Synlogic, Inc.
Q1 2020 Earnings Call Transcript

Published: 11 May 2020

[Operator:]

Good morning. Welcome to Synlogic's First Quarter 2020 Conference Call and webcast. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of this call. Please be advised that this call is being recorded.I would now like to turn the call over to Dr. Elizabeth Wolffe, Head of Investor Relations and Corporate Communications. Please proceed.

[Elizabeth Wolffe:]

Thank you, Carlo. Good morning, and thanks for joining us on today's conference call. Earlier this morning, we issued a press release, which outlines our first quarter 2020 financial results and several other topics that we plan to discuss today. The release is available on the Investors section of our website at www.synlogictx.com.Joining me on this call are several members of Synlogic senior management, including Aoife Brennan, President and Chief Executive Officer; Gregg Beloff, Interim Chief Financial Officer; and Richard Riese, Chief Medical Officer. After Aoife's introductory remarks, Gregg will briefly summarize our financial results for the quarter and Aoife will outline our progress for the quarter and our expected activities for the rest of the year. Following our prepared remarks, we'll open up the call for questions.As we begin, I'd like to remind everyone that comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include without limitation, statements other than statements of historical facts, regarding the potential of Synlogic's platform to develop therapeutics to address a wide range of diseases, including cancer, metabolic disease and inflammatory and immune disorders; the future development of synthetic biotic medicines and the approach Synlogic is taking to discover and develop novel therapies using our synthetic biology technology; and the expected timing of Synlogic's clinical trials and availability of clinical trial data.Actual results could differ materially from those contained in any forward-looking statements as a result of various factors, including those described under the heading Forward-Looking Statements in Synlogic's press release from earlier today or under the heading Risk Factors in Synlogic's most recent Form 10-Q, which was also filed today. Synlogic cautions you not to place undue reliance on any forward-looking statements.Now, I'd like to turn the call over to Aoife.

[Aoife Brennan:]

Thank you, Liz. Good morning everyone and thank you for joining us on our quarterly update call to discuss our financial results for the first quarter of 2020 and provide an update on our programs and upcoming milestones. We hope you and your families are healthy and coping with the unprecedented circumstances we find ourselves in. As we navigate a new way of working in the face of the COVID-19 pandemic, I think that it's fair to say that the recent weeks have challenged us all.At Synlogic, we're working to continue to keep both employees and patients who participate in our chemical trials safe, while we operate against our strategy and advance our programs. These difficult circumstances have challenged the usual format of site visits, ad boards, clinical trials and investor meetings. We're devising new ways to successfully conduct many of these activities virtually including our upcoming R&D event on May 27, which I will tell you more about later in the call.Under the heading That You Don't Know How Strongly you Are Until You're Tested, I believe that as a company we have responded by becoming more innovative and resilient. And despite the disruptions of COVID, we've made good progress in 2020 as we continue to develop our Synthetic Biotic platform and pipeline.Innovation is part of our culture. We're developing a novel class of medicines based on engineered microbes, Synthetic Biotic medicines that have the potential to address unmet medical need in a variety of therapeutic areas. In designing, our Synthetic Biotic medicines, we use synthetic biology to engineer different elements into bacteria. These include factors that can provide therapeutic benefits as well as elements that enhance the safety of the medicine. The beauty of this platform is that this allows us to use and reuse some of the same synthetic biology parts in different medicines.With every strain we build, we gain information and understanding of the utility of these reusable parts and the potential of the platform. The experience we're gaining with these components in different Synthetic Biotic medicines is enabling us to advance subsequent programs more efficiently. As an illustration, all of our Synthetic Biotic medicines thus far are based on a single strain or chassis, a nonpathogenic strain of E. coli called E. coli Nissle, which has a long history of safe use as a probiotic.Using the same chassis strain repeatedly means that we've become expert in its engineering and manufacturing. We are leaders in developing this new class of medicine and are building the capabilities and skills required across all stages of development of these novel drugs.In early March, Nature Communications published a perspective, altered by several of our scientists that provides a great introduction to design and development of engineered microbes as therapeutics. You can access a copy of the published article on the Presentations and Publications page of the Investors and Media section of our website.Our current pipeline is focused on a couple of areas that exploit the natural properties of bacteria. E. coli are among the many types of bacteria that are able to live and function in the human GI tract. Our core focus is on metabolic diseases including phenylketonuria or PKU and enteric hyperoxaluria, in which a metabolite that is present in the gut can build up to toxic levels in the blood and other tissues.We can engineer bacteria to enable them to consume the metabolite in the gut with the potential to lower systemic levels. These disorders have relatively simple and well-understood biology and affect relatively small numbers of patients.In addition, dietary intervention in these disorders provide support for a GI-based approach. In addition to our rare metabolic programs, an important part of our strategy is to explore the breadth of our platform and evaluate the potential of Synthetic Biotic medicines in modulating the immune system.We are currently focused on leveraging the ability of bacteria to interact with the immune system in two areas; oncology and inflammatory bowel disease. We see these broader indications as areas that could be developed with a partner or collaborator.We have an ongoing collaboration with AbbVie to develop Synthetic Biotic medicines for the potential treatment of IBD. These Synthetic Biotic medicines are engineered to produce factors that down-regulate the disease-associated immune response.Bacteria can also stimulate the immune system in certain settings and we're exploiting these properties in our immuno-oncology program with SYNB1891. SYNB1891 is a synthetic biotic medicine that we have engineered to express an immunostimulatory effector called a STING agonist that augments the natural properties of the bacteria. SYNB1891 is administered directly into solid tumors to stimulate the immune system to fight and potentially clear the cancer.In addition, we believe that the immunostimulatory properties of our engineered bacteria could also be used as a vaccine and have an early initiative to evaluate this approach as a potential COVID vaccine working with our collaborators at Ginkgo. Work with Ginkgo has moved into high gear with the initiation of several other projects for strain improvement and optimization. We will share more details of these promising uses of Synthetic Biotic's at our R&D event on May 27.Before I tell you more about what we've planned for the event, let me hand over to Gregg to cover the financials for the quarter. Gregg?

