Earnings Call Transcript - SYBX Q2 2021

Operator, Operator

Good morning and welcome to Synlogic’s Second Quarter 2021 Conference Call. At this time all participants are in a listen-only mode. Later 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 Daniel Rosan, Head of Finance and Investor Relations. Please proceed.

Daniel Rosan, Head of Finance and Investor Relations

Thank you, operator. Good morning and thanks for joining us on today’s conference call. This morning we issued a press release which outlines our second quarter 2021 financial results and additional business updates. The release is available on the Investors section of our website at synlogictx.com. Joining me on this call are Dr. Aoife Brennan, President and Chief Executive Officer; and Dr. David Hava, Chief Scientific Officer. Other members of the management team will also be available during the Q&A. This morning Aoife will provide a review of second quarter highlights and recent progress. Dave will share the latest advancements in applying our Synthetic Biotic platform to Phenylketonuria and Aoife will then return to provide an update on our metabolic portfolio including Enteric Hyperoxaluria. Finally, I will summarize our financial results for the quarter. Following our prepared remarks, we will open the call for your questions. As we begin, I would like to remind everyone that comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date hereof 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 statement as a result of 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 would like to turn the call over to Aoife.

Aoife Brennan, President and Chief Executive Officer

Thanks Dan. Good morning everyone and thank you for joining us. I'm thrilled to share with you today updates on our recent execution and progress across the portfolio as well as our financial results for the second quarter of 2021. Before we dive in and as I'm sure you're already aware I wanted to first thank Dr. Richard Riese for all of his contributions over the last few years serving as Synlogic’s Chief Medical Officer. We wish Richard the best in his new endeavors. As our programs continue to build momentum, we remain in good hands with the highly experienced executive team. I'm personally excited to tap into my CMO muse as we initiate a search for a CMO who can lead our growing clinical development organization and shepherd our programs as they transition to later phases of development. Now back to the business. We are executing on our plans to demonstrate the clinical potential of our Synthetic Biotic platform in 2021. With proof of mechanism established in our two lead metabolic programs, a strengthened balance sheet, and an exciting new partnership, we are well-positioned to deliver proof of concept in multiple high-value indications. Like all companies with ongoing clinical studies, we continue to watch the impact of the COVID-19 pandemic and particularly the delta variant carefully especially on clinical sites in the Southeastern United States. We're pleased that our team continues to execute with this singular goal of developing Synthetic Biotic medicines which provide meaningful treatment for patients with serious diseases. Let me turn to those programs now. I'll begin with our PKU program. We believe patients living with PKU continue to need additional treatment options to manage this devastating disease and we believe that an efficacious oral therapy regardless of genotype remains one of the most attractive clinical profiles. This is why we have been executing on our plan to evaluate our lead PKU candidate SYNB1618 in the Phase 2 clinical study we call SynPheny. We're thrilled to weekly publish the compelling proof of mechanism results for our Phase 1 study of SYNB1618 in Nature Metabolism and the SynPheny study is on track to deliver data later this year. This quarter we also took another important step forward by initiating the Phase 1 study of SYNB1934. SYNB1934 is an advanced strain of SYNB1618 and in a moment Dave will tell you more about the science behind our PKU program. Let me tell you why we developed SYNB1934, it is because we never stopped asking the question how much more efficacy can we deliver for patients. Synthetic biology tools are progressing rapidly and our team has access to the best of those tools both internally and through our network of collaborators. By deploying a new suite of directed evolution tools to SYNB1618, we were able to generate a candidate which may have even more phenylalanine-consuming capacity and move rapidly into the clinic. In Enteric Hyperoxaluria we also see a significant opportunity to make a meaningful difference in the lives of patients. SYNB8802, our other lead metabolic program is designed to consume the toxic metabolite oxalates in the GI tract in patients with Enteric Hyperoxaluria, a leading cause of oxalate nephropathy and recurrent kidney stones for which there are no approved therapies. As we have previously communicated, SYNB8802 has demonstrated the ability to consume oxalate in the GI tract of healthy volunteers exhibiting a robust and dose-responsive urinary oxalate reduction. We are now evaluating the oxalate-lowering potential of SYNB8802 in a Phase 1B study in patients with Enteric Hyperoxaluria following Roux-en-Y gastric bypass surgery. This study gives us an opportunity to demonstrate highly clinically attractive profiles. We are taking the learnings from our co-lead metabolic programs and applying them to novel approaches to address other diseases in which a GI-based approach may be relevant, including inherited and acquired metabolic disorders, as well as partial immune conditions. We recently entered into a research collaboration agreement with Roche for the discovery of a novel Synthetic Biotic medicine for the treatment of inflammatory bowel disease or IBD. IBD remains an area of high unmet need in which new approaches are urgently needed. We're delighted to be working with an organization with unparalleled depth in immunology and look forward to exploring the potential of synthetic biology medicine in IBD. Our team has done a tremendous job executing across multiple programs during our continued to be trying times for all of us in 2021. This resilience and teamwork has set the stage for multiple meaningful readouts in 2021. Thanks to our careful capital stewardship, these milestones occur well within our cash window. In summary, 2021 has been an incredibly exciting year for the company. We now have demonstrated proof of mechanism in humans from both our lead metabolic programs in PKU and Enteric Hyperoxaluria. We initiated a Phase 1 study of a next-generation strain in our PKU portfolio, and initiated an exciting new partnership in immunomodulation. We have the opportunity to demonstrate proof of concept in our co-lead program and advance a mission to bring the transformative power of synthetic biology to medicine. Now, let me turn the call over to Dave to go deeper into our PKU program.

