Good morning. I'm Eric Joseph, Senior Biotech Analyst with JP Morgan, and our next presenting company is Enanta Pharmaceuticals. Presenting on behalf of the company is CEO Jay Luly. There's a Q&A after the presentation. We'll bring mics around for those who have questions. Folks tuning in via webcast, feel free to submit questions via the portal. With that, Jay, thanks for joining us.
Thanks, Eric. Before I begin, I want to remind you that I'll be making some forward-looking statements, and for a summary of the risks associated with these statements, please see our filings on SEC.gov and on our website. For those of you less familiar with Enanta, we're a company that has sort of a legacy in virology. We're working on multiple different viral targets. More recently, have expanded into respiratory viruses, including RSV and SARS-CoV-2. And today, I will also be talking about our recent recently announced entry into immunology. We've been a small molecule drug discovery and development company for many years now.
We were very active during the days of Hepatitis C, and in fact, together with AbbVie, helped them put two drugs onto the market for the treatment of chronic Hepatitis C. And in fact, Mavyret is the only 8-week cure for that virus, where Mavyret has cured well over a million patients worldwide with that infection. So it's particularly gratifying to have done that. We have a strong balance sheet with about $370 million in cash as of September 30 quarter, and we've deployed that very judiciously over our pipeline, which is going to be shown in just a second.
This shows an overview of the two pieces, and I'll get more into the decision and how we got into immunology, and where we're planning to go there in the future. But it was a logical springboard for us, having been in virology for many years. On this slide, we're looking at the pipeline. Mavyret, obviously at the top, is commercial, but everything below that is wholly owned and discovered by Enanta. We have an asset in HBV, which is a core inhibitor called EDP-514. I'll touch on that very lightly toward the end. In RSV, we have two molecules, an N protein inhibitor and an L protein inhibitor. Both of them are replication inhibitors, which are to be contrasted with other, a nother approach that some companies have taken in the past, which is entry inhibitors.
So instead of trying to block viral entry, we focus on shutting down the replication of the virus, and we have two very interesting targets, the N protein, L protein. We have a phase II stage asset in each of those mechanisms, and we'll be talking about that today as well. Who can forget the pandemic? I think we're all trying to, but it's still around, and in fact, COVID, SARS-CoV-2 infections are very high right now. So there is a need and will continue to be a need, as we progress into the endemic phase of SARS-CoV-2, to have potent agents for that. And we have one such protease inhibitor called EDP-235.
We'll touch lightly on that, and then we'll shift gears into immunology. Our first indication that we're talking about, well, first mechanism, is tyrosine kinase called KIT, and we'll be talking a little bit about a prototype KIT inhibitor today. And targeting among other things, but CSU, which is chronic spontaneous urticaria. We have other immunology approaches ongoing within the company, and we plan to make sequential disclosures around that as the year progresses. So let's first start with Hep C. Again, our drug is part of a two-drug combo called Mavyret that's on the market today. And what I'm going to do is really just give some financial highlights of it. I think most people know the success of the drug overall.
Last year, we had about $80 million in royalty revenue. Also last year, we announced the sale of just over half of that royalty revenue stream to a Canadian pension fund called OMERS. But we retained just under half of that. And, in fact, you know, we will continue to have royalty revenue through patent expiry. And in fact, once we reach the cap payment back to OMERS, 100% of the royalty revenue reverts to Enanta. Okay, shifting gears now to RSV and some of our trials that are ongoing. So, I think probably there's a very high level of awareness about RSV these days. The world has been primed for respiratory infection news flow.
It's hard to turn on the news, any day, at least during, you know, Q4 and Q1 without hearing stories about flu or COVID, and increasingly now RSV. RSV was very quiet during the pandemic, because RSV and flu viruses were pretty much pushed away by COVID. People wearing masks, lockdowns, school closures, et cetera, et cetera just stopped the spread of RSV. But we're not pleased to say it's back, but from the perspective of recruitment of clinical trials, we are finally, I think, witnessing a fairly normal RSV season, where it starts usually in late October, climbs during the remainder of the year, and then, you know, tails out through Q1 and sometimes into Q2. It's a big problem.