[Gregg Beloff:]

Thank you, Aoife, and good morning, everyone. Earlier today, we filed a Form 10-Q that describes our financial results for the first quarter of 2020 and we issued a press release that also summarizes that data. I'm pleased to review now the highlights of those results with you.Research and development expenses were $12.7 million for the three months ended March 31, 2020, compared to $10.4 million for the corresponding period in 2019. This increase was primarily due to the use of synthetic biology services provided under Synlogic's collaboration with Ginkgo and increased clinical study activities associated with our SYNB1618 bridging study and our SYNB1891 Phase 1 clinical study.General and administrative expenses were $3.8 million in the first quarter of 2020, compared to $3.7 million for the same period in 2019. For the first quarter of 2020, the company reported a consolidated net loss of $15.8 million or $0.46 per share compared to a net loss of $12.9 million or $0.51 per share for the corresponding period in 2019.Revenues in the first quarter of 2020 were $0.1 million as compared to $0.3 million for the same period in 2019. Revenue is associated with the services performed under Synlogic's collaboration agreement with AbbVie to develop a Synthetic Biotic medicine for the treatment of IBD.Now turning to the balance sheet. Synlogic ended the first quarter of 2020 with $114.2 million in cash, cash equivalents and other investments. As we outlined in the press release at the end of March as a result of the COVID pandemic, we have experienced some delays in recruitment of subjects into our SYNB1891 clinical trial, as well as a potential delay in the initiation of our Phase 2 clinical trial of SYNB1618 in PKU patients.These delays are expected to push out some of our projected expenses. We are currently evaluating the effect of these delays as part of our customary long-range planning process. We iterate that under our current operating plan, we expect that our cash will take us into 2022 and enable us to advance our clinical programs through important data readouts over the next 12 to 24 months.Now before I hand the call back to Aoife, I want to introduce a new member of the finance team Dan Rosan who's joined us as our VP of Finance. Dan brings broad expertise in strategy, long-range planning, valuation corporate, development, capital allocation and portfolio management. He previously spent six years at Biogen and in roles of increasing responsibility in the finance and research and development departments. Now Dan joined Synlogic just before the stay-at-home order went into place here in Massachusetts. And in the midst of a busy reporting season, he had a mere 48 hours in the office to meet the team. So it's been a baptism by fire, but he's done a great job so far.Thank you for your attention and we look forward to keeping you updated on future calls. I will now turn the call back to Aoife.

