Paratek Pharmaceuticals, Inc.
Q3 2015 Earnings Call Transcript

Published: 12 Nov 2015

[Operator:]

Good day, and welcome to the Paratek Pharmaceuticals Third Quarter of Corporate Update Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Paul Arndt. Please go ahead, sir.

[Paul Arndt:]

Thank you, Taylor. Good morning. This is Paul Arndt, Managing Director of LifeSci Advisors, Paratek's Investor Relations Firm. Welcome to Paratek's third quarter 2015 quarterly update and earnings conference call. A press release with the company’s third quarter financial results was issued earlier this morning and can be found 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. Dr. Evan Loh, 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 its lead compound Omadacycline as well as an update on its 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 for Q&A. Adam Woodrow, Chief Commercial Officer will also be available on the call for questions. Before we begin, I would like to remind you that today's discussion 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. The words anticipate, plan, potential, expect, will and other words noting future events identifies statements as forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in our press release today and in the Risks Factor section of our Form 10-Q filed with the Securities and Exchange Commission on November 12, 2015. In addition, any forward-looking statements represent our views only as of today Thursday, November 12, 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. I will now turn the call over to Michael Bigham. Good morning, Michael.

[Michael Bigham:]

Thank you, Paul. Good morning. Thank you all for joining our third quarter 2015 earnings call and corporate update. During this past quarter, we made significant progress in advancing the Phase 3 development program for Omadacycline, which is our once-daily oral and IV broad-spectrum antibiotic being developed for patients with serious community-acquired infections. As you will recall, in June of this year, we announced the start of our first Phase 3 registration study for Omadacycline in acute bacterial skin and skin structure infections. And earlier this week, we announced the dosing of the first patient in our second Phase 3 registration study for Omadacycline, this one in community-acquired bacterial pneumonia. With both of these studies now actively enrolling, we are pleased to be able to report that the Omadacycline registration program is progressing as planned. Evan will provide more details on our progress shortly. Omadacycline has the potential to be an important new class of antibiotics that can provide patients and physicians with a well-tolerated, once-daily oral and IV broad spectrum monotherapy treatment options for treating patients with serious community-acquired bacterial infections, particularly when resistance is of concern to physicians. Paratek owns global rights to the development and commercialization of Omadacycline. Another important achievement for the Omadacycline registration program is Fast Track Status, which was recently granted by the FDA to Omadacycline. This is a significant development for Paratek that underscores Omadacycline potential as an important treatment option in our target indication. Paratek has a second compound of Phase 3 developments, namely Sarecycline, a narrow-spectrum once-daily oral antibiotic with potent anti-inflammatory properties. Our U.S. partner for this program Allergan continues to make progress in the execution of the Phase 3 registration program for Sarecycline. As a reminder, Paratek’s primary focus however is on the successful development and commercialization of Omadacycline for the U.S. market, while over time seeking partners for the commercialization of Omadacycline outside of the U.S. Paratek entered the third quarter on a strong financial position and we took steps to strengthen that position this quarter. Later, in this call, Doug will provide an overview of our financials and describe the loan and security agreement we’ve entered into that provides us with additional financial flexibility to fund development of Omadacycline and also to fund our measured growth as an organization. With that, I will now turn the call over to Evan to discuss our clinical highlights from this past quarter. Evan?

[Evan Loh:]