There are no approved treatments for RSV. The main patient populations that we focus on are the high-risk categories of peds, children less than five, but in our trial, less than three years of age, and adults, elderly adults and/or adults who have a condition that might exacerbate an RSV infection, such as asthma or COPD or congestive heart failure. There are some prophylactic approaches that are out there that are getting some attention. But just like with COVID, vaccines became available, but it didn't stop people from still getting infected. Compliance in vaccination is often not as high as public health officials would like.
In fact, for flu, it's about 55%, I think shingles around 35%, and recent data on scripts looking at RSV vaccines in this first year that they were available, it's less than 10% of eligible adults getting these things. In peds, there's monoclonal antibody that's out there, and what that does is it helps prophylax a child in their first RSV infection year. But children require multiple real infections to build up an actual immunity as opposed to a short-term passive immunity from an antibody, and they can't escape getting infections in childhood until they have had multiple infections.
So, children will continue to get infected, and the antibody dosed children, it's just pushing their real infections, you know, to slightly older ages, and but they're still gonna get infected, and they're still gonna spread the virus to sibs and adults, and it won't change the overall RSV situation globally. So with that, we're focused on replication inhibitors again. At the top of this slide, you'll see the F protein. That's the fusion protein. That's what the prophylactic approaches hit, and people have used small molecule approaches to target that. In fact, we'll talk about that in a second. But those are the, It's sort of the equivalent of the spike protein.
You know, in COVID, if you were targeting the spike protein and trying to block viral entry, that's what you would be doing with a fusion protein inhibitor. And what we reckoned was that by the time people present clinically, they've got a lot of viral replication already ongoing. Viral loads are high, and it's simply more difficult, we think, to keep up with that by trying to block viral entry on this rapid viral expansion. Instead, our approach is to shut down that viral replication. So our lead asset there, although we have two, but the lead is called EDP-938, and there's a new name for it. It's zelicapavir, or Zeli for short. Fast Track designation by the FDA, it's we've talked about the virology at various meetings in the past.
Very strong, balanced virology against the two major types of RSV, RSV-A and RSV-B. It has a high barrier to resistance, unlike fusion inhibitors that have a very low barrier to resistance. In fact, with fusion inhibitors, you can dose for as few as a couple of days and start to see resistance mutations mounting, and that's never a desirable feature with an antiviral. So we like the high barrier to resistance. It has great PK. We've exposed over 500 subjects with the drug, and the safety profile is consistently very good. We've also talked about demonstrating antiviral activity in a human challenge study with EDP-938, and some of that data is shown here.
Whether you're looking at viral load reduction or symptoms, you get a very dramatic and highly statistically significant viral load reduction. You also see a concomitant reduction in symptoms. They correlate very well. You can read the paper on that in the New England Journal where that challenge study is published. It's a very, very strong challenge study data set. High barrier to resistance, as I mentioned, once-daily dosing for five days, and we're in two global phase IIs in high-risk patient populations, the peds and the adults. The other competitors, one is a fusion inhibitor that's capture trying to capture the Chinese market. It is and has finished a phase III in China. And Pfizer has the same mechanism that they're pursuing.
Again, we chose not to pursue entry inhibitors in favor of replication inhibitors. So our two high-risk studies are RSV Peds and RSV HR. And you can, as the names might imply, one is high-risk adults, the other is in peds population. They're fairly straightforward in their layout. They're both short-term dosing protocols of only five days. We have to do a little bit more work in the peds study as we're establishing dose. We've already established that dose in the adult population, but you have to do a little bit of dose ranging in your first in peds study. So there's a part one and part two of this, but fundamentally, we're establishing safety, PK, and also antiviral activity in both studies, actually. The endpoints are just slightly different.