David Hava, Chief Scientific Officer

Thank you, Aoife. It is my role today to share the exciting science which underpins our PKU program, and our next-generation strain SYNB1934. Before I do, let me remind you of the challenges faced by PKU patients and caregivers. PKU is an inherited metabolic disease in which children are born without the ability to metabolize phenylalanine or Phe. Consuming even modest amounts of dietary Phe causes irreversible neurocognitive deficits in patients with PKU. Despite the availability of dietary management and approved treatments, a large proportion of patients struggle to maintain blood Phe levels in the target range required to avoid irreversible damage. It is clear to us that both current and emerging treatment options continue to leave too many patients behind and so we have set as our target product profile, a safe, tolerable, reversible, and oral therapy, which would reduce plasma Phe levels for PKU patients regardless of underlying genotype. The scientific hypothesis behind our approach is quite simple. It is well understood that reducing the dietary consumption of phenylalanine reduces plasma Phe levels in patients with PKU. Our team has built on that biology to introduce the Synthetic Biotic medicine into the GI tract, which is specifically designed to consume Phe and break it down to produce TCA and HA. TCA or trans-cinnamic acid and HA is a further breakdown product of TCA. Both are generally regarded as safe substances which are harmlessly excreted from the body. These measurable biomarkers TCA and HA are key because they allow us to determine the Phe-lowering potency of our strains in a consistent manner, across in vitro, in vivo, healthy volunteer, and patient studies. As you know, our first-generation PKU candidate SYNB1618 has shown promising activity with dose-dependent increases in TCA seen in healthy volunteers. This indicates that the strain is consuming Phe in the GI tract at escalating levels that correspond closely with how much SYNB1618 we are administering. Based on this observation, we have moved SYNB1618 into Phase 2 clinical development. However, our scientific team at Synlogic has continued to ask how much Phe-consuming activity can we engineer into a Synthetic Biotic medicine, especially as synthetic biology tools have advanced rapidly in the time since 1618 was engineered. That curiosity led us to SYNB1934, a strain that has been evolved from SYNB1618 with the potential to provide increased Phe-lowering efficacy for patients living with PKU. Preclinical in vivo and in vitro studies demonstrated greater than two-fold improvement in the ability of SYNB1934 to consume and break down Phe compared to SYNB1618. SYNB1934 was developed using a directed evolution approach, utilizing a biosensor engineered to a tool strain which was designed to respond to TCA. This allowed us to generate hundreds of variants of the Phe-consuming enzyme PAL and to test their whole cell activity in a translational development environment. After multiple rounds of selection, we chose the top candidate strains and confirmed their increased activity in simulated GI compartments in vitro and in vivo in non-human primates, which is the most predictive animal model for humans. This approach resulted in a doubling of Phe-consuming activity between SYNB1934 and SYNB1618, which we're now seeking to confirm in Phase 1. This rapid progression of SYNB1934, which went from candidate selection to first in human dosing in less than a month demonstrates the speed and power of our Synthetic Biotic platform. While we evaluate SYNB1934, we also continue to progress the SynPheny 1 Phase 2 proof of concept study with utmost care and attention. Our goals in this study are to demonstrate the potential of SYNB1618 to lower blood Phe in adult PKU patients and to validate our pharmacodynamic model to better understand the relationship between the strain biomarkers we have spoken about and plasma Phe lowering in a disease setting. Patients in SynPheny have no therapeutic options; they're ineligible, inappropriate for, or unresponsive to existing therapies. These are patients left behind by today's limited treatment options. The study is powered to detect a 20% reduction in plasma Phe. PKU patients and investigators tell us that a 20% Phe reduction in an oral, tolerable, and reversible therapeutic, which is effective for KUVan non-responders would be a welcome treatment option. In summary, the Phase 1 multiple ascending dose study in SYNB1934 will evaluate the safety, tolerability, and Phe consumption activity of SYNB1934, including a head-to-head comparison with SYNB1618 in healthy volunteers using biomarkers of Phe consumption. Based on the data from the head-to-head comparison, as well as results of the ongoing Phase 2 study of SYNB1618 in patients with PKU, Synlogic plans to select one therapeutic stream for late-stage development. Data from both studies are expected by the end of 2021. The willingness of advocates, caregivers, and patients to engage with us and other sponsors is critical to advancing new treatment options for this devastating disease. We want to thank them for their partnership. Let me now turn the call over to Aoife to share progress in Enteric Hyperoxaluria.

