Paratek Pharmaceuticals, Inc.
Q2 2015 Earnings Call Transcript

Published: 9 Aug 2015

[Operator:]

Welcome to the Paratek Pharmaceuticals Second Quarter of Corporate Update Conference. At this time I would like to turn the conference over to Mr. Paul Arndt. Please go ahead, sir.

[Paul Arndt:]

Thank you, Lauren. Good morning everyone Paul Arndt of LifeSci Advisors, Paratek's Investor Relations Firm. And welcome to Paratek's first earnings conference call in which the company will provide a corporate update and discuss second quarter 2015 earnings results. Approximately at least with our second quarter financial result was issued earlier this morning and can be found on our website at www.paratekpharm.com. The agenda for today's call is as follows, Michael Bigham, CEO and Chairman of the Board will provide an overview of the company's progress and plans for the remainder of 2015. Evan Loh, MD, President, Chief Medical Officer and Director will review the company's clinical programs. He will provide an update on the two Phase 3 registration studies for it's lead compound Omadacycline as well as an update on it's second Phase 3 compound Sarecycline. Doug Pagan, Chief Financial Officer will review the financials for the quarter and the year-to-date. Michael will then make brief closing remarks and open the call to Q&A. Adam Woodrow, Chief Commercial Officer will also be available for questions. Before we begin I would like to remind you that today's decision will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the risk factor section of our Form 10Q filed with the SEC on May 5, 2015. In addition any forward-looking statements represent our views only as of today Wednesday of August 5, 2015 and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future we specifically disclaim any obligation to do so even if our views change. Now I will turn the call over to Michael Bigham.

[Michael Bigham:]

Thank you, Paul and first let me thank all of you on the call for joining our first quarterly earnings call. As Paratek has grown as an organization such calls are natural opportunity for us to provide updates and answer questions about the company's progress and upcoming milestones. We are pleased to announce that during this past quarter we were able to continue our forward progress and deliver upon several key milestones. Most significantly we announced in June the initiation of dosing in the first of our two planned Phase 3 registration studies for Omadacycline, our ones daily oral and IV broad spectrum of antibiotics. The first study focuses on the treatment of patients with moderate to severe acute bacterial skin and skin structure infections or ABSSSI. Our second registration study will focus on the treatment of patients with moderate to severe community acquired bacterial pneumonia or CABP. The CABP study continues to be on track to start enrollment before the end of this year. Initiation of dosing in our skin study in June marked the start of our Phase 3 registration program for Omadacycline. This milestone moves up an important step closer to the potential approval of Omadacycline which we believe will provide patients and physician with a well-tolerated, once daily oral and IV broad spectrum monotherapy treatment options for those patients with moderate to severe community acquired bacterial infections where resistance is of concern to physicians. Our second Phase 3 compound is sarecycline, like Omadacycline, sarecycline is a tetracycline-derived small molecule designed by Paratek. Sarecycline has a narrow spectrum once daily oral antibiotic with anti-inflammatory properties. It is currently being tested in two identical Phase 3 registration studies for the treatment of [indiscernible]. These studies were initiated in December 2014 by Allergan our U.S. partner for sarecycline. Allergan has U.S. rights to the development and commercialization of sarecycline and based upon sarecycline's product profile in earlier clinical studies we believe that it has the potential to become a significant product for this indication. Under our agreement with Allergan we are eligible for future development milestone payments as well as royalties on U.S. sales if the compound is approved. In addition we continue to retain all ex-U.S. development and commercialization rights for sarecycline for acne. We’re enthused about the potential of sarecycline and we’re pleased with Allergan's progress on and commitment to this program. It is important however to reiterate that the primary focus of Paratek is on the successful development and commercialization of Omadacycline for the U.S. market. During this past quarter we also continued our committed to strengthen our senior management team. Specifically we are pleased to announce several new hires, Yulii Bogatyrenko as Senior Vice President, Business Development, Randy Brenner as Senior Vice President, Regulatory Affairs and Quality, William Haskel as Senior Vice President, General Counsel and Corporate Secretary, and Jeanne Jew as Vice President, Business Development. And most recently we announced the addition of Timothy Franson, M.D. as the new Independent Director to our Board of Directors. Dr. Franson has offered more than 50 articles in the field of infectious disease, epidemiology, pharmacoeconomics and antibiotic utilization. His leadership in these areas as well as our regulatory, compliance and policy matters is not only widely recognized but we will have important regulatory and policy support for our Paratek Clinical development programs. We believe that he had an insight, guidance and expertise from these new members of our management team and Board for will be invaluable to the continued success of our business as we finalized our clinical development of Omadacycline, anticipates potential commercial launch in the U.S. and as well execute against our business development strategies for both of our Phase 3 assets. As part of our recent growth phase we have reallocated our corporate offices to new spaces within Boston as well as expanded our office space in the Philadelphia area. Our physical expansion is necessary to support our growth as we continue to attract the experience talent needed to bring these important medicines to patients. In May of this year we completed a successful follow-on common stock offering. The proceeds of this offering further strengthened our financial position and provided us with the added resources needed to complete our Phase 3 registration studies for Omadacycline and skin infections and CABP. In addition these proceeds will also enable Paratek to accelerate early Phase clinical studies to explore PK/PD and the potential efficacy of Omadacycline and patients with urinary tract infection or UTI and Sinusitis. We closed the quarter with 148.7 million in cash and cash equivalents which we expect will fund operations through top line results from our second Omadacycline pivotal study in patients with CABP. With that I will now turn the call over to Dr. Evan Loh to discuss our clinical highlights from this quarter. Evan?