[Aoife Brennan:]

Thanks Gregg. As Gregg mentioned, at the time stay-at-home orders were put in place, our immuno-oncology Phase 1 clinical trial of SYNB1891 was ongoing and we were screening and dosing patients who had advanced tumors or lymphoma.In subsequent weeks, patients who are already part of the trial have continued to receive treatment. While many of the sites have remained open enrollment has slowed. Thus far we have -- while we will have data from the monotherapy arm of the study in 2020, it may not be as complete or robust as we had anticipated. However, we are evaluating ways to increase the likelihood of patient participation as sites become safer for patients to visit and we will update you as to when we expect to have data to share.With SYNB1618 bring study data in hand -- bridging study data in hand, we were also planning to initiate a Phase 2 study of a solid formulation of SYNB1618 in PKU patient to evaluate its potential to lower systemic levels of phenylalanine. We've been advancing the paperwork necessary to initiate the trial. We're also amending our plans to include flexibility regarding virtual visits to mitigate the risk of future disruptions to clinical trials once this initial phase of the outbreak is over.Moving to more home-based trials is something we will be considering for all programs and is enabled by our platform and our successful formulation of SYNB1618 as a lyophilize preparation. We've made good progress on this plan and look forward to providing more information as to the design at our upcoming R&D event later this month and on future calls.During the R&D event, in addition to outlining our clinical programs in immuno-oncology and PKU, we will also provide more insight into the engine we have developed and the concept of reusable parts that enables our Synthetic Biotic platform. These foundational capabilities allow us to move more efficiently to develop additional programs, particularly in our metabolic disease pipeline to develop strains capable of consuming toxic metabolites in the GI tract.Along those lines, we will present preclinical data from our enteric hyperoxaluria program. We will be joined by an expert in this field Dr. David Goldfarb, who is Professor of Medicine and Physiology and Clinical Chief of the Division of Nephrology at NYU School of Medicine, as well as Chief of Nephrology at the VA Medical Center.Dr. Goldfarb will present his overview of enteric hyperoxaluria and as someone who has personal experience at kidney stones, he will also be able to provide a patient perspective. We will host our virtual R&D event from 12

[Operator:]

Thank you. [Operator Instructions] Our first question is from Mark Breidenbach of Oppenheimer. Go ahead. Your question please.

[Mark Breidenbach:]

Hey, good morning and thanks for taking the question. Aoife I was just wondering if you can give us a sense for where we are in the 1891 dose escalation process? And how many cohorts you would want to complete before feeling comfortable with presenting interim data from the trial?

[Aoife Brennan:]

Sure. So we announced with our press release around the beginning of the cohort that we were dosing patients in the second cohort of that dose escalation. The aim of that trial is to see target engagement at a relatively well-tolerated dose. And it's difficult right now to project how many cohorts that's going to be. And you know certainly, we'd like to continue to escalate.And so far the safety and tolerability profile appears to be amenable to continue to escalate. But as with every Phase I study we're kind of feeling our way along with regard to kind of safety and tolerability early on. So it's really very difficult Mark to say, whether we'll be achieving maximum tolerated dose at the fourth or the fifth or the sixth cohort right now, just given where we are.And -- so I think it's going to be one of these issues of kind of feeling our way through the dose escalation and looking at the biomarkers as we go along. And certainly, if we feel that there's something meaningful to discuss we'll do just that.

[Mark Breidenbach:]

Okay. That makes sense. And a quick follow-up, I'm just wondering if it would make sense to activate any new trial sites in the 1618 study to maybe focus in geographies that are relatively less affected by COVID? Any plans to expand the number of trial sites there?

[Aoife Brennan:]

Yes, it's difficult. We're obviously watching very closely. The biggest lever for us in the PKU program is going to be bringing the trial to the patient's home so that you're not bringing patients into a medical center or clinical trial center. We recently received some feedback from the Patient Advocacy Organization around patients with PKU and their appetite for coming into a center versus having maybe a study nurse to visit them at home.And I think the response to that survey has been overwhelming. Patients are very amenable to having the study come to them in their homes with maybe a single nurse visit and a telehealth visit from the investigator to take any of the medical information.And my personal belief is, I think that's the way trials are going anyway. And so if we can get ahead of the curve and invest in some of those capabilities now, I think it will stand us in good stead for the long term.We have looked geographically and it's as you know a moving target. And early on it seems like we may be going to regions that appear to have good control and have seen very low numbers of cases might be a good way. But even there some of those regions of the world have seen an uptick in cases that they started to loosen up and open up their economy.So it's difficult to predict where in the world. And as you know it can take about six months to open up the trial sites in some of these new regions. So it's almost like looking through your crystal ball at six months in the future. But I think diversification is definitely the name of the game.Flexibility and being agile is definitely the name of the game. And I think as I said earlier allowing more things to occur virtually I think is the way that that clinical trials are going to get done over the next year or so. So we've been moving in that direction.

