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 investor section of our website at www.synlogictx.com. 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 this quarter's highlights. Molly will provide additional detail 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 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 statement. 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 updates 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 SYNB1618 for the treatment of PKU. This is an important step for our program as 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 readouts and phase III candidate confirmation.
For SYNB1353, a Synthetic Biotic designed to consume methionine as a potential treatment for homocystinuria or HCU, findings from the recently initiated phase I healthy volunteer study. Finally, for SYNB8802, a potential treatment for enteric hyperoxaluria, we also expect to share proof-of-concept data. We recently recognized SYNB1353 as our third program to enter the clinic in less than two years, reflecting the advantages of Synthetic Biotics. SYNB1353 built on technical as well as regulatory synergies and the promise of this platform of biotherapeutics based on synthetic biology. SYNB1353 entered the clinic within just a year of being named as a candidate. As was done for SYNB8802 and SYNB1934, the FDA waived the traditional pre-clinical toxicology package for SYNB1353, recognizing the transferable findings of using the E. coli Nissle chassis.
Looking beyond the clinical pipeline, I'm excited to announce the newest addition to the Synlogic pipeline, SYNB2081 for gout. Gout is a well-known and often debilitating form of inflammatory arthritis, causing 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 SYNB2081, our second synthetic biotic developed through our partnership with Ginkgo Bioworks. Finally, it was a pleasure to share earlier that Brendan St. Amant has been appointed Synlogic's General Counsel and Corporate Secretary. 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 SYNB1618 strong activity and reduction in plasma Phe, the amino acid PKU patients are unable to metabolize and become neurotoxic at high levels. In parallel with the proof-of-concept readouts, we confirmed even greater potency with next generation SYNB1934 while establishing the safety bridge at a phase I head-to-head study. Since then, we've progressed SYNB1934 such that it is now the presumed phase III candidate. However, that will be confirmed after assessing the SYNB1934 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 endpoints 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 are working as intended. For PKU, our Synthetic Biotic is designed to metabolize Phe in the GI tract. To measure this effect in a more precise and controlled way, we provide labeled Phe or D5-Phe 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 Phe levels, as well as TCA in plasma and HA in urine, two metabolic byproducts which can only be produced if our strain is effectively consuming Phe. We also look forward to sharing data from evaluation as a monotherapy, but also as an adjunct to sapropterin or Kuvan.
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 color on our HCU program. Molly?
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, are also 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 BH4 or Kuvan responsiveness. However, even these patients, in spite of responding to and benefiting from Kuvan, often have Phe levels far above desired levels. These patients present an opportunity for adjunctive treatment. The large majority of PKU patients in the U.S. and Northern Europe are considered to have classical PKU. These are the patients with higher Phe levels who did not respond to Kuvan and for whom Palynziq 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. Synlogic's program positioning, which you see shown here in the middle, is for these more severe patients who are currently untreated or in need of additional Phe lowering as an adjunct. Turning now to SYNB1353, which as Aoife noted, recently entered the clinic in healthy volunteers. We've shared that this program builds on disease state synergies. Since, as an inborn error of metabolism, there is a direct overlap between HCU and PKU in terms of PIs, KOLs, and connected patient communities. In terms of the 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.
In addition, however, elevated homocysteine levels in HCU present significant risk of devastating and acute systemic complications, including thromboembolism and 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, an approach that is orally administered without systemic absorption and associated risks, and also conducive to both monotherapy or an adjunctive or combination treatment approach. Today's standard of care is the generic betaine, known as the brand name Cystadane, which has been generic for decades, does not alleviate dietary restrictions, and often leaves further need for homocysteine reduction. Current options in development are injectable enzyme replacement therapies. From speaking with KOLs, clinicians and patients, we have heard consistently the excitement for an oral option, particularly one with the profile of an engineered probiotic, and we are excited about moving this program 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 as well as 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 SYNB8802, designed to consume oxalate in the GI tract and reduce risk of recurrent kidney stones and related renal complications in patients with enteric hyperoxaluria. SYNB8802 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 SYNB8802 can lower urinary oxalate in those patients.