[Evan Loh:]

Thank you, Michael. Good morning everyone and thank you for joining us today. As you have heard from Michael we have made exciting progress in advancing the clinical program for our lead compound of Omadacycline. The first a new class of tetracycline is known as Aminomethylcyclines, with broad spectrum activity against gram positive, gram negative and atypical bacterial. We believe Omadacycline has the potential to become an important -- once daily well-tolerated broad spectrum, monotherapy treatment option for patients suffering from acute bacterial skin and skin structure infections community-acquired bacterial pneumonia and urinary tract infections as well as other bacterial infections when resistance is of concern. Further we believe Omadacycline is the most advanced broad spectrum once daily oral and IV monotherapy antibiotic currently in late stage development for both the ABSSSI and CABPs indications. As Michael mentioned the dosing of the first patient in our Phase III skin infection study in June was an important milestone for Paratek. This Phase 3 randomized double blind multi-center study will compare the safety and efficacy to IV to Omadacycline with IV to oral Linezolid in adults with acute bacterial skin and skin structure infections. In this study we will be assessing both the early clinical response as required by the FDA as well as the post-therapy evolution at that point historically known as the test of cure assessment is required by EMA. The study is designed to enroll approximately 650 adults participants in approximately 90 centers worldwide. I'm pleased to report that to-date enrollment in this study is in-line with our expectations. As we have said previously we expect to top line results from this study approximately 12 to 15 months from initiation of enrollment. As such we continue to expect top line data in the second half of 2016. As Michael mentioned the skin infection study is the first of two planned Phase 3 registration studies of Omadacycline under our special protocol assessment or SPA agreement with FDA. The second plan Phase 3 registration study for the treatment of patients with moderate to severe CABP. It is scheduled to begin enrolling patients before the end of this year. This randomized study will compare IV to oral Omadacycline with IV to oral Moxifloxacin. As with our skin infection study the CABP study will assess early clinical response as agreed upon with the FDA as well as the post therapy evaluation as required by EMA. We expect that the CABP study will enroll approximately 750 patients at approximately 150 sites worldwide. We expect top line data in the second half of 2017. Given the importance of these registration studies we will provide updates on their progress during our quarterly calls. If both studies are successful in demonstrating non-inferiority to their respective competitors combined with an adverse event profile consistent with the well-tolerated profile seen to-date we anticipate being able to submit a new drug application to FDA in the first half of 2018. Because of the qualified infectious disease products or QIDP designation granted to Omadacycline by FDA under the GAIN ACT. Omadacycline will be eligible for expedited regulatory review. FDA's guidance for this type of expedited review is that it would last approximately eight months thus enabling a potential approval for the once daily oral and IV formulation of Omadacycline or both ABSSSI and CABP as early as late 2018. Our second tetracycline derived compound in Phase 2 development, sarecycline is progressing in it's registration clinical studies which are designed to demonstrate efficacy for patients with acne. As you may know acne has an inflammatory component, by design sarecycline is a novel narrow spectrum once daily oral antibiotics with demonstrated anti-inflammatory activity. Importantly sarecycline is a well-tolerated once daily oral drug candidate that in previous clinical studies has demonstrated a favorable tolerability profile. We believe that sarecycline has demonstrated an important set of differentiated features when compared to currently available generic reformulated [indiscernible] and minocycline on the global markets today. In the Phase 2 study in acne sarecycline achieved it's primary endpoints for both safety and efficacy. The Phase 2 program is combined of two identical double blind