So anyway, maybe I'll go back. Each of these studies is currently recruiting. We're hoping to finish at least one of these studies in the current ongoing Northern Hemisphere season, and assuming that timing plays out with the current season, we should. That would translate into having data in the third quarter of this year. So let me shift to our other RSV agents. So after we got the N protein inhibitor 938 advanced, discovered, and then advancing into the clinic and well on its way, we targeted another protein. Because, again, Enanta's goal is not only to try to get the first-ever drug treatment for RSV, but then to have, you know, the best portfolio overall and to have the broadest reach into RSV.
So for that, we wanna, you know, explore multiple different mechanisms. The L protein is the polymerase. It's a viral polymerase. I think people know viral polymerases have been tried and true targets against many different viruses. We discovered a molecule called EDP-323. It has Fast Track designation. It plays well with other mechanisms in case we ever wanted to do combinations, and it's very potent against both the major types of RSV. We've moved it beyond phase I. So we did a phase I healthy study. The molecule was found to be safe and well tolerated. We dosed over a wide variety of doses and had a very nice half-life that was supportive of once-daily dosing.
Given its exquisite potency of picomolar potency, the good drug levels that we achieved at even at 24-hour trough concentrations were driving up to 40-fold multiples of the protein-adjusted EC90. So it's leaning on the virus incredibly hard with potent drug, high drug levels of a very potent antiviral. We've entered the challenge study. We announced that late last year, and with that molecule, we're aiming to replicate the success that we had with EDP-938 in a challenge study, which is sort of a rite of passage of an antiviral, and reporting that data out in Q3 as well. Just a few words on COVID-19. Again, probably everybody's familiar with Paxlovid. It's a SARS-CoV-2 3CL protease inhibitor.
EDP-235 is also one of those, but I'll contrast it in a fair number of ways. One is that EDP-235, which does have Fast Track designation by the FDA, is more potent. It's given once a day. It's given once a day without ritonavir boosting, so you don't have the ritonavir-associated taste problems, nor the ritonavir-associated drug-drug interaction issues that Paxlovid has. We found it to have great tissue target distribution into compartments where we think the virus needs to be dealt with. And again, the phase I data that we demonstrated, one of two doses gave very high multiples over the protein-adjusted EC90, and we're going forward with the 400 mg dose, which gives about a 13x multiple over the EC90.
We completed a study called SPRINT that we announced last year that is supportive of advancing to a phase III. What we've decided and we announced this earlier last year that our plan is to focus on our other internal pipeline assets and clinical progression and pursue a partnership for phase III and beyond activities in the area of COVID. But just as a scorecard on this slide, you can see 235 versus two other protease inhibitors. Nirmatrelvir is the protease inhibitor in Paxlovid, and ensitrelvir is Shionogi's version of that. But Paxlovid, again, is given twice a day. I think it's six pills a day for five days. Again, our aim is one pill once a day, no ritonavir boosting, and good activity.
We ran the SPRINT study, which is shown here. Again, we've already talked about this data, so I won't spend much time on it. We found it to be safe and well-tolerated. We did see an effect on symptoms, which wasn't something we were necessarily expecting to see, particularly when you look at a subset of symptoms. There are 14 sort of COVID-defined symptoms that, starting from the beginning of the pandemic, people were encouraged to look at. But the reality is, as you march through different variants and you march through different patient experiences, the patient population now is much more experienced, having been vaccinated many times, probably having very many repeat infections.
Also the virus is more experienced, as it's evolved, into different, different variants, you know, one shade or another of Omicron right now. But what we found was there was a subset of symptoms that was the most relevant, and this is sort of the, the approach that's taken in flu. There's often a big panel of symptoms, but at the end of the day, there's a subset of symptoms that are most important to study when one's looking at, at flu. So unfortunately, when we looked at all 14 together, it was hard to, to, show that effect, and it certainly wasn't powered to do that. But when you got into the subset, you began to. That's where you could, see the, the symptom improvement.
