Good morning. Welcome to Synlogic's Second Quarter 2022 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 this call. Please be advised, that this call is being recorded. I would now like to turn the call over to Andrew Funderburk of Kendall Investor Relations. Please proceed.

Thank you, operator. Good morning, and thank you for joining us on today's conference call. This morning, we issued a press release, which outlines our second quarter 2022 financial results and additional business updates. The release is available on the Investors section of our website. Joining me on this call are Dr. Aoife Brennan, President and Chief Executive Officer; Molly Harper, Chief Business Officer; Dave Hava, Chief Scientific Officer; and Michael Jensen, Chief Financial Officer. Other members of the management team will be available during the Q&A. During the call, Aoife will provide a review of first quarter highlights. Molly will provide additional details for the clinical programs. Dave will discuss our earlier-stage programs and collaborations, and Michael will provide a financial overview. Following our prepared remarks, we will open the call for questions. As we begin, I'd like to remind everyone that comments today may include forward-looking statements. These forward-looking statements are made as of today and are subject to numerous factors, assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those contained in any forward-looking statements based on various factors, including those described under the heading Forward-Looking Statements in Synlogic's press release from earlier today or under the heading Risk Factors in Synlogic's most recent Form 10-K or in later filings with the SEC. Synlogic cautions you not to place undue reliance on any forward-looking statements. Now I'd like to turn the call over to Aoife.

Thanks, Andrew. Good morning, everyone, and thank you for joining us. I'm happy to share an update today on our recent progress, the financial results for the second quarter of 2022 and upcoming milestones. This is an exciting time for Synlogic and the synthetic biotic platform. For our most advanced program in PKU, in the second quarter, we announced that we received a positive opinion on orphan drug designation from the European Medicines Agency or EMA for SYNB 1618 for the treatment of PKU. This is an important step for our program and the EMA's opinion reflects the recognized need for new treatments of PKU. In the remainder of 2022, we expect three clinical data readouts from three different programs. These include for the PKU program, the Phase II data readout and Phase III candidate confirmation; for SYNB 1353, our synthetic biotic designed to consume methionine as a potential treatment for homocystinuria or HCU; findings from the recently initiated Phase 1 healthy volunteer study; and finally for SYNB 8802, a potential treatment for enteric hyperoxaluria, from which we also expect to share proof of concept data. We recently recognized SYNB 1353 as our third program to enter the clinic in less than two years, reflecting the advantages of synthetic biotics. SYNB 1353, built on technical as well as regulatory synergies, showcases the promise of this platform of biotherapeutics based on synthetic biology. SYNB 1353 entered the clinic within just a year of being named as a candidate, a timeline similar for SYNB 8802 and SYNB 1934. The FDA raised the traditional preclinical toxicology package for SYNB 1353, recognizing the transferable findings of using the synthetic chassis. Moving beyond the clinical pipeline, I'm excited to introduce our newest addition to the Synlogic pipeline, SYNB 2081 for gout. Gout is a well-known and often debilitating form of inflammatory arthritis characterized by intense joint pain and limited range of motion due to excessive levels of uric acid. Patients remain underserved, especially those who are intolerant of or refractory to available therapies. We are excited to advance SYNB 2081, our second synthetic biotic developed through our partnership with Ginkgo Bioworks. As discussed on our last call, trial readiness activities are underway for the start of our Phase III study for the PKU program in the first half of 2023. This builds on Phase II interim analysis and proof of concept data shared last fall, demonstrating in PKU patients SYNB 1618's strong activity and reduction in plasma phenylalanine, the amino acid PKU patients aren’t able to metabolize, which becomes neurotoxic at high levels. In parallel with the proof of concept readout, we confirmed even greater potency with the next generation SYNB 1934 while establishing the safety bridge at a Phase I head-to-head study. Since then, we've progressed SYNB 1934 such that it is now the presumed Phase III candidate, but that will be confirmed after assessing the SYNB 1934 experience in PKU patients from the Phase II study to be shared later this year. Looking ahead to the Phase II data, we have an opportunity to remind this audience of the endpoint we use to confirm drug activity. For all of our programs, we look for multiple endpoints that are specific to the synthetic biotic to assess if they're working as intended. For PKU, our synthetic biotic is designed to metabolize phenylalanine in the gastrointestinal tract. To measure this effect in a more precise and controlled way, we provide labeled phenylalanine or D5-phenylalanine as part of a test meal at baseline and then again after treatment in the study. This is the primary endpoint for the Phase II Symphony trial. We are also assessing the impact of our synthetic biotic on fasting plasma phenylalanine levels, as well as TCA in plasma and HA in urine, two metabolic byproducts that can only be produced if the strain is effectively consuming phenylalanine. We also look forward to sharing data from evaluation as a monotherapy, but also as an adjunct to existing treatments. With that, I'll pass the call over to Molly to provide a bit more perspective on the significance of this positioning and our differentiation in PKU, as well as some further insights on our HCU program.