[Mark Breidenbach:]

Okay, perfect. Thanks for taking the question.

[Operator:]

Thank you. Our next question is from Raghuram Selvaraju of H.C. Wainwright.

[Blair Cohen:]

This is Blair Cohen on for Ram. Just a couple of questions for you. How is the enrollment proceeding for 1891? Can you give us a little bit more detail there? And when might the second arm of the trial begin enrollment? Could this still happen before the end of the year?

[Aoife Brennan:]

So in terms of enrollment, what we've seen is that patients who are already on the study are able to come in and get dosing. But most of the academic medical centers where we're conducting the study in the U.S. have slowed down to new patients coming into studies that are ongoing. So we've absolutely seen a slowdown in enrollment there.And having said that, we think that over the summer a lot of those studies and centers will open back up particularly for oncology trials because I think there's a realization that these patients are going to continue to advance and that often your participation in the trial is really their only hope.So I think of all of the studies that are impacted by COVID. I think the oncology studies will potentially be the first kind of set to get going again as soon as it becomes safe to have patients in the unit.And in terms of the answer to your second question Blair, it really depends on our -- the study design has been that we would achieve maximum tolerated dose in the monotherapy arm before opening up the combo therapy part of the trial which is the second part of the study.And -- so it really depends on how many cohorts we need to dose to achieve the maximum tolerated dose and that's a little bit as I mentioned earlier in answering Mark's question was still very early in the study to be able to predict whether we will achieve maximum tolerated dose after the fourth cohort or the sixth cohort. So this is a moving target.We're absolutely pushing ahead on all cylinders and are actively looking at ways that we can accelerate enrollment in the second half of the year by opening up additional sites. And -- so we'll continue to keep the investment community updated as we go through the study and learn more about kind of the safety and activity profile of the agent. But right now, it's just very difficult to predict.

[Blair Cohen:]

Okay. Perfect. And last question for me. Do you think sepiapterin is a competitive threat in PKU?A - Aoife BrennanWhat -- I'm not familiar what's the product that you're speaking about?

[Blair Cohen:]

The molecule – the molecule, I may be pronouncing it wrong. Sepiapterin.

[Aoife Brennan:]

It's – that's the product that's the analog of Kuvan?

[Blair Cohen:]

Yes.

[Aoife Brennan:]

Okay. So the issue with Kuvan is an analog of BH4, which is a cofactor for the PAH enzyme. That's the endogenous way that those of us, who don't have PKU metabolite phenylalanine to tyrosine, a small subset of patients with PKU respond, whether it's Kuvan or a Kuvan-like agent. The subsets of patients who actually respond to Kuvan is about 20% to 30%. So we see that, certainly, if the patients are responding to Kuvan and doing well they're not going to be a candidate for our product. But there is still a large proportion of patients with PKU who either don't respond to Kuvan or Kuvan-like product or who have a suboptimal response meaning they see some decrease in their blood Phe levels, but they don't actually achieve the therapeutic target. And – so we were aware, Kuvan has been approved for some time now. So there's a good kind of – there's a good idea of how many patients that are candidates for that product. We don't see it as a threat necessarily. We actually see that there could be some complementarity at some point down the road, if we can achieve blood Phe lowering.

[Blair Cohen:]

Perfect. Thank you very much

[Aoife Brennan:]

You welcome.

[Operator:]

Our next question is from Ted Tenthoff of Piper Sandler. Your line is open.

[Ted Tenthoff:]

Good morning. Happy Friday.

[Aoife Brennan:]

Hey, Ted. How are you?

[Ted Tenthoff:]

I'm glad to hear everyone is doing well, and I'm looking forward to the R&D data. That's steal your thunder, but maybe to kind of ask a question a little bit on a higher level. I'm wondering sort of, where you are in terms of – for the platform in general ratcheting up potency on primary mechanism? But also in terms of looking at introducing secondary mechanisms into the chassis, I'm really just trying to think at a high level where this technology can start to show meaningful differentiation versus other modality? Thanks so much.