There is a second ongoing phase I study to the SYNB8802 program to continue to build our clinical data set in patients with Roux-en-Y gastric bypass. This is an inpatient setting study where we can collect diet 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. It is also my pleasure to share that we've named an additional program in our metabolic pipeline, SYNB2081, a Synthetic Biotic designed to consume uric acid in the GI 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 by current treatments, which are limited 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 30th, 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 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 equivalents, and marketable securities compared to $120.5 million as of March 31st, 2022. Under our current operating plan, we expect that our cash will take us into 2024 and enable Synlogic to advance a clinical program through multiple important data readouts across the metabolic portfolio. 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 things up.
Thank you, Michael. This is an exciting period for Synlogic as we advance to three anticipated data readouts in the coming months and 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 in the fortunate position of having 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.
As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Joseph Schwartz from SVB Securities.
Hi, Aoife. 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. I know you mentioned labor shortages on your earnings call last quarter. 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, Joey. This is Aoife. I can say that our guidance for the Arm 2 data is unchanged. We plan to have data later this year. Regarding the market dynamics in PKU, maybe I'll pass the call over to Molly to make some comments on. We've obviously been observing other products and learning from them, and she can provide you with a little bit more color there.
Hi there. Thanks for the question. In terms of the other products, what we've generally heard from the clinicians there is that the interest in new therapies and alternate therapies that provide a different profile is extremely strong. In every single patient appointment they're having, they're talking about not just what's available, but also options in development. I think while you know, clinicians across categories and different treatment categories are seeing different paces of return to you know, quote-unquote, normal, including a seasonality consideration, what's guiding you know, the excitement and the opportunity that's the foundation of our program really hasn't changed. If anything, you know, as we engage with the community is just getting you know, stronger and stronger.
Okay. That's helpful. Thank you. Maybe continuing on the enrollment theme. I know it's very early, but are you anticipating major differences in your phase III enrollment versus 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?
Yeah, great question. I think there are a couple of things that are gonna be very different, Joey, for the phase III program compared to phase II program. Number one thing is that we'll have a lot more sites. We anticipate going to multiple countries and regions and having, you know, a full difference in terms of the number of sites that we'll be using to enroll. The trial will obviously be bigger, but I think spreading a broader geographic net will certainly help us in terms of achieving the required enrollment rates. I think the second component is that there are gonna be big differences in terms of the study design. These patients with PKU are very interested in having access to therapy, you know, beyond just the two weeks of a phase II study.
That's some of the feedback that we've received as we've been enrolling phase II, is that these patients are, you know, interested in maybe phase III, where they have the opportunity to participate in an open label extension study and have that opportunity, if they benefit from treatment, to be able to continue until the product is approved. That's very similar to lots of rare diseases. That's always a key concern for patients in enrolling. They don't want to have potential benefits and then have to discontinue the product. I think the third thing that's going to be very different from between the phase II and the phase III is that the phase III will obviously be a lot less intensive in terms of the commitment and work required for patients and sites. Our phase II study is very data rich.
There's lots of endpoints. Patients have multiple visits to the clinic for, you know, meal tests and other things. That's obviously a big burden for patients. It pays off 'cause we get these nice biomarker endpoints. While we're learning about the program, that makes perfect sense. As we move to phase III, I think the burden for sites and for patients will be a lot lower because we'll really be focusing in on the plasma Phe lowering as the primary endpoint with less frequent visits, with, you know, a much more less intensive visits in terms of blood draws and other assessments. I think those are the kind of key factors. The good news is we have other, you know, studies, other phase III trials to base our enrollment projections on.
When we come to that point and are providing guidance around, you know, phase III enrollment rates and things like that, we have some precedent to go by, for those kinds of data points.
Okay, great. That's very helpful. Maybe finally, if I could just squeeze one more in. How should we think about age playing a role in Phe reduction? My understanding is Kuvan phase III trial included children and adults. On the other hand, your phase II trial is enrolling 18 and up. I know that the platforms are different, but you know, I guess the question is, are you anticipating or expecting a difference in Phe lowering based on age? Thank you very much.