We saw a one-day improvement in a subset of six symptoms and a two-day improvement when we looked at the same symptoms, but with a quicker time to treatment. So if we looked at within three days of treatment, the effect was even more profound. When it came to virology, again, in this experienced population, it was a bit tricky to measure viral loads in the nose, and in fact, if you looked at the whole population, it, it was hard to see a viral decline. These are very small anyway, with even early in the pandemic, because it's not like a chronic viral infection where the viral loads stay high for a long time.
Even in the placebo group, the viral loads are falling, and what we found was in our placebo group, in this experienced population, they were falling very quickly in our placebo group. But nonetheless, when we looked at the patient population, we found that there was a subset of patients who hadn't been infected recently. These are demonstrated by looking at nucleocapsid antigen levels, and sure enough, when we looked at those people who presumably had less mucosal immunity in the nose, you were able to see the antiviral effect. So I think as the pandemic has matured and people have had multiple infections, it's gonna be harder and harder to measure viral loads in the nose, but symptoms are still very significant in these patients.
We wish we could sample other compartments for virology, but that's very difficult to do. So let's just shifting across HBV, huge important area. We've got a core inhibitor called 514 that's demonstrated very nice antiviral activity in two HBV patient populations that we've looked at. It plays very well with the standard of care of NUCs to give us a double. And we're continuing to look in the field and across different people who are looking at other mechanisms to see if we can find a third mechanism to combine to create a triple. But until we do that successfully, we are not going to advance just a two-drug regimen. It doesn't make sense. Okay, shifting to immunology.
As I mentioned, our first indication that we're gonna be thinking about is chronic spontaneous urticaria, or CSU. But how did we get into immunology? Why did we do it? So if you look at the bottom of this slide, I think Enanta's pretty well known for having strong drug discovery expertise, and we can apply that in many, you know, some of the medicinal chemistry and preclinical stuff, tox, DMPK, tissue distribution, metabolism, all kinds of things, are fairly generally applicable when you have good infrastructure. The key is in the biology, and many, many people, as it turns out, who are virologists, actually classically trained in immunology, and vice versa. There's often people switching into one field or another, and that certainly is the case within Enanta.
So we're using some of the virology underpinnings and training in immunology that we have in-house to focus in that area and to, you know, broaden our scope beyond just virology. I think one of the things that's compelling is, you know, we're small molecule drugs. In immunology, there are a lot of drugs that are biologics and that do incredibly well, but there are some indications for which there's no oral treatment option, and many of those would be desirable. And so we're gonna be scrutinizing that area very carefully for opportunities in which we might be able to take an oral molecule into some of these immunologic indications. CSU is a, it's much more prevalent than I had ever imagined.
It affects, you know, about 0.5%-1% of the global population at some time in their lives. It's sort of a debilitating, it can be a debilitating, mast cell-driven condition with hives and itching and so forth. And it's not always controlled with antihistamines. In fact, only about half the patients respond to antihistamines, and the rest, you know, might get Xolair, but there really is an unmet need for these antihistamine refractory patients. So, we're targeting the mast cell. CSU is one indication. There's an inducible urticaria as well.
You can think about other mast cell-driven indications beyond CSU, and you know, in general, we focused in on KIT inhibitors, where you have a direct effect on mast cell populations or levels of mast cells, where you can modulate downward the numbers of mast cells that are driving these this condition. We like this target from another vantage point, too, because it comes with a phase II proof of concept with an antibody, and the mechanism to date in this indication seems to have best in disease performance, so versus many other mechanisms one might consider approaching. So with that, our goal is to create a novel, you know, potent KIT inhibitor.
We've been working on this for a fair amount of time internally, and suffice it to say, we've got a potent prototype. We're continuing to do a lot of med chem optimization to see if we can beat the one that we have, but otherwise, we will ultimately declare our plan is to declare a candidate during the course of this year with good properties. And this is just some data on, you know, one of our lead prototype molecules. You can look at it from a sort of kinase binding perspective and also cellular assays. It's a very potent molecule in terms of binding and cellular IC50s, EC50s.