randomized placebo controlled clinical studies for subjects with moderate to severe acne. Each study is planned to enroll approximately 1000 subjects with an addition of 500 patients followed in a roll over extension study for nine months. Our U.S. partner for this program Allergan has publically stated that it expects to have results from the Phase 2 program in 2016 which would potentially enable the filing of it's NDA in the U.S. in 2017. If approved this will be the first tetracycline derived compound developed specifically for use in dermatology indications such as the treatment of acne. We remain enthusiastic about the potential of sarecycline and believe it will be well-positioned to compete successfully in the acne market. As Michael mentioned the U.S. registration of Omadacycline remains our first priority given it's potential impact on patient care and it's potential as a growth driver for our organization. As described in the [indiscernible] successful follow-on offering in May, we plan to initiate also exploratory Phase 1 studies in both UTI and Sinusitis as part of our ongoing strategy to broaden the prospective of oral only indications for Omadacycline. We expect that these UTI and Sinusitis studies will commence in the first half of 2016. With regard to potential registration of Omadacycline in Europe, earlier this year we filed for scientific advice through the centralized advice procedure in Europe. We have received feedback that it is confirmed that the study designed and choice of competitors for both the ABSSSI and CABP pivotal registration studies as designed are acceptable. The received guidance also noted that the potential for obtaining approval based upon a single study in each indication could only be determined once the data from the studies are available. In addition the analysis of this data will be subject to more stringent standards than would data derived from a more traditional strategy involving two pivotal studies per indication. We’re evaluating this guidance within the context of our broader clinical development strategy and considering options to support a potential EMA filing. With respect to Omadacycline we’re actively engaging the medical and scientific communities with regards to our science. Along those lines we are pleased that seven abstracts on data from our Omadacycline microbiology program that we submitted to the ICAAC 2015 meeting plan for this September have been accepted for poster presentations. Details on our presentations at ICAAC in September were disclosed in a press release that we issued earlier this week. These abstracts will be available on August 8 on the ICAAC conference website and present the posters during that meeting. With that I will now like to turn the call over to Doug who will review our financial results for the quarter. Doug?

[Doug Pagan:]

Thank you, Evan. This month we’re recording financial results for the quarter ended June 30, 2015 this quarter we reported a net loss attributable to common stock holders of $15.7 million or $0.96 per share compared to a net loss attributable to common stockholders of $3 million or $41.79 per share for the quarter-ended June 30, 2014. This net loss reflects expenditures on the Phase 3 studies for Omadacycline and spending on clinical drug supply. No revenue was reported for the second quarter of 2015 as compared with 0.3 million in research and development and collaboration revenue for the same quarter last year. Research and development expenses for this quarter were $11 million, an increase of 10.2 million as compared to the same quarter in 2014. The change was primarily the result of initiation of our planned Phase 3 clinical studies of Omadacycline as well as higher personnel related costs as a result of our growing team. General and administrative expenses for the second quarter were $4.3 million, a 2.9 million increase compared to the same quarter last year primarily due to increases in professional and consulting services, expenses associated with being a public company and personnel related cost. We ended the quarter with cash and cash equivalents of $148.7 million which as Michael noted we expect to fund operations through top line results from our second Omadacycline registration study expected in the second half of 2017. And now I will turn the call back over to Michael to summarize this morning's discussion.

