs. General and administrative expense for the quarter was $13.8 million compared to $10.5 million for the same period in 2022. The increase was due to increased stock-related compensation expense and legal fees associated with our patent infringement suit against Pfizer. Net loss for the three months ended March 31, 2023, was $37.7 million or a loss of $1.79 per diluted common share compared to a net loss of $33.6 million or a loss of $1.63 per diluted common share for the corresponding period in 2022. Enanta ended the quarter with approximately $225 million in cash and marketable securities before giving effect of the royalty sale transaction. We expect that our current cash, cash equivalents to term long-term marketable securities, along with the $200 million in cash we received on the sale of our portion of MAVYRET royalties as well as our retained portion of royalty revenue will continue to be sufficient to meet the anticipated cash requirements of our existing business and development programs into calendar 2026. Further financial details are available in our press release and will be available in our report on Form 10-Q when filed. I'd now like to turn the call back to the operator and we'll open up the lines for questions. Operator?
Operator, Operator
Thank you. One moment for our first question, which comes from Yasmeen Rahimi with Piper Sandler. Please proceed.
Yasmeen Rahimi, Analyst
Hi team. Thank you for the details from SPRINT. Now that we have this data, what are the next steps? How soon can you meet with the agency to get insights on the Phase design? Considering there was variability in the viral load and no significant differences shown in the total symptom score, do you think these data points could influence discussions with potential partners? Could you clarify whether they understand the variabilities and nuances? Thank you for letting me ask my questions.
Jay Luly, CEO
Hi, this is Jay. I’ll let Scott provide some additional details. We are progressing our data set and will be taking it to the agency as we complete the study. In relation to the data, we have the viral load bid that we can discuss further. However, the agency does not approve any COVID drugs based solely on viral load; instead, it considers other endpoints. For a standard risk patient population, the focus will be on symptoms, while for a high-risk population, the emphasis will be on hospitalization and mortality. That’s why we were particularly pleased to observe statistically significant improvements in the total symptom score and the time to improvement. Both are important metrics that can be viewed as highly clinically relevant. Scott, do you have anything to add?
Scott Rottinghaus, Chief Medical Officer
Yes, Yasmeen, thanks for that question. I mean, just to reiterate, we're so excited about the strong data in symptoms, and we do expect that to form the basis of a discussion with regulators to look at next steps in terms of Phase 3 design. While the virology data are mixed, as you say, I do think we have an opportunity here given the symptom data. So, we are very excited and looking forward to moving this to next steps.
Jay Luly, CEO
It's clear that the patient population has changed significantly since the pandemic began, as has the virus itself. The increase in seropositivity resulting from vaccination, natural infection, or a combination of both has been building over time. This trend is evident in the various study populations analyzed. As seen in the data, particularly in the placebo curves presented in the slide deck—which will be available at the end of the call—it is evident that viral load reductions have occurred more rapidly and dramatically over time, particularly with respect to nasal viral loads, which are easier to measure. However, assessing what's happening in other body tissues from a virology perspective is more challenging. We do know that our drug has strong tissue penetration, high potency, and favorable exposures, leading to significant symptom relief, which we believe stands out compared to other studies in this patient population. In terms of future studies, we're considering various types of Phase 2 trials, including those focused on long COVID or different patient populations. We also need to strategize how these studies will unfold while planning for Phase 3. Our ongoing strategy involves seeking a partner for late-stage development, commercialization, and launch. With the positive SPRINT data, we see a significant opportunity for developing drug 235 across various treatment scenarios for COVID, including those at standard risk, high risk, prophylaxis, and long COVID. To fully realize this potential, a pharmaceutical partnership would help us establish the best registration program and achieve the most favorable label. Therefore, this will be our primary focus for Phase 3.
Yasmeen Rahimi, Analyst
No, that was great. That was great. Thank you so much.
Operator, Operator
Thank you. One moment for our next question please. It comes from the line of Brian Abrahams with RBC Capital Markets. Please proceed.
Brian Abrahams, Analyst
Good afternoon everyone. I appreciate you taking my questions and providing all the detailed SPRINT data; it's been very helpful. My first question is about your confidence in the potential go-forward dose. How certain are you that the symptomatic benefits observed are dose-dependent or possibly linked to a higher baseline in the 400-milligram group? I'm also interested in how patients on the 400 and 200-milligram doses compared at the end of day five regarding their absolute symptom scores and your thoughts on the future dosing strategy.
