Axcella Health (AXLA) 17 Mar 212020 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Axcella’s Fourth Quarter and Full Year 2020 Conference Call. Please be advised that today's conference is being recorded, and that all participants will be in a listen-only mode until the question-and-answer session. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] And now for opening remarks, I would now like to hand the call over to Jason Fredette, Vice President of Investor Relations and Corporate Communications at Axcella. Please go ahead, sir.

thanks who's and morning. in operator, you, to tuning everyone, this Thank to submissions would certain statements uncertainties. call today's relating that to that such planned we those We various advise on are remarks subject like risks include clinical and trials will to make as our forward-looking IND and conference on and SEC filings, website. which risks are in detailed the other These axcellahealth.com our most on be our accessed our and uncertainties recent website or Form XX-Q can SEC's as views should our today, March upon represent representing and statements forward-looking as of XX, XXXX, subsequent not as All date. relied be of our views any undertake update We these to obligation forward-looking no statements. tolerability our clinical structures biological effects functions. also that designed on product were and Please to-date safety, have evaluate clinical studies all and that been non-IND of normal to note for investigations candidates to not studies treat prevent a were These or or designed the to disease. ability evaluate intended

upcoming Our will discussion. AXAXXXX Bill? be and our the President like and conducted Hinshaw, of to INDs I'd over now to to under at And begin and clinical CEO, trials Bill call. call the turn aimed will be AXAXXXX this

milestones Thank have everyone. excitement, reflect validation opportunity IND, more recent Axcella. joining clearance our as Thanks position XXXX, the you, of enter of ahead on key the period was we We're first which that a to pleased late-stage execution, We're happy clinical well accomplishment and to highlight Jason, tremendous good us. morning, and also to trials. for for for updates, including us

approaching And from and the just the COVID-XX. in data team as forward the grapple a ago starting or a Thanks readout of milestone recurrent this of and risk candidate recent for overt looking readouts. AXAXXXX, hepatic world work oral ahead original on rich at positive our XXXX period through we and delivered executing reduction studies encephalopathy. to was sites, plans. year of we're to rest proactive the second our were challenging multi-targeted with the study product time, was Axcella to Most the multiple Now clinical our this and of navigated Axcella important of

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become believe of standard the opportunity Why? a eventually Well, reasons. exists there also We the are to care. few

today's reduction, driver standards that OHE. care, downstream of rifaximin limited For a on have mechanisms lactulose one, pneumonia focus and of

only unpleasant, patients medications, loose of removes despite more complications, via and Secondly, tolerability with is experience to recognized but product continue ammonia widely gut finally, This day. OHE today's on a not these adherence This can four associated per to agent being lactulose. events. are frontline the stools number or And including many from lead toxic dehydration. it there challenges other

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likely The the the XX four is stratify for including and AXAXXXX, for This a to at a the well effect the this are program also in patient approach OHE will XXXX both candidate secondary then of These believe safety of as and/or testament after be lactulose past screening. significant validates months, we'll development. as will division highly enrolled over than the on the week proportion a global, XXX we will most follow-up. neurocognitive dysfunction a non-IND we the weeks two-point event. this arms with IND a design, clinical the of friendly, for one this to believe include are and placebo another top leapfrog expected FDA, well the setting, second of they XX the clinical events, be our criteria to across least sites. clearly. clearance at and which active XXXX. will All OHE of enrich to the patients note amount number into design enable streamlined same with Just enrollment in that data one dose power It from OHE later-stage XXXX’s Approximately event on other We again randomized, be the XX. population us bodes This is patients use. we four-week rifaximin to important will improvement endpoints ranging experienced patients in endpoint we've experience prepare double-blind who X, rifaximin, in AXAXXXX have prior and is years timed PHES baseline key the at lead events, studies. provided OHE this achieved and These just completing Phase must primary compare in more for completed patients gather on it will must upcoming of thorough the milestone least more trial course of six of a as and of a that to hospitalization. is demonstrate it how with we'll And dose to soon. demonstrate who time be

a be We separation events OHE of expect these to Ultimately, treatment the versus registration in are see active arm to endpoints. six-month a over expected period. placebo events the

end reported secondary Phase will these in be agreed important focus Other discussion with agencies. patient function FDA for changes data regulatory So our outcomes. of with endpoints to the and on will X physical

considerations, previous the fact trial, first a execution, enrolling that reviewed this relatively the first XXXX. COVID position our estimate which and for have be in factors, quarter potential in is Based a patients our number on from initial a pandemic. this ongoing planning in report of these is we'll condition of Now, trial top the we including overt experience rare line HE, to of with impact key study is the this data