Thank you, Michael. Good morning, everyone. As you’ve heard from Michael, we continue to advance our Phase 3 registration program for Omadacycline and we are now dosing patients in both of our pivotal Phase 3 registration studies. Our Phase 3 study in skin infections began in June and is enrolling patients according to plan. As a reminder, we plan to enroll approximately 650 patients in this study at approximately 100 sites worldwide. Based on our progress to-date, we continue to expect top line data in the second half of 2016. In addition, we have started dosing patients in our Phase 3 study of Omadacycline in pneumonia. We plan to enroll approximately 750 patients in this study at approximately 150 sites worldwide. We expect the pneumonia trial to be completed in the second half of 2017. In September, we presented microbiology data on Omadacycline at the ICAAC conference. These important data demonstrated that Omadacycline remains active against Gram-positive bacteria, including community-acquired strains of MRSA, active against Gram-negative bacteria as well as active against atypical pathogens such as Legionella. Activity against these multiple pathogens is important as it enables Omadacycline to address several target indications of which skin and pneumonia are now in Phase 3 registration studies. As Michael noted, we recently received Fast Track Status for both the oral and IV formulations of Omadacycline for skin, pneumonia and complicated urinary tract infections. Fast Track’s designation facilities the development and expedites the review of drugs, which treats serious or life-threatening conditions and address an unmet medical need. Fast Track Status provides three main advantages for our development of Omadacycline. First, ready access to and involvement of senior FDA officials in the clinical development and NDA review process for Omadacycline. Second, more frequent and quicker meetings with FDA during the development process. And finally, priority review and a rolling NDA submission to expedite the overall regulatory process. Priority review, as you remember, was also part of the QIDP designation that FDA granted to Omadacycline. As a reminder, given its broad spectrum of activity, both the oral and IV formulations of Omadacycline were granted QIDP status for three important indications; serious skin infections, community-acquired bacterial pneumonia and complicated urinary tract infections. The QIDP designation for Omadacycline is eligible to benefit from important incentives as provided under the Generating Antibiotic Incentives Now or GAIN Act. For example, Omadacycline will be eligible for an additional five-year extension beyond the Hatch-Waxman new chemical entity market exclusivity upon approval resulting in up to 10 years of total market exclusivity. Given our confidence in the emerging profile of Omadacycline, our primary focus remains with successful execution of our ongoing Phase 3 registration program. With the commencement of our two registration studies this year, we remain on track to file our NDA for Omadacycline in the first half of 2018. This filing could allow for approvals for the once-daily oral and IV formulations of Omadacycline for both skin infections and pneumonia as soon as late 2018. As we advance our registration program for Omadacycline, we are also taking steps to maximize its broader potential value. For example, we are planning to initiate Phase 1 pharmacokinetic studies of Omadacycline in urinary tract infections as well as sinusitis in the first half of 2016. These will be our first studies focused on expanding the oral only use of Omadacycline. With that, I will now turn the call over to Doug who will review our financial results for the quarter. Doug?

[Doug Pagan:]

Thank you, Evan. This month, we are recording financial results for the quarter ended September 30, 2015. This quarter, we reported a net loss attributable to common stockholders of $23.4 million or $1.33 per share compared to a net loss attributable to common stockholders of $4.0 million or $29.48 per share for the same quarter ended 2014. Research and development expenses for the quarter ended September 30, 2015 were $17.8 million, an increase of $15.8 million compared to the same quarter in 2014. The increase primarily is a result of initiation of our planned Phase 3 clinical trials of Omadacycline and includes CRO fees, investigator fees and costs associated with clinical sites and laboratories of $12.1 million. Additionally, clinical material and registration batches of $3.8 million, and personnel-related costs of $1.1 million. General and administrative expenses for the quarter ended September 30, 2015 were $5.8 million, a $3.7 million increase compared to the same quarter in 2014, primarily due to growth in corporate infrastructure acquired to support a public company. Salaries and benefits, including stock-based compensation, increased $1.5 million compared to the same quarter in 2014. Professional and consulting fees increased $0.4 million compared to the same quarter in 2014 primarily due to higher legal, finance and accounting, and market research costs. As Michael stated, we entered into a loan and security agreement that provides access to $40 million, of which we drew $20 million upon closing on September 30, 2015. These funds will be used for general corporate purposes including support of late-stage clinical development opportunities for oral indications of Omadacycline. We ended the quarter with cash and cash equivalents of $146.4 million, which we expect will fund operations through top line results from our second Omadacycline registration study, which are projected to be available in the second half of 2017. Now, I’ll turn the call back over to Michael to summarize this morning's discussion.

[Michael Bigham:]

Thank you, Doug. As you’ve heard this morning, we continue to execute against our Phase 3 development program for Omadacycline as planned and on schedule. Our Phase 3 study in skin remains on track to yield top line results in the second half of 2016. Additionally, we started dosing the Phase 3 study of Omadacycline in pneumonia with top line data projected to be available from that study in the second half of 2017. We presented important microbiology data during the quarter at ICAAC that continues to reinforce the potential of Omadacycline as a broad spectrum and empiric monotherapy for community-acquired infections where resistance is of concern. And finally, the recently granted Fast Track designation for Omadacycline from the FDA will further facilitate our efforts to successfully register Omadacycline in the U.S. in a timely manner. We continue to anticipate filing an NDA for Omadacycline in the first half of 2018 and which if successful, could enable an approval in the U.S. as soon as late 2018. In summary, we remain excited about the future of Omadacycline, Sarecycline and with Paratek. Our accomplishments this past year have placed us in a strong position as an organization to execute on our plans. We thank you for your interest and for your time this morning. With that, I think we’re now happy to open the call up for Q&A. Operator?