[Aoife Brennan:]

Great. Yeah. Thanks, Ted. That's a great question. So I'm going to answer this in two parts, which is kind of consistent with how we think about our strategy. Number one is the internal pipeline in rare metabolic programs and then the kind of more medium to long-term in the kind of immuno-oncology space.So in terms of our metabolic programs, we believe that success there really requires us to choose targets that are within what we know we can achieve based on our PKU learnings. So if you will choose targets where the amount of metabolite that needs to be consumed is within range of what we know we can achieve based on our initial learnings in PKU. And that was what led us to the enteric hyperoxaluria program. We believe that based on the amount of metabolite that needs to be consumed to have a clinical benefit there that that's kind of within range of what we can do today.And I think then the second component for success is to continue to increase the ceiling of metabolic activity, so that we can continue to improve potency and so that we can reach for higher and higher metabolic loads. And there we've learned a tremendous amount in the last year through partnerships with Ginkgo, and other technology groups. We're really starting to understand, how you can optimize the bacterial strings to do specific things.And I think that has impacted across many different biomedical applications for us. We're using it to increase the amount to metabolite that bacteria can consume. And you may have noticed, Ginkgo are working with others like Moderna, to help an optimization of some of the manufacturing steps for their vaccine programs. So I think this idea of using synthetic biology continue to optimize activity be it production of something that's required in manufacturing or in vivo metabolic activity in – for our platform. I think it's certainly an area of active investigation is a very exciting space right now. So that's the internal pipeline answer.On the external pipeline, we've really been – a lot of these diseases are complex diseases that require more than one effectors. And I think the idea that you can combine within our platform was certainly one of the attributes that attracted AbbVie for instance in the early days of the company to think about working with us. And you're there been able to combine different factors that maybe perform different functions in vivo might be very important. We've seen that with 1891 for instance. We know based on our preclinical data that, we can stimulate multiple pathways of the kind of innate immune response in parallel and that's very challenging to do with other modalities.And certainly, based on the preclinical data that we have seen with that molecule, we're able to do that. And we'll – you have to walk before you can run. And we'll start to get kind of explore more of that space. But for now that's kind of more of a medium and long range opportunity for us, I think, but we're certainly very excited at that capabilities. And we're able to see spaces, where our platform could really be disruptive. And I think that's been kind of very energizing I think for us over the past couple of months.

[Ted Tenthoff:]

Sure. That's excellent. That's helpful. And I can imagine that Ginkgo is helping out of those capabilities. I think that's a great partnership. Thanks so much. Looking forward to the R&D Day.

[Aoife Brennan:]

Thanks.

[Operator:]

Thank you. Our next question is from Yigal Nochomovitz of Citi. Go ahead. Your line is open.

[Samantha Semenkow:]

Hi. This is Samantha on for Yigal. Thanks very much taking my question. So maybe building on the prior question and specifically for maple syrup urine disease. I noticed that you're still working on maybe further optimizing that but you have some initial data that you've included in your corporate deck pretty striking trend in your base molecule and then how Ginkgo is able to allow you to optimize?I wonder can you just tell us a little bit more about what further optimization needs to be done for that? And then just maybe a broader question in general, how do you know when your optimization process is complete? I imagine you could continue to go through many iterations here. Just curious on your thought process there.

[Aoife Brennan:]