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meaningful XXXX, study difficult these treat since last additional diabetes, in now XXXX. and presentations week for screening our and were to with XXX Our the mechanism about the which This biomarkers just in reported has presentation expect presentations multi-targeted to-date. clinical MRI-PDFF, product XXXX XXXX. of included AXAXXXX, progressing adult our followed at versus reductions candidate very pronounced pediatric half to and fibrotic sites, weeks. In with EASL insights nearly subjects placebo. are Included tolerated in Reduction XXXX Similar available we on is our to notable is non-invasive engaging data action. population. Meanwhile, at over well the XXX Pro-CX. X Nash We that These team ALT May website. them safe XXXX’s XXXX Type tandem new key represent been patients made last was up of study, among tag differentiated from top-line NASH progress our several poster and has of like begin is and oral test and among insulin with resistance, showing great next AASLD generated into most we multi-targeted year NASH that

into pre-IND to or And fourth importantly, versus On endpoints. week regulatory XX however, to no a we Phase Xb agency are no including trial barriers meeting we directly the in in the biopsy were standard Most paired and work. able a a there IND, arms drug-drug Type noninvasive is quarter. clinical histological interaction encouraged gating This toxicology trial. proceed two to B by active that placebo the an with front, and affirm include we're the opening to participated dosing expected FDA period,

and We This plans. Type enroll patients feature stratifying global XX Nash status patients to our development inform FX interim an will with sharing approximately tuned. FX expected and sites. virtually be we've already quarter eager adults, our but it received to we'll Nash, look And it's we're we only on Based is to underway and across stay IND include data diabetic well that so our X the details treatment. today. to and opinion key population Nash no XXXX estimates there to up clinical be physicians first aimed to a not treating potential of our XX% development from positioned believe commentary in leaders, is this And in based We trial in final once will at forward have on children is get analysis also the line adolescents. investigate Despite cleared, two.

have need, medical safety, modality reengage our first development acids We on the established to FDA regarding we're plan using unmet amino once potential we field. mover well to Xb Given seeking the in this a underway. be with steps, Phase the with

Schecter excited Alison am welcome to to I Finally, the team. Dr. Axcella

is the to experience commercialization. translational integrated model, who's IND of the clinical both clinical we of is our an research, and and Development. expand efforts. Big and This cycle across Given and us have the pipeline. enabled brings research work clinical our our the Alison, our and life Biotech development ideal to to ongoing join candidate execution product today clinical regulatory as President our time She from all nature tremendous and overseeing full on upcoming development Research drug science research trials exciting her Pharma, and within call for of design,

Our we're I will for Alison's has our under team's positioned next leadership. been trials. that And excellent execution and continue confident track this well record am

number enhanced aggressively include milestones work next we're EMM a These have to complex is other intent knowledge the to XXXX tools its compositions. a to EMM’s important our of and updates summary, and ahead. Axcella studies, milestones will reached conditions and impact regulatory of develop work later diseases towards completed number our lead. generation in and of extending potential multiple excited have about So in substantial our successfully on

our the Now, call me Laurent? financials. Chardonnet CFO, turn our over to review Laurent let to

full and rapid morning and and Bill; our a This was securities clinical we've management how These our down a summary solid in share year XXXX We tremendous million model our clearance, September $XXX is. of you, most year and quarter and with to our XX, everyone. reflect our $XXX cash with I'll and ended Axcella million wind IND with fourth the the compared sheet. high-level XXXX. results good balance cash efficient XXXX. as morning, XXXX marketable Thank recent of of proven the the Starting changes for studies. for

meet We to XXXX. operating sufficient expect that quarter our of third into cash needs the balance be will our