Aoife Brennan, President and Chief Executive Officer

Thank you, Dave and congratulations to your team on the tremendous progress in bringing potential new treatments to patients with PKU. Now let me turn to our co-lead metabolic program SYNB8802 in Enteric Hyperoxaluria. Enteric Hyperoxaluria, which we just call HOX, is a devastating condition with no treatment option in which dangerously high levels of urinary oxalate lead to progressive kidney damage. It often occurs as a result of the primary insult to the bowel leading to fat malabsorption such as inflammatory bowel disease, short bowel syndrome, or is a result of surgical procedures such as bariatric weight loss surgery. If left untreated, the dangerously high levels of urinary oxalate cause recurrent kidney stone formation, nephrocalcinosis, and progressive damage resulting in chronic kidney disease. Since oxalate is present in many healthy foods, Enteric Hyperoxaluria is almost impossible to control with diet alone. That means the patients are at risk for serious kidney complications. For most patients, Enteric Hyperoxaluria isn't a standalone problem. Because the pathogenic absorption of oxalate is a result of an underlying bowel disorder, this means in clinical practice, it is patients who already have the complexity of living with short bowel syndrome, chronic pancreatitis, IBD, or who have undergone bariatric surgery, who now have to face the devastating challenge of recurrent and chronic kidney stones. In this patient population, the pain and disruption of recurrent kidney stones is a significant challenge in their overall care. There are approximately 75,000 to 90,000 patients within Enteric Hyperoxaluria and recurrent chronic kidney stones, at a high risk of significant kidney damage in the United States. They have no treatment options today and we believe the Synthetic Biotic platform could provide a meaningful new approach. Meeting the needs of this population led us to develop SYNB8802, an oral Synthetic Biotic medicine which metabolizes the toxic substance oxalate in the GI tract and converts it into formates which are harmlessly excreted from the body. As you may recall, we have demonstrated 8802 proof of mechanism in a dietary hyperoxaluria study. We have now moved to Part B of that study in which SYNB8802 will be evaluated for the potential to lower urinary oxalates in Enteric Hyperoxaluria patients. Let me walk you through both parts of this study. The primary outcome of Part A of the Phase 1 study was safety and tolerability, which would be used to select the dose for further study in patients within Enteric Hyperoxaluria in part B of the trials. We completed dosing of five cohorts in Part A of the study. In the efficacy analysis, the percent change from baseline urinary oxalate level was 28.6% compared to placebo after a 3e11 live cell dose, a clinically meaningful level of oxalate degradation. This dose was well tolerated and it's being used in Part B of the study. Similar to our prior programs, we did not observe any systemic toxicity and there were no serious adverse events of any dose. Adverse events were generally mild to moderate GI related and transient. We found that a dose around significantly improved the tolerability profile. SYNB8802 is a non-colonizing, non-reproducing strain and periods from subjects after cessation of dosing. We were thrilled to see substantial urinary oxalate lowering across multiple dosing cohorts. This consistent and dose-responsive result is very encouraging. In Part B of the study, patients with Enteric Hyperoxaluria post Roux-en-Y gastric bypass surgery, who have dangerously high levels of urinary oxalate will be assessed in a crossover design. We have chosen a dose of 3e11 live cells for Part B of the trial. We believe this dose could provide a clinically meaningful reduction in urinary oxalate levels in this population. In parallel, we will also continue to evaluate SYNB8802 in additional cohorts of healthy volunteers as we explore further optimization of dose and dose frequency. Overall, this study will inform an enormous amount as we progress in the 8802 through clinical developments. We will better understand not only the activity of SYNB8802 in dietary hyperoxaluria disease model, but also in patients within Enteric Hyperoxaluria itself, as well as the degree of colonic activity and the potential for less frequent dosing. Moving forward, we believe the regulatory and clinical path in this indication is relatively straightforward, with significant precedent by sponsors in related diseases such as primary hyperoxaluria for the importance of urinary oxalate as one critical endpoint. Our initial efficacy assessments will evaluate clinically relevant reductions in urinary oxalate levels and feedback from our key investigators suggests greater than 20% lowering in patients would be clinically meaningful. Lowering dangerously high levels of urinary oxalate is the only way to reduce the risk of disease progression and reduce or eliminate oxalate nephropathy. We're pleased that SYNB8802 has demonstrated the potential to lower urinary oxalate levels in healthy volunteers with dietary hyperoxaluria. We're looking forward to advancing the program rapidly into patients and providing additional data later this year. As we move forward with both of our lead metabolic programs in PKU and Enteric Hyperoxaluria, I will come back to you with more information as the studies unfold. Now, let me hand the call over to Dan to briefly run through our financial results.