[Operator:]

Thank you. [Operator Instructions]. We’ll take our first question from Paul Matteis with Leerink.

[Paul Matteis:]

Hi. Great. Thanks very much guys. I appreciate it. I have a few. My first is just on the OpEx line. Obviously, we saw a pretty big increase with the start of a couple late-stage studies and also some earlier stage clinical work. Can you talk about your projections even just at a high level for quarterly cash burn in the next 12 to 18 months? Do you see that increasing over this quarter? And secondarily, what do your projections assume for both the ATM agreement and the drawdown of the second tranche of your $40 million debt agreement? Thanks.

[Doug Pagan:]

Thanks, Paul. This is Doug speaking. Yes, our operating expense is higher than our historical run rate primarily due to the reasons we talked about, the advents of the two late-stage studies, earlier stage studies as well as increased manufacturing both to support registration and clinical supply stage studies. So we’re not giving specific guidance on quarterly cash burn but I’ll say that we do continue to project our cash runway to able to capture the CABP study, which is the second half of '17. The spend will be – it will vary from quarter-to-quarter based on the clinical trials and with skin study underway and the CABP study just commencing, the next several quarters will likely be the highest. As far as the ATM, the ATM facility that we put in place in Q4, there are no plans right now to draw that down and no proceeds from the ATM are included in our cash projections. The debt of $20 million remains available to us and as we further develop our plans for oral indications, we’ll be making further plans whether or not to draw that to support those trials. So we have made no plans for that to date.

[Paul Matteis:]

Okay. Thanks, Doug. That’s helpful. And then maybe one for Evan. So, Evan, can you talk a little bit about your Phase 1 study in UTI, what you’re hoping to learn from that and what the hurdle is for going forward? And I guess maybe you can speak to that in the context of the recent failure of the other tetracycline study – I’m sorry, from Tetraphase which did not work in late-stage studies. How was that been integrated into how you’re thinking about this program and its risk profile? Thanks.

[Evan Loh:]

Thanks Paul for the question. We’re excited about this third indication that we’re pursuing in urinary tract infections. The historical background for urinary tract for us is based upon the Medacorp survey that we have talked about from 2013, which illustrated to us that the inability for physicians to have an option for an oral therapy to treat multidrug resistant E. coli, which is the predominant bug that you see both in uncomplicated urinary tract infection or cystitis as well as complicated urinary tract infection is a very large unmet medical need. And so we believe that Omadacycline has the potential to be considered as a oral therapy for E. coli in that setting. That being said, if you look historically at tetracycline, they have not been utilized as first-line therapy for urinary tract infections. Often times, as we look back due to the fact that many of the prior generations of tetracycline have been heavily protein bound, and therefore they have challenges with regards to clearance in the urine. As a reminder, Omadacycline actually is minimally protein bound and we have very clear data that in fact – as you know, our compound is un-metabolized and that we have preliminary data that in fact we have good concentrations of Omadacycline in urine. That being said, though, it is our responsibility to be deliberate in how we actually move this program forward because I think it’s still unclear to us today what the exact PK/PD driver of efficacy is relative to seeing efficacy in either complicated or uncomplicated urinary tract infections. Accordingly, the Phase 1 PK study will be conducted in individuals with cystitis and we’ll be exploring both with the microbiology effects as well as the PK of Omadacycline in urine. And we’ll be looking at the PK of urine compared to the typical serum AUC to MIC ratios that we have already established, which are very positive in terms of our being able to move ahead in this particular domain. And so I think we will do the Phase 1 study first, establish the PK. And one of the things that is nice about our particular compounds, given its excellent tolerability, especially for the oral formulation, we have a great amount of flexibility in our dosing. So even if today, the dose regimen that we are using in the ABSSSI study as well as in the community-acquired bacterial pneumonia settings are not optimal, we have the ability based on our human PK data that we have in hand today to be able to go up higher in order to try to maximize the overall PK parameters to ensure that we will have efficacy success in patients with urinary tract infections. The other caveat that I’ll share with you Paul as we’ve discussed before is that if we can’t optimize the PK parameters, we won’t pursue either uncomplicated or complicated cystitis but our choice of either going ahead overall or the choice between cystitis or complicated UTI will be predicated initially on those PK results, which as a reminder as I said earlier we hope to be able to get that study off the ground in the first half of 2016. And I think getting that off the ground and hopefully getting clinical PK results out sometime in 2016 would be a very exciting result for us.