Yes. So it's a perennial issue in drug development when it's good, good enough to move forward into the clinic. And what we've been able to build based on our lead programs is to be able to establish a set of kind of go/no-go criteria for a clinical candidate. So once we start on the program, we'll be able to set a set of criteria around how does that program need to look before we move forward into the clinic.So I'll just give you kind of an illustrative example if you will. In enteric hyperoxaluria, we know that we all eat about 150 to 200 milligrams of oxalate in our diet every day. We know that in patients with enteric it's very, very difficult to get rid of oxalate from your diet because it's in vegetables and fruits and lots of different things.But if you can you know when the enteric hyperoxaluria that's there the oxalate will go down. So that gives us some benchmarks in terms of how potent a strain needs to be to move forward into IND-enabling studies. So we'll use that understanding of saying, okay we need to engineer a bacteria that can consume 150 to 200 milligrams of oxalate at a dose based on what we've learned from PKU that's well tolerated and that will be kind of have good manufacturing characteristics.We always want to have the ability to get this into one capsule or one pill. So we're able to make some calculations based on those learnings. And then we're able to calculate back how much oxalate does 10^9 cells need to be able to consume per hour in order to be good enough to move forward.And we continue to do our iterative optimization until we hit that target. And so programs that hit that target get to move forward into the next year. You get to take two steps forward on your snakes and ladders game. Programs that don't reach that target continue to be optimized. And programs that move forward de facto they've kind of achieved, what we think we need from a potency perspective.In the case of maple syrup urine disease, we have made tremendous progress with Gingko but it hasn't achieved the bar that we believe is needed from the potency perspective to meet our minimum product profile based on our calculations. So that one continues in optimization how we've made great progress.There's still some things that we think could continue to improve that strain and that continues to be a work in progress. Others where we've achieved that goal were moving forward into development. So that's kind of how we think about our drug development framework. And we're learning all of the time and we're continuing to tweak those criteria all of the time.But the idea is that hopefully if we're doing a good job. Every program we take forward has a higher probability of success based on learnings from programs that went before. And this process has been worked out for protein biologics for small molecules. We've had to work it out for Synthetic Biotic medicines. And I think we've made some good progress there and we'll continue to learn as we go along. Does that make sense?

[Samantha Semenkow:]

Yes that was very helpful very fair. And I guess just sticking with the enteric hyperoxaluria program maybe you're going to talk about this. I'm sure you are actually at the R&D Day. But if you could give us a previous – how – a little bit about the mechanism of action how many synthetic circuits have you incorporated onto that asset? And do they consume – do they produce a biomarker similar to how like 1618 produces hippuric acid that can be measured? Or is that not even necessary for this particular disease since you can easily measure plasma oxalate level?

[Aoife Brennan:]

Yes. So the biomarker there would be oxalate lowering. And certainly prior companies who've been working in this space have demonstrated that it's possible to increase urinary oxalate in healthy volunteers by putting them on a high oxalate diet and then that could be a useful way to demonstrate proof of mechanism in vivo. I can't build too many beans. Otherwise, people won't come to our R&D event but we'll certainly show the full engineering all the preclinical data that we've developed to date and some more of the work and future plans at that event later this month.

[Samantha Semenkow:]

Looking forward. Thanks very much for taking the question.

[Operator:]

[Operator Instructions] Our next question is from Joe Schwartz of SVB Leerink. Go ahead. Your question please.

[Joe Schwartz:]

Thank you. Good morning. I hope you're faring well. I was wondering if you could give us some more insight into how you stand in terms of the rate-limiting steps to starting the next trial for 1618? And what you see as the biggest challenges in this environment for the next phase of clinical development? It seems like we're tentatively entering a period of somewhat more relaxed public behavior. But obviously, there's IRBs that need to be maintained, perhaps amended things like that. So I was just wondering, if you could give us some more insight into how you how well you feel like you're positioned with enough sites given this environment? And how intensive this trial needs to be?

[Aoife Brennan:]

Yes. So again, we'll show all of the details in terms of the study design at the end of the month. But we've been working -- one of the nice things we've been seeing a lot of very challenging things about the COVID pandemic, one of the maybe positive things have been that a lot of physicians -- metabolic physicians who are often kind of flying around really busy doing clinic are now home and we've had a lot of interaction with our KOLs and our potential sites and continue to -- they're actually more available to us for phone calls and virtual ad boards now than they were six months ago. So it's really given us the good opportunity to work with them and to hear at each site what the local situation is.At some sites, IRBs continue to be open. They're continuing to see protocols to meet virtually to provide feedback. In other sites, they have prioritized emergency, INDs and other kind of work based on the kind of unique situations at each site. So similarly to how different states are responding here in the U.S., we see that there's lots of kind of different local variation in terms of how each site is working. And just like in every study you have to kind of spend time understand what the unique challenges are at each site and make sure that when you write a protocol that you can have your one single protocol that can be implemented at every site with their kind of unique challenges and capabilities.So that's exactly how we're using this time. I actually think in some ways every cloud has a silver lining and the silver lining here has been it's really kind of honed our relationship with the advocacy organization and the site and also our thinking around how to execute and operationalize these kinds of studies, now that we're moving into a more of a home-based trials for the PKU program and future programs as well. So certainly, our mantra has been not just to survive, but to actually use this challenge as a way to thrive and to thrive operationally and that's what we plan to do.We think that based on our current kind of evaluation, there's no reason why all of the visits for this next study couldn't occur virtually in a patient's home, if that was what we needed to do. And so we're pursuing that as kind of a home-based virtual type of setup. I think there's different logistics there that you have to worry about in terms of shipping drug to the patient not to the site. But that's all doable. There are vendors that are available to do that. So a lot of what we've been doing in the last couple of weeks has been surveying those vendors getting all of the logistics in place so that we have a lot maximum flexibility. And I know Richard is on the call and he's been basically doing all of that work with his team. And Richard is there anything that you'd like to add in terms of what I've said for Joe?