Daniel Rosan, Head of Finance and Investor Relations

Thank you, Aoife and good morning, everyone. This morning, we released our financial results for the second quarter ended June 30, 2021. And I'd like to review the highlights of those results with you now. Research and development expenses were $10.7 million for the three months ended June 30, 2021, compared to $12.9 million for the corresponding period in 2020. The R&D expense for the three months ended June 30, 2021 consisted primarily of costs related to our collaboration with Ginkgo Bioworks for the optimization of Synthetic Biotic medicines, as well as clinical study activities associated with SYNB1618 and SYNB8802, the ongoing SYNB1891 Phase 1 study, and the initiation of the SYNB1934 Phase 1 study. General and administrative expenses were $4.1 million for the second quarter of 2021, compared to $3.5 million for the same period in 2020. For the second quarter of 2021, the company reported a consolidated net loss of $14.5 million, or $0.28 per share, compared to a net loss of $15.5 million, or $0.44 per share for the corresponding period in 2020. Revenue was $0.2 million for the second quarter of 2021 compared to $0.4 million for the same period in 2020. Revenue was due to the recently initiated collaboration with Roche for the discovery of a novel Synthetic Biotic medicine for the treatment of IBD. Now turning to the balance sheet, Synlogic ended the second quarter of 2021 with $115.5 million in cash, cash equivalents, and short-term investments, compared to $100.4 million as of December 31, 2020. Under our current operating plan, we expect our cash and cash equivalents will be sufficient to fund the company through the second half of 2023. This will enable Synlogic to advance our clinical programs through important data readouts over the coming months. Thank you for your attention, and we look forward to keeping you updated on future calls. I will now turn the call back over to Aoife to wrap up.

Aoife Brennan, President and Chief Executive Officer

Thank you, Dan. Our team has made tremendous progress across all of our programs both in and outside the clinic. We're executing effectively and with a sense of urgency. We look forward to demonstrating proof of concept in our co-lead programs in PKU and Enteric Hyperoxaluria later this year. We will now open the call for questions.

Operator, Operator

Thank you. Our first question comes from Ram Selvaraju with H.C. Wainwright. Your line is open.

Unidentified Analyst, Analyst

Hi, this is Myles speaking on behalf of Ram, H.C. Wainwright. Thanks for taking our questions. So in terms of the SynPheny 1 Phase 2 trial for 1618 and the Phase 1 for 1934, can we expect a combined data release at the same time later this year together with your announcement of your selection for one of the compounds for development?