[Paul Matteis:]

Okay. Thanks, Evan. That’s helpful. And maybe just on one quick follow up, if you could expand upon just from like a chemistry perspective, the key differences between Omadacycline and anthracycline [ph] or I guess both the similarities and differences? And how that might help you guys interpret the read through from that study onto the potential of your program?

[Evan Loh:]

All right. So if you look at anthracycline [ph] and I’m not that familiar with the compound but when we look at that structure, it actually is within the class of what we refer to as the glycocycline. And the glycocycline that I’m most familiar with is Tygacil. Maybe that comparison to me is most comfortable because I do know that compound quite well based upon the work that I’ve done along with some of our colleagues here at Paratek on getting that product approved and registered in many, many markets around the world. There is from a chemical structure standpoint, there’s actually a very simple single carbon difference on the 9-positions aminomethyl that is our structure activity changes that we have on our starting material, which is Minocycline. One of the nice things about our manufacturing process is that we start with Minocycline and it is a relatively efficient and straightforward three-step manufacturing process from our starting material, which is Minocycline. That, for us, I think is a huge advantage for our understanding and view today of our cost of goods and providing us with flexibility in terms of dosing and manufacturing this product going forward. The other features that are different than my Tygacil product were specifically that Tygacil was very prominently protein bound. And because it was protein bound, it was actually not excreted in the urine significantly. And I think that as we talked about before is I think a big advantage for Omadacycline. The other challenge that we had with Tygacil was that we couldn’t make it orally vial available and it also had a fair amount of nausea and vomiting. And one of the other features of our oral formulation that we have today is that, as a reminder, it’s 35% vial available. Our oral is a robust formulation that is bioequivalent to our IV formulation and it has exquisitely positive oral tolerability, and we think that’s a hugely important feature as we explore and consider the important oral only indications from a community-based, community-acquired infection opportunity as we think about both to the hospital as well as the community’s base going forward and that again is something that we are devoting a lot of thinking to today as we consider the oral only indication for Omadacycline. So when you look at those particular features of Omadacycline versus Tygacil, we think that those are big advantages that actually expand the patient opportunities for us to actually provide this to improve the health of individuals with serious community-acquired infections, especially where resistance is of concern.

[Paul Matteis:]

Okay. Thank you very much, Evan. I appreciate it.

[Evan Loh:]

Thanks, Paul.

[Operator:]

We’ll take our next question from Bert Hazlett with Ladenburg.

[Bert Hazlett:]

Thank you. Thank you for taking the questions. Congrats on the great progress. As I hear you describe the user phrase community-acquired infection where resistance is of concern, it sounds like you’re sharpening your position of the Omadacycline molecule in the context of antibiotic more broadly in the current and future molecules that are out there. It sounds like Adam and his group have been hard at work with that position. Do you care to make any additional comments to give us a little additional flavor with regard to how you’re thinking about the ultimate positioning of Omadacycline in a marketplace? And I have a second one as well.

[Adam Woodrow:]

Hi, Bert. It’s Adam. Thanks for the question. I think we are sharpening in terms of where our positioning is and we’re also trying to make sure that we understand the addressable patient population for a new product such as Omadacycline. It’s clear from the research that we got that the area that we fit is sort of between the generics at one end where you first line generic treatment options. And then when you still don’t know what the infection may be prior to coming in with a [indiscernible] and some of these other drugs. But only in a patient population that’s at risk, so the way that we’re looking at it at the moment is the space that we will fill is at an at risk patient population that has a known or suspected drug resistant pathogen based on your local epidemiology. There are more than enough patients there for us to be approaching with a sensible approach from a promotional perspective that fits with antibiotic stewardship and the requirements to make sure that you keep antibiotics that are new relatively in reserve but used appropriately. That also gives us a better value proposition because of course we’re not trying to capture large shares and this approach has played very, very well in the market research that we conducted so far. I think one thing I would add also, Bert, just so that you – for full transparency, one thing that came out of our research that was a little bit more surprising that I was initially anticipating was the profile in the skin sector. It’s a very crowded market space and at least that’s where I thought we would get the most pushback. But the fact remains that there isn’t a broad spectrum anti-MRSA agent that’s got an oral formulation to date, and that’s played very, very well in the market research.