Jay Luly, CEO
I believe the go-forward dose will be 400. It was significant in many ways. There were minor differences at baseline, but within the first 24 hours, the 400-milligram dose reduced symptoms quickly and aligned closely with the other patient group. There's clear evidence that the 400-milligram dosage was effective and worked rapidly in the right direction.
Scott Rottinghaus, Chief Medical Officer
I want to highlight that in addition to the reduction in the total symptom score, there is also improvement in the time to improvement for specific symptoms. We have various pieces of evidence indicating that this reflects a genuine dose-dependent enhancement in efficacy, and we are quite confident in this.
Brian Abrahams, Analyst
Got it. And to what do you attribute the TSS symptom signals that you're seeing here, given that there isn't a measurable antiviral effect. Is this related to maybe sort of like an unmeasurable effect that's going on in terms of viral clearance in a different reservoir or some sort of additional benefit on anti-inflammatory benefit?
Scott Rottinghaus, Chief Medical Officer
Yes, that's a crucial question, Brian. We believe it's about the area we're examining. Many focus on the nose, which is easily accessible for checks, but we know that these patients have a 95% rate of seropositivity. Our background data in the presentation supports this. The overall population is developing strong hybrid immunity and is capable of clearing the virus. However, when systemic symptoms arise, it's clear there are other virus reservoirs in the body that we can't measure efficiently. Nevertheless, our drug is known for its excellent tissue distribution and penetration. This may be what distinguishes it and contributes to the therapeutic effect on symptoms, even though we don't observe much viral presence in the nasal pharynx.
Brian Abrahams, Analyst
That makes sense. And if I could squeeze one more quick one in. Wondering if you could maybe talk a little bit more about the triglyceride and total cholesterol effects that you're seeing in terms of, I guess, how long you follow those patients and how close to their baselines, did they return. Does that imply anything in terms of how you might think about future studies in higher-risk patients who may have concurrent hyperlipemia baseline? Thanks.
Scott Rottinghaus, Chief Medical Officer
Yes, absolutely. So obviously, we'll follow patients very closely in terms of lipids going forward. But we saw within 14 days, the triglycerides had returned entirely to normal. And within 14 days, the total cholesterol was well on its way. It's a little delayed from a metabolic perspective, of course, so we have every reason to believe that these cholesterol changes are mild and very manageable. So yes, we think that we can monitor them and manage them pretty effectively, particularly given that this drug is for acute and not chronic use.
Brian Abrahams, Analyst
Great. Thanks again.
Jay Luly, CEO
Shionogi observed similar findings, which raises the question of whether some exposure is linked to protease inhibitors. This remains an important question as we gather more clinical data on these inhibitors. Additionally, measuring viral load changes in the nose hasn't consistently produced results. For example, early in the pandemic, Gilead's drug, remdesivir, failed to show changes in nasal viral load. While some have demonstrated the presence of the virus in the nose, it hasn’t led to other findings. This uncertainty is why the FDA is hesitant to use viral loads as a basis for approval. In a subgroup of patients with viral loads above the average of five, we observed about a half log change in this experienced patient population. It appears increasingly difficult to detect these changes in otherwise healthy patients with current variants and their existing immune responses.
Operator, Operator
Thank you. And it comes from the line of Roy Buchanan with JMP Securities. Please proceed.
Roy Buchanan, Analyst
Thank you for answering most of my questions. I have a couple of quick ones. I noticed that the drug-drug interaction studies have been completed. While they may not be the most exciting, can you share anything about the drug-drug interaction profile of 235? Additionally, are there any alternative explanations for the absence of a viral load effect? Perhaps you have already discussed tissue distribution of the virus. Is there anything else you can think of? Lastly, could you update me on the status of EDP-514?
Jay Luly, CEO
Let's focus on the first question. Regarding viral load in the nose, we've provided all the information we can share at this time. We've addressed it multiple times, and there are no new updates. As for the ongoing DDI studies, ritonavir has a significant amount of complexity due to its interaction with various P450 enzymes and transporters. Therefore, we don't have a DDI profile similar to ritonavir. We believe our profile will be competitive going forward. If you have another brief question, feel free to ask. I believe you mentioned EDP-514, Roy. If you're still on, great; if not, you can return to the queue later.
Roy Buchanan, Analyst
Yes, sorry, 514. Just the status of searching for additional candidates to combine with that. You considered out-licensing 514 in addition to in-licensing something else? Thanks.