Aoife Brennan, President and Chief Executive Officer

Yeah, so thanks so much for the question. It's very difficult for us to predict exactly when those readouts will come. We know that they're both on track for the second half of this year. I think it really will depend on how exactly the timing falls, whether we can make a single announcement or would have to do two separate announcements. So I can't give you a straight answer to your question other than to let you know that they will fall within the second half of this year if all continues to plan.

Unidentified Analyst, Analyst

Okay, makes sense. And if 1934 is indeed selected, what kinds of bridging studies would need to be done to move to a pivotal status and is the formulation of 1934 already optimized or not? Yeah, so the nice thing about 1934 is it's very similar to 1618. We use the same enzyme pathways, it's just with an optimized version of the gene for power. So we were really able to leverage a lot of the work that we had done for 1618 as we were developing 1934. And I think that's evidenced by how quickly it moved from clinical candidate to IMD to being in the clinic. And we anticipate that it will continue to benefit from kind of having a lead program that's very, very similar. And right now the Phase 1 study is being done with a lyo formulation of 1934. So we were able to go into the clinic with already kind of having taken that big step to lyo and, we anticipate that it will move very, very quickly thereafter. In terms of what we would need to do before initiating the Phase 3 study, should we decide to switch to 1934, we haven't provided a lot of guidance in terms of the specific steps. Suffice it to say that we think that it can move very, very rapidly because of being able to take advantage of all of the learnings we've had with 1618. And of course, any regulatory plan would be subject to agreement with the FDA and the other regulators as to that kind of all we can say at this time. Okay, thanks for the clarification. And just finally regarding business development, the recent gastroenterology collaboration with Roche, has this triggered any interest and momentum for further partnership opportunities?

Aoife Brennan, President and Chief Executive Officer

The Roche agreement is very exciting for us, and we are thrilled about it. It's exactly the type of deal we aim for in the areas of inflammation and immunomodulation. As we mentioned, the Roche collaboration focuses on a specific target that aligns with their research in immunology. We will continue to advance our own programs that our team is working on and maintain discussions with potential partners in this broad area. Dave, do you have anything to add regarding the immunology strategy?

David Hava, Chief Scientific Officer

Yeah, sure. I mean, I think you've summarized it well. I mean, I think we still believe there's a lot of biology that's kind of unlocked using the platform. We have a number of internal programs that we're working on at the preclinical stage and those will be opportunities to explore either additional partnerships or to advance our own pipeline as those mature. So, I think it's all pretty consistent with the strategy we've been following and we're excited about the Roche agreement as a highlight of kind of that strategy going forward.

Unidentified Analyst, Analyst

Alright, thanks very much for taking our questions and congrats on the exciting developments in your pipeline.

Aoife Brennan, President and Chief Executive Officer

Thank you.

Operator, Operator

Our next question comes from Joseph Schwartz with SVB Leerink. Your line is open.

Unidentified Analyst, Analyst

Hi, I am Judy on for Joe. Thank you for the questions. My first question is on SNVB8802. I was wondering if you could help us understand how we should be thinking about the Phase 1 Part B data in patients with EHOX resulting from Roux-en-Y gastric bypass surgery when it becomes available, how representative is this group from other manifestations with EHOX in inflammatory bowel disease and celiac disease? Are there any biological considerations we should be taking into consideration about this group or is this a fairly good representative of the overall EHOX population?

Aoife Brennan, President and Chief Executive Officer

Yes, thank you for the question, Judy. Our goal is to develop the product for patients with severe Enteric Hyperoxaluria, regardless of their underlying gastrointestinal disease or condition. We are targeting those patients experiencing a high burden of disease who currently have no treatment options. Based on previous work in this area, we do not believe there will be significant differences due to the underlying gastrointestinal issues. Past studies indicate a consistent treatment effect across various gastrointestinal conditions. We decided to focus on a relatively uniform group to establish proof of concept, which was a tactical development choice. This does not necessarily mean we will limit our focus to a narrow group of gastrointestinal causes as we progress in development. In fact, the next steps will likely involve evaluating efficacy in a broader population, including patients with conditions such as inflammatory bowel disease, short bowel syndrome, and chronic pancreatitis. There are numerous diseases that can lead to Enteric Hyperoxaluria, and we intend to explore them all.

Unidentified Analyst, Analyst

Okay, great. Thank you. That's super helpful. And then my second question is kind of building on a previous line. So wondering if you had any color on the order in which we will see your HOX program relative to your PKU program?