[Bert Hazlett:]

It sounds like you’ve had some early discussions with payors. Is that accurate or is that still to come?

[Adam Woodrow:]

No. Payors were included in our research. We are validating our pricing assumptions and I’m pleased to say that our initial pricing assumptions have proven to be correct. We can go in at a reasonable premium and I’m not talking about generic class but I’m talking about more modern day pricing somewhat similar to the pricing you see with [indiscernible].

[Bert Hazlett:]

Thank you. That’s usually helpful. And then secondly, there was a recent FDA with regard to the quinolones and the constellation of adverse events around that class of drugs. How might that affect the development of Omadacycline maybe not today directly but does that influence how you think about the Omadacycline program maybe longer term? Thanks.

[Evan Loh:]

Bert, let me take it from a medical and a development perspective and maybe Adam can talk about it from a market opportunity perspective. As you think about the discussions as well as the patient testimonials that came at the particular advisory committee, one of the things that’s very important for us is to focus on safety, make sure that we can clarify [ph] and deliver for the regulators as well as for ourselves a robust data base and a quality dossier. And so for us we want to be comfortable that in fact what we’re seeing from an adverse event profile is nothing out of the ordinary and that there are no specific adverse events that we have to note or that we have to warn against. To-date, what we’ve actually seen is a very benign overall safety profile. The safety profile that we’ve seen and we’ve talked about this before in conferences as well, our rather typical tetracycline base imbalances that we see which are mild and small that includes changes in ALP, changes in CPK, changes in BUN as well as the heart rate effect that we talked about before in the past. It seem to be rather unique to our compounds seen in only healthy volunteers. When you look at that kind of a particular profile, we have not seen any issues with regards to tendon rupture, we’ve not seen any neurologic sequelae and we’ve seen absolutely zero with regards to cardiovascular concerns as well. And in comparison to quinolones, we completed a thorough UGC [ph] study at three times above our therapeutic dose and we’ve seen zero effects with regards to cardiac repolarization or changes in QTc. So when you look at that particular profile, it gives me good comfort as a physician, as the Chief Medical Officer for the company that this is a product not only that you continue through with Phase 3 development but I think will really have a very tolerable and very long life with regards to acceptability in treating patients with serious community-acquired infections where resistance is of concern. Adam, do you maybe talk a little bit about how this looks to you in terms of the market opportunity?

[Adam Woodrow:]

Yes, I think you know that in the past we’ve thought about the profile of Omadacycline being somewhat similar in fact to levofloxacin but without the baggage of the tendon rupture and neurological effects. We cover a broad spectrum of activity Gram-positives, Gram-negatives and atypicals like the quinolones. We have the benefit of an IV and oral formulation and it appears at least that it’s very well tolerated and we’ll continue to follow this in the trials, and also once-daily option and it’s clear from this FDA advisory committee that they’re very concerned with this fluoroquinolone associated toxicities. There is going to be a need for a replacement for the quinolones. So I honestly look at this as a significant opportunity for us as times goes on because there’s going to be a need for drugs to be used in this space. You can’t just take these drugs away. They are there for a reason and we look at this as a significant opportunity for ourselves.

[Bert Hazlett:]

So just a quick follow up and then I’ll get in the queue, but does that sharpen your focus on UTI? We’ve already had a little bit of discussion there, but how does – does that increase your enthusiasm with regard to that indication --?

[Adam Woodrow:]

First and foremost, let’s go with the indications that we’re going for. Quinolones are used, as you know, for community-acquired bacterial pneumonia. They are one of the first-line treatments after the failure of generic options. Clearly, there’s going to be a need to replace them – potentially replace them there. And they are used in some skin indications. We are going to pursue, as Evan said, the urinary tract indication and we think that we have the right MICs to approach this, we think we have the right excretion, we just need to find out whether we can appropriately dose the products to maximize the effect. We’re not going to slow down in that regard and the trial will start early next year and hopefully we’ll have some results to be able to share during the course of next year in terms of what our overall development programs are going to be.

[Evan Loh:]

Yes, and I would just put a further sharpening point on this, Bert. Our research from 2013 and if you look at the epidemiology of E. coli resistance to ciprofloxacin which have been the workforce and urinary tract infection has already been climbing to a point where physicians today just can’t have that as an option if someone is actually sick and the downside of not having a cure could be a very bad outcome for patients. So, I think the unmet need has already been established but now given the – I think the evolving inversion of the benefit risk for the use of quinolones, I think it even underscores even greater unmet need and therefore I think, as Adam said, a bigger opportunity for macrolides [ph].