Turning and development expenses. research to the and P&L our

We XXXX. investing expenses X and for generation ended million $XX.X Phase XX were Xb, months of December R&D candidates. $XX continue to three upcoming our while and and in million for prepare and of million for the Phase EMM XXXX. also XX, of comparison due year-over-year XXXX, of clinical the decrease The most same studies is recent with as $XX.X our periods compared and AXAXXXX the mainly million to $XX.X

later were XXXX. as $XX.X in months company expenses XXXX. R&D our is development. December again We increasing $XX.X expect quarters to enter million we the million begin increase $X.X G&A cost the stage additional million and in of the as with XX for as XXXX, same became compared for a to ahead, mainly $X.X million costs due three XX, year-over-year and periods traded and publicly The ended we

$X.X million of quarter $XX.X G&A loss roughly $X.X flat expect loss million remain full was net $XX.X respectively and the million We XXXX includes or our for Axcella and for net the stock-based or $X.XX million to in compensation. per share. in per share, $X.XX XXXX year fourth cost non-cash the near-term. This was

and December was share, the $X.XX per XX, months million Our $X.XX share XX $XX.X ended three or respectively. per for net loss or XXXX $XX million and

progress eventful So we've very in in summary, are the and we financial a strong all we're position by excited we're year forward looking And to made. ahead. very an

Now, operator, open will for line please questions? you the

Sandler. Please question first the Yasmeen Rahimi with Instructions] The ahead. We will now go begin session. comes [Operator question-and-answer Piper from

you okay? you guys Thank and good morning. hear Can me

Yes.

questions them. And Jessie a like two at thank is I them time? This Yas. for or want once, both Cool. on you you of at go me have do to ask Can taking and one for I

Thank same Both time, the at we’ll you. take notes.

Okay, cool.

So Nash the logical on or endpoint second both in studies and the Nash? of any and comment And two resolution powering the can one such improvement you. XXX that overlap the point is, one one why? on comment the one what is, there them the between Nash you Thank for first And this Phase you Xb plan you be enroll fibrosis will you expect of study? to faster can as on which sites

morning, is this good Jessie, Bill. Great.

questions. the for thanks So

we’ll on measuring about First your question should in – first be Phase endpoints Xb. that the we the

is a we we FDA, you XX forward period. And look waiting field, upon you, exact the be with cleared, standard to IND the and in meeting to that So – the that's final that we'll see you're measures you sharing first And much initiate we're set in a that will be track very step of why for dosing shared to on we will in details the had aligned very with we because pre-IND the that which on quarter. details will IND B specific outlines the next to we're histological that endpoints clearance, we're near-term. next the used give once position with a trial week Type then great the And those final. we

that within that Xb sites say, put nice for studies, may is underway to overlap. have great getting in the for for cases interest inbound trial. distinct well again, for each the well-prepared sites, opportunity communicate we're that be and position of both up interest execute. position – quarter. institutions some in we’re us to audiences trial course, we've be of the a in the are in starting overlap we'll the mechanism, in the is, the it a distinctly There next will of major to nature terms breadth where it, I it, cases both But once had in still In more excellent again, there profile multi-targeted Phase execute of XXXX. we're our the both with ready presents set differentiated And

So questions. thanks the for

Thank you.

Please from comes go of Morabito Capital Michael The Chardan next ahead. Markets. question

questions I for gave questions. team. Thanks call. you. you on the for the XXXX, Hi some taking quick Two One think for details

the think expect if I or just until and front? please news-wise rest ex-U.S. by be correct if between of company you year and sites think COVID, XX data once overall. do be I next isn’t XXXX, is, impacted this from what launched, – and you in what have your – are change incorrect trials mitigation into how going as number I the – total, U.S. expect can like that year? second strategies that on said wondering to both sites these do employing potentially And me since XXXX what was expect and we split will you that But many the and how are not XXXX I you for to

great. Thank Good Okay, Michael. morning. you,

on protocol. So yes, us it's XXXX, plan. have over friendly XX – gives patients and first enrollment little over very sites And XXX patient a that is – a we the

excellent and set well in in up we to Europe. between nine is the which We've got sites inbound site-wise worked few countries in an experienced We're of are have Difficulty] in U.S. split U.S. terms physicians. reaching CRO, we've from with Europe We this a XX% field. the [Technical strong sites, and roughly the the next interest weeks standpoint start across

across the excellent uptake anticipating we're field. so, And

studies heart Now, we terms or familiar as COVID, year in execute ahead were on-time you're able deliver the with, our to of last and in the of pandemic time. of

others course, to favorable a level. plan situation good course of And the CROs in progressing, much pace mitigation we flagship vaccinations curves, engagement many the bringing and that we in they're circumstances, enrollment founded looked are and We very be worked the Moderna and we’re at sites how of have good that buoyant way. another where at are shape about now then and and COVID we company this the with when