Aoife Brennan, President and Chief Executive Officer

Yes. Unfortunately, we get asked that frequently and we don't have sufficient line of sight to be able to provide guidance around the specific order. Both are on track for results in the second half of this year in terms of which way they'll fall from a sequence perspective, we just don't know.

Unidentified Analyst, Analyst

Okay, great. Thank you for taking our questions.

Aoife Brennan, President and Chief Executive Officer

Thanks Judy.

Operator, Operator

Thank you. Our next question comes from Mark Breidenbach with Oppenheimer. Your line is open.

Mark Breidenbach, Analyst

Hey, good morning and thanks for taking the questions. Just looking at the SynPheny protocol, I'm remembering that you ramp up the dose levels that are about an order of magnitude higher than the previously established MTV for 1618 and I'm just wondering if you can remind us what's giving you confidence that you can safely dose up to those levels in SynPheny? And with respect to the upcoming 1934 data later this year, will that be inclusive of both healthy volunteers and PKU patients or healthy volunteers only? Thanks for taking the question.

Aoife Brennan, President and Chief Executive Officer

Yes. Yes, great, Mark. Thanks so much for giving me the opportunity to clarify the first point. So, I think you remember that we did an early study with the liquid formulation of 1618 where we studied small cohort patients with PKU. And the doses that we're currently using in the SynPheny study are logarithmically higher than the doses that we previously used approximate with the liquid formulation in patients with PKU. I think that's where the log piece comes, but they're not a log higher than the maximum tolerated dose. In fact, when we did the breaking study with the lyophilized formulation in healthy volunteers, the maximum tolerated dose there was 12. So they're absolutely still within the tolerated dose range that we established in healthy volunteers with the lyophilized formulation. They're just a log higher than the dose we used in the prior PKU cohort with the liquid formulation. So that's just a clarification there in terms of the safety and the dose that we're using in SynPheny. In terms of the second part of your question around 1934, no, the current study is designed to evaluate 1934 head-to-head with 1618 in healthy volunteers. And we look at the production of the strains specific biomarkers to make a determination around whether 1934 is actually more active in humans compared to 1618. It will not include any data in patients with PKU.

Mark Breidenbach, Analyst

Super helpful. Thanks for taking the questions.

Aoife Brennan, President and Chief Executive Officer

You're welcome.

Operator, Operator

Thank you. Our next question comes from Ted Tenthoff with Piper Sandler. Your line is open.

Ted Tenthoff, Analyst

Great, thanks. Good morning everybody. Thanks for the update. I really appreciate you guys laying out sort of the efficacy bar for SynPheny in terms of what you're seeing in sort of a win. And I'm wondering what the next steps would be assuming positive data? Thanks.

Aoife Brennan, President and Chief Executive Officer

Yes. So, I think in the second half of this year, we have data from SynPheny as well as from 1934. I think the first step is going to be determining which strain of those two that we're going to take forward into the next phase of development. And I think then the next step from there will be planning and getting regulatory alignment around our Phase 3 plan as you would with any program. So starting that conversation with regulators in the regions globally that we would intend to commercialize the product and starting to plan for that kind of confirmatory phase of development as we move forward with the program. That's the kind of the two steps, obviously a lot of work going into that second step, preparing to move to Phase 3 is not for the faint of heart. But in kind of the logical flow would be making a decision on which strain and then starting to lay out the Phase 3 plan and get engagement with the various stakeholders. Does that make sense Ted?

Operator, Operator

Our next question comes from Keay Nakae with Chardan. Your line is open.

Keay Nakae, Analyst

Hi, this is Keay Nakae from Chardan. My question is for EH. Recently, another company developing a drug for primary hyperoxaluria reported a failed result in Type 2 patients. You have effectively explained the differences in pathology and metabolic pathways for EH compared to PH in previous presentations. The takeaway from that failed study in PH seems to be a lack of understanding of the pathway they thought existed earlier versus a more developed knowledge now. How confident are you in your understanding of the pathway for EH, especially considering the different patients with varying underlying issues?

Aoife Brennan, President and Chief Executive Officer

Yeah. Yeah. So I'm assuming you're referring to dietary urinary results which…

Keay Nakae, Analyst

That's correct.

