Entera Bio Ltd. Q2 FY2021 earnings call

• Spiros joined Entera in Jan 2021, impressed by the technology platform and team.
• Second quarter: European patent granted for PTH formulations, Phase 2 clinical trial of EB613 met primary and secondary endpoints with significant dose response in BMD and biomarkers.
• EB613 is an oral PTH for osteoporosis, aiming to be the first oral once-a-day anabolic, with Phase 2 trial showing BMD increases and excellent safety.
• Plan to conduct Phase 3 non-inferiority study vs. Forteo injectable.
• Collaboration with Amgen ongoing, and signed MTA with three companies to demonstrate platform feasibility for other molecules.
• Cash balance at $28.1 million, sufficient to support operations into Q4 2022.

Revenues for the six months ended June 30, 2021, were $266,000 compared to $94,000 in the same period in 2020, both from R&D services provided to Amgen. Cost of revenues for the six months ended June 30, 2021, was $121,000 versus $73,000 in 2020. Total operating expenses for the six months ended June 30, 2021, were $5.2 million, with research and development expenses at $2.4 million and general and administrative expenses at $2.8 million. As of August 8, 2021, Entera had cash and cash equivalents of $28.1 million. Revenues were attributable to R&D services for Amgen, and expenses included headcount-related costs for EB613 clinical trial and general administrative costs like salaries and professional fees.

• Expect 2021 operating loss to be approximately $13 million.
• Cash position sufficient to fund operations into Q4 2022.
• Plan end of Phase 2 meeting with FDA in second half of 2021 to review Phase 2 results and Phase 3 protocol.
• Anticipate announcing partnerships from MTA evaluations by end of 2021.

• Uncertainties related to COVID-19 pandemic impact on future operations.
• Risks detailed in SEC filings, including factors affecting clinical trial outcomes, market adoption of EB613, and general business and economic uncertainties.

Q: Can you share the non-inferiority bar in terms of the BMD increase that you expect at 12 months that you think would be sufficient to meet that 25% non-inferiority level? And then, I think mentioned the 10% market penetration rate on the call. Just curious if you can provide more color on how you derive that estimate, and perhaps what gives you the confidence in achieving that goal.

A: On the non-inferiority margin, beyond reviewing Phase 2 results, which were strong in terms of what we showed at the height - the 2.5 milligram dose for the lumbar spine BMD, but also we also showed increases in femoral neck and total hip. And we're sort of evaluating how to incorporate that into our primary endpoint and then the statistical assumptions that we would use for non-inferiority. We’re sort of evaluating all of that. We'll update the market once we have a clear new updated plan based on our new sort of Phase 2 results. Arthur Santora added that most of the Forteo studies had between 6% and 8% increase in spine BMD at 12 months. And so, in order to be plus or minus 25%, we would have to achieve something like somewhere between 5% to 10% approximately in order to have a non-inferiority, but it depends a lot on the statistics though, just to give you a general range of what was achieved in various trials. Spiros also mentioned that the 10% market penetration was based on a market survey that was done. And I mean, we’re seeing in the market, the injectable anabolics are not achieving sort of - are achieving very low penetration in the sort of single digits across the board when you look at Romosozumab and Tymlos. And so, that leaves us with a percent - there's a much higher number of patients that are eligible anabolic agents and are receiving these injectables. So, that's been - from a high level, that's where the big gap is. Phillip Schwartz added that in general, in our survey, when we've spoken to physicians and others, it's quite clear that less than 5% of the overall treated patients, are treated with injectable medication. And the primary driver for physician choice and for patient choice in terms of which medication they use to treat osteoporosis, which is a silent disease, something that people can't feel, and especially for the elderly, that population is very sensitive to taking injections, especially for a silent disease, which they can't feel. They don't want to be bothered with it. Therefore, with the introduction of a new oral agent, typically you see a very, very large increase, especially when they have novel mechanisms of action, which PTH does, as compared to the other oral agents. We would anticipate that given the fact that it's an oral, we would lower significantly the resistance that patients and physicians have to utilizing an agent which is anabolic, which is capable of building bone and reversing some of the damage and symptoms that are attributable to osteoporosis. On a payer level, we'd also imagine that payers would also be enthusiastic about this, because the cost of fractures that result from osteoporosis, is incredibly high. And if they could get a larger proportion of their population to be treated with an oral, as well as to be treated with an oral that's an anabolic, that would have very, very significant benefits. And therefore, there would be multiple parties driving the market share of our drug, assuming that we're successful.

Q: What are the timing of that meetings in terms of when you meet, when do you expect some kind of a comment back - feedback from them? And my second question is regarding this transfer of technology. You are working with three different outfits. So what kind of timing, again, on those expectations for the transfer of proprietary technology?

A: Spiros Jamas said that we're requesting what's called an end of Phase 2 meeting with FDA, which is a - it's a standard meeting at the development that we're at. And the timing of that, I mean, we've said it's the second quarter - I mean, sorry, the second half of this year that we will have our end of Phase 2 meeting, and that is still what we're holding to. And once we have a confirmed date, we'll probably update the market on that. And typically for that, we will provide our full Phase 2 results, as well as our proposed Phase 3 protocol, and then FDA will review that, and we'll have, again, the physical meeting with FDA to get the FDA's feedback. And the key thing for the end of Phase 2 meeting is to get full agreement from FDA on the Phase 3 design and what will be required to support approval for the EB613 for the treatment of osteoporosis, so that - and we still expect it will be a - one pivotal study, one Phase 3 study will be required under this sort of 505(b)(2) pathway that we're taking with FDA. So that - so within this - before the end of the year, within the - in the second half, all of that will happen. With regard to the material transfer agreements and the evaluation of our platform with other companies, our molecules, that is ongoing right now. We’re conducting experiments right now evaluating a number of other companies’ products with our platform. That generally involves some animal studies and to demonstrate that our platform is working and we have sort of validated models to do that. And we have a lot of momentum going with the interest in the platform and with the number of companies. And we'll - I mean, I expect we should be able to announce updates on potential partnerships by the end of the year.