Yeah. I think that's a great question. I think number one thing in terms of pediatric product development, you know, Kuvan was a little bit of an outlier because it had been used clinically in Japan when BioMarin filed the initial IND. It did have some clinical data and safety and efficacy and exposure. In general, the agency would like you to demonstrate safety and some probability that patients will benefit before you start enrolling those who are below the age of consent, essentially. Our plan would be to continue to work with the FDA to be able to broaden and enroll those younger patients in a stepwise manner, based on the data that we're gathering in the phase II study.
Because we do recognize that the pediatric patients are a key, you know, segment for us with big unmet need and obviously lifelong consequences. We'll be moving as, you know, quickly and as aggressively as possible to get those patients on study. I think in terms of the endpoint with the pediatric patients, there's no reason from a biology perspective why pediatric patients will respond differently to adults in terms of Phe lowering. One thing that is different in the pediatric patients is maybe the endpoint needs to be different. You know, often particularly the young kids who are under very tight parental control will often have baseline lower Phe levels. In those patients, maybe the endpoint needs to be protein liberalization, as in how much additional natural protein can be added to their diet rather than just looking at Phe lowering.
Because, you know, some of these parents with kids who have PKU are, you know, very obsessive and monitoring Phe levels very frequently and really keeping the diet very tightly controlled. There may be differences just in terms of kind of the right endpoint in the various populations as we mark down the age groups. You know, we're absolutely thinking about pediatric development as part of our overall clinical development plan and see that there is a tremendous opportunity in that particular segment for our candidates.
Thank you. Our next question comes from the line of Mark Breidenbach from Oppenheimer.
Thanks for taking our questions, just a few from us. First of all, when can we expect you to announce the finalized phase III protocol details? Are we gonna have to kinda wait until next year for that? Can we assume the trial's being designed with the intention to support registration in more than one geography, both maybe both U.S. and Europe? Second question on PKU is whether or not you're gonna be relying on your in-house manufacturing capabilities to support the study, and if you have clearly spelled out the list of CMC requirements from the FDA for drug products that's going to be used in phase III and beyond. Those two questions on PKU and then maybe one on the new program in gout.
I guess I'm just wondering if you would expect SYNB2081 to have any impact on uric acid production from endogenous sources, or maybe even on renal excretion of uric acid. Would this product only reduce uric acid derived from dietary sources? Thanks so much for taking the questions.
Great. Yeah. Thanks so much, Mark, for your questions. For the first one, in terms of the phase III design, we plan to have an end of phase II meeting with the FDA where we'll get final alignment on the specific design before we disclose that externally. I think that's the prudent thing to do. Ditto the manufacturing requirements. We've had a lot of good discussions with them as we've been going through development around our CMC and particularly our analytics for our products and have, you know, very good alignment and a good collaborative discussion with them. We don't foresee any major showstoppers there based on the back and forth that we've had to date.
Obviously the final agreement comes with the end of phase II meeting minutes, and as soon as we have those in hand, we'll be sharing the overall study design as well as the, you know, overall feedback from FDA with the investment community. I think the other component of your question is about global regulatory. We do see a lot of opportunity for this product. You know, there are about 55,000 patients with PKU globally. About 17,000 patients of those are in the U.S. There is clearly a big unmet medical need, a large PKU population, and I think some interesting commercial opportunity ex-U.S. in some of those geographies. We are, as you've seen with our announcements of our EMA orphan designation, we're actively pursuing ex-U.S. regulatory alignment.
Having said that, the most important thing for us is speed to BLA in the U.S. We are, you know, engaging but also maintaining focus on initiating our phase III study as quickly as possible and don't want to compromise our speed or success with FDA in trying to get global alignment for PKU. On the final PKU question about manufacturing, I think we have Tony on the line. Maybe I'll ask him to explain in more detail what our plans are for manufacturing the phase III material for the trial. Tony?
Yeah. Thank you. No, I think the first point you mentioned in terms of regulatory correspondence with the FDA, we've had a positive support of CMC regulatory correspondence. We constantly are going back and forth, and that's on good path. To the question, I think on manufacturing and supporting the phase III, we've made concrete progress in executing the plan, so we have product to supply for the phase III. That comes from what I've described as maybe three different pieces. First piece is we optimize our process both to allow for high yield within by improving our cell densities, but we also have scaled up. The second piece is that we have completed expansion renovation of the suite or our manufacturing facility to allow us to support this next level scale-up or the scaled up process.