This is a slide, it's a kinome map looking at the broad constellation of kinases that one might be worried about hitting. KIT has the big bullseye on it, and the idea here is to have fewer red dots on there and the biggest red dot around KIT. I mean, in a layman's terms, that would translate into very highly selective kinase inhibition. And what you can see is this prototype, code-named Prototype 001, has extremely high selectivity. It's the same molecule as I showed you, the potency on the prior slide, and it's just a comparator to a second-generation KIT inhibitor that's in the field today.
It gives you some sense that we have a very good potency, very good selectivity, and we're optimizing lots of other properties around this. This prototype has good PK across multiple different species. We look at tissue distribution, you know, in every program we work on, but, you know, you try to avoid off-target sites, and we've done a lot of exploration there. Looks like it has reduced potential for off-target penetration. We've looked for potential reactive metabolites and other kinds of things that might be warning signs in safety, and has a good profile there, clean from a perspective of cytochrome P450, drug-drug interaction potential, et cetera, and the same with drug transporters.
I think we're well on our way, and again, our goal is to declare a candidate this year. This is the last slide. Just showing some of the catalysts for the year. Obviously, zelicapavir, otherwise known as 938. We want to report phase II data in at least one of these studies in Q3. EDP-323 is wrap up the challenge study on that very potent L-protein inhibitor, data also in Q3, and then broaden our footprint in immunology. CSU with a selective KIT inhibitor development candidate, that's a goal, and we'll announce likely later this year another program. We have several different things going on internally at Enanta. From a BD perspective, you know, we still want to pursue a partnership for EDP-235.
I think a lot of things are gonna clarify in the COVID competition space, probably in the first half of this year. And then HBV, continue there because I think we have a good asset in EDP-514. So with that, thank you very much for your attention.
Great. Thanks. We have a few minutes for questions, and I'll start. So Jay, just kind of picking up on your immunology programming candidate, can you just talk a little bit about how your your potential likely lead compound engages KIT? Are you working with a kinase inhibitor or a kinase domain inhibitor or some other mode of inhibition? And perhaps related to that, if I understand it, the objective is to, you know, kind of tamp down activity of mast cells, but not deplete them, how do you not get turnover? How do you achieve that, I guess, pharmacologically with your approach?
Yeah, so we'll give more mechanistic details around the type of kinase inhibition that we're achieving, in due course, probably around the announcement of the final candidate with more detailed data around it. And then I think, you know, with KIT, and Tara can comment on this as well, I think the key is, you know, we're not looking for mast cell ablation. It's really dialing it in, right? And the nice thing is you have markers that you can look at. You can look at tryptase and other things. These are actually one of the interesting things that allows you, even in a phase I study, I think, to look at, you know, some level of proof of target concept in terms of being able to inhibit that.
So I think you want to modulate that dial it back, and I think there are some signs that you don't need, you know, complete inhibition, obviously, in order to see efficacy, and I think that has already been demonstrated with some of the things that are out there clinically.
Yeah, just to add to that, you know, most of the drugs that are currently in development are targeting either downstream mediators of mast cell activation or reducing mast cell activation itself. The difference with KIT inhibition is you're actually reducing the quantity of mast cells that are available to drive the pathology of the disease. So by preventing signaling through the KIT receptor, you're actually depleting the mast cells themselves to some extent.
All right. Good, and maybe just kind of pivoting back to coming to the top of the presentation in RSV with zelicapavir, formerly 938. You know, for the first time, it occurred to me after a case of flu went through the whole household, and I had my first experience with Tamiflu, really my kid's first experience with Tamiflu, that taste is a really important attribute of a successful product in this category here. So can you just talk a little bit about the taste profile of zelicapavir?
Perhaps maybe related to, maybe relating it to, Tamiflu, and to the extent that it's sort of, you know, is a, you know, a factor in maintaining the blind of the randomized trials, how you're accommodating that?