[Michael Bigham:]

Thank you, Doug. As you’ve heard this morning, Paratek has made considerable progress to-date in 2015. To summarize in June we initiated our registration study in skin infections the first of two Phase 3 registration studies for Omadacycline, a once daily oral and IV well tolerated broad spectrum antibiotic. We remain on track to start our Phase 3 registration study in CABP by the end of this year and together we expect these two studies to form the foundation of U.S. MDA which we anticipate filing in the first half of 2018 and which if successful will enable an approval as early as late 2018. We have had seven abstracts accepted for presentation at ICAAC in September. We have strengthened our senior team and our Board. We further strengthened our balance sheet and our corporate infrastructure and our U.S. partner for sarecycline Allergan continues to advance the Phase 3 registration program for our second Phase 3 compound. In summary we remain excited about the future of Omadacycline, sarecycline, and Paratek. Our accomplishments this year have placed us in a strong position as an organization to execute on our future plans. We thank you again for your interest and for your time this morning. We look forward to keeping you updated on our progress on a regular basis going forward. We’re now happy to open the call up for Q&A. Operator?

[Operator:]

[Operator Instructions]. Our first question comes from Paul Matteis with Leerink.

[Paul Matteis:]

First, Evan maybe think you can expand a little bit on the planned structure of the UTI Sinusitis studies and what kind of PD end points there might be and what you hope to learn about Omadacycline from this studies going next trial is given that you know the drug RD of that -- relevant pathogens in those indications.

[Michael Bigham:]

As you know UTI is our third what we have referred to as our big three indications. UTI is a setting in which today for those multi-drug resistance E.Coli pathogens that are seen in both uncomplicated as well as complicated urinary tract infection, our KOLs have given us feedback that there continuous to be a major unmet need specifically around the absence of a well-tolerated once daily oral therapy that can be used for patients that potentially have this pathogen underlying their UTI. For us to actually be successful there the first steps as always in traditional PK/PD manner is to actually be able to evaluate the levels of Omadacycline in the urine as well as the look at initial clearance rates of bacteria that are found in individuals of urinary tract infection, this is a classic combination of looking at the PK driver efficacy which we believe will be the levels of Omadacycline in urine compared to our ability to clear bacteria from the urine. The other feature of this compound that we think is important to note is the fact that half of this clearance of this molecule which is actually still parent compound that comes in and leaves in the urine is actually parent compound so therefore for us this is important to actually document steady state levels of Omadacycline in the urine. So that will be our first study that we will get off the ground in the first half of 2016 which will be a PK/PD analysis of Omadacycline levels in the urine combined with looking at the clearance of most likely E.Coli being the most common pathogen in that setting of individuals who present with Sinusitis. Once we have established a dosing of that oral only approach then I think we will be able to plan and have discussions with the FDA about what a larger either Phase 2 or Phase 3 registration program will look like.

[Paul Matteis:]

And just on the context of the obviously you don’t know the regulatory path yet but given you’re already doing late stage studies in CABP and skin it seems like you might be able to get a faster path market in UTI, so what's your sense of what could be required there, other studies are successful and is there anything in the most recent update of 21st century [ph] [indiscernible] that suggest that you might be able to get a more rapid path to market in the third and fourth indications for Omadacycline.

[Michael Bigham:]

I think there is a completely different environment today in terms of the support that this sector is getting from both the 21st Century [indiscernible] as well as from FDA and we’re very thankful this with the momentum that’s been generated in this sector. Specifically when you look at the 21st Century [indiscernible] one of the two bills that are under consideration now in the senate is something called the Adapt Bill specifically you’re looking at a smaller population of at risk individuals who have no other options in terms of therapy and we’re hoping that overtime that we will be identify specific individuals who have gram negative infections that don’t have other oral options that potentially will be able to enrich for in our studies whether they be in a Phase 2 setting or in a more focused Phase 3 setting, a lot of those discussions will have to occur with the FDA to gain clarity in terms of what minimum number looks like but there is in many regions of the world Southern Europe is one of them, Asia as well are areas that have a tremendous amount of unmet need with regards to these gram negatives and there are no oral options and therefore unfortunately individuals that are treated in that setting have to be admitted for intravenous therapy with carbapenems. But we think this is the big unmet need and I think -- and we hope that the FDA we also see it in the same way and support our programs.