Okay.

those groups pay we will very addition, trials. with and actions if last familiar able in they're and in we'll against through proactive Mantra necessary, that at attention to it. technologies order obviously mitigation health, cetera were are reminds you Now of clinical and to And home techniques like et look year, visits, steps sites other to deliver deliver other the now many

data events in question data position okay. your in on several not come readouts I to we’re data, a would year is or second this of Now, in for going and terms necessarily year this XXXX, say

you with the be intention once have around be. we share IND XXXX, that you'll with you, cleared we when trial, share and First sense once an to when analysis update on that will to initial interim the enrollment the better is able get a

that anticipate on So necessarily don't data suggest would I you in tuned will stay XXXX. that, I be

is second excited not very stage one we these reasons have why matter piece is is data and do a The opportunities programs diseases important through learned that about we're and our of that this later two late platform only the be additional significant be announcing advances we're we'll in position have this where our year we will we amount a pursuing. generation, stage

metabolic, of Now, beyond areas will i.e., demonstrated, inflammatory the we’ve these information potential is the in there that. liver, already adjacency both be also

the that that’s the be forward the data will of update continue be that we we'll looking give and we're at, best so, readouts looking to types on And this we'll areas conducting an you that platform. at experiments

and of that. on initiation course, the and how trial of the then news IND the doing this have We also we're with events

be we'll it to analysis important with and news that of be up XXXX next the tell to you there. think expansion the timing a share related pipeline of you flow a we'll will have good where and is, I events, set position in So to the

Excellent. Thanks for the clarity.

Yes. Thank you, sir.

Choi comes The Paul Goldman next of Sachs. question Please ahead. from go

especially in is Bill on follow-up Hi, with Bill, of factor And the sort specifically XXXX, enrollment primary just progress timeline, to and with a thanks. across regard wide could. I site few the you've little the might – in or just given, congratulations assumption just the that all range COVID conservatism little is take team driven the more terms sites, wanted activation I that might out XXXX questions just Good side? to morning, by international on and the more a a of XX-plus be ones, to the XXXX. around it slower on the a the if

Yes.

in first to think, Paul, call So I initial section, alluded our I this estimate. is the as

enriching Now, first directly is to have precluded number a the foremost rare condition. is encephalopathy one, more a those patients into and things; overt experience couple as to know, patients, be event. This know that we're OHE to event an our first you recruiting we have relatively of advanced hepatic

two And so, that's – considered. those that factors we've are

fact have made. in that be everything the have do as We course, on we've impact the is an that you to thank do can and that to for and know, And to going you pandemic overall on will we a pull your progress considered comments trajectory. position it may possible, we the the We're forward. of

XXX unfortunately other this on XXX there. lot the these meaning lactulose for has excellent record inbound the been need situation in plus of We countries sites that rifaximin, the where excuse track is where patients across in is we a we enrollment not have a in or number and/or sites and patient field me, XX There have friendly in fact design, patients And interest activity standard-of-care, strong. nine are and that execution. an patients a setting, have a the

particularly everything have it we and assumptions way. any enrollment forward or estimate strive and we And to then do curves say, things, this And something going do on the for of – activation continue those very to was in to is able we're some optimistic, talked once of promise can we're to over So we're case. to updating long I shape that hoping site I'll Paul, forward, initial We underway. based an well. as deliver pull we'll we in under don't through be look anticipate that you the that's in we're fact here every we that to what good

of the just differential a given just regards the baseline have with with to including can over my than well. given two more the you second, context. two relative standard-of-care you just sort the Okay. then patients question. study first have scores lactulose That's on maybe is half walk And Thanks addition worst that more here? on maybe with us comment point the nice the to Can change? the of did of Alison, thinking And incremental how regard XXX, with given changes, as therapy the and differential maybe the how performance rifaximin, patients you for about what PHES, the And Bill much. you maybe population for severe on Thank performed assumptions through, to the you here to – more a how just it very statistical terms are relative powering that and are those PHES of in moderate the and top scores? specifically call