Thank you, Aoife. Aoife has described how our Phase II design reflects our positioning in PKU, targeting the more severe patients who, in the case of PKU, represent a large majority of the patient population. This includes both monotherapy and adjunctive patients. The more mild patients with PKU are often described in terms of BH-4 or responsiveness. However, even these patients, in spite of responding to and benefiting from current therapies, often have phenylalanine levels far above desired levels. These patients present an opportunity for adjunctive treatment. The large majority of PKU patients in the US and Northern Europe are considered to have classical PKU. These are the patients with higher levels of phenylalanine who did not respond to current therapies and for whom balancing is not an option. We find tremendous appreciation for the potential of an oral non-systemic approach like Synlogic. This is the currently untreated patient population who present an opportunity for our approach as monotherapy. Our program positioning is for these more severe patients, who are either currently untreated or in need of additional phenylalanine lowering as an adjunct. Turning now to SYNB 1353, which, as Aoife noted, recently entered the clinic in healthy volunteers. We've shared that this program builds on disease state synergies. Since it is an inborn error of metabolism, there is a direct overlap between HCU and PKU in terms of KOLs and connected patient communities. In terms of current disease management, patients with HCU also must live with restrictive diets that are considered even more onerous and challenging than those for PKU, to reduce the risk of impaired cognitive function or developmental disabilities. Additionally, elevated homocystinuria in HCU presents significant risk of devastating and acute systemic complications, including thromboembolism, stroke, skeletal weakness, and associated fracture, as well as lens dislocation. Like PKU, the current standard of care for HCU leaves a need for a new approach, one that is orally administered without systemic absorption and associated risks, and is conducive to both monotherapy or an adjunctive or combination treatment approach. Today's standard of care is a generic treatment that has been available for decades, but does not alleviate dietary restrictions and often leaves further need for homocystine reduction. Current options in development are injectables and replacement therapies. From speaking with KOLs, clinicians, and patients, we have heard consistently strong interest for an oral option, particularly one with the profile of an engineered probiotic, and we are excited to move this forward. At this point, I'd like to turn the discussion over to Dave, to provide a bit more context regarding our upcoming data readouts and our newest drug candidate.

Thanks, Molly. It is a pleasure to review this exciting time for our pipeline as it both advances and has added a new drug candidate. Molly and Aoife have both touched upon our upcoming data readouts in PKU and HCU. We are also looking forward to proof of concept data in support of SYNB 8802, designed to consume oxalate in the gastrointestinal tract to reduce the risk of recurrent kidney stones and related renal complications in patients with enteritis. SYNB 8802 is being evaluated in two studies; one in patients with Roux-en-Y gastric bypass surgery who have elevated absorption of oxalate to evaluate whether SYNB 8802 can lower urinary oxalate in those patients. There is a second ongoing Phase I study for the SYNB 8802 program to continue building our clinical data set in patients with Roux-en-Y gastric bypass. This is an inpatient setting study where we can collect dietary data as well as high-quality 24-hour urine and fecal samples. We believe that the combination of parameters assessed will support proof of concept for this patient population. I'm also pleased to share that we've named an additional program in our metabolic pipeline, SYNB 2081, a synthetic biotic designed to consume uric acid in the gastrointestinal tract, with the goal of lowering systemic uric acid levels for the treatment of gout. As Aoife mentioned, this is our second drug candidate through our partnership with Ginkgo Bioworks. We are tremendously excited about the opportunity to add another much-needed option to the gout treatment repertoire, which remains quite limited today due to current treatments that are restricted in terms of safety, efficacy, or the patient experience. I'll now turn things over to Michael to review our financial results.

Thanks, Dave, and good morning, everyone. Earlier this morning, we released our financial results for the second quarter ending June 30, 2022, and I'm pleased to review the highlights of those results with you now. Revenue was $0.2 million for the second quarter of 2022, consistent with the same period in 2021. Revenue was from our collaboration with Roche for the discovery of a novel synthetic biotic for the treatment of inflammatory bowel disease. For the second quarter of 2022, the company reported a consolidated net loss of $15.7 million compared to a consolidated net loss of $15 million for the corresponding period in 2021. Turning to the balance sheet, Synlogic ended the second quarter of 2022 with $106.8 million in cash, cash equivalents, and marketable securities compared to $120.5 million as of March 31, 2022. Under our current operating plan, we expect that our cash will take us into 2024 and enable Synlogic to advance clinical programs through multiple important data readouts across our metabolic portfolio. Thank you for your attention. We look forward to keeping you updated on future calls. I will now turn the call back over to Aoife to wrap things up.