[Richard Riese:]

Yes. No I think you've covered it Aoife. I mean, we've taken the opportunity to really reach out to investigators and to patients and to home health care providers to sort of plan our next step. And it's very clear that the investigators are excited about our next study and that patients are interested in their perspective. And everybody is sort of moving towards telemedicine, however you want to call it virtual or at-home visits for both clinical trials and for clinical things in and of itself. And we continue to push -- as Aoife said, continue to push the paperwork through.We had an opportunity where National PKU Association reached out to us and we had an opportunity to actually do a patient survey for PKU patients on how they're responding to coronavirus and their interest in study participation. And we found that overwhelmingly that patients are still interested in study participation and 86% of the patients who responded would consider participation in a fully virtual trial. So I think that's all consistent with what we've said before. And we have been reaching out to home health care providers to have the opportunity to be really flexible in our next study to either do a sort of a classical come-in-a-clinic study or do everything at home including the tracer study that we commonly do for PKU. So I think we're going to be prepared to move to the next steps and conduct these studies.

[Joe Schwartz:]

That's really helpful. Thanks for the added information.

[Operator:]

Thank you. Our next question is from Julian Harrison of BTIG. Go ahead with your question please.

[Julian Harrison:]

Hi, good morning. Thank you for taking my questions. For MSUD and enteric hyperoxaluria just wondering if you plan to start clinical development with the liquid formulation like you did for 1618 or is a solid form from the beginning and the realm of possibilities here?And on enteric hyperoxaluria specifically kidney function seems like a very important aspect of the natural history here. So just curious how you plan to consider the spectrum of CKD in future development? Thanks.

[Aoife Brennan:]

Yes, two great questions Julian. Certainly our preference would be to move forward with the lyo from the get-go and that's certainly what we're planning to do right now. So, unless there's some reason not to do that and that's how we plan to proceed.The nice thing about having our own manufacturing infrastructure means that we're kind of -- we're not relying on supply chain or vendors that may be in parts of the world that are more or less affected by COVID.So, as of now, I don't see any reason why we wouldn't move forward with the lyo straight from the get-go. And sometimes the challenges -- things happen where you feel like okay maybe we should learn something with liquids rather than await for lyo. But as of today, our plans are that we would start clinical development straight away with the lyo product based on what we've learned from PKU and just implement it.In terms of the kidney function I might hand that over to Richard. He has a lot of experience in oxalate disorders from his time in Alnylam. And I think he's probably best positioned to answer that particular question.

[Richard Riese:]

Yes, I think for -- our initial studies will -- is done for PH1 and also for enteric hyperoxaluria aim at doing a proof-of-concept in patients without severe kidney disease and look at urinary oxalate excretion models. Does that answer your question?

[Julian Harrison:]

It does.

[Richard Riese:]

Yes.

[Operator:]

[Operator Instructions] Next one is from Chris Howerton of Jefferies. Go ahead with you question please.

[Chris Howerton:]

Hey thank you. Good morning everyone. So, for the -- I guess I have two questions. For the more virtual or home-oriented clinical trials I guess from a high level I'm interested to understand what kind of capital expenditures you're deploying to kind of increase those capabilities? And then I'd also be interested in hearing about what the implications are for the number of clinical trial sites that might be required for any individual trial?And then just a final question would be have you considered moving away from E. coli just because there seems to be some tolerability issues with probably the fact that there's LPS in the patient's GI? Thank you.