Jay Luly, CEO
We are open to exploring the right partnerships and combinations. In the area of hepatitis B, we anticipate more data will be released, but determining the best combination for us or others remains uncertain. Our strategy involves monitoring additional data sets, considering alternative mechanisms, reviewing literature closely, and evaluating external assets for potential combinations. We are flexible regarding whether we license out our asset or bring in another one; our priority is ensuring the combination is optimal.
Operator, Operator
Thank you. One moment for our next question. Again, it comes from the line of Akash Tewari with Jefferies. Please proceed.
Unidentified Analyst, Analyst
Hi. This is Amy on for Akash. Thanks so much for taking our question. So Shionogi also had a high prior vaccinated patients in their Phase II trials in the range of mid- to high 80% range and believe they showed a half log to one log benefit over on viral load over placebo. What are the major differences between your Phase II and prior COVID antivirals that would attribute to a potentially more aggressive placebo?
Jay Luly, CEO
I was going to say either one of us can take that. The Shionogi study was conducted with Japanese and Asian patients at a time when they had less exposure to natural infection. Therefore, we would expect much lower rates of nuclear capsid positivity in that population compared to ours. As we can see in 2023, populations now have very high hybrid immunity, making it difficult to find patients, let alone a population, with a baseline viral load of seven logs like Shionogi to demonstrate a drop in viral load. Tara, did you have anything to add?
Tara Kieffer, Senior VP of New Product Strategy and Development
Yes. I think the terminology of seropositivity is somewhat heterogeneous in terms of what provides that seropositivity, whether it's to vaccination or natural infection. And we're seeing data coming out of the CDC now that in the US, the percentage of people with hybrid immunity, meaning they have had it through both vaccination and/or natural infection is increasing, probably provides somewhat better immunity, and that's probably borne out in the difference in baseline viral load between the two studies. We know that, that is a major factor in seeing these viral load declines. So yes, the Shionogi study had a baseline viral load of seven, which was two logs higher than what we had in SPRINT.
Jay Luly, CEO
And we've got just as an appendix to the slide deck that we presented today, which again should be on our website soon. If it's not already there, has a little bit of supplemental information about seropositivity and also percent of patients or percent of the population that have been previously infected as measured by nucleocapsid antibodies. So I think those trends are pretty interesting. So if you extrapolate them backward into Japan at that time in place, I think you would get a sense that it likely was a bit of a different patient population.
Unidentified Analyst, Analyst
Great. Thank you so much.
Operator, Operator
One moment for our next question. It comes from the line of Liisa Bayko with Evercore ISI. Please proceed.
Liisa Bayko, Analyst
Hi, there. How are you doing?
Jay Luly, CEO
Good.
Liisa Bayko, Analyst
Do you think that demonstrating an RNA change is significant for partnership discussions? How important do you believe that is? I understand that symptoms are crucial for Phase 3, but I'm curious about the relevance of RNA changes for potential partnerships.
Jay Luly, CEO
You need to consider the overall context of the data. Ultimately, people want assurance of a clear registration pathway, and symptoms certainly contribute to that. The viral load data was not primarily focused on virology, and we were surprised by the placebo results, particularly when we compared our placebo against others in similar studies, highlighting how disadvantaged our treatment arm was. This seems to reflect the current state of patient immune training and the virus's evolution.
Liisa Bayko, Analyst
Okay. Do you think that if you were able to access some of these other viral reservoirs, even though it might not be feasible, theoretically you would observe a change? I was attempting to link changes in symptoms with actual viral reduction, although it appears to be a separate question.
Jay Luly, CEO
I think it's possible that there are various compartments in the body, like the heart, liver, lungs, and other tissues, that act as reservoirs for the virus. The virus has even been detected in the brain. This presents a challenge, especially when considering long COVID. Many patients with long COVID might still harbor the virus in different tissues, even if they test negative by swabbing their nose. Some of the symptoms that long COVID patients experience could suggest that certain populations still retain the virus in those reservoirs. We are actively considering innovative ways to investigate and identify those reservoirs. However, it's too early to determine if we would conduct a smaller Phase 2 study to further explore those viral reservoirs.
Liisa Bayko, Analyst
Okay. And does, I guess, natural immunity or vaccination disproportionately reduced virus in the nasal passage, or why would it be different, I guess, than other reservoirs?