We've also completed tech transfer into the suite, and we're really getting ready now for the future GMP activities to support the phase III. The combination of the scale, the improved process cell densities that allow for high yield, the fact that we've expanded our suite, all these pieces come together to allow us to support the phase III, and we will provide material and support production of material for the phase III from our current suite. Does that answer your question?
It does. Thank you.
Great. I'm not forgetting that.
Thank you.
Can I dig out further?
Yeah. I wasn't forgetting that, Mark. I think we have David Hava on the line who can maybe explain some of the biology. We've done some really elegant work in research to elucidate the role of gut in gout, and we look forward to sharing that at a future academic meeting. Maybe Dave can give you some of the high points today.
Yeah. I'd be happy to do that. Yeah. As Aoife just said, you know, I think understanding the biology and uric acid kind of metabolism and distribution's been a big component of advancing this program forward. I think for many of the metabolites we're interested in, there are multiple pools to draw on, right? There's the obviously diet component, that's true for the amino acids, oxalate. I think we think that's also true for uric acid. There are also pools of many of these metabolites that recirculate from the systemic compartment into the gut and then back out as kind of enterohepatic recirculation pathway. We've described that for phenylalanine and methionine as a potential pool to also access. We also think that happens with uric acid.
That comes from some literature, some older literature that's really highlighted a gut component in the metabolism of just endogenous uric acid and clearance from that compartment. We do think that there'll be the ability of the bug to access some of that pool as well. We have some of our own data in both rodent and non-human primates that support that. It's likely to be both compartments is kind of the short answer to your question.
All right. Thanks so much for that clarification and good luck with everything. Take care.
Thanks.
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. As a reminder, please hit star one one on your telephone. Our next question comes from the line of Raghuram Selvaraju from H.C. Wainwright & Co.
Hi, everyone. This is Mitchell on for Raghuram. Thank you for taking our questions.
Hi, everyone. This is Mitchell Kapoor for Raghuram. Thank you for taking our questions. I wanted to ask, you were talking about on 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, it's gonna be very data rich. Could you talk about any differences that you could expect? Anything you would leave out on this being a lot of data, it's gonna be very data rich. Could you talk about any differences that you could expect? Anything you would leave out on the phase III design versus phase II in terms of that data?
In terms of like, biomarker collection and others, what might we see more of in the phase II that we potentially wouldn't get to see in the phase III?
Yeah. Good question, Mitchell. This is Aoife. In the phase II study, we really wanted to do the most efficient design possible that helped us understand whether this product could be effective in lowering Phe in PKU patients. We think based on the data we announced last year that we were successful in that. I think the data is very internally consistent. We had multiple biomarkers, all arrows pointing the same way. We know based on those data, and we're hoping to kind of further confirm that later this year, that the product can work. I think the phase III study is now going to evaluate and kind of sharpen up the clinical profile for this product. There's going to be multiple learnings from the phase II that we'll take forward into the phase III design.
The two most important components, I think from my perspective as a drug developer, are the proportion of patients who are gonna respond, the proportion of the PKU patients who are gonna have a response, and then what's gonna be the Phe lowering in that responder population. I think those are the real critical endpoints, and that's a much easier endpoint. It's a blood sample that can be taken, you know, every couple of weeks. For plasma, there's no need for meal tests, overnight fasting, intensive, you know, multiple time point daily curves like we're doing in phase II. I think the second component is just making sure that we optimize the tolerability profile of the product. You know, as you've mentioned before, we have GI AEs. We've learned a tremendous amount from all of our programs in terms of, you know, how to best manage and mitigate.
What we've seen is that those AEs are very individual, and I think allowing people to titrate up to the right dose and find the right dose for them is gonna be a really important component of our phase III study design. I think there is both efficacy components as well as tolerability components, and I think overall we see tremendous promise based on the learnings from phase II, that we can really optimize that phase III design to be as informative as possible and also have a good enrollment rate, you know, by having it low burden for patients and for sites.
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.