[Aoife Brennan:]

Yes. So, I'll take a stab at both parts of your question Chris. So, the first one in terms of the capabilities to do virtual clinical trials has been around for a while. Each component that's required to do a successful virtual trial has kind of been established. Some of the challenging components are just setting it up and getting it going in real-life kind of thing.In terms of how that impacts the number of sites generally what happens is this kind of a central site that provides oversight of a number of kind of virtual groups. And as Richard mentioned, for our initial PKU study, we're going to have a hybrid so that will be -- the protocol will be written flexibly such that patients can come to and have a traditional center they can do some visits at home or the entire study can be conducted virtually.So, we're still at kind of the early days of working at what the implications of that are on the number of centers that we would have in the U.S. We'll certainly learn as we go here and learn from others who have kind of gone down this path.But as I kind of think and learn about the future of medicine is like I think doing more remotely is absolutely the way of the future. So whatever time and effort we invest now I think will pay off.In terms of the capital expenditure, some cost increase obviously, but other costs decrease when you're doing these kinds of studies. And certainly our initial assessment is that the distribution of costs will change as we look at the study plan, but the overall ballpark of how much it will cost us to execute study will stay relatively flat compared to a type of traditional setup. So, that's that one.In terms of the chassis organism that we're engineering in, listen there's no perfect chassis, right? There are certainly advantages of using E. coli Nissle and then there's the potential that other chassis organism may have lower LPS and maybe have better tolerability.And certainly, for now, we're committed to E. coli Nissle. We think that there may be trade-off where you move to a different chassis, but you actually have to dose much higher because it's more vulnerable to digestive enzymes and low PH compared to E. coli Nissle.So I think there's constantly going to be pros and cons and no matter what chassis organism you choose to base your engineering on. And we know E. coli Nissle now. We know and love it for all its faults. And we think that we have a lot of experience engineering it. We have established ways that we can manufacture it. And, certainly, as we go forward we're constantly evaluating bringing a second chassis on board, as I talk about this shelf of reusable parts.And once we get to a point where we really think that we know and we've gotten our arms around engineering and manufacturing E. coli Nissle, we may add another chassis organism to that shelf of reusable parts. But our assessment now is that that will be based on capabilities, maybe a chassis that are better at secretion, chassis that are better at colonization as opposed to something based on tolerability. So that's kind of how we think long term. But in the short term, we're pretty committed to Nissle.

[Chris Howerton:]

Okay, great. And maybe just another question, if you don't mind, with respect to the enteric hyperoxaluria program. So for the -- I just want to clarify, first of all, are you planning on going after patients with chronic kidney disease? And then, what's your view on what the approvable endpoint would be in this setting?

[Aoife Brennan:]

Yes. So, as Richard mentioned earlier, initially we'll be taking patients with good renal function. The reason for that is, we kind of know a lot about urinary oxalate as a biomarker and that's challenging to interpret in the context of patients who have very low kidney function and chronic kidney disease. So our initial population is going to be based on those with decent renal function.We actually do see a huge potential application in patients with chronic kidney disease. They're actually often the patients who have -- get systemic oxalosis, because they enter this kind of vicious cycle where they're not able to secrete oxalate in their urine, so they get -- start to get buildup of oxalate in their heart in other tissues and can enter into a phase of kind of multisystem oxalosis.So we actually see that there's big unmet need in that population. But certainly that would kind of be a secondary population for us, after we've demonstrated proof-of-concept in patients with sufficient renal function. And as you know, there's work to be done there in terms of what the approvable endpoint might be.You could think about echo around cardiac function, you could think about plasma oxalate. There are a number of different potential endpoints. But we're pretty early in terms of our thinking and certainly have had no regulatory interactions around what the path forward would be in that kind of second or -- kind of second population or second indication.But we do see -- based on the biology we do see it as a big potential. If you're not making urine, your only way to excrete oxalate is in your feces, right? And that's kind of our zone, right? That's our neighborhood. So, based just on first principles, we see that as a great opportunity. Does that make sense?

[Chris Howerton:]

Yes. Okay. Very good. Yes, that definitely does. Okay. Well, thanks so much for taking the questions and look forward to the event in, I guess, just a few weeks.

[Aoife Brennan:]

Great. Thanks, Chris. Talk to you soon.

[Operator:]

Okay. That concludes the Q&A session. I would now like to turn the call back to Aoife Brennan.

[Aoife Brennan:]

Great. Well, thank you so much everyone for joining us today and we look forward to seeing many of you at the end of the month at our R&D event and we'll be available later today, if there are any follow-up questions. Thank you, operator.

[Operator:]

This concludes today's webcast. Thank you all for attending. You may now disconnect.