[Paul Matteis:]

And one more if you don’t mind, I know this is speculative but do you have any sense on a quantitative level what EMA guidance means that because you’re only doing one study of these indication, the requirements could be more stringent? Do you think that means a narrow down non-inferiority margin and you also refer to some other considerations that might augment your chance for approval there. Is that are, you considering other studies or how you’re thinking about your approach ex-U.S.? Thanks.

[Michael Bigham:]

The design of the trial that we have planned are going to be the same, we’re not changing the non-inferiority margin where we believe the stringency will come is in terms of disproving the hypothesis at our p-level with less than 0.01 and because of that since our trials parted at a level of less than 0.5 I think there maybe some considerations given to stringency in terms of whether that will be adequate enough to rule out the possibility of it falls positive, I think the Europe will probably looking for less than a 1% chance of a false positive in this particular setting. So that being said I think there might be an opportunity for us to think about how to enrich that overall safety database for them to adjudicate benefit risk. We’re considering the potential for oral only indications in both skin as well as pneumonia. I think we need to start having those kind of further conversations with our regulators as well but I think to-date our focus continues to be on the U.S. and that’s the path we’re most focus on currently.

[Operator:]

Our next question comes from Louise Chen with Guggenheim Partners.

[Louise Chen:]

So just a follow-up on the EMA response, I'm curious when do you think you will actually make a decision here at the time frame. Secondly on the UTI indication are you looking at complicated or just regular UTI and then on the community opportunity for Omadacycline, can you talk about resistance in the community physician awareness of this you know how to think about this and I had one another question as well, but answer those first. Thanks.

[Michael Bigham:]

I think for us we continue to keep our heads down with regards to executing against the pivotal trials for skin and pneumonia as they are currently designed because the U.S. is our focus from a registration standpoint. I think that what we need to do is go back and look at what the capital resource will be with regards to thinking about those particular trials and we’re in the process right now of evaluating our overall life cycle strategy and I think all of those will be -- those factors will be taken into consideration with regards to the timing and which particular trial we will be initiating wanting to take on first. The second question was around UTI?

[Louise Chen:]

Yes are you going after complicated or just regular UTI and why?

[Michael Bigham:]

We don’t actually know yet, what we want to do is get our PK/PD metrics right and we think that PK/PD metrics will be relevant for both uncomplicated as well as complicated because again we’re going after the pathogen and once we get that dose right I think we will then valuate the ability for us to actually pursue complicated or uncomplicated. There is potential that we might go after both of this as well. I think for us. I think getting the opportunity to really test the oral only approach in a relatively streamline dosing fashion for a shorter period of time, 5 to 7 days is exactly what the community is looking for and our KOLs as continue to say that from a E.Coli perspective that is the most common pathogen, it's about over 90% of the cases in uncomplicated UTI and 65% to 70% of the cases is in complicated UTI. That continues to be the most important pathogen and as you know we have got microbiology there and we believe that we get the right levels in the urine in appearance [ph] perspective that we will actually have optimism with regards to efficacy in those populations.

[Louise Chen:]

And what the resistance?

[Michael Bigham:]

The environment today is that quinolones were the drug of choice actually in the treatment of both uncomplicated and complicated urinary tract infections. Overtime there has been continued resistance both to legal [indiscernible] today in the U.S. the data looks as if probably 15% to 20% of E.Coli are resistant to quinolones and quinolones seem to be also a marker for other classes of antibiotic resistance as well but go along and including sulphur resistance to -- in the setting of E.Coli as well. So because of that as you know from a guidance perspective all guidances start moving compounds down in terms of priority in terms of second and third line therapy as resistance patterns grow above 10% to15%. So today if we see individuals that are ill with a primary urinary tract infection whether it will be complicated or uncomplicated they really want to get an effective therapy on Board and they really want to have the best choice available for them and we think this is the potential option for them.