Tara Kieffer, Senior VP of New Product Strategy and Development
Liisa, that's a great question. We believe that hybrid immunity, based on some available data, may offer improved protection. The nose serves as the initial entry point for the virus, where it begins to spread and replicate throughout the body, and it seems to be where clearance occurs. Patients develop mucosal immunity that can aid in clearing the virus, at least in the nasal area.
Liisa Bayko, Analyst
That makes sense.
Jay Luly, CEO
I was going to mention that when it comes to natural infection, you develop mucosal immunity that vaccination may not provide to the same extent.
Operator, Operator
Thank you. And just as we think about next steps, are those predicated on finding a partnership, or is that something you'd be willing to take on yourself? Like how are we thinking about the gating factors for development?
Jay Luly, CEO
I don't believe any Phase 2 study would be limited by a different population like long COVID; that's not a restriction. In fact, it's included in the financial guidance that Paul mentioned, allowing us to proceed while still having cash through 2026. However, I think for Phase 3, these are larger and more costly trials, and it’s important to have a partner involved in the trial design and execution. We have always aimed to find a late-stage partner and commercialization launch partner for this, rather than planning to commercialize in COVID ourselves. So, that remains our strategy for moving forward with Phase 3.
Liisa Bayko, Analyst
Okay. Thanks a lot.
Operator, Operator
Thank you. One moment for our next question please. And it comes from the line of Brian Skorney with Baird. Please proceed.
Brian Skorney, Analyst
Good afternoon everyone. Thank you for taking my question. I would like to clarify something mentioned in the press release regarding the prespecified protocol. You referred to the total symptoms score and also to 14 targeted COVID-19 symptoms. Can you explain if these represent different sets of symptoms that you are assessing? Additionally, in the protocol listed on clinicaltrials.gov for numbers three and four, the symptoms mentioned may indicate the proportion of COVID-19 symptoms at times and the change from baseline in COVID-19 symptoms. Is this referring to the total symptoms score or the 14 targeted COVID-19 symptoms?
Jay Luly, CEO
It's the same. Yes. So, the way we get it is we have the 14 symptoms and each one is graded by the patient on a scale of zero, one, two, or three and then add up the score, and that's the score. So, total symptom score and all 14 symptoms, we mean to be the same thing. Does that help?
Brian Skorney, Analyst
I'm having difficulty understanding the statement about no differences being observed in the time it took to improve the 14 targeted COVID-19 symptoms. Is this saying that there is no difference in the observed time for improvement in the total symptom score? I'm not quite clear on the distinction we're discussing.
Jay Luly, CEO
I understand your point. We assess the time to improvement differently. To achieve this, all your symptoms must either be absent or mild, and anything present at the start must remain absent for two consecutive days. This applies to all 14 symptoms. That's what I mean by the time to improvement for all 14 symptoms. When referring to a specific subset of those symptoms, we're focusing on just those individual symptoms. This selected group provides us with a stronger ability to identify differences with the placebo because those symptoms tend to linger longer with the placebo and resolve more quickly with EDP-235.
Operator, Operator
Thank you. And it comes from the line of Ed Arce with H.C. Wainwright. Please proceed.
Thomas Yip, Analyst
Hi, good afternoon everyone. It's Thomas Yip asking a couple of questions for Ed. Thank you for taking my questions. With COVID-19 entering its endemic phase, I am trying to understand what the market opportunity looks like in both the US and international markets, especially considering the recent performance and the inventory write-down that was reported.
Jay Luly, CEO
Sorry, could you repeat? I mean you're asking what the market opportunity is for COVID therapeutics?
Thomas Yip, Analyst
Yes, because as COVID-19 asset transgression from a pandemic into an endemic phase and for treatment as well. How do you look at the COVID-19 treatment market going forward?
Tara Kieffer, Senior VP of New Product Strategy and Development
Sure. So, I think what we can look at is what the guidance has been provided in terms of revenue from the drugs that are currently available, looking at remdesivir, molnupiravir, and paxlovid, I think combined, it's around $10 billion market size. And so if you look at information that they just released on their quarterly revenue, they were guiding to $8 billion in revenue to 2023, and they actually reported $4 billion just in Q1. So we do believe that there is a good market and still a lot of use for antivirals in this indication.
Thomas Yip, Analyst
Thank you for the essential information. Perhaps two more questions from us. You mentioned in the press release that long COVID will be a possibility, how does that aptly compare to COVID and an endpoints in the study that brand that could suggest potential in COVID?