jump day this Alison's So I'll Paul Because Paul two, have – here. okay. in I’ll is

a We that point of difference have in MHE of and roughly that advanced in But key active she standpoint, to the I ammonia and asking in detailed components, you we the more questions MHE show able couple did the terms doses. XX a where you're the that saw answer and between Margaret confidence the arms population. see measurement, from first, placebo all where excellent the and AXA So near-term. be will

really well seen have is a study, more So XXX power mechanism, have imbalanced are on the advanced benefit there we We're trend about their advanced the here. more one we That really did effect the amino the impact. okay. an on XXX talking course In patient was pronounced measures, our because broader general, and had think the where the see population. elevated. ammonia impact handling, in neurocognitive more to a into the the both ammonia reasons baseline – acids, to we and that, muscular move several forward patients as differentiated this Number as demonstrate excited then the metabolism, of can is we're

statistically standard this that placebo settings. demonstrated, we you've in noted The equaling lactulose, other relatively fact have related significant cetera, we in aspect comparable case, arm benefit as the PHES see what the is rifaximin, to et in patient a with

clinical So from because you're also aware we that of advanced have standpoint, the in settings up patients a six a believe, broken as in who in through to month clinical more a on We are study are in have not well addition, believe in to And the these world. and difference. a breakthrough. enriched patients Paul up period, to half lactulose study setting, that's show we're real set

Now, you up with to X and a see Phase our what consistent are study set see with that. powering is we

XX% We as patients rifaximin of well are roughly in occurs on in asking. the only lactulose the are as to by there show the world and stratifying order difference real you're show out – represent to as the combination, what what both

So we there in we're to us double overall, will and become as we or very improve And standard-of-care, and set believe hopefully our eventually arms. the single the monotherapy better tolerated up profile impact the an a question we show backbone in a feel on standard-of-care, to even of, well is of to set feel the up impact here position answer know, we're replace then it. that well you

of there, key all and had passed captured points question your I I you multi-part see sure if that so make a there. I'll So

and Yes. That's back the I’ll great. And in queue color Thanks clarification for Bill. additional here. jump

Okay. Thank you, sir.

of next comes The from ahead. Argyrides Wedbush Please Securities. question Andreas go

on for question. Thank our Thanks Liana you This and good Moussatos. Andreas morning. for taking is

clearance on suggestion color you. the and Thank provide process clearance? you could XXXX, to Xb to initiate achieving FDA Phase prior Regarding IND the the additional to

Yes.

thanks, So Andreas, good morning.

So an are in this process, us terms barriers to there of and in IND no initiate up. XXXX opening first the and

you, using setting gathered in stage-IND, significant Phase into where to I'll Xb. non-IND the As we've a going directly i.e., order remind inform data a we’re in late model our

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very both in the fact on And this that that, because had interaction well to the We just same is the we about guys recent are which important most able as shared we we feel with agency, the XXXX. we on of track you to align with were with do, the moved we that much that information through as updates. now, good division as clear IND, the

discussion we’re incorrect and beforehand, next you to that points, So they next conclusion key start anticipating starting and if, that study we the us are quarter. the set a in some apologize we're we're the that's we interactions, on encouraged prepared for I to We up quarter. reason start of to the understand excellent position led well discussion, good a not case. we well had some

the as well. Congrats the step queue. for into on the clarity. Thanks I'll Great. progress

Thanks Andreas.

Julian Please BTIG. comes Harrison question ahead. from next go The Instructions] with [Operator

you questions. Thank morning. taking good my Hi, for

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Thank it. you. Very Got helpful.

you, Thank sir.

ahead. B. question Riley next Mayank go FBR. comes The of from Mamtani Please

and board. team, morning, for Alison my question, to and have thanks on Good taking great

OHE have on you follow-up a care trial, on thoughts would kind feel on have a from on study think at on of the context also, updated time – going as confident then maybe standpoint. that a you’re just I the you’ll just what how looking the so are registration about of breakthrough you First all Could you that you could as your PHES the endpoint? you primary and top standard appreciate great. the be Bill, of we’re NASH. also use? endpoint And comment PHES comment Or that So, the events, on to see assumptions could

Sure.

welcome for Thanks and Mayank. for morning, good question Alison. the So a

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up and inform the So out a X would X. we understand that ourselves for well-informed and set science Phase set very wanted efficient Phase then the to

our So is this primary PHES change endpoint to in XX-week in over X a Phase the point, your period.