[Adam Woodrow:]

I would go as far as to say that the oral is more important and in fact the failure of the Tetraphase compound has opened the door up in that space as well.

[Bert Hazlett:]

Terrific. We’re looking forward to this data. Thank you, gentlemen.

[Evan Loh:]

Yes, we are too, Bert.

[Operator:]

[Operator Instructions]. We’ll take our next question from Louise Chen with Guggenheim Securities.

[Unidentified Analyst:]

Hi. It’s Brandon Firth [ph] on for Louise. A number of my questions have been answered, but perhaps could you help us frame the UTI and sinusitis market opportunity? And then secondly, are you seeing an increased level of awareness from physicians about resistance in the community? Thank you.

[Adam Woodrow:]

I think we’re slowly starting to see an increased level of awareness in the respiratory sector of the business. There’s a lot of awareness, a great deal of awareness especially here in the United States about MRSA and skin. Multiple products have been launched in that space to try and address that from an IV perspective, but as I mentioned before no orals with a broad spectrum and also with MRSA coverage and of course that would be the space that we will occupy. I think there is still a level of education that needs to be brought out in terms of the community-acquired bacterial pneumonia space. I do believe our colleagues in Cempra are doing some of that right now. Obviously, there are significant levels of resistance to the macrolides today and to the quinolones and other drugs in this space. But unfortunately with no alternatives, it’s very difficult for individuals to be educating about something without the solution. When the solutions are approved, you will see more indication in that space. I think there is also an understanding and an awareness in general around the challenges in the urinary tract side. I think physicians in the primary care setting and in the hospitals have all faced this issue of a drug resistant E. coli requiring a hospitalization of five days on an IV [indiscernible], one of the new β-lactam-β-lactamase inhibitor combinations when really what they would really like to do is put them on an IV, see if they start to recover and then put them on the oral and send them home. Unfortunately, there just isn’t an oral alternative around today but that area, if you do own research, you’d find that there is quite a level of awareness in that space already.

[Evan Loh:]

Brandon, it’s Evan. Just to talk about sinusitis a little bit. Sinusitis is an indication that when you look at the bacterial profile of the pathogens you’re concerned with, you need a broad spectrum agent to be relevant there. Not only are most of the Gram-positives exactly when you see with community-acquired bacterial pneumonia but you also need to be able to cover a Gram-negative that’s just more Enterobacteriaceae [ph]. And so based upon our broad spectrum feature of our compound, we believe that this is an indication that we should definitely consider and we’ll be getting a Phase 1 study off the ground in 2016. That being said, I think when you go back to the question that Bert asked earlier specifically about the quinolones, the quinolones benefit risk that I was talking about in terms of an inversion was specifically in reference to three community-acquired type of infections that included sinusitis, AECB as well as otitis media. And so as we look at where our next opportunity is for an oral only indication, we do believe that sinusitis makes a lot of sense. That being said, we need to explore it in a Phase 1 deliberate fashion as we’re doing for urinary tract as well but we believe that the profile as well as the once-daily and overall tolerability profile of our oral makes sense for us to be thinking hard about that right now.

[Unidentified Analyst:]

Great. Thanks so much and congratulations on all advancements during the quarter.

[Operator:]

We’ll take our next question from Katherine Xu with William Blair.

[Y. Katherine Xu:]

Hi. Good morning. I’m just wondering, can you comment on the activity of [indiscernible] against VRE?

[Evan Loh:]

So we’ve got very good activity against both E. faecium as well as E. faecalis as well as VRE. Our overall MIC90 for Enterococcus range between 0.125 and 0.5 micrograms per mL, Katherine. Katherine, did that answer your question?

[Y. Katherine Xu:]

Yes, that’s good. Thank you.

[Evan Loh:]

Okay, great.

[Operator:]

We have no further questions. I would now like to turn the conference back over to Michael Bigham for any additional or closing remarks.

[Michael Bigham:]

We’re good. Thank you. So I think with that, I think we will conclude the call. We have no further questions and we have no additional comments. So thank you very much for your time and your attention this morning.

[Operator:]

This concludes today's conference. Thank you for your participation. You may now disconnect.