[Louise Chen:]

And one another question here is on the competitive advantages of your drug for skin and pneumonia versus other drugs that are currently available. You know why do you think you get will get uptake for your product?

[Adam Woodrow:]

I mean if you look at where we’re in terms of our product, Omadacycline is a pretty unique profile you know we’re a new macular entity, the first in new class with Aminomethylcyclines and we believe if we’re approved we have the potential to provide those patients and physicians with the one tolerated ones daily or an IV broad spectrum monotherapy treatment. The moderate is community acquired bacterial infections where resistance is a concern and in truth we’re the only drug that has that profile and that multitude of indications that we’re going forth. Based on the researches that we have done we know that the profile is being well accepted both in hospitals where obviously we will launch and also it's being well received by primary care physicians.

[Operator:]

Our next question comes from Bert Hazlett with Ladenburg Thalman.

[Bert Hazlett:]

I want to shift back to the EU discussions with EMA if I could, what does this mean for Omadacycline or broadly in the EU, we talked about trial design let's talk about enhancements, I guess is the word used. Does it mean anything strategically in terms of the pace of development in that geography and your strategic view of the assets there?

[Michael Bigham:]

I think to put this into sort of a broader context to reiterate, our primary focus has always been and remains as you know U.S. registration and that’s been our principle driver. As part of that approach number one of course we start with our registration program the first two Phase 3 studies in skin and CABP that you’re well-aware hospital setting, IV oral step down. As part of our broader strategic game plan we have in mind other studies that are very important in our mind to expand the ultimate use of Omadacycline in the U.S. market but these studies of course are done not just in the U.S. but U.S. and abroad and those studies will have applicability to other markets including Europe. Specifically beyond these two initial studies, the future studies we have in mind tend to be oral only studies for the reasons we have discussed in the past given the profile of Omadacycline we expect it's use in the communities to be quite broad with a multitude of indications overtime. So getting back to the EMEA question, a feedback regarding from the AA was very consistent with what we expecting and obviously reassured that the study designs accepted by the FDA are also acceptable to the EMA, that was nice confirmation but not a surprise. The fact that the EMA has not yet accepted per say officially a one plus one strategy as the FDA has done with us, that’s not a surprise. The fact that they are open to the possibility of approval based upon a one plus one strategy with one study per indication that was frankly a modestly pleasant surprise, but it's not clear if that’s necessary but why this course if in fact what you want to do get approval as soon as you can once you submit. In addition as we look at the timelines and our timelines for Europe had not been explicitly detailed from our perspective yet. The plan has always been to allow them to follow the U.S. filing, what is likely to be the case is by the time we do file in Europe we will have other study trial results based upon our life cycle strategy in the U.S., that’s in and of themselves may well be more than sufficient to provide a very robust EMA filing at that time. So maybe more detailed than you had expected but that sort of current state of play and how we’re thinking about it.

[Bert Hazlett:]

I do want to come back to Omadacycline but first could we just discuss sarecycline and your additional thoughts if you have any at this point in terms of the strategy for the ex-U.S. rights with that molecule. Is there any progress there? Is there any evolution to this strategy and any significant updates would be welcome there.

[Michael Bigham:]

No significant updates on sarecycline with respect to ex U.S. rights, in truth our belief and perhaps our expectation is that the value of those ex U.S. rights will simply be significantly higher once we have in hand the Phase III results from the U.S. studies being conducted by Allergan and so our game plan all along has being to raise the profile of sarecycline with potential ex-U.S. partners which we have been doing and interest levels have been very strong. So the view towards actually looking to consummate an ex-U.S. arrangement once we have the Phase 3 data in hand and that should happen next year based upon what Allergan has disclosed publically.