Thank you, Michael. This is an exciting period for Synlogic as we advance to three anticipated data readouts in the coming months, along with a Phase III initiation in the first half of 2023. We're well-positioned with a strong balance sheet to advance these important programs and are fortunate to have funds available to support us well into 2024. I'm very pleased with all of our progress and the commitment of our entire team to advance promising therapies to patients in need of new treatment options. We will now open the call for questions.

Our first question comes from Joseph Schwartz from SVB Securities.

Stallion for Joe. Thank you for taking our questions. The first one is on your PKU franchise. Another company recently lowered their sales guidance for their PKU franchise citing that PKU treatment centers have not bounced back from the pandemic. And I know you mentioned labor shortages on your earnings call last quarter. So I'm wondering if you're still detecting some challenges enrolling Symphony, and if internal expectations on the market opportunity have been adjusted based on the recovery rate observed from the other company.

Thanks, Julie. This is Aoife. I can say that our guidance for the arm II data is unchanged. We're planning to have data later this year. Regarding the market dynamics in PKU, I'll pass the call over to Molly for some comments on what we've been observing with other products and she can provide you with a bit more insight there.

Hi there. Thanks for the question. In terms of the other products, what we've generally heard from clinicians is that the interest in new therapies and alternate therapies with different profiles is extremely strong. In every patient appointment, they're discussing not only what's available but also options in development. While clinicians are seeing different paces of return to, quote unquote, normal—including seasonality considerations—the excitement and opportunity that serve as the foundation of our program really hasn't changed. If anything, as we engage with the community, it seems to be getting stronger and stronger.

Okay. That's helpful. Thank you. Continuing on the enrollment theme, I know it's very early, but are you anticipating major differences in your Phase III enrollment compared to Phase II that could affect the enrollment rate? I'm wondering if you're just expecting it to be faster, slower, or about the same based on your experience in Phase II.

Great question. I think there are a couple of things that will be very different for the Phase III program compared to the Phase II program. The first major difference is that we'll have many more sites. We anticipate going to multiple countries and regions, which will provide a considerable difference in terms of the number of sites that we will use to enroll participants. The trial will obviously be larger, and I think spreading a broader geographic net will certainly help with achieving the required enrollment rate. The second component is that there will be significant differences in terms of study design. PKU patients are keenly interested in access to therapy, beyond just two weeks of a Phase II study. Feedback we've received from patients during Phase II indicates they value the opportunity for an open-label extension study, which allows them to continue receiving treatment if they benefit, until the product is approved. This follows similar concerns seen in rare diseases, where there's reluctance to discontinue a potential beneficial treatment. Lastly, the Phase III trial will have less intensity in terms of the commitment and activities required from patients and sites. Our Phase II study is very data-rich, with many endpoints; patients have multiple clinic visits for meal tests and other evaluations, which adds substantial burden. As we move to Phase III, we can significantly reduce the burden on patients and sites, focusing on plasma phenylalanine lowering as the primary endpoint, with less frequent visits and fewer intensive assessments. Overall, key factors for smoother enrollment include valuable learnings from our Phase II experience that provide precedent for our enrollment projections.

Okay, great. That's very helpful. Finally, if I could squeeze one more in; how should we think about age in phenylalanine reduction? My understanding is the Phase III trial includes children and adults, while your Phase III trial is enrolling only those aged 18 and up. I know that the platforms are different, but are you anticipating or expecting a difference in phenylalanine lowering based on age?

That's a great question. In terms of pediatric product development, Kuvan was somewhat unique because it had clinical data from Japan when it filed the initial IND. It had existing safety, efficacy, and exposure data. Generally, the FDA prefers that you demonstrate safety and some probability of benefit before enrolling patients below the age of consent. We plan to continue working with the FDA to expand enrollment to younger patients gradually based on the data we gather in the Phase II study, as we recognize pediatric patients represent a crucial segment with significant unmet needs and lifelong consequences. From a biological perspective, there's no reason to expect pediatric patients will respond differently to adults in terms of lowering phenylalanine. However, the endpoints may need to differ, especially for very young children whose parents maintain strict control, resulting in lower baseline phenylalanine levels. For this population, the endpoint might need to focus more on protein liberalization—how much additional natural protein can be added to their diet—rather than just lowering levels. So, we are actively considering pediatric development as part of our overall clinical strategy and see significant opportunities for our candidates within that demographic.

Our next question comes from the line of Mark Breidenbach from Oppenheimer.