Aoife Brennan, President and Chief Executive Officer

We observed positive activity in Type 1, but not as much in Type 2 and 3 as expected. First and foremost, we don't think this impacts our program. The primary issue, as you noted, stems from a genetic liver defect causing overproduction of oxalates due to several mutations. We consider this a significantly different disease with distinct causes and underlying mechanisms. Regarding Enteric Hyperoxaluria, we understand it stems from excessive absorption of oxalates, and these patients experience fat malabsorption, leading to a larger amount of free oxalates in the gastrointestinal tract, which are then absorbed at a much higher rate than those with normal gastrointestinal functioning. Common elements among the diseases include pancreatitis, inflammatory bowel disease, and short bowel syndrome, which share the underlying issue of excess free fatty acids in the gastrointestinal lumen. Our understanding of the pathophysiology of Enteric Hyperoxaluria suggests that this is a key factor driving elevated urinary oxalate levels. This gives us confidence that we can effectively target this larger patient group, despite varying underlying gastrointestinal issues. However, the true test will come through clinical studies, and if we achieve favorable results in our current study, our next step will be to expand our focus to include other gastrointestinal diseases and assess whether we can achieve similar effectiveness in that wider patient cohort. Based on our current knowledge of the pathophysiology and insights from previous studies within the Enteric Hyperoxaluria population, we believe there is a strong possibility of successfully addressing this broader group of patients.

Keay Nakae, Analyst

Okay, great. And then just in terms of the homogeneity of the bypass patients, is there something specific about that population that makes them more consistent versus some of the others with different disease states?

Aoife Brennan, President and Chief Executive Officer

Yes. The bariatric patients have all undergone similar surgeries, which is a beneficial aspect. In early development, the goal is to conduct a smaller study to gather as much information as possible with limited treatment numbers. A more homogenous group leads to clearer signals. However, when considering different patient groups, such as those with IBD, factors like active inflammation in the GI tract or other medications can introduce confounding variables. Therefore, it's important to take various elements into account when examining broader patient populations. The decision was influenced by the need for homogeneity and the ability to execute a straightforward study. The next step, as I mentioned, will be to expand our focus to include different patient types as we advance in development.

Keay Nakae, Analyst

Okay. Well, thanks for the color on both of those questions.

Aoife Brennan, President and Chief Executive Officer

Pleasure.

Operator, Operator

Our next question comes from Tom Shrader with BTIG. Your line is open.

Unidentified Analyst, Analyst

Hello, good morning. This is Sol calling in for Tom. I have a question about the PKU program. I understand that there is a 20% reduction in phenylalanine. What does that mean for patients? Is the 20% reduction based on the low phenylalanine meals that a patient consumes? Thank you.

Aoife Brennan, President and Chief Executive Officer

Yes. So, thanks for the opportunity to clarify that. Our current study has been done with patients who have blood Phe levels that are greater than 600 milligrams. So there are patients who are not on a controlled diet or maybe they are semi-controlled, but have elevated blood Phe levels at baseline. We believe in those patients being able to reduce blood Phe levels by 20% is meaningful; it may bring some of them into the less than 600 range. But really important thing for us, we think that this is the gateway to moving into other patient segments including patients who are maybe on a diet, but not achieving their goal or patients who are on a very strict diet, but would really like to be able to eat additional protein. That's particularly important consideration in pediatric patients. We consistently hear from parents that in the pediatric group, managing protein intakes such that kids are getting enough so that they feel full, they're satiated and they are growing normally, is a real challenge with the very, very restricted diet that these kids have to be on. And when we kind of extrapolate what a 20% Phe lowering in an adult whose uncontrolled could be for pediatric patients in control, we estimate that could mean being able to double the amount of natural protein that that kid is able to eat on a given day, which I think would be a huge boost to that kid from both a clinical and quality of life perspective. So, we really can see being able to demonstrate a 20% Phe lowering in the current population as kind of a step to further evaluation across patients with different kind clinical scenarios and we'll continue to build that value story as we move forward in development and execute additional studies.

Unidentified Analyst, Analyst

Thank you. That's very helpful.

Operator, Operator

Thank you and there are no further questions in the queue. I'd like to turn the call back to Aoife Brennan for closing remarks.

Aoife Brennan, President and Chief Executive Officer

Great. Thank you, operator. And thank you everyone for joining us today. It has been a very exciting year for us at Synlogic and we look forward to keeping you up to date. Thank you.

Operator, Operator

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