[Bert Hazlett:]

And then just briefly on the data upcoming with at ICAAC, the presentations could you just comment on what investor should be focused on in terms of the highlights of the data. I know you have got some information on Omadacycline and against Legionella [indiscernible] could you just comment on what you think is important out of the data that’s coming in September.

[Michael Bigham:]

I think it's nice that we’re having a chance now to expand and share with broader scientific community, the data that we generated over the last several years with regards to the microbiology profile of the Omadacycline. The data that you will see continuous to support the broad spectrum opportunity with Omadacycline, it will show we think continued consistency in our MICs and no drift with regards to MIC as it relates to potential resistance as well what you wouldn’t expect to be honest with you since it hasn’t been in the marketplace but it's nice to see that over a 4 to 5 year period of time since the last time we published these type of microbiology data in 2010 that in fact our data has remained absolutely consistent with what we have shared with you to-date.

[Operator:]

Our next question comes from Hartaj Singh with BTIG.

[Hartaj Singh:]

Just on your -- when I'm seeing the number of patients that you’re going to be recruiting 650, can you just break down what -- the number of trial sites that you’re going to have in the U.S. versus ex-U.S. just sort of where ex-U.S. are those patients coming from and then just an idea on when would recruiting be done and nothing too detailed but when would you expect recruiting to be done for example U.S. versus ex-U.S. because I would imagine that that would just take a little bit different times and just quick follow-up after that.

[Michael Bigham:]

Yes, so 650 subjects about 90 sites worldwide, if you look at the total number of subjects from what you’re getting is a total number of subjects in the U.S. versus ex-U.S. We anticipate that probably a minimum of 50% of subjects will be enrolled in the U.S. The regulatory path is a little bit more streamlined in the U.S. from an FX committee review process and that’s where we have some of our initial enrollment today is primarily in the U.S. And in Europe we will see approximately the other half to our subjects will be enrolled in Europe as well. So primarily about a 50

[Hartaj Singh:]

And then just quick follow-up, just on that is there any difference in practice between for example the United States ex-U.S. in terms of just protocol educating investigators etcetera, etcetera. Just on things that you will be watching out for in the U.S. versus ex-U.S. and the only reason I'm asking is just I'm looking back at history of some of these skin and pneumonia trials, a lot of it, you’ve some of the failures have been dependent on just differences in practice between various geographic regions, just any thoughts on that?

[Michael Bigham:]

We don’t see very much in terms of practice deviation [ph] I think our job as the sponsors to make sure that we have identified sites that have relative consistency in the way they practice and the way they treat patients. But we have seen before in my prior experience with other antibiotics is that Europe tends to have a little bit longer in terms of the IV phase, in terms of being hospitalized versus in the U.S. pending to switch to an oral sooner but at the end of the day we have both of those options given our two formulation that we’re testing both IV and oral and we will be able to look at that but we don’t anticipate any major differences overall.

[Operator:]

[Operator Instructions]. We will take our next question from Daniel Brims with Cantor.

[Daniel Brims:]

Most of my questions have been answered but I guess first starting with EMA like everybody else, right now you’ve about 650 patients, if you wanted to increase those numbers to be sure that with your current assumptions reach that 0.01 p-value, how much larger of a study would you have to do?

[Adam Woodrow:]

I think it's a good question, we have considered that as an option I think that you know it's a fair number more than where we were planning at 650. I think it's a balance Dan, in terms of overpowering this study with regards how the FDA looks at these particular study designs and I think at this point if we were to increase our study to that level of increased patients we probably should back to the FDA, have another discussion under a SPA agreement and that would delay I think our current commitment and what we need to deliver for the current trial and for the U.S. Again our focus is on the U.S. we have a clear path there, I think we’re relatively cautious about trying to relook at that particular path right now.

[Michael Bigham:]

One thing I would say just to reiterate that we have never given a timeline say for any EMA filing for host of reasons, first and foremost of which our focus has always been on the U.S. for obvious reasons and as well as overtime we will have partnering discussions looking for European partner and they will few as well that will impact any final decisions. But in terms of timing, by the time we would file for approvals with the EMA it is highly likely that we will have completed other studies on Omadacycline with the principle focus of call it label expansion or pursuing other indications almost exclusively in the oral only settings and that data wouldn’t be available at the time we would intend to file. So at present we really don’t think we need to do any additional work that’s EU focused specifically because our natural program for Omadacycline in the U.S. we believe was just generate a data we need for first EMA filing.