Thanks for taking our questions. First of all, when can we expect you to announce the finalized Phase III protocol details? Are we going to have to kind of wait until next year for that? And can we assume the trial's being designed with the intention to support registration in more than one geography, both the US and Europe?

Great. Thanks for your questions. For the first one, regarding the Phase III design, we plan to hold an end of Phase II meeting with the FDA to ensure final alignment on the specific design before we disclose that externally. I think that’s the prudent approach. Regarding manufacturing requirements, we have engaged in substantial discussions with the FDA concerning our CMC and analytics for our products, and we’ve established good alignment through collaborative discussions. We don’t foresee any major roadblocks based on our communications to date. However, the final agreement will come with the end of Phase II meeting minutes. Once we have those, we’ll share the overall study design and feedback from the FDA with the investment community. Regarding global regulatory alignment, we see a lot of opportunities. Globally, around 55,000 patients have PKU, with about 17,000 in the US, indicating a significant unmet medical need and a promising commercial opportunity worldwide. We’re actively pursuing ex-US regulatory alignment, while prioritizing speed to BLA in the US. We are focused on initiating our Phase III study as quickly as possible and don’t want to compromise our speed or success with the FDA while seeking global regulatory alignment for PKU.

Second question on PKU: Are you going to rely on your in-house manufacturing capabilities to support the study? Have you clearly outlined the list of CMC requirements from the FDA for the drug products to be used in Phase III and beyond?

Thank you. Our regulatory correspondence with the FDA has been positive; we’ve been continually engaging and have made significant progress with our manufacturing plans. We have product to supply for the Phase III, which comes from three key areas. First, we’ve optimized our processes to improve yield by enhancing our cell densities. Second, we’ve completed the expansion and renovation of our manufacturing suite to facilitate this next level of scale-up. Additionally, we’ve successfully transferred our technology into the updated suite, positioning us well for future GMP activities needed for Phase III support. The combined progress on scale, process yields, and facility capacity enables us to support Phase III production from our current suite.

That does answer my question. Thank you.

I wasn't forgetting that Mark. We have Dave Hava on the line who can explain some of the biology we've elucidated regarding the role of the gut in gout. We look forward to sharing that at a future academic meeting, but maybe Dave can provide you with some highlights today.

I'd be happy to do that. Understanding the biology of uric acid metabolism and distribution is a significant part of advancing this program. For many metabolites, there are multiple pools to draw on; the dietary component is true for amino acids and oxalate. We believe it's also true for uric acid. In addition, many metabolites recirculate from systemic compartments into the gut and back out; we’ve described that for methionine and believe that it applies to uric acid as well. This view is supported by some older literature highlighting a gut component in the metabolism and clearance of endogenous uric acid. Therefore, we anticipate that our synthetic biotic will access some of that pool, based on both literature and our own data in both rodent and non-human primate studies. Likely, the product will target both dietary and endogenous sources of uric acid.

Alright, thanks so much for that clarification, and good luck with everything. Take care.

Our next question comes from Raghuram Selvaraju from H.C. Wainwright.

Hi everyone. This is Mitchell on for Ram. Thank you for taking our questions. You were discussing the enrollment rate for PKU for Phase III versus Phase II. It could be a little less intensive because in Phase II, you're collecting a lot of data. Could you discuss any differences you expect, particularly in terms of biomarker collection that might be less emphasized in the Phase III? What might we see more of in the Phase II that could potentially be reduced in the Phase III?

Good question, Mitchell. This is Aoife. In the Phase II study, we wanted a highly efficient design that would help us evaluate whether our product could effectively lower phenylalanine levels in PKU patients. Based on the data we announced last year, we believe we achieved that goal; the data appears internally consistent. We know that the product can work. The Phase III study will focus on evaluating and refining the clinical profile for this product. There will be many learnings from the Phase II that will be incorporated into the Phase III design. The two most critical components from a drug developer's perspective are the proportion of patients who respond, and what level of phenylalanine lowering can be achieved in this responder population. These endpoints are more straightforward, requiring simple blood samples every few weeks. There’s less need for overnight fasting or intensive multiple time-point daily curves like in Phase II. Additionally, we’re also focused on optimizing the tolerability profile of the product. Based on our experience, addressing adverse events will be crucial, and allowing patients to adjust to the right dose that works for them will be an important aspect of our Phase III design. Overall, we see tremendous promise based on our Phase II experiences and believe that we can effectively enhance the Phase III design for informative outcomes while streamlining enrollment.

Thank you. I would now like to turn the conference back to Aoife Brennan for closing remarks.

I'd just like to close by thanking everyone for joining us today for the call. We look forward to a busy second half of this year. Thank you so much for your attention.

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