Jay Luly, CEO
Yes. Well, long COVID is very different than acute COVID. It has different clinical manifestations and a diverse patient population. That said, there are maybe common elements in a subset that could be a patient population that could benefit from an antiviral. And so again, as I mentioned a minute ago, we're going to look and think about that and any plans for any next study where we to do one and long COVID, we'll design or give further details around the design at that point. So it's premature for us to comment on it today.
Thomas Yip, Analyst
Got it. Just one last question from us regarding the 323 switching gears to 323 with the Phase 1 data expected next month. Can you remind us what the next step will be? Is it the challenge study? If so, can you provide some preliminary thoughts on what that study will look like?
Jay Luly, CEO
Yes. So 323 again, our polymerase inhibitor, super potent, great clinical PK and safety, took it into Phase 1 study in healthy, MAD, SAD study. That's the data that we'll report out next month. Top line would have safety, tolerability and PK. From that, it will allow us to derive what sorts of multiples we have of protein adjusted EC90, which are the hallmarks of efficacy surrogates that you can measure in a Phase 1 study even in healthy patient population. So I think the logical next step, assuming positive data there would be a challenge study. And from that standpoint, we've had a very successful challenge study for EDP-938 in the past. Again, one could look at that to get insights on how we might be thinking about progressing 323, assuming positive data. And we'll have more details on data and next steps when we release it next time.
Thomas Yip, Analyst
Understood. Thank you so much again for taking our questions.
Jay Luly, CEO
You're welcome.
Operator, Operator
Thank you. One moment for our next question please. And it comes from the line of Roanna Ruiz with SVB Securities. Please proceed.
Roanna Ruiz, Analyst
Great. Thanks. Some of my questions were already asked, but maybe a quick one on 235. I was curious if your outlook on time to possible approval for that asset has changed at all? Especially considering the Phase 3 and possibly an addition Phase 2 that you might run?
Jay Luly, CEO
Well, again, a Phase 2 would be supportive perhaps of a different indication. I think the wildcard there is in the context of a partner. I mean, obviously, one of the reasons we're seeking partner would be the potentially the time to approval could be accelerated by the strength and resources of a global pharma partner helping us to execute. So yeah. I think right now, I would assume that it's going to be a lot driven by a partner in terms of moving that time either forward or backward, I’d say.
Roanna Ruiz, Analyst
Yeah, understood. And then last one from me. I was curious. In the individuals where you saw elevated cholesterol or triglycerides, was there any trends or commonalities among them that could help you identify them proactively in some of the data that you've seen so far?
Jay Luly, CEO
Thanks, Roanna. So nothing specifically. We've gone through it at a population basis. There weren't any substantial outliers who didn't already have really high lipids at baseline. So we haven't detected anything specific or any patterns in terms of outliers. It was just a general population trend.
Hannah Adeoye, Analyst
Hi. This is Hannah on for Eric Joseph. Thanks for taking the question. So just acknowledging that there are a number of details left to be finalized as it relates to a pivotal study design, given the fact that you have observed treatment benefit in non-high risk mild to moderate COVID patients? How are you thinking about the target patient population for the therapy? And then just secondly, with Pfizer announcing plans to develop a next-gen COVID antiviral PAXLOVID that won't be using ritonavir boosting. Just wanted to get your sense of how you're thinking about the impact that might have and it might have on bearing on potential partnership discussions for EDP-235?
Jay Luly, CEO
We've always anticipated that there would be multiple players in the COVID space. In terms of Pfizer's next molecule, we'll need to see what data they can produce. We know their capabilities with PAXLOVID and what Shionogi has. Aside from Pfizer and Shionogi, we have another option as well. Currently, the market remains favorable considering its size and the contribution that a protease can make to the overall treatment landscape for COVID. What was the other part of your question?
Hannah Adeoye, Analyst
Just your thoughts on targeted patient population for the therapy since the safety study.
Jay Luly, CEO
Yes, we are considering a broad approach to the patient population. This includes both standard risk and high-risk patients, which align with different risk profiles, as well as those for prophylactic long COVID. I don't see any reason not to include these considerations in a comprehensive development program.
Jennifer Viera, Investor Relations
Thank you, everyone, for joining us today. Please note that we will have these slides on our website as well as our updated corporate presentation. If you have any additional questions, feel free to contact us by e-mail or call the office. Thank you, and have a great night.
Operator, Operator
Thank you, ladies and gentlemen, for participating in today's conference. You may now disconnect.