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breakthrough. OHE to time measuring indeed are We

are hospitalization. time We to measuring

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feel of on establish well which time efficient risk recurrence modality, endpoint, agency, the the positioned an we have the will of which important gather and So of information we’re to our be understanding we breakthrough. breakthrough to agreed registration impact with of

potentially function. We for secondary differentiate mechanistic could product. but the important be population also something information agreed, course, has us key agency only in a of will and is gathering also claims is This allowing not mechanism, on in and be, muscle to the a downstream. differentiator endpoint key label It

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And extent the how you are interim you’re X. part that of Can can share again, obviously context. I’m couple different a of A lot quickly, NASDAQ about there. just highlighted posters and the on of of the of NASH programs thinking curious and many have the variations then on over of weekend, your out And very helpful it big analysis. done I’m see the a to us different non-invasive, there. is great non-invasive in time that discussion sure been are to was that a followed points conference Phase your there you this

if just you your latest that. share curious So on thinking can

Yes.

markers understanding And is to field the obviously, to are on of the to then continue all clinical non-invasive this you’re inform that of these to histological the a as something outcomes, goes as element help So alluding disease. critical the non-invasive correlate impact markers and will us.

near-term, cleared As anticipate tell Mayank, IND, we both state-of-the-art in and to-date. of already you which times, Phase can used the measures. standard that in seeing the you final we the demonstrated will things the you’re I the give expect we’ll details should we’ve include I’ve to stated a that the Xb histological you, that of number What have the once field

on count can that clear. you So being

of used update And We as in for you that expect field. will analysis. timeframe to we’re within should standard to the the parameters be the you interim that again, the also seeing

mechanism, to believe one time. which we’re over opportunity a that excited So broader we of impact the by the will have differentiated compound

demonstrated cTX, impact As MRI-PDFF, others on and subjects, thresholds in importantly, Type all then both on and population. reaching the of that and ALT, correlate important X of on ProCX you we’ve on terms know, towards those diabetic thresholds outcomes

once So diabetes and we this, to information in we’ll share that you we’ll stratifying IND. for position with in clear Type X a be the be

Excellent. And a for then question Laurent quickly. final

and to non-disclosed of about then adolescent the in move that may quarters programs the the seven four spend factor or some also like R&D the On does in you even runway, next clinic? that think in study quarters the the

Yes. you. thank Yes,

additional million coming. end the programs our in pipeline are strong and studies we $XXX in the of we a the with financial year. include the when that have we at So cash very Yes, position

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we quickly. And that runway. additional what cash That’s come applications of in to to for your share programs question, last part the will this you And, and main guys do of Phase proud the that quickly we’ve I’m Xb move test of platform design information. really We very Mayank, significant been back be. status of four and one can order the we’re very can efficiently that very We years. in excited we trials IND able to that have. with X, reach Phase inside gather

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Thanks, Yes. Mayank.

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ahead. with SVB question from Smith final go The Thomas will come Leerink. you. Thank Please

guys. morning. Thanks the Hey, questions. for Good taking

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inform data So we’re this in again, demonstrated get is us, based we’ll as the quickly something the the that that confident field as we’ve based through that on we the will help to-date and enthusiasm mechanism, can. very on

Got it. color, Bill. That’s helpful. the Thanks for

Tom. Thanks, Yes.

closing any conference question-and-answer back This over concludes like Bill to our to the session. Hinshaw turn would I for remarks.

joining everybody morning in our operator. So, Thank you engagement thank for and progress. you, interest and and this for Axcella Health continued your

sharing for near-term, at progress the with positive We XXXX, and to stage a platform very you hopefully to our and company. our the in our on make continuing look exciting on pipeline. are We updates forward

take thank will well. well. So care. see very you person and soon much. Be you. We hopefully Be in Thank you

The now for presentation. you conference concluded. Thank attending today’s has

disconnect. now may You