[Daniel Brims:]

And I guess one question on sarecycline, I guess for severe patients or chronic patients that this is targeting for acne, how many what's the estimate for how many patients in the U.S. would be addressable?

[Michael Bigham:]

I mean for the market that patients in the trial, you mean the ultimate market potential?

[Daniel Brims:]

I don’t know that we have that number handy, we can get back to you on that for those of us who have teenagers that seems like an awful lot. Certainly all of their friends, so I don’t know the exact--

[Adam Woodrow:]

I will have to get back to you on the exact numbers of patients. I mean it's an enormous market but of course they would need to require an oral therapy and the first line treatments are topical. I have to get the actual numbers from Allergan for the U.S. on that for you. One thing I would say is if you recall it's quite a lucrative market for good oral treatments, given the fact that we sold [indiscernible] from a commercial perspective makes a $150 million in the U.S.

[Operator:]

And next we will go to a follow-up question from Bert Hazlett with Ladenburg.

[Bert Hazlett:]

Just a general question that I think would be helpful for me and hopefully for others. If team has had some significant experience with the development of Tigecycline and other potent broad spectrum tetracycline. Can you discuss maybe in general terms how is the experience Tigecycline you’ve had has informed your development with Omadacycline and kind of strengths and weakness and relative benefits of the Aminomethylcyclines of vis-à-vis Tigecycline.

[Evan Loh:]

Tygacil is a very good product, it's a very potent broad spectrum intravenous only antibiotic that’s approved for complicated skin, immunity pneumonia as well as complicated intra-abdominal infections. It has a spectrum that is very similar to what we have expect that it has a little bit more in terms of gram negative potency. This drug that we have when we developed Tygacil which is a glycylcyclines not in our current class of Aminomethylcyclines that we struggle with two things, one is that we struggle with making orally bio-available and number two the glycylcycline class of antibiotics tends to have intrinsic moderate to severe nausea vomiting from the tolerability perspective. If we have that attribute currently with the Omadacycline we could not really come to you and discuss positioning in the community acquired serious infection space. And we have today made it orally available which is very, very convenient as a once daily dosing for an individuals in the community acquired space now. We’re still going to be effective and launch as we said in the hospital based space with our intravenous initial therapy followed by an oral switch but as you’ve heard from Michael and others we will pivot rapidly I think to consider oral only indications under our belt as well from an approvability standpoint. The other features of Omadacycline that are different than Tygacil, the big one here has been in fact actually is renal [ph] cleared quite robustly. Tygacil was minimally cleared in the urine but we really couldn’t consider urinary tract infection as an indication to pursue and so because we are orally I mean from our oral and intravenous formulations getting a lot of our compound in urine we can consider this as well. There are a couple of other different features I think are really important to point out as well. This compound is metabolized, the parent compound starts, leaves this parent compound as well. That from a safety and tolerability perspective is really very important and finally compared to Tygacil this compound has very low protein binding because it has very low protein binding we think we have anywhere from 3 to 4 more free drugs circulating in humans that is available to go to the tissue matrices in which the infections are based. So when you combine all of those features together of no metabolism, absence of need for consideration of drug-drug interactions as well as the well-tolerated profile we have seen to-date. We continue to remain silent about having opportunity to be relevant in the care of patients with serious community acquired infections both in the hospital settings as well as in the community setting with a once daily oral as well as an intravenous formulation.

[Operator:]

It appears there are no further questions at this time. I would like to turn the conference back to management for any additional or closing remarks.

[Michael Bigham:]

I think we’re in good shape. I thank all of you for your time and attention and thank you for those questions. Always appreciate it. Look forward to seeing or hearing at a minimum on the next quarterly call. Thank you. Bye, bye.

[Operator:]

This concludes today's conference. Thank you for your participation.