Yeah. Well, we're dealing. So in the peds area, since you were talking about peds, I mean, one of the things that goes through, there's a whole sort of taste panel thing that you go through when you're looking, you know, among other things, looking for the right pediatric formulation because we do dose it as a solution in children. In adults, it's obviously pill form. So we in any of the studies, and we've been in a lot of them, I don't think there have been any reports of any taste issue that showed up anywhere along the way, complaining about that or, you know, compromising placebo blind.
Okay. And I guess, you know, with the expectation of reporting out data from either at least our one of the phase II trials ongoing, I guess, what incremental line of sight on do you have on the pace of enrollment, and perhaps sort of which, if not both, studies would likely read out in the second half of the year?
Yeah, it's, it's a tough one. You know, they're both, they're, they're different-sized trials. They're very different patient populations. There are different considerations to think about in terms of informed consent and getting into a study. You know, peds, obviously, you're dealing with, parents of children, sometimes, young babies is, you know, just a few weeks old. So there's so many different variables, in this mix. I think we can't really call it right now. I think as we get a little further into the season, we probably, you know, would be able to call it, but right now, it's, hard to know.
I think when we were working on transplant, which we've kinda deprioritized right now in favor of these other two high-risk patient populations, when people ask me that question, which is gonna be the first to complete, I couldn't answer the question because it was hard to know, but I could tell which was gonna be the last to complete, and it was gonna be transplant. It was just very, very slow enrollment in that study based on, you know, the need for a hematopoietic stem cell transplant and then an infection on top of that in a very, very, very cautious patient population during the COVID era.
So anyway, I think, I mean, we can tell the difference immediately from what's a season and what's not, you know, when you look at recruitment rates, and this is the first, you know, sort of quasi-normal season that we've felt in these phase II studies.
I guess, the threshold for reporting data from RSV. Given that there's two parts to the study. There's a dose-finding component in two different age cohorts, followed by a second stage following dose selection. I guess, is it after completion of both halves of the study that's really sort of the appropriate time for-
Yep.
Yes.
Threshold for reporting out data? All right.
Yes.
So, yeah. So I guess having asked that, have you, you know, are you at a point where you've identified the dose to advance into part two and begun that phase of the study?
Yeah, I think we have. Yep.
Okay. And with the healthy challenge, the human challenge study for EDP-323, where you're also expected to present data in the third quarter of this year, can you just talk a little bit about, maybe just set the stage there a little bit. You know, it seems to share a lot of similarities with the design of the human challenge study with zelicapavir. That being said, I guess, what would you kind of point to direct investors to in sort of what might make for a differentiated activity profile relative to your first mover candidate? Yeah, 938.
Yeah. So the trial designs are essentially the same. So you have healthy patients that are infected with an RSV strain, and then we monitor the viral loads as they come up. Once they reach a certain level, everyone's treated for five days with either placebo or EDP-323, and we'll be measuring virology and symptoms over that time period. And so the data readout will be very similar to what we showed with 938. So you're looking for a difference in viral load as well as symptoms between placebo and active treatment. So we'll be able to, to the extent that you can compare with, you know, trials, separate trials, we'll be kind of looking to the 938 benchmark in terms of the-
It does, it does give you a really nice early look at antiviral kinetics. And one of the things that was amazing about dosing with zelicapavir was essentially within the first dose, you know, within 12 hours or so of taking the dose, you could see that the placebo patients just continued to get worse and worse. And you know, for the drug treatment cohorts, it stopped the virus sort of dead in its tracks, and viral loads immediately started going down, and people resolved very quickly. So we would be looking for that same sort of profile. You know, could we do it even faster with 323? That'll be one of the things that we can ask.
I don't know how well you can tease that out in a challenge study, but our first one was really good, tight error bars. Very, very nice data set. So we wanna hopefully at least replicate that. And I think 938 already sets a high bar. And then, you know, again, you'll be able to ask other questions in real-world patients in the next study.
Okay, great. I think we'll have to leave it there for time, so, thanks again, Jay.
Yep.
For your time.
Very much.
Thanks, everybody, for joining the call.